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GCP Applied Technologies Inc. – ‘DEFC14A’ on 4/15/20 re: GCP Applied Technologies Inc.

On:  Wednesday, 4/15/20, at 9:40am ET   ·   Effective:  4/15/20   ·   Accession #:  1193125-20-107702   ·   File #:  1-37533

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  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/15/20  GCP Applied Technologies Inc.     DEFC14A     4/15/20    1:4.1M GCP Applied Technologies Inc.     Donnelley … Solutions/FA

Document/Exhibit                   Description                      Pages   Size 

 1: DEFC14A     Definitive Proxy Statement for a Contested          HTML   1.10M 
                Solicitation                                                     

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934 (Amendment No.   )

Filed by the Registrant  ☒                            Filed by a Party other than the Registrant  ☐

Check the appropriate box:

GCP Applied Technologies Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

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GCP Applied Technologies Inc.

62 Whittemore Avenue

Cambridge, Massachusetts 02140

Notice of

2020 Annual Meeting and

Proxy Statement

Date of Notice: April 15, 2020

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April 15, 2020

To Our Stockholders:

We are pleased to announce the Annual Meeting of Stockholders (the “Annual Meeting”) of GCP Applied Technologies Inc. (“GCP” or the “Company”) will be held on May 28, 2020 at 10:00 a.m. Eastern Time at the AC Hotel Cambridge, 10 Acorn Park Drive, Cambridge, MA 02140. We are actively monitoring developments regarding the coronavirus, or COVID-19, and are sensitive to the health and travel concerns of our shareholders, as well as the protocols that federal, state and local governments may impose. In the event it is not possible to hold the Annual Meeting solely in person, we will evaluate our options for holding the Annual Meeting by means of online remote communication as well, and we will announce any such alternative arrangements. If we take this step, we will announce the decision to do so as promptly as practicable and provide instructions on how shareholders can participate via a press release and on our website, www.gcpat.com, which will also be filed with the Securities and Exchange Commission (the “SEC”) as proxy material.

To ensure that you have a say in the governance of GCP, it is important that you vote your shares. Accompanying this proxy statement, you should also have received a BLUE proxy card or BLUE voting instruction card and postage-paid return envelope, which are being solicited on behalf of our Board of Directors (the “Board”). Please review the proxy materials and follow the instructions to vote your shares.

Overview

GCP’s Board and management team are focused on maximizing shareholder value and building long-term business success through sound corporate governance and the implementation of GCP’s transformational initiatives — including streamlining our core business, investing in new technologies, and launching multiple products in both Specialty Building Materials (“SBM”) and Specialty Construction Chemicals (“SCC”).

GCP has a strong history of creating and commercializing high-performance products for concrete and cement producers, as well as architects, engineers, developers, and contractors. In February 2016, W.R. Grace spun out GCP into a public company with annual revenue of $1.42 billion for the year ended December 31, 2015. At the time of the spin-off, GCP’s three segments – SCC, SBM and Darex Packaging Technologies (“Darex”) – provided annual revenues of $694 million, $398 million and $326 million, respectively. In July 2017, GCP successfully closed the sale of Darex for approximately $1.1 billion. The Company used a portion of the Darex sale proceeds to reduce its debt by approximately $450 million and, as a result, its interest expense by approximately $45 million. Since the spin-off, the Company has also executed six strategic bolt-on acquisitions, adding approximately $90 million of additional revenue. These new businesses created product and technology platforms to expand GCP’s reach in the global building materials industry. After the significant work required to establish GCP as a public company, divest Darex and capitalize on these new acquisition opportunities, it was necessary to focus our efforts on the organization, and in particular on reducing costs and the complexity of our business model. To that end, we announced three restructuring programs in 2018 and 2019 to create a more efficient and effective organization. As a result of these initiatives, we expect to achieve total annualized cost savings of approximately $80 million by the end of 2022.

Throughout its time as a public company, GCP has continued to build enduring partnerships with customers around the world through customized solutions, expert technical sales and service and deep construction application expertise. During 2019, we focused on continuing to leverage our industry-leading products and strong customer relationships, while restructuring our operations to improve the Company’s performance.

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Business Highlights

During 2019, we made significant progress improving profitability for Specialty Construction Chemicals, driving adoption of our VERIFI^® integrated in-transit admixture system, implementing our restructuring programs and increasing our Adjusted Free Cash Flow, notwithstanding the challenges we faced primarily due to volume declines in the project-driven products of our Specialty Building Materials segment. Highlights of our performance include:

Streamlining Our Operations

While we are encouraged by our progress in 2019, we know there is more work to be done in order to realize GCP’s significant potential and position the Company for success in 2020 and beyond. To support these efforts, in 2019 we made important organizational changes and implemented restructuring actions designed to create a more efficient and effective organization and reduce complexity. These actions include:

Our goal is to transform GCP into a more focused business, and we are seeing the results of our efforts, having achieved approximately $33 million in total cost savings through 2019. We expect these efforts to yield total expected annualized savings of approximately $80 million by the end of 2022. Moving forward, we will continue to identify ways to create a more efficient operating model and align our cost structure with the opportunities in our markets.

Stockholder Engagement

We encourage and appreciate meaningful discussions with our stockholders and believe this mutual dialogue is an essential component of our Board’s governance philosophy. We emphasize transparency in our approach to stockholder communications and seek out engagement and feedback from current and prospective stockholders on corporate strategy, executive compensation, corporate governance and other topics of importance. In 2019, the Board and representatives of GCP management engaged in discussions with many of our institutional investors. These discussions focused on GCP’s business strategy and performance, operational initiatives and the Board’s role in overseeing the Company’s strategy and operations. GCP values stockholder feedback and insight on all matters.

Governance – Director Independence, Qualifications and Refreshment

GCP’s Board of Directors is committed to sound corporate governance practices. Our Board regularly reviews GCP’s governance policies to ensure we are aligning the Company’s governance framework with best practices that drive long-term value creation for our stockholders.

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In August 2019, the Company announced a leadership transition plan, which included, in addition to my appointment as Chief Executive Officer, Elizabeth Mora’s appointment as Lead Independent Director and Gregory Poling’s transition to the role of Executive Chairman, from which position he retired as of December 31, 2019 in accordance with our leadership transition plan. This structure underscored the Board’s unwavering commitment to robust independent leadership while also enabling the Company to benefit, for a transitional period, from Mr. Poling’s 40 years of experience in transitioning GCP into its next stage of growth, while allowing its Chief Executive Officer to focus on operating the business.

Later in December 2019, we announced that, in accordance with our leadership transition plan, Ms. Mora would transition to the role of independent Chairman on December 31, 2019 in connection with Mr. Poling’s retirement as Executive Chairman on that date. This reflected the Board’s steadfast commitment to strong independent oversight and its recognition that a period of continuity would help ensure a smooth transition. Our Board has also consistently demonstrated its strong commitment to Board independence and refreshment. Eight of the nine current members of our Board are independent directors, three of the current independent directors have joined our Board in the last two years, five of the current directors have joined our Board in the last three years and we are nominating two new independent directors to join our Board this year. Our governance approach underscores the Board’s and the Company’s commitment to leveraging independent leadership and oversight to advance the Board’s refreshment efforts, advise management on strategic planning and operations and ensure effective Board operations. We believe that our governance structure ensures strong, independent oversight of management and the Company’s financial and strategic plan, while promoting effective governance in the best interests of our stockholders.

Our Board has vast experience in public company leadership across numerous industries relevant to GCP’s business and in the areas of operations, innovation and technology, M&A, finance and accounting. Further, board diversity across a number of dimensions was critically important in constructing our slate of nominees. The strong mix of knowledge, skills and industry expertise among our director nominees provides the required breadth and depth for effective Board oversight. Accordingly, I, along with the Board, recommend that you vote “FOR” the election of all ten nominees proposed by the Board on the BLUE proxy card or BLUE voting instruction card.

Focus on the Future

Looking ahead in 2020, we are excited about what the future holds and the many opportunities we have to continue to improve GCP’s performance for the benefit of our stockholders. In 2019, we engaged in a formal process to evaluate a range of alternatives to enhance shareholder value. While the Board received significant interest in the process, the review ultimately did not result in a sale. We believe that current dynamics in the sector, in particular, the prospect of further consolidation, may result in future transaction opportunities. The Board will continue to regularly evaluate strategic opportunities to enhance shareholder value.

Under our current leadership, we are executing well against our stated objectives as we continue to focus on providing customers with high-performance products, differentiated technologies, and best-in-class services, including:

I would like to thank our employees personally and on behalf of GCP’s Board and management team for all of their hard work implementing our plans and for the impressive commitment they have displayed supporting the needs of our customers during this unprecedented time. We remain committed to taking the appropriate steps to protect our workers, while continuing to work hard to support our customers, suppliers, and other stakeholders. Without our employees, none of our successes would be possible.

Thank you for your support and continued trust in GCP. We value our stockholders and their opinions deeply and look forward to maintaining our ongoing dialogue and keeping you informed of the Company’s progress.

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NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS

to be held on

Thursday, May 28, 2020

The 2020 Annual Meeting of Stockholders of GCP Applied Technologies Inc., a Delaware corporation (“GCP” or the “Company”), will be held on Thursday, May 28, 2020 at 10:00 a.m. Eastern Time at the AC Hotel Cambridge, 10 Acorn Park Drive, Cambridge, MA 02140 for the following purposes:

We are actively monitoring developments regarding the coronavirus, or COVID-19, and are sensitive to the health and travel concerns of our shareholders, as well as the protocols that federal, state and local governments may impose. In the event it is not possible to hold the Annual Meeting solely in person, we will evaluate our options for holding the Annual Meeting by means of online remote communication as well, and we will announce any such alternative arrangements. If we take this step, we will announce the decision to do so as promptly as practicable and provide instructions on how shareholders can participate via a press release and on our website, www.gcpat.com, which will also be filed with the SEC as proxy material.

Please note that Starboard Value and Opportunity Master Fund Ltd (“Starboard”) has filed a definitive proxy statement reflecting that it has nominated eight persons for election as directors to the GCP Board of Directors at the Annual Meeting in opposition to the nominees proposed by GCP’s Board of Directors. As a holder of Company common stock, par value $0.01 (“common stock” or “shares”), you may receive solicitation materials from Starboard, including a proxy statement and white proxy card. We are not responsible for the accuracy of any information provided by or relating to Starboard or its nominees contained in solicitation materials filed or disseminated by or on behalf of Starboard or any other statements Starboard may make.

The Company’s Board of Directors does not endorse any Starboard nominee (other than Mr. Kiefaber) and unanimously recommends that you vote “FOR” the election of all ten nominees proposed by the Board of Directors on the BLUE proxy card or voting instruction card (including via the telephone or Internet methods of voting specified thereon). Our Board of Directors strongly urges you NOT to vote using any white proxy card sent to you by Starboard. Please note that you will NOT help elect the Board’s nominees (other than Mr. Kiefaber) if you sign and return white proxy cards sent by Starboard even if you vote to “withhold” your vote with respect to Starboard’s nominees using the white proxy card. In fact, doing so will revoke any previous vote you cast on the Company’s BLUE proxy card. To support your Board of Directors’ nominees, you should vote “FOR” the Board’s nominees on the BLUE proxy card and disregard, and not return, any white proxy card sent to you by Starboard. If you have previously submitted a white proxy card sent to you by Starboard, you can revoke that proxy and vote for our Board of Directors’ nominees by using the enclosed BLUE proxy card or voting instruction card (including via the telephone or Internet methods of voting specified thereon), which will automatically revoke your prior proxy. Any later-dated white proxy card that you send to Starboard will also revoke your proxy, including BLUE proxies that you have voted “FOR” our Board of Directors’ nominees, and we strongly urge you NOT to sign or return any white proxy cards sent to you by Starboard. Only the latest validly executed proxy that you submit will be counted.

The record date has been fixed as the close of business on April 13, 2020 for the determination of stockholders entitled to notice of and to vote at the meeting, and any adjournments or postponements of the meeting. This notice and the accompanying proxy materials are made available to you by order of the Board of Directors. The Company’s Board of Directors is soliciting proxies for use at the Annual Meeting and any adjournment or postponement thereof.

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We have enclosed our annual report, proxy statement (together with the notice of Annual Meeting) and BLUE proxy card or voting instruction card. For specific instructions on how to vote your shares, please refer to the instructions on the BLUE proxy card or voting instruction card to vote by Internet, telephone or by mail.

YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the Annual Meeting, we encourage you to read this proxy statement and vote your shares by submitting the BLUE proxy card or voting instruction card in the envelope provided to you or to use the telephone or Internet methods of voting described in your BLUE proxy card as promptly as possible so that your shares can be voted at the Annual Meeting in accordance with your instructions. If you attend the Annual Meeting, you may revoke any prior proxy by voting in person or, in the event that the Annual Meeting is held by means of online remote communication as well as in person, by means of online remote communication.

Given the contested nature of the election, your broker may only be able to vote your shares with respect to the proposals at the Annual Meeting if you have instructed them how to vote. Your broker has enclosed a voting instruction card for you to use to direct them regarding how to vote your shares. Please instruct your broker how to vote your shares using the voting instruction card you received from them. Please return your completed BLUE voting instruction card to your broker and contact the person responsible for your account so that your vote can be counted. If your broker permits you to provide voting instructions via the Internet or by telephone, you may vote by those methods using the BLUE voting instruction card as well.

If you have questions about the matters described in this proxy statement, how to submit your proxy or if you need additional copies of this proxy statement, the enclosed proxy card or voting instructions, you should contact D.F. King & Co., Inc. (“D.F. King”), the Company’s proxy solicitor, toll free at (866) 796-6867 (banks and brokers may call collect at (212) 771-1133), or via email at gcp@dfking.com.

This proxy statement is dated April 15, 2020 and, together with the enclosed proxy card, is first being furnished to stockholders on or about April 15, 2020.

By Order of the Board of Directors,

April 15, 2020

Neither the Securities and Exchange Commission nor any state securities regulatory agency has passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

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GCP^®, the GCP^® logo and, except as may otherwise be indicated, the other trademarks, service marks or trade names used in this proxy statement are trademarks, service marks or trade names of GCP or its subsidiaries.

Unless the context otherwise indicates, in this document (i) the terms “GCP” or the “Company” mean GCP Applied Technologies Inc. and (ii) the terms “we,” “us” or “our” mean GCP Applied Technologies Inc. and its consolidated subsidiaries. Unless otherwise indicated, the contents of websites mentioned in this proxy statement are not incorporated by reference or otherwise made a part of this proxy statement.

