Shareholder Proposal
Proposal No. 5: Shareholder Proposal Requesting that the Board Annually Conduct an Evaluation and Issue a Report on CNX’s Lobbying and Policy Influence Activities, if Properly Presented
The following shareholder proposal will be voted upon at the Annual Meeting if such proposal is properly presented at the Annual Meeting by or on behalf of the shareholder proponent. Shareholders submitting a proposal must appear personally or by proxy at the Annual Meeting to move the proposal for consideration. The Corporation has been advised that Proxy Impact, as the proxy for Handlery Hotels Inc, beneficial owner of 19,815 shares of the Corporation’s common stock, whose address is 180 Geary Street, Suite 700, San Francisco, California 94108, intends to present the proposal set forth below. As required by SEC rules, the proposal and supporting statement are presented below in the form received from the shareholder proponent. The Board and the Corporation accept no responsibility for the contents of the following shareholder proposal or supporting statement, including the website addresses and related content included in the shareholder proposal.
CNX Resources — Report on corporate climate lobbying in line with Paris Agreement
Whereas: The United Nations Framework Convention on Climate Change asserts that greenhouse gas emissions must decline by 45 percent from 2010 levels by 2030 to limit global warming to 1.5 degrees Celsius. If that goal is not met, even more rapid reductions, at greater cost, will be required to compensate for the slow start on the path to global net zero emissions.(1)
Even with the recent passage of the Inflation Reduction Act, critical gaps remain between Nationally Determined Contributions set by the U.S. government and the actions required to prevent the worst effects of climate change. Domestically and internationally, companies have an important and constructive role to play in enabling policymakers to close these gaps.
Corporate lobbying that is inconsistent with the Paris Agreement presents increasingly material risks to companies and their shareholders, as delays in emissions reductions undermine political stability, damage infrastructure, impair access to finance and insurance, and exacerbate health risks and costs. Further, companies face increasing reputational risks from consumers, investors, and other stakeholders if they appear to delay or block effective climate policy.
Of particular concern are trade associations and other politically active organizations that say they speak for business but too often present forceful obstacles to addressing the climate crisis.
Proponents appreciate that CNX has a goal of reducing its Scope 1 and 2 emissions by 90,000 metric tons by 2022 and 200,000 metric tons by 2025. Yet it has not declared a net-zero target or plans to address Scope 3 emissions.
Proponents believe that enhancing this with reporting on the alignment of the company’s lobbying with the internationally agreed goals of the Paris Agreement would fill an important gap. The Global Standard on Responsible Climate Lobbying, backed by investors and networks representing $130 trillion in assets, provides reporting guidelines, particularly in regards to evaluating and mitigating misalignment on climate policies.(2)
Resolved: Shareholders request that the Board of Directors annually conduct an evaluation and issue a report (at reasonable cost, omitting confidential or proprietary information) describing if, and how, CNX Resources’ lobbying and policy influence activities (both direct and indirect through trade associations, coalitions, alliances, and other organizations) align with the goal of the Paris Agreement to limit average global warming to “well below” 2°C above pre-industrial levels, and to pursue efforts to limit temperature increase to 1.5°C, and how CNX plans to mitigate the risks presented by any misalignment.
Supporting statement: In evaluating the degree of alignment between the Paris Agreement goals and CNX lobbying, CNX should consider not only its policy positions and those of organizations of which it is a member, but also the actual lobbying and policy influence activities such as comment submissions, with regard to climate provisions of key international, federal and state legislation and regulation.
The proponents believe this request is consistent with the investor expectations described in the Global Standard on Responsible Climate Lobbying, and that this Standard is a useful resource for implementation(3).
(1)
https://unfccc.int/news/updated-ndc-synthesis-report-worrying-trends-confirmed
(2)
https://climate-lobbying.com/
(3)
https://climate-lobbying.com/wp-content/uploads/2022/03/2022_global-standard-responsible-climate-lobbying_APPENDIX.pdf
| |
 2023
PROXY STATEMENT
| │78 |
Back to Contents
Statement of Opposition
The Board UNANIMOUSLY recommends that shareholders vote AGAINST this proposal for the following reasons:
Summary of Board Opposition Statement.
At a fundamental level, CNX employs a unique, transparent, and localized approach across its business as part of a broader Appalachia-focused strategy. The Corporation’s differentiated corporate responsibility model leverages new technologies to lower emissions while prioritizing investments in local communities and, regarding this proposal, transparently applying its localized approach to participation in the public policy process. CNX does not engage with national trade associations for the purpose of influencing national or international public policy. Indeed, in line with our Appalachia First strategic vision, policy engagement is focused solely on our local region through local associations that understand the unique issues and needs facing Appalachia. To suggest otherwise is to display a lack of understanding of what CNX stands for and its extensive public record on these matters.
