| Jo Ann Golden | Mark E. Tryniski
CORPORATE GOVERNANCE AND NOMINATING COMMITTEE REPORT The role of the Corporate Governance and Nominating Committee is to recommend individuals to the Board for nomination as members of the Board and its committees and to develop and recommend to the Board a set of corporate governance principles applicable to the Company. The Board of Directors, in its business judgment, has determined that all members of the Corporate Governance and Nominating Committee are “independent”, as required by applicable listing standards of the NASDAQ Stock Market, in that no member of the Corporate Governance and Nominating Committee has received any payments, other than compensation for Board services, from the Company. The Corporate Governance and Nominating Committee operates pursuant to a Charter that was last amended and restated by the Board of Directors on February 25, 2013.in March 2011. A copy of the amended and restated charter is available on the Company’s web site in the corporate governance tab of the investor relations section. The Corporate Governance and Nominating Committee has no fixed process for identifying and evaluating potential candidates to be nominees. The Corporate Governance and Nominating Committee has no fixed set of qualifications that must be satisfied before a candidate will be considered. Rather,considered, although the Corporate Governance and Nominating Committee and the Full Board are committed to creating a Board with diversity, including diversity of expertise, experience, background, and gender and is committed to identifying, recruiting, and advancing candidates offering such diversity in future searches. The Corporate Governance and Nominating Committee has opted to retain the flexibility to consider such factors as it deems appropriate. These factors may include judgment, skill, diversity, reputation, experience with businesses and other organizations of comparable size as executives, directors or in other leadership positions, an understanding of finance and financial reporting processes, a corporate governance background, the ability to dedicate significant time for service on the Company’s Board of Directors, the interplay of the candidate’s experience with the experience of other Board members, and the extent to which the candidate would be a desirable addition to the Board and any committees of the Board. In this regard, the Corporate Governance and Nominating Committee also looks for the skills and expertise required to satisfy the listing requirements of the NASDAQ Stock Market, on which CONMED’s stock is traded. The Corporate Governance and Nominating Committee has in the past six months commenced a search process and retained (and may from time to time in the future engage) a nationally-recognized, third party search firm to assist in the process of identifying, screening and evaluating director candidates. When a search firm is engaged by
During 2017, the Corporate Governance and Nominating Committee it identifies director candidates on behalfconsidered and made changes to the Committee membership of the Committee for a fee, and also screens candidates identifiedBoard by individual directors, management or third parties. Currently,accepting Mr. Tryniski’s request to step down from the Corporate Governance and Nominating Committee, has instructedand appointing Ms. Goldberg Aronson to the search firm to prioritize identifying candidates who bring financial expertise.Corporate Governance and Nominating Committee. The Committee may consider candidates proposed by management, but is not required to do so. As previously disclosed, the Corporate Governance and Nominating Committee will consider any nominees submitted to the Company by shareholders wishing to propose nominees for election as directors at the 20162019 Annual Meeting, provided that the shareholders proposing any such nominees have adhered to specified advance notice procedures contained in the Company’s by-laws, a copy of which is available on request to the General Counsel of the Company, CONMED Corporation, 525 French Road, Utica, New York 13502 (Telephone (315) 797-8375). Submitted by the Corporate Governance and Nominating Committee, | | | | Brian P. Concannon (Chair) | Jerome J. LandeDavid Bronson | Stephen Martha Goldberg Aronson | Dirk M. Mandia | Mark E. Tryniski |
SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS Shareholders who wish to communicate with the Board of Directors as a group or an individual director may do so by sending correspondence to the attention of the General Counsel of the Company at 525 French Road, Utica, New York 13502 with a cover letter specifying the intended recipient. At this time, no communications received by the Company in this manner will be screened, although this could change without prior notice. As set forth in the Company’s Corporate Governance Principles, the Company’s policy is that directors will attend the Annual Meeting of Shareholders, absent exceptional circumstances. Historically, all directors have attended the Annual Meeting of Shareholders, and all directors then in office were present at the 20142017 Annual Meeting of Shareholders (the “2014“2017 Annual Meeting”).