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This summary highlights selected information in this proxy statement. Please review the entire document prior to voting.

ANNUAL MEETING OF STOCKHOLDERS

		Vote Online		Vote by Mail		Vote by Phone
		www.cesvote.com		Complete, sign and date the BLUE proxy card or BLUE voting instruction card and mail it in the postage-paid envelope provided		1-888-693-8683

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Starboard has filed a definitive proxy statement reflecting that it has nominated eight persons for election as directors to the GCP Board of Directors at the Annual Meeting in opposition to the nominees proposed by GCP’s Board of Directors. As a result, unless Starboard withdraws its nominations, you may receive solicitation materials, including a white proxy card, from Starboard seeking your proxy to vote for Starboard’s nominees. OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF OUR BOARD’S NOMINEES ON THE ENCLOSED BLUE PROXY CARD OR BLUE VOTING INSTRUCTION CARD. Our Board of Directors strongly urges you NOT to sign or return or vote the white proxy card sent to you by Starboard. If you have previously submitted a white proxy card sent to you by Starboard, you can revoke that proxy and vote for our Board of Directors’ nominees by using the enclosed BLUE proxy card or voting instruction card (including via the telephone or Internet methods of voting specified thereon) which will automatically revoke your prior proxy. Any later-dated white proxy card that you send to Starboard will also revoke your proxy, including BLUE proxies that you have voted “FOR” our Board of Directors’ nominees, and we strongly urge you NOT to sign or return any white proxy cards sent to you by Starboard. Only the latest validly executed proxy that you submit will be counted.

MEETING AGENDA AND BOARD RECOMMENDATIONS

HOW TO VOTE

YOUR VOTE IS EXTREMELY IMPORTANT THIS YEAR IN LIGHT OF THE PROXY CONTEST BEING CONDUCTED BY STARBOARD.

Our Board unanimously recommends that you vote “FOR” each of our Board’s nominees and urges you NOT to sign or return any white proxy card sent to you by Starboard.

If you sign your BLUE proxy card and return it without indicating how you would like to vote your shares, your shares will be voted “FOR” our Board’s nominees and “FOR” the other proposals submitted by our Board.

At the 2020 Annual Meeting, our Board of Directors is nominating ten highly qualified director nominees, Gerald G. Colella, Randall S. Dearth, Janice K. Henry, Clay H. Kiefaber, James F. Kirsch, Armand F. Lauzon, Phillip J. Mason, John R. McPherson, Elizabeth Mora and Danny R. Shepherd.

You may receive solicitation materials from Starboard, a dissident stockholder, seeking your proxy to vote for its nominees to become members of our Board of Directors. OUR BOARD OF DIRECTORS DOES NOT ENDORSE ANY STARBOARD NOMINEE (OTHER THAN MR. KIEFABER). IF YOU HAVE PREVIOUSLY SUBMITTED A VOTE USING THE WHITE PROXY CARD SENT TO YOU BY STARBOARD, YOU CAN REVOKE IT BY USING THE ENCLOSED BLUE PROXY CARD TO VOTE “FOR” OUR BOARD’S NOMINEES AND “FOR” ALL OTHER PROPOSALS RECOMMENDED BY OUR BOARD.

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OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF OUR BOARD’S NOMINEES LISTED ON THE ENCLOSED BLUE PROXY CARD AND “FOR” EACH OF THE PROPOSALS DESCRIBED IN THIS PROXY STATEMENT, INCLUDING THE RATIFICATION OF THE AMENDED RIGHTS AGREEMENT.

For more information and up-to-date solicitation materials, please go to www.gcpat.com. If you have any questions, you may contact D.F. King, our proxy solicitor assisting us in connection with the Annual Meeting, toll-free at (866) 796-6867 (from the U.S. and Canada) or collect at (212) 771-1133 (from other locations), or via email at gcp@dfking.com. Banks and brokers may call (212) 771-1133.

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BOARD OF DIRECTORS

The table below includes current GCP directors and Board-recommended director nominees. For more information about our directors’ qualifications, skills and experience, please see page 20.

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The following matrix identifies the primary skills, core competencies and other attributes that each Board-recommended director nominee brings to bear in their service to GCP’s Board and committees. The lack of a mark for a particular item does not mean that the director does not possess that qualification, characteristic, skill, or experience. We look to each director to be knowledgeable in these areas; however, the presence of a mark indicates that the item is a particularly prominent qualification, characteristic, skill, or experience that the director brings to the Board. Each director possesses numerous other skills and competencies not identified below. We believe identifying primary skills is a more meaningful presentation of the key contributions and value that each Board-recommended director nominee brings to their service on the Board and to GCP shareholders. See page 20 for more details.

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CORPORATE GOVERNANCE HIGHLIGHTS

Elimination of Supermajority Voting Provisions

In May 2018, our Board and management proposed, and stockholders approved, amending our Certificate of Incorporation to eliminate the supermajority voting requirements relating to (1) the removal of directors and (2) the approval of future amendments to our By-Laws.

Our Structure

We are committed to best-in-class governance practices that protect the long-term interests of our shareholders and establish strong Board and management accountability. The “Corporate Governance” section beginning on page 26 describes our governance framework. We have adopted key corporate governance best practices, including:

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EXECUTIVE COMPENSATION HIGHLIGHTS

The Compensation Committee firmly believes in pay-for-performance and has structured the executive compensation program to align our executives’ interests with those of our shareholders. Our executive compensation program provides market-aligned pay opportunities that foster the attraction, motivation, engagement, and retention of key talent needed to drive outstanding Company performance and long-term shareholder value.

Our Chief Executive Officer (“CEO”) and other named executive officers (“NEOs”) have a significant amount of their target pay tied to an annual bonus and long-term incentives, which is “Pay at Risk” and dependent on GCP’s financial performance and stock price. Details about our executive compensation program are provided on pages 40-68.

For purposes of this chart, “Long-Term Incentives” includes stock options, restricted stock units and performance-based units. Compensation is considered “Pay at Risk” because it is subject to performance goals, the fluctuations of our stock price or both.

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2019 EXECUTIVE COMPENSATION COMPONENTS AND ACTIONS

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BACKGROUND OF THE SOLICITATION

The following discussion provides background information regarding our engagement with Starboard beginning in January 2019 through the date of this proxy statement. During this period, the Company has also, under the leadership of the Board and management, (i) continued its extensive engagement program with stockholders of the Company, (ii) reaffirmed its ongoing commitment to Board refreshment, which is underscored by the addition of four new independent directors in the last three years and our proposed addition of two new independent directors as described in this proxy statement, (iii) undertaken a comprehensive review of strategic alternatives, (iv) executed a leadership transition plan, appointing Elizabeth Mora as Independent Chairman of the Board and Randall S. Dearth as GCP’s new Chief Executive Officer, (v) adopted restructuring and repositioning plans to increase the Company’s target for total cost reduction initiatives to approximately $80 million in annualized savings, including through strategic country exits, global supply chain and service model delivery optimization and more efficient G&A functions, and (vi) continued to maintain a disciplined, risk-adjusted approach to capital allocation that has resulted in a strong balance sheet that is currently providing the Company with substantial financial flexibility, serving as a competitive differentiator, and positioning the Company to successfully manage through the ongoing economic challenges and uncertainty caused by the COVID-19 pandemic.

On January 23, 2019, Gregory E. Poling, the Company’s then serving Chief Executive Officer, and Dean Freeman, the Company’s then serving Vice President and Chief Financial Officer, had a brief introductory call with Starboard representatives at the request of the Starboard representatives. During the call, the Starboard representatives informed Messrs. Poling and Freeman that Starboard was a stockholder of the Company and intended to nominate director candidate(s) to stand for election at the Company’s 2019 annual meeting. The Starboard representatives noted that Starboard’s notice of nominations would be for “placeholder” nominee(s). Mr. Poling and the Starboard representatives agreed to schedule a meeting in early March 2019, following the Company’s earnings release for the fourth quarter of 2018. The Starboard representatives did not discuss any substantive issues or concerns with respect to its views on the Company’s business, strategy, performance, governance or other matters during this call.

On February 1, 2019, Starboard submitted a notice to the Company stating its intention to nominate five individuals for election as directors at the Company’s 2019 annual meeting of stockholders.

On February 5, 2019, Mr. Poling and Naren Srinivasan, the Company’s then serving Vice President and Chief Strategy, Marketing and Business Development Officer and current Executive Vice President, Global Head of Specialty Building Materials, had a call with Starboard representatives, and asked whether the Starboard representatives would be willing to share any details around their views of the Company. The Starboard representatives stated that they believed the Company was undervalued and that there had been operational and cost issues since its spin-off from W.R. Grace & Co. The Starboard representatives also stated that the Company could fit in with other businesses in whole or in part, and that the ongoing consolidation in the sector has in some cases resulted in high multiples being paid in transactions. Beyond sharing these high-level views, the Starboard representatives did not engage in substantive dialogue during the call.

Prior to and throughout this period, the Board continued its ongoing evaluation of GCP’s businesses. The Board and its management team and advisors periodically discussed the competitive landscape and the challenges and opportunities the Company’s businesses face, as well as the M&A environment. In light of such factors, the Board and management team determined to undertake a comprehensive evaluation of all strategic, financial and operational alternatives, including a potential sale of GCP, a strategic business combination, the continued execution of the Company’s business plan (as well as potential enhancements to the business), or some combination of these, all with a view to maximizing value for the Company’s stockholders. Also during this period, the Board and management team continued to focus on execution and the performance of the business and, with the assistance of an independent expert consulting firm, finalized its restructuring plan, which represented the Company’s next step in its cost improvement effort to reduce complexity and create a more focused, efficient and effective organization. At the same time, the Board continued to focus on its ongoing Board refreshment efforts, including by working with an independent third party search firm to identify potential director candidates, as well as by reviewing and considering Starboard’s director nominees.

In light of the Board’s commitment to transparent communication with its shareholders, the Board determined to publicly announce the foregoing actions and initiatives, as well as Starboard’s recent ownership position and notice of nomination of director candidates, in conjunction with the Company’s earnings release for the fourth quarter of 2018. In addition, the Board also considered the expense and distraction that the Company would incur in the event of a proxy

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contest for the election of directors. Accordingly, the Board authorized Mr. Poling and the Company’s management and advisors to explore, following the Company’s earnings release, with Starboard whether a proxy contest could be avoided if the Board agreed to add a Starboard nominee for election at the 2019 annual meeting.

In an effort to work collaboratively with Starboard, the Board determined to give Starboard confidential advance notice of the announcements it planned to make in its open letter to GCP stockholders that would be released in conjunction with its earnings release. On February 25, 2019, after the Company and Starboard had executed a confidentiality agreement, Messrs. Poling and Srinivasan met with representatives of Starboard. After providing background on the Company’s strategy and the strategic actions the Company has taken since its spinoff from W.R. Grace in February 2016 (including, among others, the sale of GCP’s packaging assets, six bolt-on acquisitions, two major cost restructuring programs delivering more than $50 million of cost savings from 2017 to 2020, and the development of the breakthrough technology VERIFI^®), Mr. Poling reviewed the key elements the Board planned to announce in its open letter to shareholders – additional cost reduction actions, board refreshment and a review of strategic alternatives – which the Board and management team had been focused on prior to Starboard’s submission of its notice of nominations. Mr. Poling pointed out that the Company and Starboard were generally aligned on the key areas of focus for GCP and noted that key elements and initiatives that the Board planned to discuss and announce in its open letter to shareholders addressed Starboard’s stated objectives for the Company. Messrs. Poling and Srinivasan also offered to discuss the board refreshment process that GCP has been undertaking. Messrs. Poling and Srinivasan and the Starboard representatives agreed to continue discussions following the Company’s upcoming earnings release.

Prior to the release of the Company’s earnings on February 27, 2019, representatives of Starboard informed representatives of the Company that Starboard beneficially owned approximately 4.6% of GCP’s outstanding shares as of February 26, 2019.

On February 27, 2019, in conjunction with the Company’s earnings release, the Board released its open letter to stockholders disclosing the actions and initiatives described above, including its review of strategic alternatives.

On March 4, 2019, Messrs. Poling and Srinivasan met with representatives of Starboard and proposed, subject to Board approval, that one Starboard nominee would be added to the Board and included as an additional GCP-recommended nominee for election at the 2019 annual meeting if Starboard would withdraw its slate of nominees. Representatives of Starboard stated that they would need more than one of their nominees appointed to the Board for them to withdraw their slate and that they would come back to GCP with a counterproposal. Discussions between the parties ensued over the next few days. In an effort to reach a mutually agreeable resolution with Starboard, also over the next few days, members of the Board interviewed certain of the individuals Starboard had nominated for election as directors at the Company’s 2019 annual meeting of stockholders.

On March 11, 2019, the Company entered into an agreement with Starboard (the “2019 Settlement Agreement”), pursuant to which, among other things, the Company agreed to appoint two independent Starboard nominees, Marran H. Ogilvie and Clay H. Kiefaber, to its Board and to reimburse Starboard for its expenses in connection with its submission of nominations and related activities, Starboard agreed to irrevocably withdraw its nominations for election to the Board and to abide by certain standstill restrictions during the term of the 2019 Settlement Agreement and both parties agreed to certain non-disparagement restrictions and provisions regarding the press release and other publicity regarding the 2019 Settlement Agreement. Also on March 11, 2019, the Company issued a press release announcing the 2019 Settlement Agreement.

On March 15, 2019, 40 North Management (together with its affiliates, “40 North”), GCP’s largest stockholder, disclosed it had increased its ownership in GCP to 24.6% through a rapid accumulation of approximately 10% of the Company’s outstanding shares.

In response to 40 North’s rapid and significant accumulation of GCP’s outstanding common stock and the possibility that 40 North could accumulate a potentially controlling position in GCP without paying a control premium to all stockholders (40 North had previously received clearance under the Hart-Scott-Rodino Act allowing it to acquire up to almost 50% of GCP’s common stock and representatives of 40 North had also informed representatives of GCP that 40 North may be interested in purchasing additional shares), GCP’s Board unanimously adopted a stockholder rights plan to protect GCP and its stockholders from efforts to obtain control of GCP that are inconsistent with the best interests of GCP and its stockholders and enable all GCP stockholders to realize the full potential value of their investment in GCP.