CNX stands by its commitment to take tangible and measurable steps to reduce methane emissions. Diverting resources from those tangible actions to instead focus on yet another, albeit largely redundant, paperwork exercise is wasteful and does little to address the stated concerns of the proponent of this shareholder proposal: an inadequate decline rate in greenhouse gas emissions. CNX contends that its financial and other resources are better spent taking meaningful action to reduce emissions, which it believes is best done in a manner designed to simultaneously maintain energy reliability. As outlined in further detail below, CNX has significantly lowered its methane emissions in the past decade, continues to focus on further reductions to both its emissions and the larger world’s carbon footprint, complies with industry leading reporting standards on emissions, and is transparent in reporting on its political activities. The Board believes that evaluating and reporting on CNX’s lobbying and policy influence activities is unnecessary and not in the best interests of shareholders for the following reasons:
•
CNX’s Tangible, Impactful, Local ESG Philosophy and its Appalachia First Vision for the Future are Focused on Tangible ESG Impacts and Local Solutions Within the Appalachian Region to Reduce Emissions and Promote Low-Carbon Market Opportunities.
•
CNX Already Provides Significant Lobbying-Related Public Disclosures; Preparing an Additional Report is Unnecessary and an Inefficient Use of Company Resources.
•
CNX Publishes Detailed Information on its Environmental Stewardship Programs and Other Local Initiatives in its Annual Corporate Responsibility Report.
•
The ESCR Committee Provides Independent Oversight of the Corporation’s Environmental- and Climate-Related Initiatives.
CNX’s Tangible, Impactful, Local ESG Philosophy and its Appalachia First Vision for the Future are Focused on Tangible ESG Impacts and Local Solutions Within the Appalachian Region to Reduce Emissions and Promote Low-Carbon Market Opportunities.
CNX is proudly engaged in the production and transportation of lower carbon intensive natural gas, a cornerstone product of our modern economy. We operate in the heart of Appalachia, one of America’s most prolific, lowest-cost, and lowest methane-intensive energy regions, and we take our commitment to sustain the future of our region seriously. The Corporation does not engage with national trade associations for the purposes of public policy advocacy. Instead, CNX’s efforts to reduce emissions and promote low-carbon market opportunities are focused locally within the Appalachian region. Our Appalachia First strategic vision is rooted in three key objectives:
•
Leverage CNX’s and Appalachia’s natural gas opportunity by bolstering all sectors of the economy through lower-cost, lower-carbon, and locally produced natural gas.
–
As
one of the largest, most efficient, and environmentally sustainable sources of natural gas in the world, Appalachia (consisting
of Pennsylvania, Ohio, West Virginia, and Virginia) are equipped with the tools to lead the sustainable revolution touching all
sectors of the economy — including energy, manufacturing, technology, and transportation.
•
Develop and deploy a new wave of innovative technologies and enhance local communities by using natural gas product derivatives for vertical market growth.
–
Combined
with new technology and derivative products, natural gas catalyzes a more sustainable future. CNX and Appalachia can fuel new
industrial and manufacturing growth through local natural gas derivatives by:
•
Using proprietary technology to change manufacturing processes for the extraction and delivery of natural gas.
•
Capturing and converting GHG into sustainable products and applications.
•
Jumpstarting the local hydrogen economy.
•
Transform the sectors of aviation, plastics, rail, cargo, mass transit, trucking, and fleet and passenger vehicles by displacing higher carbon fuels with locally produced natural gas.
–
The
U.S. is the world’s largest producer and a net exporter of petroleum and natural gas products, but we still import a lot
of foreign oil that can be supplanted with CNG and LNG to transform the region’s hard-to-abate sectors.
CNX’s vision pays environmental and economic dividends and should be embraced by the proponents of the proposal as a tangible action to help accomplish our shared objective of a lower carbon future.
| |
2023
PROXY STATEMENT | │79 |
Back to Contents
CNX Already Provides Significant Lobbying-Related Public Disclosures; Preparing an Additional Report is Unnecessary and an Inefficient Use of Corporate Resources.
CNX complies with applicable laws that require detailed disclosure of its political and lobbying activities. Specifically, CNX files publicly available federal Lobbying Disclosure Act Reports each quarter, which provide information about the Corporation’s lobbying expenditures for the quarter, including, in each case, descriptions of the specific legislation or other policy issue that was the subject of the advocacy, the federal agency or house of Congress contacted, and the specific individual who engaged on those topics on behalf of CNX. CNX files similar periodic reports with state agencies reflecting state lobbying activities, which are also publicly available.
The Corporation’s support for political parties, candidates, and other political causes may be provided only through CNX’s Political Action Committee (“CNX PAC”) or through limited corporate contributions at the state and local level, where permitted by law and approved by appropriate Corporation personnel. The disbursements by CNX PAC can be viewed on the website of the Federal Election Commission at www.fec.gov. The disclosures therein detail all of CNX PAC’s contributions to political parties, candidates, and other causes, in accordance with applicable campaign finance and election laws. As stated in the Corporation’s 2021 Corporate Responsibility Report, “[t]he CNX PAC promotes the interests of CNX Resources Corporation, its employees and their families, the region, and the low carbon intensity domestic energy industry”—further underscoring that CNX’s activities are intended to align with the goals of the Paris Agreement.
