2018 Guide to Effective Proxies

2.2 Board/CEO letter | 31 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES ARMSTRONG WORLD INDUSTRIES, INC. ARTHUR J. GALLAGHER & CO. AT&T, INC. ATLAS AIR WORLDWIDE HOLDINGS, INC. ARMSTRONGWORLDINDUSTRIES,INC. 2500COLUMBIAAVE.,LANCASTER,PA17603 P.O.BOX3001,LANCASTER,PA17604 www.armstrongceilings.com April30,2018 ThomasM.Armstrong Founder 1860 2018 ANNUAL MEETING OF SHAREHOLDERS ARMSTRONG WORLD INDUSTRIES, INC. DearFellowShareholders: WelookforwardtoyourattendancevirtuallyviatheInternet,inperson,orbyproxyatthe2018ArmstrongWorldIndustries,Inc. AnnualShareholders’Meeting.Wewillholdthemeetingat8:00a.m.EasternTimeonThursday,July12,2018. In fiscal 2017, we continued to execute on our strategy, driving significant consolidated net sales growth and delivering strong adjusted EBITDA performance, in large part driven by our innovative product portfolio, including our Total Acoustics solutions andournewSustainfamilyofproducts. We also addressed key strategic priorities through an agreement to sell our European, Middle East, African, and Pacific Rim businessestoKnaufInternationalGmbH;theclosureofourSt.Helensplant;andtheaccelerationofourbusinessdevelopment strategies,whichresultedintheacquisitionofTectum,Inc.inearly2017. AswelookaheadtoourfutureasanAmericas-focusedbusiness,wearewell-positionedandpoisedforgrowthaswefocuson serving our customers, now and in the future, in both our Mineral Fiber and Architectural Specialties segments, with an experiencedleadershipteam,industry-leadinginnovationandastrongfinancialposition. Atthisyear’sAnnualShareholders’Meeting,Iwill stepdownasadirectorandChairmanoftheBoard.Ithasbeenanhonorto serve as Chairman since 2010, following my tenure as independent lead director. I have had the great pleasure to closely observeourCompanyemergefrombankruptcy,separatetheflooringbusinessintoanindependentpubliclytradedcompanyand transitionintoanAmericas-focusedtotalceilingsandwallsolutionsprovider. Atthisyear’sAnnualShareholders’Meeting,wewillvoteontheelectionofdirectors,votetoratifytheselectionofKPMGLLPas ourindependentregisteredpublicaccountingfirm,andvoteonanon-bindingadvisorybasisonthecompensationofournamed executive officers. Please refer to the proxy statement for detailed information on each of the matters to be acted on at the meeting.Yourvoteisimportant,andwestronglyurgeyoutocastyourvote.Formostitems,including theelectionofdirectors, your shares will not be voted if you do not provide voting instructions via the Internet,by telephone, or by returning a proxy or votinginstructioncard.Weencourageyoutovotepromptly,evenifyouplantoattendthemeeting. OnbehalfofyourBoardofDirectors,thankyouforyourcontinuedsupportofArmstrongWorldIndustriesandyourparticipation inthisyear’sAnnualMeeting. Verytrulyyours, JamesJ.O’Connor ChairmanoftheBoard March23,2018 Dear Fellow Stockholder, ThankyouforyourcontinuedinterestinArthurJ.Gallagher& Co.OnbehalfofourBoardofDirectors,Iinviteyoutoattend the2018AnnualMeetingofStockholders. Ifyouarenotableto attendinperson,wehopethatyouwillvotebyproxy.These proxymaterialscontaindetailedinformationaboutthematters onwhichweareaskingyoutovote.Wehopeyouwillread thesematerialsandthenvoteinaccordance withtheBoard’s recommendations. Yourvoteisveryimportanttous. AtGallagher,astrongcultureandsoundcorporategovernance arethefoundationsofourfinancialperformance.Thisyear’s proxystatementreflectsourcontinuedfocusonperformance andgrowth,anengagedandeffectiveBoard,andtheculture wehavebuiltoverthepast90years. 2017 Performance .Wedeliveredoutstandingfinancial performancein2017.Ourcombinedbrokerageandrisk managementoperationsgrewadjustedrevenue8.7%to $4.6billionwhileexpandingouradjustedEBITDACmargin46 basispointsto25.8%. 