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Recognizing that the rights plan would not deter the Board from considering any offer that is fair and otherwise in the best interests of GCP stockholders, the Board unanimously determined that the rights plan would provide it with time to make informed decisions that are in the best interests of GCP and its stockholders. The rights plan also provided several recognized stockholder-friendly features, including a one-year term and an exception for fully financed offers that are open for at least 60 business days, are made for all GCP shares and treat all stockholders equally.

From the beginning of the year and throughout this period, including following the Company’s public announcement of its strategic review, the Board, together with its outside financial advisor, continued its ongoing evaluation of GCP’s businesses and all available strategic, financial and operational alternatives, with the goal of enhancing value for the Company’s stockholders. This review included a comprehensive assessment of a range of alternatives against the backdrop of ongoing change in the Company’s industry, where technology, innovation and consolidation continued to impact sector dynamics. Over the course of its review process, the Company and its advisors contacted and engaged with both strategic industry players and private equity investors.

On May 13, 2019, Messrs. Poling, Dearth and Freeman met with representatives of Starboard to discuss the Company’s 2019 first quarter earnings.

During the Company’s strategic review process, on June 6, 2019, Starboard filed a Schedule 13D with the SEC disclosing a 6.4% ownership position in GCP.

While the Company received significant interest in the process, ultimately it did not result in a sale. On June 18, 2019, the Company issued a press release announcing the completion of a publicly announced strategic review process. As part of the announcement, the Board noted that it would continue to evaluate all opportunities to drive value for GCP’s shareholders on an ongoing basis as the industry continues to evolve.

Later on June 18, 2019, Messrs. Poling and Srinivasan discussed the Company’s June 18, 2019 announcement with representatives of Starboard.

Also during the summer of 2019, the Board and the Nominating and Governance Committee continued the ongoing succession planning process, described further below, that the Board and the Nominating and Governance Committee had been engaged in for some time, which was conducted with a view towards identifying and selecting candidates that would be suited to eventually step into the Chief Executive Officer position, after a period of serving as the Company’s Chief Operating Officer, upon Mr. Poling’s retirement. To ensure they were carefully considering perspectives from the Company’s key stockholder constituencies regarding GCP’s performance and succession planning, representatives of the Board proactively reached out to Starboard (and other key shareholders constituencies) to understand their general viewpoints before the Board finalized any actions with respect to succession or related organizational and governance changes.

On June 25, 2019, representatives of the Board had a discussion with representatives of Starboard on these topics, during which Starboard indicated that they were not in favor of a public strategic review process conducted by the Company (but rather they would have advised to conduct a private process), indicated that it was not supportive of Messrs. Poling or Dearth and shared its belief that there was a need for “fresh perspectives” but declined to offer any other specific suggestions or thoughts regarding succession planning, performance or otherwise.

On July 1, 2019, the Company announced a leadership transition plan, which included the appointment of Mr. Dearth as the Company’s Chief Executive Officer, in addition to retaining his position as President of the Company, effective August 1, 2019 upon Mr. Poling’s retirement as Chief Executive Officer on that date. Mr. Death’s appointment was the culmination of an extensive Board-led search conducted with the assistance of two leading executive search firms, which involved screening 237 candidates and interviewing 17 of those candidates, as well as consideration of the perspectives of certain of the Company’s shareholders, before Mr. Dearth was selected. Additionally, the leadership transition plan provided for lower aggregate compensation payable to Messrs. Poling and Dearth in their new respective roles as Executive Chairman and Chief Executive Officer than would have been payable, in the aggregate, had they remained Chief Executive Officer and Chief Operating Officer, respectively.

The Company announced also that, effective August 1, 2019, Ronald Cambre was retiring as Chairman of the Board and that Mr. Poling would assume the role of Executive Chairman, enabling the Company to continue to benefit from his 40 years of experience in transitioning GCP into its next stage of growth. In connection with this Board leadership transition and consistent with the Board’s commitment to robust independent leadership, it was also announced that Elizabeth Mora would assume the role of Lead Independent Director.

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Mr. Poling remained as Executive Chairman through the end of the Company’s fiscal year, at a reduced level of base salary (and as a result also a reduced bonus for 2019, if any were to be earned) that the Board determined appropriately reflected the need for the Company to have, for a short transitional period, an Executive Chairman that could assist with customer relationship transitions and R&D projects where the Company was able to leverage his specific background and experience and allow Mr. Dearth to focus on operational matters to enhance and optimize the Company’s performance. As part of his responsibilities, Mr. Poling was also tasked with continuing to evaluate potential strategic opportunities.

On July 1, 2019, representatives of Starboard had a call with representatives of the Board and criticized the appointment of Mr. Poling as Executive Chairman. The Starboard representatives indicated that they were unsupportive of any continuing role for Mr. Poling given what they viewed as a poor management track record and their opinion that he was not adding value to the Company. They also expressed concern about the level of compensation payable to Mr. Poling as Executive Chairman. Representatives of the Board explained that the aggregate compensation payable to Messrs. Poling and Dearth in their new respective roles as Executive Chairman and Chief Executive Officer was lower than what would have been payable, in the aggregate, had they remained Chief Executive Officer and Chief Operating Officer, respectively.

On July 2, 2019, representatives of Starboard had a call with Mr. Dearth, Joseph DeCristofaro, GCP’s Vice President, Investor Relations, and Mr. Freeman to discuss the Company’s recently announced leadership transition plan. The Starboard representatives were critical of the Company’s management and Board during this call, but did not offer any ideas on how GCP’s performance could be improved.

On August 6, 2019, in conjunction with the release of the Company’s second quarter 2019 earnings, the Company announced that the Board had approved a plan to further optimize the design and footprint of the Company’s global organization, primarily with respect to its administration and business support functions, and streamline cross-functional activities. The Company announced that it expected to realize additional annualized pre-tax savings associated with this plan of approximately $30 million to $35 million. This plan represented an additional step in its cost improvement effort to reduce complexity and create a more focused, efficient and effective organization.

On August 7, 2019, representatives of Starboard had a call with Messrs. Dearth and Freeman to discuss the Company’s 2019 second quarter earnings.

On August 16, 2019, representatives of Starboard had a call with Mr. Freeman and Mr. DeCristofaro to further discuss the Company’s 2019 second quarter earnings.

On August 20, 2019, Starboard delivered a letter to Ms. Mora and the Board criticizing the Company’s recent leadership transition and performance, and suggesting that the Company’s focus should be on margin improvement, but offering no concrete suggestions regarding achieving such margin improvement or otherwise on enhancing the Company’s business and performance. In an effort to better understand Starboard’s perspectives on these matters, Ms. Mora requested a meeting with representatives of Starboard, which was scheduled for September 17, 2019.

On August 27, 2019, Starboard filed Amendment No. 1 to its Schedule 13D with the SEC, disclosing a 7.7% ownership position in GCP.

On September 17, 2019, representatives of Starboard met with Ms. Mora, Mr. Dearth and Janice K. Henry, an independent member of the Board. During the meeting, representatives of Starboard reiterated the criticisms expressed in Starboard’s August 22, 2019 letter and indicated that they were interested in being involved in a process to fully reconstitute GCP’s Board or that they would take alternative steps to do so. Also during this meeting, Ms. Mora, Ms. Henry and Mr. Dearth asked representatives of Starboard whether they had any specific plans or ideas for GCP to improve operations, strategy or performance, but representatives of Starboard declined to engage on these topics.

Throughout this period, and over the course of the ensuing months, representatives of the Board and the Company’s management team engaged extensively with shareholders of the Company in order to better understand, and take into account, their viewpoints and ideas regarding the Company’s operations, strategy, performance, governance and Board composition. In particular, representatives of the Company, including Ms. Mora and Mr. Dearth, had regular and ongoing discussions with 40 North, which expressed its desire, given its approximately 25% share ownership position in the Company, to obtain significant representation on GCP’s Board. While discussions regarding these topics continued for the next six months, ultimately no agreement was reached.

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On October 2, 2019, the Company announced that Mr. Freeman would be leaving the Company to pursue another opportunity and that Craig A. Merrill, the Company’s Vice President, Finance, Analytics and Strategy, had been appointed Interim Chief Financial Officer, effective following Mr. Freeman’s departure on October 15, 2019. The Company also reaffirmed its previously announced outlook for full-year 2019.

On October 15, 2019, Ms. Mora had a call with representatives of Starboard and informed them that the Board was fully aware of the issues that Starboard raised, including Starboard’s request for Board refreshment, and that the Board was taking those issues seriously and would consider constructive proposals from Starboard in that regard.

On November 6, 2019, Messrs. Merrill and DeCristofaro had a call with a representative of Starboard to discuss the Company’s third quarter 2019 earnings, and also on November 6, 2019, Ms. Mora and Mr. Dearth had a separate call with representatives of Starboard to discuss the Company’s performance and governance matters. During the call, Ms. Mora and Mr. Dearth communicated to Starboard that Board composition was a critical issue for the Company and that the Board would be considering the views of its stockholders, and in that regard the Board was always open to hear any perspectives Starboard might have. Representatives of Starboard did not provide any specific feedback.

In an effort to maintain an open line of communication with Starboard, on December 2, 2019, Mr. Dearth contacted representatives of Starboard to inform them of the Company’s upcoming leadership changes that would be announced the next day, and to indicate that, as with any other shareholder, the Company always remained open to discussions regarding governance and other matters and would be willing to engage in those discussions with Starboard. Mr. Dearth also shared his views on the Company’s performance.

On December 3, 2019, the Company announced that, in accordance with the Company’s leadership transition plan, Mr. Poling would retire as Executive Chairman and as a member of the Board effective December 31, 2019, and that Ms. Mora was appointed to the role of Independent Chairman of the Board, also effective December 31, 2019. Mr. Poling received no special compensation or severance upon his retirement as Executive Chairman and as a member of the Board.

On January 6, 2020, a representative of Starboard contacted Mr. Dearth and asked whether Mr. Dearth would be willing to meet the following week. Thereafter on January 6, 2020, Mr. Dearth responded that he would be able to meet the following week.

On January 7, 2020, a representative of Starboard contacted Ms. Mora to schedule a time to speak. On January 8, 2020, Ms. Mora spoke to a representative of Starboard, who expressed impatience at the fact that the Board had not yet responded regarding Starboard’s stated interest in being involved in a process to fully reconstitute GCP’s Board. During the call, Ms. Mora agreed that she and Mr. Dearth would have a more in depth discussion with representatives of Starboard the following week.

On January 13, 2020, Starboard issued a press release, publicly announcing its nomination of a full slate of nine director candidates for election at the Company’s 2020 Annual Meeting to replace GCP’s entire Board, with two of the nominees (Ms. Ogilvie and Mr. Kiefaber) being current GCP directors who joined the Board in 2019 in connection with the 2019 Settlement Agreement, as well as two Starboard-affiliated nominees. Also on January 13, 2020, Starboard submitted a notice to the Company stating its intention to nominate the nine individuals for election as directors at the Company’s 2020 Annual Meeting. Starboard did not discuss its candidates with GCP or its Board prior to publicly disclosing its slate of nominees.

Later on January 13, 2020, in light of Ms. Ogilvie and Mr. Kiefaber agreeing to be included on Starboard’s slate of director nominees and director concerns regarding confidentiality and other conflict matters, the Board formed an ad hoc committee composed of all directors other than Ms. Ogilvie and Mr. Kiefaber to deliberate and take any necessary or appropriate actions regarding governance and annual meeting matters. Thereafter, the ad hoc committee met on many occasions to discuss these matters.

Also on January 13, 2020, the Company issued a statement in response to Starboard’s nominations, stating that its Board and management team are committed to executing the Company’s strategic plan and continuing to drive enhanced performance and operating efficiency to unlock value for all stockholders. The Company reiterated its commitment to an independent, diverse and experienced Board and confidence that its current Board composition includes the right mix of knowledge, skills and expertise to support the execution of GCP’s strategy. The Company further noted it would evaluate Starboard’s nominees pursuant to its regular process and make a recommendation with respect to the election of directors in due course.

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Later on January 13, 2020, Starboard filed Amendment No. 2 to its Schedule 13D with the SEC, disclosing a 7.9% ownership position in GCP and the nomination of its nominees.

On January 14, 2020, Ms. Mora and Mr. Dearth had a meeting with a representative of Starboard. The Starboard representative reiterated the criticisms of the Company that Starboard had previously expressed. The Starboard representative also indicated that should the Board make changes to its composition independently, such as by increasing or decreasing its size, without Starboard’s involvement, Starboard would not react favorably. As in previous interactions, Ms. Mora and Mr. Dearth asked the Starboard representative whether Starboard had any suggestions on strategic or operational matters beyond the actions that the Company had already publicly disclosed. The Starboard representative did not provide any of, and refused to engage regarding, Starboard’s thoughts and suggestions with respect to strategic or operational matters, other than to note that Starboard would not be supportive of the Company pursuing acquisition opportunities, notwithstanding attempts by the GCP representatives to understand Starboard’s perspectives and engage constructively on these topics.

In connection with the Nominating and Governance Committee’s and Board’s evaluation of Starboard’s nominees, on February 5, 2020, an independent third party search firm engaged by the Company attempted to contact certain of Starboard’s nominees to schedule interviews with them. Later on February 5, 2020, a representative of Starboard contacted Ms. Mora and Mr. Dearth and stated that it would not be appropriate for the Company to interview Starboard’s nominees until the Company and Starboard agreed to a settlement framework.

On February 18, 2020, Ms. Mora provided a representative of Starboard with an update regarding the Company’s timing for considering Starboard’s proposed nominees and having further discussions with representatives of Starboard regarding Board composition. Ms. Mora also again asked if Starboard would be amenable to allowing the Nominating and Governance Committee to conduct interviews of Starboard’s nominees. However, Starboard again stated that it would not allow any interviews of its nominees until and unless a framework for an agreement was reached.

On February 24, 2020, Starboard delivered a letter to the Company, demanding the inspection of certain stockholder list materials and related information pursuant to Section 220 of the Delaware General Corporation Law.

On February 28, 2020, Ms. Mora and Mr. Dearth had a call with representatives of Starboard to discuss whether there might be a mutually agreeable resolution that was in the best interests of all shareholders. During the call, Ms. Mora and Mr. Dearth proposed to representatives of Starboard that the Company include three Starboard nominees as part of a mutually agreeable resolution (which would be one more nominee than the two nominees that Starboard agreed to pursuant to the 2019 Settlement Agreement). Representatives of Starboard rejected this proposal and did not provide any counterproposal. Ms. Mora and Mr. Dearth also reiterated that not being permitted to interview Starboard’s nominees put the Board in a difficult position, but the Starboard representatives did not change their position on this point, asserting that that was not how their “process” works. Also during this meeting, Ms. Mora and Mr. Dearth asked what Starboard believed the Company should be doing differently to improve performance and drive value, but the Starboard representatives did not provide any ideas and refused to engage on this topic.