CNX advocates for its industry through community engagement, political action committees, state- and local-based trade association memberships, and direct engagement by management. Although the Corporation does not make earmarked contributions to trade associations and does not have complete information on the independent lobbying efforts of particular trade associations, it believes its participation in such groups contributes to the robust debate of the views on the issues facing its industry. The Corporation invests resources into these efforts to help policymakers, regulators, media, communities, and the public understand the crucial, positive impacts low carbon intensity domestic energy has on families, businesses, and underserved communities across the region, nation, and world. CNX’s annual Corporate Responsibility Report (as described in greater detail below) already discloses many of the groups that the Corporation supports or in which the Corporation is a member, and such disclosures go beyond the requirements of the Lobbying Disclosure Act and any other requirement of campaign finance or tax law. The Board does not believe that further disclosures regarding CNX’s trade association or other group participation would be appropriate because CNX does not control the activities of these organizations and thus such additional disclosure would not paint a complete and accurate picture of the Corporation’s policy priorities.
The Board believes that the conduct of an evaluation and the issuance of an annual report as requested by the shareholder proposal would be an inefficient use of Corporation resources and would require significant additional time and expense for CNX to produce without providing substantially more information about CNX’s lobbying and policy influence activities than what is currently already available in the public domain. A simple online search by the shareholder proponent would provide it with the answers it seeks about CNX’s lobbying and policy influence activities without requiring the Corporation and the Board to expend substantial amounts of time and resources to conduct the evaluation and prepare and issue the annual report requested by the shareholder proponent.
CNX Publishes Detailed Information on its Environmental Stewardship Programs and Other Local Initiatives in its Annual Corporate Responsibility Report.
Environmental stewardship in CNX’s local communities is embedded in its core values and is a central part of the Corporation’s work each day. Local stewardship of the Appalachian region’s communities and vast natural gas resources are vital to CNX’s vision for the region that will reduce emissions and spur economic activity around emerging, lower carbon market opportunities. Each year, CNX publishes a Corporate Responsibility Report, which highlights the Corporation’s progress on material topics and issues identified by the organization’s key stakeholders, and incorporates standards from leading reporting frameworks, including the Task Force on Climate-related Financial Disclosures (“TCFD”), the Sustainability Accounting Standards Board, and the Global Reporting Initiative Standards. CNX uses these well-established disclosure frameworks to, among other things, promote transparency about CNX’s greenhouse gas (“GHG”) reduction, water management, and other environmental initiatives.
As disclosed in the Corporation’s 2021 Corporate Responsibility Report, CNX has undertaken several initiatives intended to decrease GHG emissions, including:
•
investing capital in emissions reduction technologies to achieve further reductions in Scope 1 and 2 CO2e emissions (in addition to the 90% reduction the Corporation has achieved since 2011);
•
exploring continuous monitoring options designed to further mitigate fugitive methane emissions;
•
linking executive compensation to lowering methane intensity;
•
establishing a Regulatory Reporting Group to enhance reporting of environmental compliance data;
•
publishing a quarterly environmental scorecard;
•
using an electric frac fleet to conduct its shale completions operations;
| |
2023
PROXY STATEMENT | │80 |
Back to Contents
•
forming a New Technologies team to focus on how best to utilize CNX’s existing assets to drive results in methane abatement and other similar carbon capture opportunities; and
•
analyzing the three most relevant climate scenarios provided by the International Energy Agency (“IEA”) and endorsed by TCFD, to identify potential climate-related risks and opportunities that help inform the Corporation’s internal risk assessment, strategy development, and decision-making processes.
The Board believes that CNX’s summaries of its actions to mitigate the environmental impacts of the Corporation’s business, including through the reduction of GHG emissions, in combination with the use of well-established disclosure frameworks to provide transparency about CNX’s operations, all as contained in the Corporation’s annual Corporate Responsibility Report, provide the Corporation’s shareholders and other stakeholders significant, detailed information regarding Corporation-wide strategies and influence activities without necessitating that the Corporation also produce an additional, administratively burdensome report regarding CNX’s lobbying and policy influence activities.
The ESCR Committee Provides Independent Oversight of the Corporation’s Environmental- and Climate-Related Initiatives.