The Company has adopted, as of March 31, 2003, and updated on February 28, 2017, an ethics program which applies to all employees, including senior financial officers and the principal executive officer. The ethics program is available throughon the “Investors” sectionCompany’s website in the corporate governance tab of the CONMED Corporation web siteinvestor relations section (http:// www.conmed.com)www.conmed.com/en/about-us/investors/investor-relations), and is administered by the Company’s General Counsel. The Program codifies standards reasonably necessary to deter wrongdoing and to promote honest and ethical conduct, avoidance of conflicts of interest, full, fair, accurate, timely and understandable disclosure, compliance with laws, prompt internal reporting of code violations and accountability for adherence to the code and permits anonymous reporting by employees to an independent third party, which will alert the Chair of the Audit Committee of the Board of Directors if and when it receives any anonymous reports. No waivers under the Ethics Program have been granted.
OTHER MATTERSOn February 25, 2014, the Company entered into the Coppersmith Nomination and Standstill Agreement with significant shareholder Coppersmith Capital Management, LLC, Jerome J. Lande, Craig Rosenblum (collectively, the “Coppersmith Group”) and Curt R. Hartman. Under the terms of the Coppersmith Nomination and Standstill Agreement, the Company agreed to increase the size of the Board of Directors to eleven members and appoint Jerome J. Lande and Curt R. Hartman to the Board of Directors, effective March 1, 2014. The Company also agreed to appoint Mr. Lande to the Corporate Governance and Nominating Committee and the Compensation Committee and Mr. Hartman to the Audit Committee. The Company’s Board of Directors and the Corporate Governance and Nominating Committee of the Board agreed to nominate, recommend and support, and solicit proxies on behalf of, Mr. Lande, Mr. Hartman and Mr. Farkas, who was an independent director candidate selected by the Company from a list of candidates provided before execution of the Coppersmith Nomination and Standstill Agreement to the Coppersmith Group (Mr. Farkas, Mr. Lande and Mr. Hartman, the “New Nominees”) for election as directors at the 2014 Annual Meeting. All three New Nominees were elected to the Company’s Board of Directors at the 2014 Annual Meeting. Bruce F. Daniels and Stuart J. Schwartz chose not to stand for re-election as directors at the 2014 Annual Meeting. The size of the Board of Directors decreased to eight members effective as of the 2014 Annual Meeting. The Company’s Board of Directors and the Corporate Governance and Nominating Committee of the Board also agreed to nominate, recommend and support, and solicit proxies on behalf of, the New Nominees for election as a director at the Annual Meeting. Under the terms of the Coppersmith Nomination and Standstill Agreement, the Coppersmith Group agreed to vote all of the shares of Common Stock that it beneficially owns in favor of the election of the Company’s nominees for director at the 2014 and 2015 annual meetings of shareholders and in accordance with the Board of Director’s recommendation for each other proposal to come before the 2014 and 2015 annual meetings of shareholders if Mr. Lande has voted for such proposal in his capacity as a director. The Coppersmith Group has also agreed to certain standstill provisions that remain in effect from February 25, 2014 until the date that is thirty days prior to the expiration of the notice period specified in the Company’s advance notice by-law related to nominations of directors at the 2016 annual meeting of shareholders. These standstill provisions restrict the Coppersmith Group and certain of its affiliates and associates from, among other things, engaging in certain proxy solicitations, soliciting consents from shareholders, seeking to influence the voting of any Company securities, making certain shareholder proposals, proposing or participating in certain extraordinary corporate transactions involving the Company, calling meetings of shareholders, seeking additional representation on the Board of Directors or nominating candidates for election to the Board of Directors other than in accordance with the Coppersmith Nomination and Standstill Agreement, seeking to remove any of the Company’s directors or taking any action to influence the Board of Directors or the Company’s management.