1 Weachievedtheseresultsbyexecuting oneachofourfourkeystrategicobjectives:organicrevenue growth,mergerandacquisitiongrowth,productivity improvementsandqualityenhancements, andmaintainingour uniqueGallagherculture.Iampleasedwithourteam’s performanceandexcitedaboutourfuture. Strong Momentum .Webringincrediblevaluetoourclientsin everyareaofinsurance,riskmanagementandconsulting,andI seemanyopportunitiesaheadforourbusiness.In2017, organicrevenuegrowthwas4.5%forourcombinedbrokerage andriskmanagementoperations,representingsolid improvementoverlastyear’s3.1%organicgrowth. 1 Looking forward,theorganicgrowthprospectsforourbrokerageand riskmanagementoperationsareattractive.Wehaveamodest marketshare,theinsuranceindustryisgrowing,andtheworld isbecomingmoreriskyandcomplex.Aswecontinuetoadd capabilitiesandinsightsaroundemergingrisks,weare confidentinourabilitytohelpanyclient,ofanysize,anywhere intheworld.Ourcompetitivepositionisgrowingstrongerevery day,andwearewellpositionedforfuturegrowth. An Engaged and Effective Board .OurBoardofDirectors is comprised ofagroupofcommittedandhighlyqualified individuals whocaredeeplyaboutourcompany andbringa diverse setofexperiences andperspectives toourBoard deliberations. Ourdirectors’ skillsetsandindependent thought leadership havebeeninvaluable tomeandthemanagement teaminestablishing ourlong-term business strategyand executing onthatstrategy.Iamgratefultoallofourdirectors for theirdedicated service andIencourage youtosupporteach director nomineeonthisyear’sballot. 90 Years .In2017,wecelebratedthe90thanniversaryofthe foundingofArthurJ.Gallagher&Co.Thevaluesthatwere instilledinthiscompanyin1927bymygrandfatherandour founder,ArthurJ.Gallagher,continuetodriveourglobalteam’s success today.Thesetraits,articulatedin TheGallagherWay , includeacollaborativeandprofessionalsalesculture,an unwaveringfocusonourclientsandadevotiontomaintaining thehigheststandardsofmoralandethicalbehavior.Webelieve thatourcultureisatruecompetitiveadvantageandakey differentiatorwhenrecruitingexperiencedtalent,growingour owntalentthroughoursummerinternshipprogram,attracting newacquisitionpartners,retainingourvaluedclientsand winningnewbusiness.Asfurthertestamenttoourunique culture,in2018wewerepleasedtoberecognizedbythe EthisphereInstituteforthe7 th consecutiveyearasoneofthe World’sMostEthicalCompanies ® . OnbehalfofourBoardofDirectors,thankyouforyour continuedsupport.Welookforwardtowelcomingyouatour 2018AnnualMeeting. Sincerely, J.PatrickGallagher,Jr. ChairmanoftheBoard, PresidentandChiefExecutiveOfficer 1 SeeExhibitAforreconciliationsofnon-GAAPmeasures. LETTER TO OUR SHAREHOLDERS FROM THE BOARD OF DIRECTORS DearShareholders, We are pleased to invite you to attend the Annual Meeting of Shareholders on Wednesday, May 23, 2018. Our meeting will be held at 9:00 a.m., local time, at the Belmond Charleston Place Hotel, located at 205 Meeting Street,Charleston,SouthCarolina29401. As your Board, we welcome this opportunity to communicate with you. In stewarding your Company, we seek to achieve long-term, sustainable performance and create value through the right business strategies, prudent risk management, effective corporate governance practices, environmental and social initiatives, effective executive compensation programs, and well-functioning talent and succession planning. We would like to highlight a few areasofparticularsignificancefortheBoardthispastyear: AYearofExcitingGrowth 2017 was a year of exciting growth for Atlas Air Worldwide. We delivered record volumes, record revenue, and robust earnings growth, and we expect that to continue in 2018. Our performance in 2017 and our outlook for higher volumes, revenue and earningsin2018reflectthestrategicinitiativesthatwehaveputinplaceovermany years–initiativesthathavetransformedourcompany,broadenedourcustomerbase,anddiversifiedourfleet. We are capitalizing on our strong market position and our focus on express, e-commerce and fast-growing global markets. We are operating in a strong airfreight environment, underpinned by global economic growth. And with thebuildingblockswehaveinplace,weseeopportunitiestogrowwithexistingcustomersandnewones. Our vision is to be our customers’ most trusted partner. And we are committed to driving value for our shareholders. 