The Board has established the ESCR Committee to provide oversight of the Corporation’s policies and management systems with respect to environmental, safety, corporate responsibility, and security matters. Each member of the Board serves as a member of the ESCR Committee, which is chaired by an independent director, Mr. Clarkson. The ESCR Committee meets regularly and has the following specific duties and responsibilities, among others:
•
oversees management’s monitoring and enforcement of the Corporation’s policies to protect the health and safety of employees, contractors, customers, the public, and the environment;
•
reviews with management the quality of the Corporation’s procedures for identifying, assessing, monitoring, and managing the principal risks in the Corporation’s business associated with protection of the environment, safety, corporate responsibility, and security matters;
•
reviews the Corporation’s strategy, including objectives and policies, relative to the protection of environment, the safety of employees, contractors, customers, the public, as well as issues of corporate responsibility and security;
•
reviews (i) any material compliance issues with health, safety and environmental laws, (ii) any material pending or threatened administrative, regulatory, or judicial proceedings regarding health, safety or environmental matters, and (iii) management’s response to the foregoing legal matters; and
•
reviews any significant environmental, safety, corporate responsibility public policy, legislative, political and social issues and trends that may materially affect the business operations, financial performance, or public image of the Corporation or the industry, and management’s response to such matters.
The Board believes that the report called for by the shareholder proposal would be a redundant and burdensome measure, without commensurate value to the Corporation’s shareholders and other stakeholders, in light of the oversight role and duties currently performed by the ESCR Committee.
Conclusion
In sum, the Board believes that the Corporation’s existing disclosures already provide shareholders with ample information on CNX’s business, efforts to mitigate the environmental impacts of the business, including to reduce GHG emissions from its operations, and lobbying activities. In addition, such matters are already subject to robust oversight by the ESCR Committee. The Board believes that CNX, its employees, and its shareholders are better served by the continuing execution of the Corporation’s business plans, including through the initiatives and efforts described above, rather than devoting attention and resources to the additional and duplicative reporting called for by the shareholder proposal.
The Board of Directors Unanimously Recommends that You Vote “AGAINST” the shareholder proposal requesting that the Board annually conduct an evaluation and issue a report on CNX’s lobbying and policy influence activities, if properly presented.
| |
2023
PROXY STATEMENT | │81 |
Back to Contents
Securities Authorized for Issuance under the CNX Equity and Incentive Compensation Plan
The following table summarizes the Corporation’s equity compensation plan information as of December 31, 2022:
EQUITY COMPENSATION PLAN INFORMATION
Plan Category
|
Number
of securities
to be issued upon
exercise of
outstanding options,
warrants and rights
(a)
|
|
Weighted
average
exercise price of
outstanding
options, warrants
and rights
(b)
|
|
Number
of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
|
Equity compensation plans approved by security holders
|
|
7,106,345
|
(1)
|
$
|
8.55
|
(2)
|
|
11,180,911
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
TOTAL
|
|
7,106,345
|
(1)
|
$
|
8.55
|
(2)
|
|
11,180,911
|
(1)
Of this total, 2,262,845 shares are subject to outstanding stock options, 2,216,764 shares are subject to outstanding RSUs (including deferred RSUs), 107,941 shares are subject to outstanding DSUs, and 2,518,795 shares are subject to outstanding PSUs (assuming maximum payout), including ESG PSUs.
(2)
The weighted-average exercise price does not take into account the RSUs, DSUs, or PSUs (including ESG PSUs), as such awards have no exercise price.
|
| |
2023
PROXY STATEMENT | │82 |
Back to Contents
Information about the Annual Meeting
Virtual Format
We have decided to host a completely virtual Annual Meeting again this year. We continue to deploy the virtual format to:
•
facilitate and increase shareholder attendance and participation by enabling shareholders to participate fully and equally from any location around the world, at no cost (historically, we have had little to no attendance by our shareholders at our in-person annual meetings);
•
increase our ability to engage with shareholders, regardless of their size, resources or physical location;
•
be mindful of the enhanced desire of our shareholders to participate virtually;
•
provide for cost-savings to the Corporation and our shareholders; and
•
make our Annual Meeting more environmentally friendly.
Attendance and Participation
Our completely virtual Annual Meeting will be conducted on the internet via live webcast. We have designed the virtual Annual Meeting to provide shareholders substantially the same opportunities to participate as if the Annual Meeting were held in person. You will be able to attend and participate in the Annual Meeting online and submit your questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/CNX2023. You also will be able to vote your shares electronically online during the Annual Meeting (other than shares held through the 401(k) plan, which must be voted prior to the Annual Meeting).
All shareholders of record as of March 7, 2023 (the Record Date), or their duly appointed proxies, may attend and participate in the Annual Meeting. To attend and participate in the Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials (the “Notice”), on your proxy card or voting instruction card, or on the instructions that accompanied your proxy materials. The Annual Meeting webcast will begin promptly at 10:00 a.m. Eastern Time. We encourage you to access the meeting prior to the start time. Online access will begin at 9:45 a.m. Eastern Time.
The virtual meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari) and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Participants should confirm that they have a strong internet connection wherever they intend to participate in the Annual Meeting. Participants should also give themselves plenty of time to log in and confirm that they can hear streaming audio prior to the start of the Annual Meeting.