PRINCIPAL ACCOUNTING FEES AND SERVICES The Audit Committee is responsible for the audit fee negotiations associated with the retention of PricewaterhouseCoopers LLP.TheLLP. The aggregate fees and expenses billed by PricewaterhouseCoopers LLP for professional services rendered for the audit of the Company’s annual financial statements for the years ended December 31, 20142017 and December 31, 2013,2016, for the reviews of the financial statements included in the Company’s Quarterly Reports on Form 10-Q for those years, for the audit of the Company’s internal control over financial reporting as of December 31, 20142017 and December 31, 2013,2016, and all other audit related, tax consulting and other fees and expenses, are set forth in the table below. | Fee Summary | 2014 | 2013 | | Audit Fees: | | | | Audit of Annual Financial Statements and Interim Reviews | $1,599,500 | $1,596,200 | | Audit of Internal Control over Financial Reporting | Included above | Included above | | SEC Registration Statements | $0 | $0 | | Total Audit Fees | $1,599,500 | $1,596,200 | | Audit Related Fees: | | | | Advisory Services | $0 | $0 | | Tax Fees: | | | | Tax Compliance and Consulting Services | $324,100 | $507,700 | | All Other Fees: | | | | Research Service License | $1,800 | $2,000 | | Total Fees and Expenses | $1,925,400 | $2,105,900 |
| | | | | | | | | | | Fee Summary | | 2017 | | 2016 | | Audit Fees: | | |
| | |
| | Audit of Annual Financial Statements and Interim Reviews | | $ | 1,897,400 |
| | $ | 1,912,200 |
| | Audit of Internal Control over Financial Reporting | | Included above |
| | Included above |
| | SEC Registration Statements | | $ | — |
| | $ | 8,500 |
| | Total Audit Fees | | $ | 1,897,400 |
| | $ | 1,920,700 |
| | Audit Related Fees: | | |
| | |
| | Advisory Services | | $ | — |
| | $ | — |
| | Tax Fees: | | |
| | |
| | Tax Compliance and Consulting Services | | $ | 497,081 |
| | $ | 536,800 |
| | All Other Fees: | | |
| | |
| | Research Service License | | $ | 1,800 |
| | $ | 1,800 |
| | Total Fees and Expenses | | $ | 2,396,281 |
| | $ | 2,459,300 |
|
The Audit Committee has adopted procedures requiring prior approval of particular engagements for services rendered by the Company’s independent registered public accounting firm. Consistent with applicable laws, the Audit Committee has delegated its authority to pre-approve work by the independent registered public accounting firm and related-party transactions to the Chair of the Audit Committee, who is required to disclose any such pre-approvals at the Audit Committee’s next meeting. All fee amounts set forth in the table above were pre-approved.
COMPENSATION DISCUSSION AND ANALYSIS Introduction
The following Compensation Discussion & Analysis (“CD&A”) describes the philosophy, objectives and structure of our fiscal year 2017 executive compensation program. This CD&A is intended to be read in conjunction with the tables beginning on page 38, which provide further historical compensation information for our named executive officers (“NEOs”) as identified below. | | | | | Name | | Title | | Curt R. Hartman | | Chief Executive Officer | Luke A. Pomilio* | | Executive Vice President, Finance & Chief Financial Officer | | Patrick J. Beyer | | President, CONMED International | | Nathan Folkert | | Vice President & General Manager, U.S. Orthopedics | | Stanley W. (Bill) Peters | | Vice President & General Manager, U.S. Advanced Surgical |
*On January 2, 2018, Todd W. Garner commenced employment with the Company as the Company’s Executive Vice President and Chief Financial Officer. In connection with Mr. Garner’s hiring, Mr. Pomilio ceased serving as Executive Vice President, Finance & Chief Financial Officer of the Company and assumed the role of Special Advisor to Mr. Garner in accordance with the letter agreement previously entered into between the Company and Mr. Pomilio.
| | | | | Quick CD&A Reference Guide | | | | Executive Summary | | Section I | | Objectives and Philosophy | | Section II | | Compensation Decision-Making Process | | Section III | | Competitive Market Analysis | | Section IV | | Elements of Executive Compensation | | Section V | | Additional Compensation Policies and Practices | | Section VI |
Our compensation program is designed to reward executives for focus and achievement of the Company’s short- and long-term performance goals. This is important, as our Company’s performance is very much dependent on the talents, skills and engagement of itsour people. We measure Company performance by growth in sales and earnings, and other financial metricsthese goals are directly reflected in our annual bonus plan. Strengthening our stock price performance over the long-term is also a focus as wellwe continue this strategic transformation; as such, our equity incentives are delivered as stock options and, to a lesser degree, restricted stock units (“RSUs”). Finally, our executives are measured by their individual contributions to the Company’s performance. Employment, advancementsuccess, and compensation are always contingent on demonstrating high ethical standards and compliance with governmental and regulatory standards.In this Compensation Discussion and Analysis, we primarily focus onis reflected in a small portion of the compensation decisions and approach in 2014. However, we have also attempted to highlight some changes made to the compensation program in the early part of 2015. We believe that in order to attract, retain, and reward top talent, some adjustments to our compensation programs were appropriate. We will continue to evaluate our compensation programs to ensure we reward and drive the Company’s performance goals.