2017FinancialandOperatingPerformance Our financial and operating performance in 2017 reflected the leadership and strength of our ACMI and Charter businesses, the growth of our annuity-like Dry Leasing operations, and ongoing efficiency and productivity initiatives. Volumesincreased20%to252,802blockhoursin2017,withrevenuegrowing17%to$2.16billionandtotaldirect contributionbyourbusinesssegmentsincreasing15%to$422.6million. On a reported basis, income from continuing operations, net of taxes, increased more than five-fold to $224.3million,or$8.68perdilutedshare,primarilyduetoa$130.0millionbenefitrelatedtotherevaluationofour deferredtaxliabilitiesasaresultoftheU.S.TaxCutsandJobsAct. On an adjusted basis, income from continuing operations, net of taxes*, grew 17% to $133.7 million, or $4.93 per dilutedsharein2017,withEBITDA,asadjusted*,rising12%to$428.6million. * Adjusted income from continuing operations, net of taxes, Adjusted net income, Adjusted Diluted EPS, and EBITDA, as adjusted, are non-GAAP measures. A reconciliation to the most directly comparable GAAP measuresiscontainedinExhibitAattachedhereto. Total of 03 pages in section To Our Stockholders Letter from the Chairman, CEO and President Dear Stockholders: I’m pleased to invite you to join us for our 2018 Annual Meeting of Stockholders on Friday, April 27, 2018, at 9:00 a.m., at the Moody Performance Hall, 2520 Flora Street, Dallas, Texas 75201. At this year’s meeting, we will discuss our business and strategy to create the best entertainment and communications experiences in the world . Everything we’ve done is about executing that strategy: From our wildly popular DIRECTV NOW video streaming service to the success of our bundled video, wireless and broadband offerings, to being named by the U.S. First Responder Network Authority to build a best-in- class nationwide network for first responders and public safety officials. The next step in executing our strategy is our pending acquisition of Time Warner. Despite the U.S. Department of Justice’s decision to challenge the acquisition in court, we remain confident we will com- plete this merger, and we look forward to bringing its benefits to both our customers and investors. Our goal is to deliver strong results for our stockholders while positioning AT&T for the long term. On behalf of the Board and our management team, thank you for your continued support. Sincerely, Randall Stephenson Letter from the Lead Director Dear Stockholders: As your company’s Lead Independent Director, I’m proud of the commitment to strong governance that is a hallmark of AT&T. The Board’s role is to keep our company focused on the long term and protect the interests of our stockholders. We do that by challenging conventional thinking and offering different points of view, while maintaining a sharp focus on creating value for stockholders. As the marketplace around us has changed, so too has the composition of our Board. Since 2013, we have elected seven new directors, resulting in a Board with the rich diversity of knowledge, experience and per- spectives across technology, finance, marketing and public policy that AT&T needs to continue creating value for you, our stockholders. I hope you are able to join us at our Annual Meeting. And as always, the entire Board thanks you for your confidence and support. Sincerely, Matthew Rose