Questions and Information Accessibility
Shareholders may submit questions during the Annual Meeting. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/CNX2023, typing your question into the “Ask a Question” field, and clicking “Submit.” Questions pertinent to Annual Meeting matters will be answered during the Annual Meeting, subject to time constraints. Questions regarding personal matters, including, but not limited to, those related to employment, product or landowner issues, are not pertinent to Annual Meeting matters and therefore will not be answered. Any questions pertinent to Annual Meeting matters that cannot be answered during the Annual Meeting due to time constraints will be posted online and answered on our Investor Relations page at investors.cnx.com.
Additional information regarding the ability of shareholders to ask questions during the Annual Meeting, related rules of conduct, and other materials for the Annual Meeting will be available during the Annual Meeting at www.virtualshareholdermeeting.com/CNX2023.
Technical Difficulties
We will have technicians ready to assist you with any technical difficulties accessing the virtual Annual Meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual Annual Meeting log in page.
| |
2023
PROXY STATEMENT | │83 |
Back to Contents
Voting and Proposals
Whether you hold your shares directly as the shareholder of record or beneficially in street name, you may vote prior to the Annual Meeting without attending the Annual Meeting in one of the following manners:
By Internet: Go to www.proxyvote.com and follow the instructions. You will need the 16-digit control number included on your Notice, proxy card, voting instruction card or the instructions that accompanied your proxy materials;
By Telephone: Dial 1-800-690-6903. You will need the control number included on your Notice, proxy card, voting instruction card or the instructions that accompanied your proxy materials; or
By Mail: If you received a paper copy of the proxy materials, complete, date and sign your proxy card or voting instruction card and mail it.
If you vote on the internet or by telephone, you do not need to return your proxy card or voting instruction card. Internet and telephone voting for shareholders will be available 24 hours a day, and will close at 11:59 p.m., Eastern Time, on May 3, 2023 or at 11:59 p.m., Eastern Time, on May 1, 2023 for shares held through the 401(k) plan.
Shareholders of record and beneficial owners of shares held in street name may also vote online during the Annual Meeting. You will need the control number included on your Notice, proxy card, voting instruction card or the instructions that accompanied your proxy materials to log in to the virtual meeting platform at www.virtualshareholdermeeting.com/CNX2023. Voting electronically online during the Annual Meeting will replace any previous votes.
Those who hold shares through the 401(k) plan may attend and participate in the Annual Meeting but will not be able to vote shares held in the 401(k) plan electronically online during the Annual Meeting. Shares held through the 401(k) plan must be voted in advance of the Annual Meeting using one of the methods described above.
The persons named as proxies have informed CNX of their intention, if no contrary instructions are given, to vote the shares represented by such proxies as follows:
•
FOR the election of each of the seven director nominees (Proposal No. 1);
•
FOR the ratification of the anticipated appointment of EY as CNX’s independent auditor for the fiscal year ending December 31, 2023 (Proposal No. 2);
•
FOR the advisory approval of CNX’s 2022 named executive officer compensation (Proposal No. 3);
•
1 YEAR on the advisory approval of the frequency of future advisory votes on CNX’s named executive officer compensation (Proposal No. 4);
•
AGAINST the shareholder proposal requesting that the Board annually conduct an evaluation and issue a report on CNX’s lobbying and policy influence activities, if properly presented (Proposal No. 5); and
•
in accordance with their judgment on any other matters that may properly come before the Annual Meeting.
The Board does not know of any other business to be brought before the Annual Meeting other than as indicated in the Notice of Annual Meeting of Shareholders. If other matters are properly presented at the Annual Meeting, the persons named as proxies may vote on such matters in their discretion. In addition, the persons named as proxies may vote your shares to adjourn the Annual Meeting and will be authorized to vote your shares at any adjournments or postponements of the Annual Meeting.
Record Date and Vote Required for Approval
The Record Date with respect to this solicitation is March 7, 2023. All holders of record of CNX common stock as of the close of business on the Record Date are entitled to vote at the Annual Meeting and any adjournment or postponement thereof. As of the Record Date, CNX had 167,957,150 shares of common stock outstanding. Each share of common stock is entitled to one vote. Shareholders do not have cumulative voting rights. The holders of a majority of the outstanding shares of common stock of CNX as of the Record Date entitled to vote generally in the election of directors, represented in person or by proxy, will constitute a quorum at the Annual Meeting.