Also on February 28, 2020, Messrs. Merrill and DeCristofaro had a call with representatives of Starboard to discuss the Company’s fourth quarter 2019 earnings.

Later on February 28, 2020, Starboard filed a preliminary proxy statement with the SEC.

On March 2, 2020, Starboard issued an open letter to stockholders of GCP regarding its preliminary proxy statement and nomination of a full slate of directors for election at the Company’s 2020 Annual Meeting.

On March 4, 2020, the Company sent a letter from Mr. Dearth and Ms. Mora to certain of GCP’s shareholders and posted it on its website. Among other things, these materials reviewed the decisive actions the Company has taken to reposition its portfolio, strengthen core businesses through targeted investments, streamline operations and develop innovative products and solutions. The materials also noted the Company’s belief that Starboard’s public statements have mischaracterized the Board’s unwillingness to concede to Starboard’s demands to take control of the Board as being uncooperative, and that while the Board has had a continuing dialogue with Starboard and asked to interview Starboard’s nominees, Starboard has prevented these nominees from even being interviewed without a pre-arranged settlement agreement. The materials further expressed the Board’s belief that nominating any candidates without first interviewing them, much less a possible majority of the Board, would be irresponsible and reflect poor corporate governance, but that it had and would continue to seek a resolution with Starboard in the interests of all shareholders, and that it remained open to constructive ideas on how to create shareholder value.

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On March 6, 2020, Starboard filed Amendment No. 3 to its Schedule 13D with the SEC, disclosing a 9.0% ownership position in GCP.

On March 10, 2020, the Company and Starboard entered into a confidentiality agreement in connection with Starboard’s request to inspect certain stockholder list materials and related information pursuant to Section 220 of the Delaware General Corporation Law, and thereafter the Company’s representatives began providing these records to Starboard.

On March 13, 2020, Starboard filed Amendment No. 1 to its preliminary proxy statement with the SEC.

Also on March 13, 2020, the Board unanimously approved and adopted the Amendment to the Rights Plan, with all directors voting to approve the Amendment. The Amendment extended the expiration date of the Rights Plan to March 14, 2023, subject to stockholder approval of the Amendment at the 2020 Annual Meeting. In addition, the Amendment raised the level of beneficial ownership for a person or group to become an “Acquiring Person” (as defined in the Amendment) to 20% of GCP’s outstanding shares of common stock. The Board adopted the Amendment after determining that existing circumstances, including 40 North’s ownership of almost 25% of the Company’s outstanding shares and the possibility that 40 North would purchase additional shares to obtain effective control over GCP, continued to warrant the Company maintaining the protections afforded by the Rights Plan in order to enable all GCP stockholders to realize the full potential value of their investment in GCP and to protect GCP and its stockholders from efforts to obtain control of GCP that are inconsistent with the best interests of GCP and its stockholders.

On March 18, 2020, at the direction of the Board, representatives of the Company’s financial advisor contacted representatives of Starboard to seek a consensual resolution that the Board believed would be in the best interests of all GCP stockholders, particularly at a time when the Board believed that the Board and management should be devoting all of their focus on the Company’s business, the health and safety of its employees and on serving its customers in the face of a global crisis with the COVID-19 pandemic. Specifically, representatives of the Company’s financial advisor communicated the Company’s proposal to include on the Company’s slate of ten director nominees three independent directors identified in Starboard’s slate of nominees (subject to customary vetting and approval by the Company) and also offered Starboard input with respect to a fourth independent director from among new independent directors identified by the Company as potential candidates as part of its regular refreshment process.

On March 19, 2020, representatives of Starboard informed representatives of the Company that Starboard was rejecting the Company’s latest proposal, and stated that they would only agree to cease their proxy fight if the Company would agree to nominate six of the nine Starboard-proposed nominees, including Mr. Feld, Ms. Ogilvie and Mr. Kiefaber, and that the size of the Board would need to be limited to nine directors. Starboard’s proposal would therefore allow Starboard to select a majority of the Board.

On March 31, 2020, Ms. Mora contacted a representative of Starboard to see whether a consensual resolution might be reached. Ms. Mora asked whether Starboard would be willing to reconsider the Company’s latest proposal at this extraordinary time as the COVID-19 pandemic exponentially grows and disrupts the country and GCP’s business. Ms. Mora further expressed her belief that the Company’s latest proposal was reasonable and constructive, and that a proxy contest was not in anyone’s best interest, particularly given the massively destabilized environment and GCP’s desire to focus solely and intensively on its business, employees and customers – for the ultimate benefit of GCP’s investors. Starboard did not respond to Ms. Mora’s outreach.

On April 1, 2020, at the direction of the Board, a representative of the Company’s financial advisor spoke to a representative of Starboard. During this call, the representative of the Company’s financial advisor reiterated to the Starboard representative that the Company continued to desire a consensual resolution based on the Company’s latest proposal.

On April 2, 2020, Starboard filed its definitive proxy statement with the SEC, reflecting its nomination of eight persons for election as directors to the GCP Board at the 2020 Annual Meeting in opposition to the nominees proposed by GCP’s Board.

On April 3, 2020, the Company issued a letter to its stockholders and thereafter filed a preliminary proxy statement with the SEC.

On April 9, 2020, the Company filed an amended preliminary proxy statement with the SEC.

Also on April 9, 2020, Starboard filed Amendment No. 1 to its definitive proxy statement with the SEC.

On April 15, 2020, the Company filed this definitive proxy statement with the SEC.

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PROPOSAL ONE

ELECTION OF DIRECTORS

The GCP Board of Directors – Director Qualifications and Nomination

Pursuant to the Amended and Restated By-Laws of GCP (the “By-Laws”) and the Amended and Restated Certificate of Incorporation of GCP (the “Certificate of Incorporation”), the number of directors of the Company is determined by resolution of our Board. The size of our Board of Directors is currently set at ten members, and we have nominated ten director nominees for election at the 2020 Annual Meeting for a one-year term.

Our Board and Nominating and Governance Committee have unanimously nominated the following ten individuals for a one-year term expiring at the 2021 annual meeting of stockholders and until their respective successors shall have been duly elected and qualified or until their earlier resignation or removal: Gerald G. Colella, Randall S. Dearth, Janice K. Henry, Clay H. Kiefaber, James F. Kirsch, Armand F. Lauzon, Phillip J. Mason, John R. McPherson, Elizabeth Mora, and Danny R. Shepherd.

Clay H. Kiefaber was appointed to our Board effective March 11, 2019 pursuant to an agreement dated the same date (the “Agreement”) with Starboard and certain of its affiliates. The Agreement is described in, and attached as an exhibit to, the Company’s Form 8-K filed with the SEC on March 11, 2019. Mr. Kiefaber’s nomination for re-election at the 2020 Annual Meeting was not required under the Agreement.

If a Board-recommended nominee becomes unable to serve or for good cause will not serve as a director, the proxies will vote for a Board-designated substitute or our Board may reduce the number of directors. Each Board-recommended nominee has consented to being named as such in this proxy statement, and GCP has no reason to believe that any of our nominees for election will be unable to serve. The proxy holders intend to vote each proxy received from stockholders of record for the election of each of our nominees, unless otherwise instructed.

Our Board determined that each of our nominees qualifies for election as a member of our Board. In making this determination, our Board believes that its membership should be composed of directors who have the highest integrity, a diversity of experience, the education and ability to understand business problems and evaluate and propose solutions, the personality to work well with others, a dedication to the interests of our stockholders, a commitment to our social responsibilities, and the time to meet their responsibilities as directors. Our Board further believes that a substantial majority of its membership should be independent. Our Board has determined that Mr. Colella, Ms. Henry, Mr. Kiefaber, Mr. Kirsch, Mr. Lauzon, Mr. Mason, Mr. McPherson, Ms. Mora, and Mr. Shepherd qualify as independent under applicable rules and regulations and GCP’s independence standards. See information contained in the “Corporate Governance-Number and Independence of Directors” section of this proxy statement.

All of our director nominees bring to our Board a wealth of leadership capabilities derived from their service in executive and managerial roles and also extensive board experience. Further, Board diversity across a number of dimensions was critically important in constructing our Board and our current slate of Board nominees. The strong mix of knowledge, skills and industry expertise among our director nominees provides the required breadth and depth for effective Board oversight. Our Board believes that our nominees as a group have the backgrounds and skills important to our business and that this allows the Board as a collective body to lead GCP in a manner that serves our stockholders’ interests. The following list highlights the skills and experience that we consider important for our directors in light of our current business and structure. The nominees’ biographies note each nominee’s relevant experience, qualifications and skills, including those relative to this list.

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A biography for each of the ten Board-recommended nominees standing for election is set forth below.

In a contested election, where the number of nominees for director exceeds the number of directors to be elected, directors will be elected by a plurality of the votes cast, meaning that the nominees that receive the most “FOR” votes will be elected. Starboard has filed a definitive proxy statement reflecting that it has nominated eight persons for election as

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directors to the GCP Board of Directors at the Annual Meeting in opposition to the nominees proposed by GCP’s Board of Directors. The Company’s Board of Directors has nominated ten persons for election at the Annual Meeting. The number of directors to be elected to the GCP Board of Directors at the Annual Meeting is ten. In light of the nomination notice provided by and definitive proxy statement filing made by Starboard, we expect the Annual Meeting to have a contested director election and, therefore, the plurality voting standard will apply. Accordingly, the ten nominees receiving the highest number of “FOR” votes will be elected. Withhold votes will be counted as present for purposes of this vote but will have no effect on the outcome of the election of directors. Broker non-votes will be counted in determining the quorum, but are not entitled to vote on the election of directors and therefore will have no effect on the outcome of the election of directors.

The Board does not endorse any Starboard nominee (other than Mr. Kiefaber) and unanimously recommends that you vote “FOR” the election of each of the nominees proposed by the Board. The Board strongly urges you not to sign or return any white proxy card sent to you by Starboard. If you have previously submitted a white proxy card sent to you by Starboard, you can vote for the Board’s nominees and on the other matters to be voted on at the Annual Meeting by using the enclosed BLUE proxy card or voting instruction card (including via the telephone or Internet methods of voting specified thereon) which will automatically revoke your prior proxy. Any later-dated white proxy card that you send to Starboard will also revoke your proxy, including BLUE proxies that you have voted “FOR” our Board of Directors’ nominees, and we strongly urge you NOT to sign or return any white proxy cards sent to you by Starboard.

Please note that voting to “withhold” with respect to any Starboard nominee on its white proxy card is not the same as voting for our Board’s nominees because a vote to “withhold” with respect to any of Starboard’s nominees on its white proxy card will revoke any BLUE proxy you may have previously submitted. To support the Board of Directors’ nominees, you should vote “FOR” the Board’s nominees on the BLUE proxy card and disregard, and not return, any white proxy card sent to you by Starboard.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR”

THE ELECTION OF EACH OF THE TEN BOARD-RECOMMENDED NOMINEES FOR DIRECTOR USING THE BLUE PROXY CARD OR VOTING INSTRUCTION CARD (INCLUDING THE TELEPHONE OR INTERNET METHODS OF VOTING SPECIFIED THEREON). BLUE PROXY CARDS RECEIVED WILL BE VOTED “FOR” EACH OF OUR TEN DIRECTOR NOMINEES UNLESS STOCKHOLDERS SPECIFY OTHERWISE IN THE PROXY.

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BOARD-RECOMMENDED NOMINEES FOR ELECTION AS DIRECTORS

Gerald G. Colella Age 63 Director since 2017

Mr. Colella has served as a director and as Chief Executive Officer and President of MKS Instruments, Inc., a provider of technology solutions for the environmental monitoring, defense and security, life sciences and research, process and industrial manufacturing and thin film industries, since January 2014. From February 2013 until December 2013, Mr. Colella served as President and Chief Operating Officer of MKS Instruments. He served as Vice President and Chief Operating Officer from January 2010 until February 2013 and served as Vice President and Chief Business Officer of MKS Instruments from April 2005 until January 2010. In addition, Mr. Colella also served as Acting Group Vice President, PRG Products from July 2007 to March 2010.

Primary Skills, Core Competencies and Attributes   Mr. Colella brings to our Board over 30 years of commercial and operating experience and leadership. As the CEO of a public company, Mr. Colella is familiar with the numerous and varied issues facing public companies, particularly with respect to operational, financial and corporate governance matters. His leadership experience and financial acumen position him well to serve as a member of our Board.

Public Company Board Experience

Public Company Senior Leadership Experience

Financial / Accounting

Risk Assessment / Management

Operational Leadership of a Global Business

Strategic Planning / Business Development

Mergers & Acquisitions

Innovation and Technology

Randall S. Dearth Age 56 Director since 2019

Mr. Dearth has served as GCP’s President and Chief Executive Officer since August 1, 2019. Prior to that, he served as GCP’s President and Chief Operating Officer since September 2018. Prior to joining GCP, Mr. Dearth served as President, Chief Executive Officer and Chairman of the Board of Calgon Carbon Corporation, a NYSE-listed company that manufactures and markets products that remove contaminants from liquids and gases, from May 2014 to July 2018, and as President and Chief Executive Officer of Calgon Carbon from August 2012 to May 2014. From 2004 through July 2012, Mr. Dearth served as President and Chief Executive Officer of LANXESS Corporation (North America), a specialty chemicals company. Prior thereto, Mr. Dearth was President and Chief Executive Officer of Bayer Chemicals Corporation (North America) and held a number of global marketing roles with Bayer, both in the United States and Germany. Mr. Dearth has served on the Board of Directors of Stepan Company, a global chemical solutions company, since April 2012.

Primary Skills, Core Competencies and Attributes   Mr. Dearth brings to our Board his extensive industry background and broad global leadership experience, ranging from sales and marketing management to president and chief executive officer-level roles, including leading a public company and successfully holding a number of senior operating positions in the chemical industry.

Public Company Board Experience

Public Company Senior Leadership Experience

Industry Experience

Risk Assessment / Management

Operational Leadership of a Global Business

Strategic Planning / Business Development

Mergers & Acquisitions

Innovation and Technology

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Primary Skills, Core Competencies and Attributes   Ms. Henry brings to our Board her substantial experience in financial and accounting leadership, including with respect to acquisitions and capital structuring, gained as an officer of a chemicals and materials manufacturer. She also has significant governance and oversight experience from her service on public and private corporate boards.