Specifically discussed below are certain aspects of our compensation program as they relate to our chief executive officer or “CEO” (Curt R. Hartman), our chief financial officer or “CFO” (Robert D. Shallish, Jr.), and our three other most highly-compensated executive officers in 2014 (Joseph G. Darling, Daniel S. Jonas and Luke A. Pomilio). These individuals are collectively referred to as our “Named Executive Officers” or “NEOs.” We also discuss compensation for Joseph J. Corasanti, our former CEO, who is also an NEO for 2014 under SEC rules governing compensation disclosure.
Mr. J. Corasanti resigned as our CEO effective July 22, 2014 and was replaced by Mr. Hartman, who served as our Interim CEO from July 23, 2014 until his appointment as our CEO on November 9, 2014. Mr. J. Corasanti’s compensation arrangements are discussed below in the section titled, “—Employment Contracts – Mr. J. Corasanti’s Employment Agreement and Separation and Release Agreement”. Mr. Hartman’s compensation arrangements are discussed below in the section titled, “—Employment Contracts – Mr. Hartman’s Compensation Arrangements”.
Compensation Committee Role
The Compensation Committee is responsible for and oversees all aspects of compensation for executive officersannual bonus as well as certain other key employees. The Compensation Committee relies on the CEO alongin base salary adjustments.
Overview of Pay Program Our pay program is reflective of our business strategy, our desire to fairly and appropriately pay our executive team, and our desire to align management with the Executive Vice President of Human Resources to make recommendations on compensation levels for the executives (other than the CEO). In July 2013, the Compensation Committee retained Semler Brossy as a compensation consultant in connection with the compensation paid to the CEO and CFO, and this engagement continued through 2014 as the Compensation Committee continues to evaluate the compensation for the NEOs. Semler Brossy does not provide any services to management and does not have any business or personal relationship with any member of the Committee or management.Each year the Compensation Committee reviews compensation for similar positions at other corporations within a designated peer group of companies that includes other public medical device companies. The purpose of the review is to ensure that the Company’s overall compensation levels, and the components thereof, are appropriate in light of the nature of the medical device business and the talent for which we compete. Thereshareholder interests.
While there is no fixed formula, or percentile of market-established compensation levels which the Company strives to meet. The complete list of the companies reviewed in 2014 was: Accuray, Inc., Align Technology, Inc., Analogic Corp., Cooper Companies, Inc., Greatbatch Inc., Hill-Rom Holdings, Inc., IDEXX Laboratories, Inc., Integra Life Sciences Holdings Corporation, Invacare Corp., Masimo Corp., Nuvasive Inc., Orthofix International N.V., Resmed Inc., Sirona Dental Systems, Inc., Steris Corporation, Teleflex, Inc., Thoratec Corp., West Pharmaceuticals, Inc. and Wright Medical Group, Inc. The Compensation Committee may reviseseeks an appropriate balance between cash and non-cash compensation, short and long term incentives, at-risk compensation and the listappropriate mix of peer companies used for annual benchmarkingdifferent forms of equity compensation. In addition, the Compensation Committee believes that senior executives who have greater and more direct impact and influence over the Company’s overall performance should receive a significant proportion of equity relative to their total compensation, thus seeking to align the executive’s incentives and impact with the value he or she brings to the Company-wide performance.