•
Election of Seven Director Nominees (Proposal No. 1): Shareholders may vote “for,” “against,” or “abstain” with respect to each director nominee. Assuming a quorum, a majority of the votes cast at the Annual Meeting is required for each director nominee to be elected. Under our Bylaws, this means that the number of votes cast “for” a director’s election must exceed 50% of the total number of votes cast with respect to that director’s election. Votes cast include direction to withhold authority and exclude abstentions.
| |
2023
PROXY STATEMENT | │84 |
Back to Contents
•
Ratification of the Anticipated Appointment of EY as CNX’s Independent Auditor for the Fiscal Year Ending December 31, 2023 (Proposal No. 2), Advisory Approval of CNX’s 2022 Named Executive Officer Compensation (Proposal No. 3), Advisory Approval of the Frequency of Future Advisory Votes on CNX’s Named Executive Officer Compensation (Proposal No. 4), and Shareholder Proposal Requesting that the Board Annually Conduct an Evaluation and Issue a Report on CNX’s Lobbying and Policy Influence Activities, if Properly Presented (Proposal No. 5): Shareholders may vote “for,” “against,” or “abstain” with respect to Proposal No. 2, Proposal No. 3 and Proposal No. 5. Shareholders may vote “1 year,” “2 years,” “3 years,” or “abstain” with respect to Proposal No. 4. Assuming a quorum, the vote to ratify the anticipated appointment of EY as CNX’s independent auditor for the fiscal year ending December 31, 2023, the advisory vote to approve CNX’s 2022 named executive officer compensation, the advisory vote to approve the frequency of future advisory votes on CNX’s named executive officer compensation, and the shareholder proposal requesting that the Board annually conduct an evaluation and issue a report on CNX’s lobbying and policy influence activities, if properly presented, will be determined by the affirmative vote of a majority of the shares of our common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the matter. With respect to Proposal No. 4, the Board expects to be guided by the voting option that receives the greatest number of votes, even if that alternative does not receive a majority vote.
If you hold shares beneficially in street name and do not provide your broker with voting instructions, your shares may be treated as “broker non-votes.” Generally, broker non-votes occur on a matter when a broker is not permitted to vote on that matter without instructions from the beneficial owner and such instructions are not given. Brokers that have not received voting instructions from their clients cannot vote on their clients’ behalf on “non-routine” proposals, such as Proposal Nos. 1, 3 4 and 5, although they may vote their clients’ shares on “routine matters,” such as Proposal No. 2. In tabulating the voting result for any particular proposal, shares that constitute broker non-votes are not considered entitled to vote on that proposal and have no effect on the outcome. Abstentions have the same effect as votes against the matter, except in the case of Proposal No. 1, where abstentions would not have an effect on the outcome. Proxies received but marked as abstentions and broker non-votes will be counted for quorum purposes.
The voting instruction card also serves as voting instructions for the trustees who hold shares of record for participants in the CNX’s 401(k). If voting instructions representing shares in this plan are not received, those shares will not be voted.
Revocation of Proxy
If you are the owner of record of shares of our common stock as of the close of business on the Record Date, you can revoke your proxy at any time before its exercise by:
•
sending a written notice to CNX at CNX Center, 1000 Horizon Vue Drive, Suite 400, Canonsburg, PA 15317, Attention: Corporate Secretary, bearing a date later than the date of the proxy that is received prior to the Annual Meeting, stating that you revoke your proxy;
•
submitting your voting instructions again by telephone or over the internet;
•
signing another valid proxy card bearing a later date than the proxy initially received and mailing it so that it is received by the Corporation prior to the Annual Meeting; or
•
participating in the Annual Meeting and voting online during the Annual Meeting.
If you hold your shares through a bank, broker or other nominee, you must follow the instructions found on your voting instruction card, or contact your bank, broker or other nominee in order to revoke your previously delivered proxy. If a proxy is properly executed and is not revoked by the shareholder, the shares it represents will be voted at the Annual Meeting in accordance with the instructions provided by the shareholder. If a proxy card is signed and returned without specifying choices, the shares will be voted in accordance with the recommendations of the Board. Participation at the Annual Meeting without a request to revoke a proxy or voting online during the Annual Meeting will not, by itself, revoke a previously executed and delivered proxy.
Proxy Solicitation
All costs relating to the solicitation of proxies will be borne by CNX. Morrow-Sodali LLC has been retained by CNX to aid in the solicitation of proxies at an estimated cost of $12,500, plus reimbursement of out-of-pocket expenses. Proxies may also be solicited by officers, directors and employees personally, by mail, or by telephone, facsimile transmission or other electronic means. Upon request, CNX will pay brokers and other persons holding shares of common stock in their names or in the names of their nominees for their reasonable expenses in sending soliciting material to, and seeking instructions from, their principals.
| |
2023
PROXY STATEMENT | │85 |
Back to Contents
Additional Matters
Shareholder
Proposals for Inclusion in Next Year’s Proxy Statement or Presentation at Next Year’s Annual Meeting
Under SEC rules, a shareholder proposal submitted to CNX for the Annual Meeting of Shareholders in 2024 (the “2024 Annual Meeting”) pursuant to Rule 14a-8 of the Exchange Act must (a) conform to the requirements of Rule 14a-8 promulgated under the Exchange Act and (b) be received by the Corporate Secretary of CNX at our principal executive offices no later than 5:30 p.m. Eastern Time on November 24, 2023. Any such proposal should be addressed to the Corporate Secretary, CNX Resources Corporation, CNX Center, 1000 Horizon Vue Drive, Suite 400, Canonsburg, PA 15317.