Public Company Board Experience

Industry Experience

Public Company Senior Leadership Experience

Financial / Accounting

Risk Assessment / Management

Mergers & Acquisitions

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Primary Skills, Core Competencies and Attributes   Mr. Kiefaber brings to our Board significant substantive experience from serving in a variety of senior executive positions as well as industry specific knowledge, making him a valuable asset to our Board.

Public Company Board Experience

Public Company Senior Leadership Experience

Mergers & Acquisitions

Financial / Accounting

Risk Assessment / Management

Strategic Planning / Business Development

Operational Leadership of a Global Business

Industry Experience

Innovation and Technology

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

Public Company Board Experience

Industry Experience

Public Company Senior Leadership Experience

Financial / Accounting

Operational Leadership of a Global Business

Innovation and Technology

Risk Assessment / Management

Mergers & Acquisitions

Strategic Planning / Business Development

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Primary Skills, Core Competencies and Attributes   Mr. Lauzon brings extensive senior management experience in domestic and international companies related to manufacturing and construction. As a former Chief Executive Officer and board member of multiple companies, he has significant experience in governance, strategy, and operations.

Industry Experience

Financial / Accounting

Strategic Planning / Business Development

Risk Assessment/ Management

Operational Leadership of a Global Business

Innovation and Technology

Mergers & Acquisitions

Primary Skills, Core Competencies and Attributes   Mr. Mason brings over 35 years of international business experience to our Board, including starting, developing and growing businesses abroad in both mature and emerging markets. Additionally, he brings a strong finance and strategic planning background, including merger and acquisition experience, along with significant experience working with and advising boards on diverse issues confronting companies with international operations.

Public Company Board Experience

Public Company Senior Leadership Experience

Innovation and Technology

Operational Leadership of a Global Business

Strategic Planning / Business Development

Risk Assessment / Management

Mergers & Acquisitions

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Primary Skills, Core Competencies and Attributes   Mr. McPherson brings extensive experience in strategy and operations from a variety of management roles in the specialty materials sector and public board service in infrastructure-related manufacturing.

Public Company Board Experience

Public Company Senior Leadership Experience

Financial / Accounting

Risk Assessment / Management

Operational Leadership of a Global Business

Strategic Planning / Business Development

Industry Experience

Mergers & Acquisitions

Primary Skills, Core Competencies and Attributes   Ms. Mora brings to our Board a breadth of financial, audit, accounting, risk management, and financial controls experience.

Public Company Board Experience

Financial / Accounting

Innovation and Technology

Strategic Planning / Business Development

Risk Assessment / Management

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Primary Skills, Core Competencies and Attributes   Mr. Shepherd brings to our Board over 40 years of executive, operations, and commercial leadership experience with public companies, spanning P&L management, corporate strategy, business development, mergers and acquisitions, investor relations, capital planning, organization structure, and succession planning.

Public Company Board Experience

Industry Experience

Public Company Senior Leadership Experience

Financial / Accounting

Strategic Planning / Business Development

Operational Leadership of a Global Business

Risk Assessment / Management

Mergers & Acquisitions

CORPORATE GOVERNANCE

Corporate Governance Principles

GCP is committed to sound corporate governance, which we believe will help us sustain our success and continue to build long-term stockholder value. To that end, the Company has in place Corporate Governance Principles which are designed to assist the Company and the Board in implementing effective corporate governance practices. Our Board believes that good governance requires not only an effective set of specific practices, but also a culture of responsibility throughout an organization, and governance at GCP is intended to achieve both. The Board also believes that good governance ultimately depends on the quality of an organization’s leadership, and it is committed to recruiting and retaining directors and officers of proven leadership ability and personal integrity. You can find the GCP Corporate Governance Principles on our website at www.gcpat.com.

Independence of Directors

Under the New York Stock Exchange (“NYSE”) Corporate Governance Standards, a majority of the Board must qualify as independent directors. However, our Corporate Governance Principles require that a substantial majority of the Board qualify as independent directors. The NYSE Corporate Governance Standards define specific relationships that disqualify directors from being independent and further require that, for a director to qualify as independent, the Board must affirmatively determine that the director has no material relationship with our Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with our Company). In making determinations regarding independence, the Board applied the NYSE standards, reviewed GCP’s relationships with organizations with which our directors are affiliated and broadly considered all relevant facts and circumstances known to it.

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The Board determined that each of our director nominees, other than Randall S. Dearth, our Chief Executive Officer, satisfies the independence criteria set forth in the NYSE Corporate Governance Standards and is independent. These independent director nominees unanimously recommended by the Board are: Gerald G. Colella, Janice K. Henry, Clay H. Kiefaber, James F. Kirsch, Armand F. Lauzon, Phillip J. Mason, John R. McPherson, Elizabeth Mora, and Danny R. Shepherd. The Board previously determined that Marran H. Ogilvie, who has not been re-nominated by the Board, is an independent director under the NYSE standards and our Corporate Governance Principles. The Board considered several factors in determining not to renominate Ms. Ogilvie. As part of the Board’s ongoing refreshment process, the Board, with the assistance of a leading executive search firm, identified two new outstanding independent director nominees, while at the same time the Board desired to maintain a board size of no more than 10 directors. As a result, the Board needed to select an existing director who would not be renominated, and determined not to renominate Ms. Ogilvie. The Board considered several factors, including the Board’s concern about her ability to focus on GCP due to her service on a significant number of other public company boards and the possibility that she may join additional boards in the future, including as a result of being nominated by Starboard in another ongoing proxy fight, and that her service on other public company boards currently and in the future (including as a result of being a current Starboard nominee for another public company board) would violate overboarding policies of certain of GCP’s institutional shareholders.

Each independent director is expected to notify the chair of the Nominating and Governance Committee, as soon as reasonably practicable, of changes in his or her personal circumstances that may affect the Board’s evaluation of his or her independence.

Board Leadership – Independent Chairman of the Board of Directors

Under our Corporate Governance Principles, our Board makes a determination as to whether the Chief Executive Officer should also serve as Chairman of the Board. This determination is based upon the composition of our Board and the circumstances of GCP at the time. Our Board has considered the roles and responsibilities of each position and currently believes that GCP and its stockholders are best served by having Ms. Mora serve as independent Chairman of the Board. In August 2019, the Company announced a leadership transition plan, which included Ms. Mora’s appointment as Lead Independent Director and Gregory Poling’s transition to the role of Executive Chairman. This structure underscored the Board’s unwavering commitment to robust independent leadership while also enabling the Company to benefit, for a transitional period, from Mr. Poling’s 40 years of experience in transitioning GCP into its next stage of growth. Later in December 2019, we announced that, in accordance with our leadership transition plan, Ms. Mora would transition to the role of independent Chairman on December 31, 2019 in connection with Mr. Poling’s retirement as Executive Chairman on that date. This reflected the Board’s steadfast commitment to strong independent oversight. Our Board of Directors believes that Ms. Mora’s position as independent Chairman is appropriate due to her extensive business experience, her in-depth knowledge of GCP and its international operations and strategy, her financial, audit, accounting and financial controls experience and her full appreciation of the business environment and GCP’s risk management strategies. Our Board believes that Ms. Mora, as independent Chairman of the Board, provides strong, independent oversight of management and the Company’s financial, operational and strategic plan while providing a single voice to management, stockholders and customers, serving as a vital link between management and the independent directors and ensuring the most effective operation of the Board.

Term Limits for Directors

Pursuant to our Corporate Governance Principles, after a director has reached 15 years of service on the Board, that director must submit his or her resignation. The Board has the option to accept or reject such resignation.

Director Nomination Process; Shareholder Recommendations for Director Nominees

In considering candidates for election to our Board, we are guided by our belief that our Board should be composed of individuals with a commitment to increasing stockholder value, a diversity of experience, the highest integrity, the education and ability to understand business problems and evaluate and propose solutions, the personality to work well with others, a commitment to GCP’s social responsibilities and the availability of time to assist GCP. We wish to ensure that a diversity of experience is reflected on our Board, including a broad diversity of industry experience, product experience and functional background. Pursuant to our Corporate Governance Principles, we are also committed to having a substantial majority of our Board be independent, as defined by NYSE rules and applicable laws and regulations.

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Our Board periodically conducts a self-assessment process and reviews the skills and characteristics needed by our Board. As part of the review process, our Board considers the skill areas represented on our Board, those skill areas represented by directors expected to retire or leave our Board in the near future, and recommendations of directors regarding skills that could improve the ability of our Board to carry out its responsibilities.

When our Board or the Nominating and Governance Committee has identified the need to add a new Board member with specific qualifications or to fill a vacancy on our Board, the chair of the Nominating and Governance Committee will initiate a search, seeking input from other directors and management, review any candidates that the Committee has previously identified or that have been recommended by stockholders in that year and may retain a search firm. The Nominating and Governance Committee has the sole authority to retain and terminate any search firm to be used to identify director candidates and the sole authority to approve the search firm’s fees and other retention terms. As part of this process, the Nominating and Governance Committee engaged a leading executive search firm to assist in identifying and evaluating director candidates. This firm aided the Nominating and Governance Committee in establishing director nominee criteria, identifying and corresponding with potential director candidates, evaluating the candidates’ credentials, and facilitating conversations with management and other members of our Board. At the direction of the Nominating and Governance Committee, the search firm identified candidates who demonstrate relevant industry and professional experience and expertise, as well as diversity across multiple dimensions, including gender, age, ethnicity, national origin, or professional or personal experience.

The Nominating and Governance Committee will consider director nominations made by stockholders. To nominate a person to serve on the Board, a stockholder should write to: GCP Applied Technologies Inc., 62 Whittemore Avenue, Cambridge, Massachusetts 02140, Attention: Corporate Secretary. Director nominations must be delivered to the Corporate Secretary in accordance with the Company’s By-laws. This generally means the nomination must be delivered not fewer than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting, provided that, if (a) the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date of the preceding year’s annual meeting, or (b) no annual meeting was held during the preceding year, then the notice must be delivered not earlier than 120 days prior to the date of such annual meeting and not later than the close of business on the later of (i) the 90th day prior to the date of such annual meeting or (ii) the 10th day following the day on which public announcement of the date of such meeting is first made by the Company. The nomination must contain any applicable information and must otherwise be in proper form, as set forth in the Company’s By-laws. The Nominating and Governance Committee will consider and evaluate persons nominated by stockholders in the same manner as it considers and evaluates other potential directors.

Communications with Our Board of Directors

Stockholders, employees, customers, vendors or other interested parties may communicate with our Board of Directors by writing to our Corporate Secretary at the following address: Board of Directors, c/o GCP Applied Technologies Inc., 62 Whittemore Avenue, Cambridge, Massachusetts 02140, Attention: Corporate Secretary. The Corporate Secretary will review and forward all communications from stockholders to the Board, except for those communications from stockholders that are outside the scope of Board matters or duplicative of other communications by the applicable stockholder and previously forwarded to the Board.

Board Role in Risk Oversight

Our Board of Directors actively oversees the risk management of GCP and the implementation of our strategic plan and the risks inherent in the operation of our businesses. Our Board reviews the GCP enterprise risk management program at least annually and considers whether risk management processes are functioning properly and are appropriately adapted to GCP’s strategy, culture, risk appetite and value-generation objectives. Our Board provides guidance to management regarding risk management as appropriate. These activities are supplemented by an internal audit function that reports directly to the Audit Committee.

Standing Board committees are responsible for overseeing risk management practices relevant to their functions. The Audit Committee oversees the management of market and operational risks that could have a financial impact, such as those relating to internal controls and financial liquidity. The Audit Committee is also tasked with reviewing cybersecurity risks and incidents and any other risks and incidents relevant to our information technology system controls and security, and discussing if any such risks and incidents should be disclosed in our periodic filings with the SEC. The Nominating

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and Governance Committee oversees risks related to governance issues, such as the independence of directors and the breadth of skills on our Board. The Compensation Committee manages risks related to GCP’s executive compensation plans and the succession of the Chief Executive Officer and other executive officers. The Corporate Responsibility Committee manages certain risks related to government regulation and environmental, health and safety matters.

Risk Management in Our Compensation Practices

At the Compensation Committee’s direction, representatives of GCP’s human resources and legal departments conducted a risk assessment of GCP’s compensation policies and practices during 2019. This risk assessment consisted of a review of cash and equity compensation provided to GCP employees, with a focus on compensation payable to senior executives and incentive compensation plans, which provide variable compensation to other GCP employees based upon Company and individual performance. The Compensation Committee and its independent consultant reviewed the findings of this assessment and agreed with the conclusion that our compensation programs are designed with the appropriate balance of risk and reward in relation to GCP’s overall business strategy and do not create risk that is reasonably likely to have a material adverse effect on GCP. The following characteristics of our compensation programs support this finding:

Code of Ethics

The Company has adopted a Business Ethics Policy and a Conflicts of Interest Policy that are applicable to the members of our Board and to all of our employees, including, but not limited to, the principal executive officer, principal financial officer, principal accounting officer or controller, or any person performing similar functions. Together, these policies meet the requirements of a “code of ethics” as defined by SEC regulations as well as the requirements of a code of business conduct and ethics under NYSE listing standards. The Business Ethics Policy and Conflicts of Interest Policy are posted on our website, www.gcpat.com, under the heading “Investors.” Any amendments to or waivers of our Business Ethics Policy or Conflicts of Interest Policy that our Board of Directors approves will be disclosed on our website.

Succession Planning

The Board’s Compensation Committee and the full Board periodically review succession planning for our Chief Executive Officer and other senior leadership positions. Our Chief Executive Officer discusses with the Board and the Compensation Committee, at least once per year, his recommendations and evaluations of potential successors to his position, including in the event of an unexpected emergency, and reviews development plans, if any, recommended for such individuals. As part of its regular succession planning process, the Board oversaw multiple changes in our leadership during 2019. In July 2019, the Company announced that Gregory E. Poling would retire from his position as Chief Executive Officer of our Company as of August 1, 2019. Our Board leveraged its significant preparation in the area of succession planning in order to swiftly identify Mr. Dearth as the most appropriate, well-qualified individual to succeed Mr. Poling as Chief Executive Officer of our Company. Mr. Death’s appointment was the culmination of an extensive Board-led search conducted with the assistance of two leading executive search firms, which involved screening 237 candidates and interviewing 17, as well as consideration of the perspectives of the Company’s shareholders, before Mr. Dearth was selected. In addition, on October 2, 2019, our Company announced that Dean P. Freeman, the Company’s then-serving Chief Financial Officer, would be leaving the Company to pursue another opportunity and that Craig A. Merrill, the Company’s Vice President, Finance, Analytics and Strategy, had been appointed Interim Chief Financial Officer, effective following Mr. Freeman’s departure on October 15, 2019. Mr. Merrill has 30 years of experience in the global building products and specialty chemicals industries and has been with our Company (and its predecessor, W.R. Grace and Co.) since 1990. His experience and knowledge of our business, strategy and financial processes has helped to ensure a smooth transition for the Chief Financial Officer role.