Our executive pay program consists of three major elements: | | | | | Base Salary | | • Individual salaries are established at time of hire and adjusted thereafter by committee discretion • Designed to be competitive within the market and industry, and to reflect individual performance and contribution | | | | Short-Term Incentive (“STI”) | | • Cash incentives intended to reward the achievement of annual Company financial goals as well as individual accomplishments and contributions • For 2017, cash performance measures were Total Net Sales (FX Adjusted) and Adjusted EPS, as well as individual performance goals | | | | Long-Term Incentives (“LTI”) | | • Equity awards with lengthy vesting periods for retentive purposes as well as to focus executives on long-term share price appreciation, which are intended to align shareholder and management interests • For 2016 and 2017, equity was delivered as stock options and RSUs • Outstanding equity awards include performance share units (“PSUs”) awarded to our CEO in 2015 |
Target Pay To promote the performance-based culture as appropriate for reasons including, but not limiteddescribed above, and to changesalign the interests of management and shareholders, our executive compensation program focuses on variable compensation. Our CEO’s and other NEO’s target pay mix in revenue, market capitalization, profitability, and in the medical device industry so that the peer companies include those companies with whom we compete for executive talent.2017 illustrate this:
Compensation Program Governance | | | Best Practices We Employ | | Majority of NEO compensation tied to long-term performance | | Equity awards granted in 2015 and beyond require a double trigger for Change in Control vesting acceleration | | Stock ownership guidelines of 4x salary for CEO, 3x for the CFO, and 1x for other NEOs | | Appropriate caps on incentive plan payouts | | Compensation committee is comprised entirely of independent directors | | Compensation committee engages an independent consultant | | Compensation committee regularly meets in executive session without management present | | Annual risk assessment of the compensation program | | Robust holding requirements until minimum share ownership requirements are achieved | | Minimum vesting schedule of at least 12 months for equity awards | | Incentive program designs do not encourage excessive risk taking | | Hedging is not permitted | | Our equity plan does not allow repricing of underwater options without shareholder approval | | We do not provide executive perquisites | | Excise tax-gross ups are not permitted | | We do not pay dividends on unvested equity awards |
2017 Say-on-Pay Vote Results The Compensation Committee reviewed the voting results on the advisory resolution, commonly referred to as a “say-on-pay” resolution, when evaluating our executive compensation programs and noted 90.5%98.5% of the shares that were voted by shareholders at the 20142017 Annual Shareholders meeting voted in favor of the compensation program. The Compensation Committee believes that these voting results evidencereflect strong shareholder support for our current compensation practices, and accordinglypractices. Accordingly, we did not make anysignificant changes to our executive compensation practices or programs based on the results of the vote. Risk Assessment
The Compensation Committee will continue to review our executive compensation program as well as consider the outcome of our “say on pay” votes when making future compensation decisions for the NEOs. | | | II. | Objectives and Philosophy |
CONMED’s executive compensation program reflects the following principles: Attract, retain and motivate top talent. Provide incentives that reward the achievement of performance goals that directly correlate to the enhancement of shareholder value, as well as facilitate executive retention. Align the executives’ interests with those of shareholders through long-term incentives linked to specific performance of objective goals.
| | | III. | Compensation Decision-Making Process |
Role of Board of Directors and Compensation Consultant The Compensation Committee oversees all aspects of compensation for the CEO and the CEO's direct reports ("the Executive Team"). The Compensation Committee structures the executive compensation program to balance the goals of linking pay-to-performance and creating alignment with shareowner interests with the challenge of retaining and motivating a qualified Executive Team to provide business continuity and strategic leadership. In the fall of 2015, the Compensation Committee, after a thorough review process, retained Radford as its independent compensation consultant in connection with the compensation paid to the Executive Team, and to review director compensation. Radford does not provide any material services to management and the Compensation Committee has evaluateddetermined that it does not have any business or personal relationship with any member of the Committee or management.
In determining executive compensation, the Compensation Committee obtains input and advice from Radford, and reviews recommendations from our CEO and the Executive Vice President of Human Resources with respect to the performance and compensation of our other Executive Team members. The Board of Directors, upon recommendation from the Compensation Committee, reviews and approves CEO and NEO compensation. Risk Assessment The Compensation Committee annually evaluates the Company’s compensation programs to assess whether such programs as designed or administered would facilitate or encourage excessive risk-taking by employees. The Committee has concluded that the programs are not reasonably likely to have a material adverse effect on the Company in part due to the following program elements: (i) limits provided on annual incentive and long-term performance awards, (ii) the potential opportunity derived from long-term incentive programs outweigh the benefit available under the annual incentive programs thereby creating a focus on sustained Company operational and financial performance, and (iii) the enhanced stock ownership guidelines impacting all executives.Highlights
For summary purposes, key features of our executive compensation program include:
the Executive Team. | · | | IV. | The 2014 performance goals under the Executive Bonus Plan (our “EBP”) are based upon achievement of non-GAAP EPS and Net Sales goals. Further, 2014 performance bonuses incorporated the concept of threshold/target/maximum goals and payouts.Competitive Market Analysis |
Our compensation committee utilizes a comparative framework to help define specific peer companies and several other survey data sources to help with the assessment. | | | | Primary Market (Peer Companies) | Secondary Market (Survey Data) | Data Sources | • Specific peers in the medical device and healthcare equipment industry with a similar business and financial profile | • Broader, size-appropriate comparisons in the medical device industry | • Public SEC filings for specific peers • Radford Global Life Sciences Survey |
We regularly review this competitive data which includes data with respect to salary, bonus, and equity across a range of percentiles. There is no fixed formula or percentile of market-established compensation levels which the Company strives to meet and the benchmark data reviewed includes a range from the 25th percentile to the 75th percentile. This data is but one factor considered in our evaluation. Other factors considered include the scope of the executive’s role within our Company, the performance of the individual, and the expected future contributions of the individual.