The Bylaws require that all shareholder proposals to be submitted at the 2024 Annual Meeting, but not included in the Corporation’s Proxy Statement, be received by the Corporate Secretary of CNX in writing no later than the close of business on February 4, 2024, nor earlier than the close of business on January 5, 2024, together with all information specified in the Bylaws. If the date of the 2024 Annual Meeting is more than 30 days before or more than 60 days after the anniversary date of the Annual Meeting, notice by the shareholder must be delivered not earlier than the close of business on the 120th day prior to the 2024 Annual Meeting and not later than the close of business on the later of the 90th day prior to the 2024 Annual Meeting or the 10th day following the day on which public announcement of the date of the 2024 Annual Meeting is first made by CNX.
In addition to satisfying the requirements under the Bylaws, to comply with the universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than CNX’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act (including a statement that such shareholder intends to solicit holders of shares representing at least 67% of the voting power of CNX’s shares entitled to vote on the election of directors in support of director nominees other than CNX’s nominees), which notice must be postmarked or transmitted electronically to CNX at its principal executive offices no later than 60 calendar days prior to the anniversary date of the Annual Meeting (for the 2024 Annual Meeting, no later than March 5, 2024). However, if the date of the 2024 Annual Meeting is changed by more than 30 calendar days from such anniversary date, then notice must be provided by the later of 60 calendar days prior to the date of the 2024 Annual Meeting or the 10th calendar day following the day on which public announcement of the date of the 2024 Annual Meeting is first made.
Additional
Requirements for Shareholder Nominations of Directors
Any shareholder desiring to nominate an individual for election as a director of CNX must submit to the Corporate Secretary the information required by Section 2.8 of the Bylaws (a copy of which will be provided to any shareholder upon written request to the Corporate Secretary), including, but not limited to, (i) the proposing person’s notice, (ii) all information relating to the nominee that is required to be disclosed in a proxy statement or other filings pursuant to Section 14 of the Exchange Act, (iii) a description of all direct and indirect compensation and other material arrangements between the shareholder and the nominee, (iv) the nominee’s written questionnaire with respect to the background and qualifications of such nominee and the background of any other person or entity on whose behalf the nomination is being made, (v) a written representation and agreement of the nominee in the form provided by the Corporate Secretary that they are not party to and will not become party to any agreement about how they will act or vote, and (vi) the nominee’s agreement to comply with the Corporation’s corporate governance policies, if elected. In addition, CNX may require the shareholder to provide such further information as we may reasonably request. To be timely, a shareholder nomination must be received within the timeframe described above for proposals to be submitted at the annual meeting but not included in CNX’s Proxy Statement.
Additionally, CNX’s Bylaws provide “proxy access” rights to shareholders that provide notice to CNX consistent with the requirements set forth in the Bylaws (the “proxy access notice”). A summary of these procedures is as follows. As set forth in Section 2.14 of our Bylaws, a shareholder, or group of twenty or fewer shareholders, that (i) own at least 3% of the aggregate voting power of the outstanding shares of the Corporation entitled to vote generally in the election of directors and (ii) have owned such shares continuously for at least three years as of the date that the Corporation receives the proxy access notice and as of the record date for determining shareholders eligible to vote at the applicable annual meeting of shareholders, may nominate candidates to serve on the Board and have such candidates included in CNX’s Proxy Statement. The shareholder(s) may nominate director candidates constituting the greater of (i) two individuals or (ii) the largest whole number that does not exceed 20% of the number of directors in office on the last day on which the proxy access notice may be delivered, consistent with the requirements set forth in the Bylaws, provided that the shareholder(s) and
| |
2023
PROXY STATEMENT | │86 |
Back to Contents
nominee(s) satisfy the requirements specified in Section 2.14 of our Bylaws. To be timely, the proxy access notice must be delivered to the Corporate Secretary of CNX at CNX’s principal executive offices not later than the close of business on the 120th day nor earlier than the close of business on the 150th day prior to the first anniversary of the date that CNX mailed its Proxy Statement for the preceding year’s annual meeting of shareholders (i.e., for the 2024 annual meeting of shareholders, no later than November 24, 2023 and no earlier than October 25, 2023). The proxy access notice must contain the information required in our Bylaws, and the shareholder(s) and nominee(s) must comply with the information and other requirements set forth in Sections 2.8 and 2.14 of our Bylaws.