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Stock Ownership Guidelines

In order to ensure that the long-term financial interests of our directors and senior executives are fully aligned with the long-term interests of our stockholders, our Board has implemented stock ownership guidelines. The guidelines are as follows:

Directors and executives subject to the stock ownership guidelines have five years from the later of the year of our separation from W.R. Grace & Co. or the year of their initial election or appointment to comply with the relevant guideline.

Stockholder Engagement

It is a priority of our Company and Board to maintain open communication with our stockholders. Our Company and Board are committed to regularly engaging with our stockholders regarding our Company’s strategic direction, performance, governance and other key matters. Both management and our Board believe that this is best accomplished through ongoing dialogue with stockholders, including soliciting feedback and suggestions from our stockholders to strengthen the long-term prospects of our Company. This is an ongoing activity, not a check-the-box exercise.

Thus, since our annual meeting in May 2019, members of our Board and management met, either telephonically or in person, with stockholders representing approximately 64% of our outstanding shares, and we continue to actively engage with our stockholders on an ongoing basis. When requested, we have sought to make available our Chairman and other independent members of our Board for meetings with stockholders. Our Board and management have found these meetings invaluable: they have enhanced our stockholders’ understanding of the Company’s strategy and the ongoing robust dialogue these meetings have stimulated has generated useful feedback from our Company’s stockholder base, allowing us to better understand stockholder perspectives. We continually assess our practices and make changes to reflect our conversations with stockholders. Our Board and management are committed to maintaining and enhancing this dialogue with our stockholders.

MEETINGS AND BOARD COMMITTEES

Board Meetings

Our Board held 26 meetings in 2019. Each incumbent director attended at least 75% of the aggregate number of meetings of the Board of Directors and the committees of the Board on which he or she served during the period that he or she served.

Executive Sessions

During 2019, the independent directors met in executive session at every regular Board meeting, including executive sessions to perform annual evaluations of both our current and former CEOs. The independent Chairman, or, between August and December 2019, the Lead Independent Director, of the Board presided at these executive sessions. Also during 2019, each of the Audit, Compensation, and Nominating and Governance Committees met in executive sessions without members of management present.

Director Attendance at Board, Board Committee and Annual Meetings

Our Board generally holds six regular meetings per year and meets on other occasions when circumstances require. Directors spend additional time preparing for Board and committee meetings and participating in conference calls to discuss quarterly earnings announcements or significant transactions or developments. Additionally, we may call upon directors for advice between meetings. Under our Corporate Governance Principles, we expect directors to regularly attend meetings of our Board and of all committees on which they serve and to review the materials sent to them in advance of those meetings. We expect nominees for election at each annual meeting of stockholders to attend the annual meeting. All directors then serving on our Board attended the Annual Meeting of Stockholders held on May 2, 2019, except for Marcia J. Avedon, who did not stand for re-election at the 2019 Annual Meeting of Stockholders.

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Committees of the Board of Directors

Our Board of Directors has the following four standing committees: Audit Committee, Compensation Committee, Nominating and Governance Committee, and Corporate Responsibility Committee. Only independent directors, as independence is determined in accordance with NYSE rules and other applicable laws or regulations, are permitted to serve on the standing committees. The Board annually selects, from among its members, the members and Chair of each standing committee.

The table below provides information with respect to committee membership as of April 1, 2020. The table also sets forth the number of meetings (including teleconference meetings) held by each committee in 2019:

Each standing committee has a written charter that describes its responsibilities. Each of the standing committees has the authority, as it deems appropriate, to independently engage outside legal, accounting or other advisors or consultants. In addition, each standing committee periodically conducts a review and evaluation of its performance and reviews and reassesses its charter. You can find the current charters of each standing committee on our website at www.gcpat.com.

Audit Committee

The Audit Committee has been established in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the rules of the NYSE and our Corporate Governance Principles. The Audit Committee assists our Board in overseeing:

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The Audit Committee has the authority and responsibility for the appointment, retention, compensation, oversight and, if circumstances dictate, discharge of GCP’s independent registered public accountant, including preapproval of all audit and non-audit services to be performed by the independent registered public accountant. The independent registered public accountant reports directly to the Audit Committee and, together with GCP’s internal audit function, has full access to the Audit Committee and routinely meets with the Audit Committee without management being present. The Audit Committee is also responsible for reviewing, approving and ratifying any related person transaction.

The current Audit Committee members are Gerald G. Colella, Janice K. Henry, Clay H. Kiefaber, James F. Kirsch, Phillip J. Mason, Elizabeth Mora and Danny R. Shepherd, each of whom meets the independence standards of the SEC and NYSE, is financially literate within the meaning of the NYSE listing standards and meets the experience and financial requirements of the NYSE listing standards. Our Board of Directors has determined that Mr. Colella, Ms. Henry, Mr. Kiefaber, Mr. Kirsch. Ms. Mora and Mr. Shepherd are “audit committee financial experts” as defined by SEC rules and regulations. Ms. Henry serves as Chair of the Audit Committee.

Nominating and Governance Committee

The Nominating and Governance Committee:

The current Nominating and Governance Committee members are Gerald G. Colella, Janice K. Henry, Clay H. Kiefaber, James F. Kirsch, Phillip J. Mason, Elizabeth Mora, Marran H. Ogilvie and Danny R. Shepherd, each of whom meets the independence standards of the NYSE. Ms. Mora serves as Chair of the Nominating and Governance Committee; prior to Ms. Mora’s appointment as Chair of the Nominating and Governance Committee on August 1, 2019, Mr. Cambre served as Chair of the Nominating and Governance Committee.

The Nominating and Governance Committee engaged a leading executive search firm to assist in identifying and evaluating director candidates in 2019. This firm aided the Nominating and Governance Committee in establishing director nominee criteria, identifying and corresponding with potential director candidates, evaluating the candidates’ credentials, and facilitating conversations with management and other members of our Board. At the direction of the Nominating and Governance Committee, the search firm identified candidates who demonstrate relevant industry and professional experience and expertise, as well as diversity across multiple dimensions, including gender, age, ethnicity, national original, or professional or personal experience. Armand F. Lauzon and John R. McPherson were recommended by the search firm and, following interviews by the Nominating and Governance Committee, other members of the Board and senior management, our Board and Nominating and Governance Committee unanimously recommended and determined to include Armand F. Lauzon and John R. McPherson as independent Board-recommended director nominees at the Annual Meeting.

Compensation Committee

The Compensation Committee:

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The Compensation Committee is authorized to delegate to any one or more directors (which person(s) need not be members of the Compensation Committee) and/or executive officers the authority to review and grant, as the act of the Compensation Committee and of the Board, stock options and other equity incentive grants to eligible employees other than the Chief Executive Officer, the other executive officers, and the Chief Executive Officer’s other direct reports. The Compensation Committee may also form and delegate authority to subcommittees when appropriate, which may consist of one or more members of the Compensation Committee.

The Compensation Committee engaged Willis Towers Watson as its independent provider of compensation consulting services for decisions relating to 2019 compensation. Please see “Executive Compensation – Compensation Discussion and Analysis” in this proxy statement for further discussion about the role of Willis Towers Watson. The Compensation Committee may also utilize external legal advisors as necessary and assess the independence of all of its advisors.

Representatives of Willis Towers Watson regularly attend meetings of the Compensation Committee. For portions of those meetings, the Chief Executive Officer and the Vice President and Chief Human Resources Officer also attend and are given the opportunity to express their views on executive compensation to the Compensation Committee.

The current Compensation Committee members are Gerald G. Colella, Janice K. Henry, Clay H. Kiefaber, James F. Kirsch, Phillip J. Mason, Elizabeth Mora, Marran H. Ogilvie and Danny R. Shepherd, each of whom is: independent under the independence standards of the SEC and NYSE, a “non-employee director” of GCP as defined under Rule 16b-3 of the Exchange Act, and an “outside director” for the purposes of the corporate compensation provisions contained in Section 162(m) of the Internal Revenue Code of 1986, as amended. Mr. Colella serves as Chair of the Compensation Committee; prior to Mr. Colella’s appointment as Chair of the Compensation Committee on June 27, 2019, Mr. Cambre served as interim Chair of the Compensation Committee from May 2, 2019 to June 27, 2019. Mr. Cambre’s appointment followed Dr. Avedon’s resignation as a director and as Chair of the Compensation Committee on May 2, 2019.

Corporate Responsibility Committee

The Corporate Responsibility Committee assists our Board and management in addressing GCP’s responsibilities as a global corporate citizen. In particular, the Corporate Responsibility Committee counsels management with respect to:

The current Corporate Responsibility Committee members are Gerald G. Colella, Janice K. Henry, Clay H. Kiefaber, James F. Kirsch, Phillip J. Mason, Elizabeth Mora, Marran H. Ogilvie and Danny R. Shepherd, each of whom meets the independence standards of the NYSE. Ms. Mora serves as Chair of the Corporate Responsibility Committee.

Director Compensation

Non-Employee Director Compensation Program

Our director compensation program is intended to enhance our ability to attract, retain and motivate non-employee directors of exceptional ability and to promote the common interest of directors and stockholders in enhancing the value of GCP. The Compensation Committee reviews director compensation periodically. The Compensation Committee has the sole authority to engage a consulting firm to evaluate director compensation.

Under our non-employee director compensation program, each non-employee director receives an annual retainer of $195,000 – consisting of a cash retainer of $21,250, paid quarterly, and an annual award of $110,000 of GCP common stock. The annual retainer for non-employee directors was increased from $180,000 to $195,000, effective January 1, 2019. Additional cash retainers, also paid quarterly, are as follows: the independent Chairman of the Board, who also served as Nominating and Governance Committee Chair, received $80,000; the Audit Committee Chair receives $15,000; the Compensation Committee Chair receives $10,000; the Nominating and Governance Committee Chair receives

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$10,000 and the Lead Independent Director receives $25,000. After Mr. Cambre, the then-serving independent Chairman of the Board who also served as Nominating and Governance Committee Chair, retired on August 1, 2019, Mr. Poling became the Executive Chairman of the Board but received no retainers under the non-employee director compensation program. At that time, the newly appointed Nominating and Governance Committee Chair received $10,000 as an additional cash retainer, and the newly appointed Lead Independent Director received $25,000 as an additional cash retainer, each of which is also paid quarterly. We reimburse directors for expenses they incur in attending Board and committee meetings and other activities incidental to their service as directors but directors are not paid any separate meeting fees. Directors, and all GCP employees, are entitled to participate in GCP’s Matching Grants Program; however, no directors participated in GCP’s Matching Grants Program during the year ended December 31, 2019. We also maintain business travel accident insurance coverage for directors. Mr. Dearth’s compensation is described in the Summary Compensation Table set forth in “Executive Compensation-Compensation Tables,” and he receives no additional compensation for serving as a member of our Board.

The following table provides compensation information for the year ended December 31, 2019 for each non-employee director. Mr. Kiefaber and Ms. Ogilvie joined our Board on March 11, 2019.

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OTHER INFORMATION

Stock Ownership of Certain Beneficial Owners and Management

The following table sets forth the amount of GCP common stock beneficially owned, directly or indirectly:

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Delinquent Section 16(a) Reports

Under Section 16(a) of the Exchange Act, as amended, our directors, certain of our officers, and beneficial owners of more than 10% of the outstanding shares of GCP common stock are required to file reports with the SEC concerning their ownership of and transactions in GCP common stock or other GCP securities; these persons are also required to furnish us with copies of these reports. Based upon the reports and related information furnished to us, we believe that all such filing requirements were complied with in a timely manner during 2019, except that Ms. Ogilvie and Mr. Kiefaber each filed amendments to his or her respective Form 3 filed on March 13, 2019 and Form 4 filed on May 2, 2019, to include omitted shares, Mr. Korotkin filed one late Form 4 with respect to restricted stock unit awards awarded to him on March 1, 2019 and Mr. Dearth filed one late Form 4 with respect to restricted stock unit awards and stock option awards awarded to him on August 1, 2019 and one late Form 4 with respect to shares of GCP common stock withheld on September 1, 2019. These reports have been subsequently filed.

Transactions with Related Persons

Our Board recognizes that transactions involving related persons in which GCP is a participant can present conflicts of interest, or the appearance thereof. Accordingly, our Board has adopted a written policy with respect to related person transactions. The policy, which is included as part of GCP’s Corporate Governance Principles, applies to transactions involving related persons that are required to be disclosed pursuant to SEC regulations, which are generally transactions in which:

Each such related person transaction shall be reviewed by and may be approved or ratified only if it is determined to be in, or not inconsistent with, the best interests of GCP and its stockholders by:

In determining whether to approve or ratify related person transactions, the Audit Committee or our Board, as the case may be, will take into account, among other factors it deems appropriate, whether the transaction is on terms no more favorable to the affiliated third-party than terms generally available to an unaffiliated third-party under the same or similar circumstances, as well as the extent of the related party’s interest in the transaction. The Audit Committee or our Board, as the case may be, also will consider relationships that, while not constituting related party transactions where a director had a direct or indirect material interest, nonetheless involve transactions between the Company and a company with which a director is affiliated, whether through employment status or by virtue of serving as a director. In the event a related person transaction is entered into without prior approval and, after review by the Audit Committee or our Board, as the case may be, the transaction is not ratified, we will make all reasonable efforts to cancel the transaction.

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PROPOSAL TWO

RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Audit Committee of our Board of Directors has selected PricewaterhouseCoopers LLP (“PwC”) to be GCP’s independent registered public accounting firm for 2020. Although the submission of this matter for stockholder ratification at the Annual Meeting is not required by law, regulation or our By-Laws, our Board is nevertheless doing so to determine our stockholders’ views. If the selection is not ratified, the Audit Committee will reconsider its selection of PwC for future years.