Householding of Proxy Materials
The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy delivery requirements for proxy statements with respect to two or more shareholders sharing the same address and the same last name by delivering a single proxy statement addressed to those shareholders. This process, which is commonly referred to as “householding,” potentially provides extra convenience for shareholders and cost savings for companies. CNX and some brokers household proxy materials, delivering a single proxy statement to multiple shareholders sharing an address unless contrary instructions have been received from the affected shareholders. Once shareholders have received notice from their broker or CNX that materials will be sent in the householding manner to the shareholder’s address, householding will continue until otherwise notified or until the shareholder revokes such consent. If, at any time, shareholders no longer wish to participate in householding and would prefer to receive separate proxy statements, they should notify their broker if their shares are held in a brokerage account, or CNX if they hold registered shares. CNX will deliver promptly upon written or oral request a separate copy of the 2022 Annual Report, proxy statement or Notice, as applicable, to a shareholder at a shared address to which a single copy of the documents was delivered. To request the start or end of householding, shareholders should notify their broker or CNX. Any such written notice directed to CNX should be addressed to the Investor Relations department of CNX Resources Corporation, CNX Center, 1000 Horizon Vue Drive, Suite 400, Canonsburg, PA 15317, or oral notice may be given by calling CNX at (724) 485-4000:
•
to receive a separate copy of the 2022 Annual Report, proxy statement or Notice for the Annual Meeting;
•
to receive separate copies of those materials for future meetings; or
•
if the shareholder shares an address and wishes to request delivery of a single copy of proxy materials, rather than receiving multiple copies.
Other
CNX will provide to any shareholder, without charge and upon written request, a copy (without exhibits, unless otherwise requested) of CNX’s 2022 Annual Report as filed with the SEC. Any such request should be directed to the CNX Resources Corporation Investor Relations Department, CNX Center, 1000 Horizon Vue Drive, Suite 400, Canonsburg, PA 15317.
The Board knows of no other proposals that may properly be presented for consideration at the Annual Meeting, but if other matters do properly come before the Annual Meeting, the persons named in the proxy will vote your shares according to their best judgment.
By the Order of the Board of
Directors of CNX Resources Corporation
| |
2023
PROXY STATEMENT | │87 |
Back to Contents
Appendix A Reconciliation of Non-GAAP Measures*
Free Cash Flow
Free cash flow is defined as operating cash flow minus capex plus proceeds from asset sales.
Free Cash Flow
(Dollars in millions)
|
December 31, 2022
|
December 31, 2021
|
December 31, 2020
|
Total
|
Net Cash Provided by Operating Activities
|
$
|
1,235
|
$
|
927
|
$
|
795
|
$
|
2,957
|
Capital Expenditures
|
|
(566)
|
|
(466)
|
|
(487)
|
|
(1,519)
|
Proceeds from Asset Sales
|
|
38
|
|
45
|
|
48
|
|
131
|
Free Cash Flow
|
$
|
707
|
$
|
506
|
$
|
356
|
$
|
1,569
|
Adjusted FCF per Share for STIC and Pay Versus Performance
Adjusted FCF per Share is calculated by dividing free cash flow by the number of shares of common stock outstanding, and making any necessary adjustments in accordance with the STIC plan. This same calculation is used for the Pay Versus Performance (“PVP”) Disclosures included in this Proxy Statement.
2022 Adjusted Free Cash Flow Per Share for STIC and PVP
(Dollars in millions)
|
December 31, 2022
|
Free Cash Flow
|
$
|
707
|
Adjustments: None
|
$
|
—
|
Shares Outstanding
|
|
170,841,164
|
Adjusted Free Cash Flow Per Share:
|
$
|
4.14
|
2021 Adjusted Free Cash Flow Per Share for STIC and PVP
(Dollars in millions)
|
December 31, 2021
|
Free Cash Flow
|
$
|
506
|
Adjustments: None
|
$
|
—
|
Shares Outstanding
|
|
203,531,320
|
Adjusted Free Cash Flow Per Share:
|
$
|
2.48
|
2020 Adjusted Free Cash Flow Per Share for STIC and PVP
(Dollars in millions)
|
December 31, 2020
|
Free Cash Flow
|
$
|
356
|
Adjustments: Fees Related to CNXM Take-in Transaction
|
$
|
11
|
Adjusted Free Cash Flow
|
$
|
367
|
Shares Outstanding
|
|
187,453,712
|
Adjusted Free Cash Flow Per Share:
|
$
|
1.96
|
*
CNX’s management uses certain non-GAAP financial measures for planning, forecasting and evaluating business and financial performance, and believes that these measures are useful for investors in analyzing CNX. Although these are not measures of performance calculated in accordance with generally accepted accounting principles (GAAP), management believes these financial measures are useful to an investor in evaluating CNX because (i) analysts utilize these metrics when evaluating company performance and have requested this information as of a recent practicable date, (ii) these metrics are widely used to evaluate a company’s operating performance, and (iii) we want to provide updated information to investors. Investors should not view these metrics as a substitute for measures of performance that are calculated in accordance with GAAP. In addition, because all companies do not calculate these measures identically, these measures may not be comparable to similarly titled measures of other companies.
| |
2023
PROXY STATEMENT | │ A-1 |
Back to Contents
Back to Contents