PwC acted as independent accountants for GCP and its consolidated subsidiaries during 2019 and has been retained by the Audit Committee for 2020. A representative of PwC will attend the Annual Meeting, will be available to answer questions and will have an opportunity to make a statement if he or she wishes to do so.

THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” RATIFICATION OF THE

APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS GCP’S INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM FOR FISCAL YEAR 2020.

Principal Accountant Fees and Services

The following table sets forth the aggregate fees for audit and other professional services rendered to GCP by PwC during the fiscal years ended December 31, 2019 and December 31, 2018:

Audit services consisted of the audit of our consolidated financial statements, the review of our consolidated quarterly financial statements, and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements.

Audit-related services consisted of assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not included under “Audit Fees” above.

Tax services consisted of tax advice and compliance for non-U.S. subsidiaries, including preparation of tax returns, and advice and assistance with transfer pricing compliance.

All other fees consisted of license fees for access to accounting, tax, and financial reporting literature and non-financial agreed-upon procedures.

Audit Committee Preapproval Policies and Procedures

The Audit Committee has adopted a preapproval policy that requires the Audit Committee to specifically preapprove the annual engagement of the independent accountants for the audit of our consolidated financial statements and internal controls. The policy also provides for general preapproval of certain audit-related, tax and other services provided by the independent accountants. Any other services must be specifically preapproved by the Audit Committee. However, the Chair of the Audit Committee has the authority to preapprove services requiring immediate engagement between scheduled meetings of the Audit Committee. The Chair must report any such preapproval decisions to the full Audit Committee at its next scheduled meeting.

Audit Committee Report

The following is the report of the Audit Committee of our Board of Directors with respect to GCP’s audited consolidated financial statements for the year ended December 31, 2019, which include the consolidated balance sheets of GCP as of December 31, 2019 and 2018, and the related consolidated statements of income, comprehensive income, cash flows, and changes in equity for each of the three years in the period ended December 31, 2019, and the notes thereto (collectively, the “Financial Statements”).

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The Audit Committee currently consists of the following members of our Board: Janice K. Henry (Chair), Gerald G. Colella, Clay H. Kiefaber, James F. Kirsch, Phillip J. Mason, Elizabeth Mora and Danny R. Shepherd. Each of the members of the Audit Committee is “independent,” as defined under the NYSE’s listing standards and the rules and regulations of the Exchange Act. The Audit Committee operates under a written charter adopted by our Board of Directors.

The Audit Committee is responsible for reviewing the financial information that GCP provides to stockholders and others, and for overseeing GCP’s internal controls and its auditing, accounting and financial reporting processes generally. The Audit Committee’s specific responsibilities include: (1) selecting an independent registered public accounting firm to audit GCP’s annual consolidated financial statements and its internal control over financial reporting; (2) serving as an independent and objective party to monitor GCP’s annual and quarterly financial reporting process and internal control system; (3) reviewing and appraising the audit efforts of GCP’s independent registered public accounting firm and internal audit department; and (4) providing an open avenue of communication among the independent registered public accounting firm, the internal audit department, management and our Board of Directors.

The Audit Committee has reviewed and discussed the audited financial statements of GCP for the year ended December 31, 2019 with GCP’s management.

The Audit Committee has discussed with PwC, GCP’s independent registered public accounting firm, the matters required to be discussed by applicable rules issued by the Public Company Accounting Oversight Board (the “PCAOB”) regarding communications with audit committees.

The Audit Committee has received from PwC the required disclosures pursuant to applicable PCAOB rules concerning independence and has discussed with PwC their independence from GCP and its management.

Based on the Audit Committee’s review and discussions noted above, the Audit Committee recommended to our Board of Directors that GCP’s audited financial statements be included in GCP’s Annual Report on Form 10-K for the year ended December 31, 2019, for filing with the SEC.

Audit Committee

Janice K. Henry (Chair)

Gerald G. Colella

Clay H. Kiefaber

James F. Kirsch

Phillip J. Mason

Elizabeth Mora

Danny R. Shepherd

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Introduction

For purposes of the following Compensation Discussion and Analysis (“CD&A”) and executive compensation disclosures, the individuals listed below are referred to collectively as our “named executive officers” or “NEOs.” Our NEOs include our current and former Chief Executive Officer, our current and former Vice President and Chief Financial Officer and our three other most highly compensated executive officers, based on fiscal 2019 compensation.

Executive Summary

The Compensation Committee of our Board of Directors (the “Committee”) has adopted an integrated executive compensation program that is intended to align our named executive officers’ interests with those of our shareholders and to promote the creation of shareholder value without encouraging excessive or unnecessary risk-taking. Additionally, the Committee has tied a majority of our named executive officers’ compensation to a number of key performance measures that contribute to or reflect shareholder value. Specifically, in addition to a base salary, our named executive officers’ compensation package includes an annual incentive compensation program that is based on the Company’s attainment of objective pre-established financial performance metrics and long-term equity awards consisting of stock options, restricted stock units, and performance-based units tied to adjusted earnings per share and relative total shareholder return. Our executive compensation programs have played a significant role in our ability to attract and retain an experienced, successful executive team.

Fiscal 2019 Business Highlights

We are a global provider of construction products technologies, including admixtures and additives for concrete and cement, the VERIFI^® in-transit concrete management system and high-performance waterproofing products and specialty systems. The Company is a leader in its two global operating segments, Specialty Construction Chemicals and Specialty Building Materials. Our Specialty Construction Chemicals business produces concrete admixtures, which enhance the properties of concrete and other cementitious construction materials, and cement additives, which improve the performance of Portland cement—the most widely used construction material in the world. The Specialty Construction Chemicals business also markets and sells our VERIFI^® in-transit concrete management system, which provides sophisticated process monitoring and control while concrete is in-transit to the jobsite. Our Specialty Building Materials business produces, markets and sells building envelope, residential and specialty construction products that protect structures from water, vapor transmission, air penetration, and fire damage.

2019 was a challenging year for GCP primarily due to volume declines in the project-driven products of our Specialty Building Materials segment. In particular, for SBM we experienced a decline in large construction projects in North America, our largest and most profitable region. However, we have made significant progress improving profitability for our Specialty Construction Chemicals segment, driving adoption of our VERIFI^® integrated in-transit admixture system, implementing our restructuring programs, and improving our Adjusted Free Cash Flow, as summarized below:

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Unfortunately, the improvement of the SCC business segment did not offset the decline in our SBM business segment for purposes calculating performance for our Annual Incentive Plan (“AIP”) and resulted in the GCP executives not receiving a payout pursuant to our AIP.

Policies and Practices to Support Effective Governance

The Company is committed to integrity, the highest standards of ethical conduct and to effective governance. The following aspects of the Company’s compensation program reinforce that commitment:

What We Do:

What We Do Not Do:

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Realized Incentive Pay

The chart below is a comparison of the target incentive pay for our executives and the realizable value of those incentives over the last four years and demonstrates that a large portion of our executives’ pay is linked to the Company’s performance. The long-term incentive values are based on our officer long-term incentive mix consisting, at target, of 50% performance-based units (“PBUs”), 25% stock options (“SOs”) and 25% restricted stock units (“RSUs”). As set forth in the chart below, the value of annual incentives actually received has been less than one third of the targeted value on average, while the value of the equity awards is roughly one-half of the original target due to a combination of share price declines and underlying financial performance. While we believe the Company has responded well to challenges associated to market volatility, our financial performance has fallen short of our expectations and stated financial goals and our realized incentive compensation appropriately reflects these results.

In the chart above, the value of the equity awards is calculated based on the 2019 FYE stock price. The valuation does not assume the effects of vesting timing or taxes. We made the 2019 stock price assumption because our officers are subject to shareholding guidelines, and all of our NEOs will have to hold shares from such awards. Note that 2018 and 2019 Performance-Based Units are calculated based at the threshold of the award payout and the 2019 FYE stock price.

Advisory “Say on Pay” Vote

At our 2019 Annual Meeting of Stockholders, approximately 99% of the shares voted on our annual “say on pay” proposal were cast in favor of the compensation of our named executive officers as disclosed in our 2019 proxy statement. The Committee considered the results of the 2018 shareholder advisory vote on executive compensation when determining the Company’s 2019 executive and named executive officer compensation, and will continue to consider the results of shareholder advisory votes on executive compensation when making future decisions relating to our executive compensation programs and compensation for named executive officers.

Executive Compensation Philosophy

The key objective of our executive compensation philosophy is to attract, retain and motivate executives, including named executive officers, to perform in the best interests of the Company and its shareholders. In furtherance of this key objective, the Company has adopted the following guiding principles:

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2019 Compensation Elements

When setting compensation for named executive officers, the Committee focuses on total direct compensation. Total direct compensation includes three major components, base salary, annual performance bonus and long-term equity awards, all of which are designed to work together to drive a complementary set of behaviors and outcomes.

Base salary. Base salary is intended to reflect the market value of the named executive officer’s role, with differentiation for individual capability.

Annual incentive compensation. Annual incentive compensation in the form of a market-competitive, performance-based cash bonus is designed to focus our executives on pre-set financial objectives each year and drive specific behaviors that foster short- and long-term growth and profitability.

Long-term equity incentive awards. Long-term incentive compensation consists of grants of stock options, restricted stock units and performance-based units. The Committee designs our long-term incentive compensation awards to align the interests of named executive officers with the interests of our shareholders in long-term growth, reward executives for shareholder value creation, recognize executives for their contributions to the Company and promote retention. All of our executive officers are required to hold shares received upon the vesting or exercise of Company equity awards until the earlier of the first anniversary of the vesting or exercise of such of Company equity awards or until the date that the applicable share ownership requirement is met.

In addition to receiving direct compensation, named executive officers also participate in various employee benefit programs, as described in the “Other Benefits” section of this CD&A.

The following charts illustrate, for fiscal 2019, the distribution of value among the three elements of direct compensation—base salary, target annual incentive awards and long-term equity incentives—for our Chief Executive Officer and, on average, for the other named executive officers. The long-term equity incentive component reflects the fiscal 2019 annual equity award and is based on the dollar value awarded by the Committee before conversion to the various forms of equity awards (see the “Long-Term Incentive Awards” section of this CD&A). Of target total direct compensation, 76% of our CEO’s and, on average, 68% of our other named executive officers’ compensation was considered “at risk,” either because it was subject to performance goals, continued employment, the fluctuations of our stock price, or a combination of the foregoing factors.

For purposes of this chart, “Long-Term Incentives” includes stock options, RSUs and PBUs. This chart reflects targets for our CEO and other named executive officers as of December 31, 2019.

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2019 Compensation Decisions

Base Salary

Base salary, which represents only 25% of our Chief Executive Officer’s target total direct compensation and, on average, 32% of target total direct compensation for the other named executive officers, is paid to provide a fixed component of compensation for each named executive officer. The Committee increased the base salary for Messrs. Dearth, Holland and Srinivasan during fiscal 2019. Messrs. Holland and Srinivasan both received a 3% increase in base salary as part of our annual merit increase considerations and market movements. Mr. Dearth received an increase in base salary upon his appointment as the Chief Executive Officer and the resulting increase in responsibility. Mr. Poling received a salary reduction as part of his change in role from Chief Executive Officer to Executive Chairman:

Annual Incentive Compensation

Annual incentive compensation supports the Committee’s pay-for-performance philosophy and aligns individual goals with Company goals. Under our AIP, which is an element of and was adopted pursuant to, our Equity and Incentive Plan, executives are eligible for cash awards based on the Company’s attainment of pre-established performance metrics. The Committee, with input from its independent compensation consultant, Willis Towers Watson (“Willis”), structured the 2019 AIP as follows:

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2019 AIP Targets. The fiscal 2019 AIP targets for our named executive officers, expressed as a percentage of their base salary, were established by the Committee as follows:

2019 Performance Metrics. The Committee established 2019 AIP performance metrics based on key components of our 2019 annual operating plan and after considering the general economic and market environment in which we expected to be operating during the year. After considering various plan design alternatives, the Committee approved the continued use of Adjusted EBIT, Revenue and Adjusted Free Cash Flow, with half of the award based on the Adjusted EBIT metric and the other half of the award based on an equal weighting between the Revenue and Adjusted Free Cash Flow metrics (i.e., 25% weighting each). The Committee selected these metrics because they were consistent with our strategic objectives of growing profitability and generating cash.

For purposes of the 2019 AIP, Adjusted EBIT, Revenue and Adjusted Free Cash Flow are defined as follows:

For purposes of determining the 2019 AIP payout, the Adjusted EBIT and Adjusted Free Cash Flow metrics are adjusted (as necessary) to exclude the impact of acquisitions and/or divestitures that closed after the first quarter of fiscal 2019 from current year performance and the Revenue metric is adjusted to exclude the impact of acquisitions and/or divestitures that closed during the year, regardless of the date.

2019 Performance Targets and AIP Incentive Pool Funding. In addition to setting the performance metrics at the beginning of the fiscal year, the Committee also established a minimum performance level as well as threshold, target and maximum performance requirements for each performance metric. For fiscal 2019, the Committee established a minimum performance level of 80% of target performance on the Adjusted EBIT metric in order for any payout to be made under the AIP. If this minimum performance level was not achieved, then the AIP incentive pool would not be funded and the Company would not pay any annual incentive awards to executive officers for the fiscal year. However, if the minimum performance level was achieved, then the AIP incentive pool would be funded at the maximum performance level (200%),

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subject to reduction by the Committee after review and consideration of the Company’s performance during the fiscal year, both with respect to the performance metrics and other factors. In addition to the minimum performance level, for fiscal 2019, the Committee established threshold and maximum performance requirements as follows:

The following table summarizes the performance metrics, weightings, targets, actual results and the preliminary performance multipliers and score for the 2019 AIP. See Appendix A for a definition of Non-GAAP measures and reconciliation to most comparable GAAP measures.

For fiscal 2019, the Company did not achieve the minimum performance level for the Adjusted EBIT metric required for any payout to be made under the 2019 AIP (i.e., a performance multiplier of at least 80%) and, therefore, the AIP incentive pool was not funded. As a result, the Committee approved no annual incentive bonus payments to executive officers for the year under the 2019 AIP. Note that Mr. Merrill received an annual incentive of $34,100 for his pro-rated time while not reporting to the CEO, based on a discretionary bonus pool provided by the Compensation Committee of the Board of Directors (as could be provided other employees that were not direct reports of Mr. Dearth).

Long-Term Incentive Awards

The Committee uses long-term incentive compensation in the form of equity awards to deliver competitive compensation that recognizes executives for their contributions to the Company and aligns the interests of named executive officers with shareholders by linking their long-term incentive compensation to the Company’s long-term growth and stock performance.

The Committee views long-term incentives as a significant element of total remuneration at the executive level and a crucial component of the Company’s “total rewards” compensation package. Accordingly, during fiscal 2019 the Committee reviewed the Company’s long-term incentive structure when designing the Company’s 2019 annual equity award, with input from Willis. Based on this evaluation, the Committee determined that the long-term incentive vehicles of stock options, restricted stock units and PBUs continued to serve the Company well. The Committee also determined that it would be appropriate to maintain adjusted earnings per share (“Adjusted EPS”), as modified by total shareholder return as a relative performance measure for the PBU awards, as described below. The total long-term incentive award value for each named executive officer for the Company’s 2019 annual equity award was allocated between the long-term incentive vehicles as follows:

The Committee considers this allocation appropriate, as performance-orientation is reflected in PBUs and stock options (which only have value to the extent the Company’s stock price increases from the stock price on the grant date), while grants of restricted stock units further support retention throughout a full business cycle.

2019 PBU Metrics. For the fiscal 2019 PBU grants, the Committee determined that Adjusted EPS, measured cumulatively over a three-year performance period, continued to be an appropriate metric for PBUs because it is an important driver of shareholder value and a key Company strategic goal. The Committee also determined that retaining a

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relative total shareholder return modifier to the 2019 PBU grants would maintain the integrity of the primary metric, which is a measure of the Company’s absolute performance on earnings per share, while also reflecting Company performance against peers on a relative basis.

For purposes of the fiscal 2019 PBU grants, Adjusted EPS is defined as earnings per share from continuing operations on a diluted basis adjusted for costs related to: (i) gains and losses on sales of businesses, product lines and certain other investments; (ii) currency and other financial losses in Venezuela; (iii) legacy product, environmental and other claims; (iv) restructuring and repositioning expenses and asset impairments; (v) defined benefit plan costs other than service and interest costs, expected returns on plan assets and amortization of prior service costs/credits; (vi) third-party and other acquisition-related costs; (vii) other financing costs associated with the modification or extinguishment of debt; (viii) amortization of acquired inventory fair value adjustments; (ix) tax indemnification adjustments; (x) certain other items that are not representative of underlying trends (such as legal settlements); and (xi) certain discrete tax items.

The fiscal 2019 PBU preliminary performance factor is determined as follows:

Once the preliminary performance factor is set based on the three-year cumulative Adjusted EPS performance, the final performance factor, and payout level, are set by adjusting the preliminary performance factor based on the percentile rank that the Company has achieved for total shareholder return as compared to the combined and independently arrayed companies in the Russell 3000 Specialty Chemicals index and the companies in the Russell 3000 Building Materials index, selected based on industry relevance, as follows:

FY2016 Performance-Based Awards (Performance-Based Units and Performance-Based Cash). The Company granted Performance-Based Awards in February 2016 and the underlying award for achieved performance was certified by the Compensation Committee of the Board of Directors in February 2019. The award was earned based upon the Company achievement of a certain level of cumulative adjusted EPS for fiscal years 2016, 2017 and 2018. The awards were granted to Named Executive Officers and certain other executives in shares as performance-based units. Other employees received these awards denominated in cash.

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The Company achieved a cumulative adjusted EPS of $2.87 vs. a target cumulative adjusted EPS performance of $3.17 over the performance period.

The Compensation Committee certified that the Company satisfied 90.5% of the Company’s performance goal and, as a result, 68.7% of the performance-based awards granted were earned. The table below sets forth the amounts received by the Named Executive Officers from the FY2016 Performance-Based Awards.

Note that Mr. Merrill was not an officer at the time of grant in 2016 and his award was denominated in cash rather than shares. His figures are shown in dollars not shares. Messrs. Dearth, Holland and Thompson were not employees at the time this award was granted.

FY2017 Performance-Based Awards. These awards were granted in February 2017 and award performance was certified by the Compensation Committee of the Board of Directors in February 2020. No award was earned based upon the Company achievement of $2.36 cumulative adjusted EPS for fiscal years 2017, 2018 and 2019. $2.81 was the target cumulative adjusted EPS for 100% payout and the threshold performance, for 50% payout, was set at $2.68.

2019 Awards. When setting long-term incentive compensation for named executive officers, the Committee employs the process described in the “How We Determine Compensation” section of this CD&A. After the Committee established a dollar value for each named executive officer’s 2019 annual equity award, that dollar value was then allocated between PBUs, stock options and restricted stock units as described above, with the exact number of PBUs and restricted stock units being calculated based on the closing price of a Company share on the grant date and the exact number of stock options based on such closing price and the applicable Black-Scholes calculation. The dollar value allocated to PBUs (i.e., 50% of the total award value) represents the target value of the PBU award.

The table below lists the total dollar value (including the target value of the PBU award) awarded by the Committee to each named executive officer as the 2019 annual equity award.

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The year-over-year changes in the value of the annual equity awards noted above reflects the leadership provided by our named executive officers in executing key restructuring initiatives and quickly pivoting the organization from a Chief Operating Officer structure to a business unit structure. Long-term award determinations also factored in prior awards and current award and shareholding values set against retention concerns.

Even with the increased 2019 annual equity award values, the executive officers remained generally at competitive total direct compensation positions versus our peer group and “general industry” data for 2019. Based on a study of market compensation levels prepared by Willis the overall executive team (NEOs reported in the proxy statement and all other direct reports to the CEO) averaged 106% of total direct compensation compared to the market median. The market data compiled by Willis is discussed in further detail in the “Peer Group Review and Market Data” section of this CD&A. Total direct compensation, as discussed in the “2019 Compensation Elements” section of this CD&A, is base salary plus target annual incentive plus the value of long-term incentives.

Other Benefits

Retirement Benefits

We maintain retirement plans to assist our named executive officers with retirement income planning and increase the attractiveness of employment with us. For our named executive officers, we currently provide:

Savings and Investment Plan. Under the Savings and Investment Plan, the Company matches in full amounts that eligible employees elect to defer under such plan, up to the first 6% of the employee’s eligible pay. Employees who participate in the Savings and Investment Plan are immediately vested in both their contributions and Company matching contributions. The Company provides taxable replacement payments to employees, including named executive officers, whose annual compensation exceeds the amount taken into account for purposes of calculating benefits under a tax-qualified savings plan. Under this compensation practice, each eligible employee receives, as additional taxable compensation, the full Company matching contribution to which that employee would be entitled in the absence of the applicable limitations.

Retirement Plan. Full-time salaried employees, including named executive officers, who are age 21 or older and who have one or more years of service are eligible to participate in the Retirement Plan but are not entitled to receive any benefits thereunder until they satisfy the plan’s five-year vesting requirement or attain age 55. Under the Retirement Plan, benefits are based upon (i) the participant’s average annual compensation for the 60 consecutive month period in which the participant’s compensation is highest during the last 180 months of continuous participation and (ii) the participant’s

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number of years of credited service. At age 62, a participant is entitled to full benefits under the Retirement Plan, but a participant may elect reduced payments upon early retirement beginning at age 55. For purposes of the Retirement Plan, compensation generally includes base salary and bonus payments pursuant to the AIP; however, for 2019, federal income tax law limits to $280,000 the annual compensation on which benefits under the Retirement Plan may be based. During fiscal 2019, Messrs. Poling, Merrill, Freeman and Holland had satisfied the vesting requirement and were entitled to benefits under the Retirement Plan.

During fiscal 2017, the Committee adopted an amendment to the Retirement Plan that closed the plan to new entrants, effective January 1, 2018, and that froze all benefit accruals, effective December 31, 2022.

SERP. Under the SERP, eligible employees receive the full pension to which such employee would be entitled pursuant to the Retirement Plan in the absence of the limitations described above in the “Retirement Plan” section and other limitations imposed under federal income tax law. In addition, the SERP recognizes base salary and AIP award amounts an employee elects to defer into the Savings and Investment Plan and, in some cases, periods of employment during which an employee was ineligible to participate in the Retirement Plan. Employees are eligible for benefits under the SERP once they have met the vesting requirement and are entitled to benefits under the Retirement Plan. During fiscal 2019, Messrs. Poling, Freeman, Merrill and Holland had satisfied the vesting requirement and were entitled to benefits under the SERP.

Health and Welfare, Severance and Other Benefits

Health and Welfare Benefits. As part of our overall compensation offering, our health and welfare benefits are intended to be market competitive. The health and welfare benefits that we provide to our named executive officers are offered to all of our eligible United States-based employees and include medical, dental, vision, prescription drug, life insurance, critical illness insurance, accident insurance, accidental death and dismemberment, flexible spending accounts, short- and long-term disability coverage, wellness and the employee assistance program.

Perquisites. The Committee determined that it was in the Company’s and the executives’ best interests to establish an executive physical program that offers comprehensive and coordinated annual physical examinations at a nominal cost to the Company. Other than the executive physical program, we do not provide our named executive officers with any perquisites. The Committee believes that the emphasis on performance-based compensation, rather than on entitlements such as perquisites, is consistent with its compensation philosophy.

Severance, Salary Protection and Change in Control Benefits. We maintain a severance plan, the Severance Plan for Leadership Team Officers of GCP Applied Technologies Inc. (the “Severance Plan”), and a salary protection plan, the GCP Applied Technologies Inc. Executive Salary Protection Plan (the “Salary Protection Plan”), and also have entered into change in control severance agreements with each named executive officer (the “Change in Control Agreements”).

Severance Plan. Under the Severance Plan, benefits are payable to any named executive officer upon a qualifying involuntary termination of employment, permanent disability or death. Severance benefits include a lump sum cash payment equal to one times the sum of the executive’s base salary plus target bonus (two times base salary and target bonus for our Chief Executive Officer), a prorated payment of the executive’s annual incentive cash award and continued health coverage at employee rates for a period of up to 24 months following termination of employment.

Salary Protection Plan. Under the Salary Protection Plan, named executive officers are eligible for death and disability benefits in the event the executive dies or becomes disabled while employed by the Company. Death benefits generally include a monthly benefit payable over no more than a 10-year period that equals the executive’s monthly base salary for the first year and half of the executive’s monthly base salary for the next nine years. Disability benefits generally include a monthly benefit equal to the executive’s monthly base salary for the first year and 60% of the executive’s monthly base salary until the executive attains age 65. The number of monthly payments for both death and disability benefits may be reduced depending on the executive’s age at death or disability, and disability benefits are reduced by any benefits payable under the Company’s long-term disability plan, social security disability benefits and, upon attainment of age 62, the amount of any retirement benefits provided under a Company retirement plan.

Change in Control Agreements. Under the terms of the Change in Control Agreements, named executive officers are eligible for severance benefits in the event that there is a change in control of the Company and, within 24 months after

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the change in control, either the executive resigns for good reason or the executive experiences an involuntary termination of employment for reasons other than cause. Change in control benefits include a lump sum cash payment equal to three times the sum of the executive’s annual base salary plus target bonus, a prorated payment of the executive’s target annual incentive cash award and continued health coverage at employee rates and benefits similar to those provided under the Salary Protection Plan for a period of up to 24 months following termination of employment. The Change in Control Agreements do not provide any excise tax assistance payments (i.e., gross-ups) upon a change in control termination. Newly named executive officers will receive agreements with cash payments equal to two times the sum of the executive’s annual base salary plus target bonus. As an interim officer, Mr. Merrill has not been provided an agreement consistent with executive officers. He has a separate severance agreement provided to key executives that is for a period of up to 24 months following termination of employment and has cash payments equal to the sum of the executive’s annual base salary plus target bonus.

How We Determine Compensation

Committee Role and Input From Management. The Committee is responsible for the Company’s executive compensation strategies, structure, policies and programs and must specifically approve compensation actions relating to our executive officers. The Committee reviews the performance of and sets the performance goals and compensation for our Chief Executive Officer. The Committee relies on input from our Chief Executive Officer with respect to executive officers other than our Chief Executive Officer (and our Vice President and Chief Human Resources Officer with respect to executive officers other than our Vice President and Chief Human Resources Officer) in setting the executive officer’s performance objectives, evaluating the actual performance of the executive officer against those objectives and making appropriate decisions regarding salary and incentive awards. Management input for executive officers is based upon an assessment of the executive’s individual performance as well as the performance of the executive’s business unit or function, benchmark data, strategic value and potential as a successor to the CEO. The Committee, with assistance from its consultant, will review management’s recommendations, make appropriate adjustments and approve compensation changes in its discretion.

Compensation Consultant. The Committee has the sole authority to retain, compensate and terminate any independent compensation consultant of its choosing. During fiscal 2019, Willis served as the Committee’s independent compensation consultant. Willis performs executive compensation services for the Committee and provides corporate risk and brokerage services to the Company. The major services provided during fiscal 2019 by Willis under its engagement with the Committee included (1) preparing the compensation market study described below; (2) reviewing the Committee’s charter; (3) reviewing the Company’s compensation peer group; (4) analyzing the Company’s share allocation and utilization; (5) providing advice with respect to incentive plan design; and (6) reviewing compensation payable to non-employee directors. The major services provided during fiscal 2019 by Willis under its retention by the Company on behalf of the brokerage of our global broad-based employee benefit programs included: (A) strategy development; (B) financial data analytics; (C) renewal and placement; (D) implementation and enrollment services; and (E) account management. During fiscal 2019, the Company paid Willis $141,327 for executive compensation services to the Committee, $257,831 for corporate risk and brokerage services to the Company, $6,391 for retirement related services and $34,714 for compensation surveys. The Committee determined that Willis is independent and does not have a conflict of interest. In making this determination, the Committee considered the factors adopted by the New York Stock Exchange with respect to independence and conflicts of interest.

Peer Group Review and Market Data

When reviewing compensation programs for our named executive officers, the Committee considers the compensation practices of specific peer companies and reviews compensation data from general industry published surveys.

The Committee, with the assistance of its consultant, previously selected a peer group consisting of companies within similarly situated industries (i.e., building products, specialty chemicals, and construction materials) and which were of comparable size based on revenue and market capitalization, generally within the range of one-half to two times our revenue and market capitalization. The Committee reviews this peer group on an ongoing basis and modifies it as circumstances warrant. The Committee determined that the peer group adopted by the Committee in June 2017 remained appropriate for setting compensation for fiscal 2019, as it continued to represent our primary competitors for capital, executive talent and, in some cases, business at the time the Committee set fiscal 2019 compensation for our executive

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