2017 Peer Group Each year the Compensation Committee works with our independent compensation consultant to review compensation for similar positions at other corporations within a designated peer group of companies to help ensure that the Company’s overall compensation levels, and the components thereof, are appropriate. Our 2017 Peer Group was as follows: | | | | | Align Technologies | Hill-Rom Holdings | Orthofix International | | Analogic Corporation | Integra Life Sciences | Sirona Dental Systems | | Cantel Medical | Invacare Corporation | NX Stage Medical | | Globus Medical | Masimo Corporation | Teleflex Incorporated | | Greatbatch | Merit Medical Systems | West Pharmaceutical Services | | Haemonetics Corporation | NuVasive | |
As our Company evolves, we continue to revisit and refine, as needed, this peer group. To select peers for 2018, we worked with Radford to consider companies which generally fit within the following criteria: Market Capitalization – 1/3 to 3x CONMED’s current market capitalization, now ranging from $500 million to $4.3 billion; Revenue – 1/3 to 3x CONMED’s trailing twelve-month revenue, now ranging from $250 million to $2.4 billion; Headcount – 1/3 - 3x CONMED’s current headcount, now ranging from 1,000 to 10,000.
As a result of CONMED’s growth in revenues and market capitalization, some of the companies that formerly were within the peer group no longer fit within these criteria, and others now were added. Consequently, we removed the following companies, and added the following companies: | | | | | | Removed Company | Reasoning | | New for 2018 | | Hill-Rom | Market value (~$5.0 billion), revenue (~2.7 billion) and headcount are above the range | | | | Teleflex | Market value (~$10.7 billion) and headcount (12,600) are above the range
| | • ICU Medical
• Natus Medial
| | Sirona Dental | Acquired by Dentsply in September 2015 and no compensation data is available for FY16
| | |
| | | | Added Company | Reasoning | | ICU Medical | Market value (~$3.6 billion), revenues (~$772 million) and headcount (2,803) are within the range | | Natus Medical | Market value (~$1.2 billion), revenues (~$445 million) and headcount (1,160) are within the range |
| · | | V. | The Company remains committed not to enter into agreements to gross-up excise taxes in future agreements with executives, and does not reimburse executives for the tax liability created by compensation regularly paid to executives.Elements of Executive Compensation |
| · | The EBP was approved by shareholders at the 2012 Annual Shareholders meeting, and is intended to permit the payment of incentive compensation that is tax deductible as “qualified performance based compensation” as defined in Section 162(m) (or other provisions) of the Internal Revenue Code. |
| · | The Company’s equity awards granted to management through 2014 generally vest over five years (or longer), tying the interests of executives and shareholders. |
| · | The Company maintains stock ownership guidelines for executives and directors with holding periods for certain equity grants, and prohibits its officers and directors from holding derivatives other than those issued by the Company, further aligning the interests of management, directors and shareholders. |
| · | A Recoupment Policy has been adopted by the Company and is contained in the shareholder approved Executive Bonus Plan. |
| · | The Change in Control Severance Agreements with certain executives that were in effect during 2014 included a “double-trigger”, requiring a termination of employment or constructive discharge in addition to the change in control (as defined more particularly under “Employment Contracts” below) before triggering the severance benefits. Effective April 7, 2015, Messrs. Jonas and Pomilio agreed to terminate their Change in Control Severance Agreements with the Company, and as a result there are no such agreements in place with our NEOs as of the date of this proxy statement. |
| · | For the NEO’s 2014 annual RSU grants and all equity grants in 2015, a “double-trigger” also applies, requiring a termination of employment or constructive discharge in addition to a change in control before triggering accelerated vesting. |
Compensation Components
NEO compensation primarily consists of base salary, annual incentive awards, and annual grants of equity awards. These elements are in line with the level of responsibility and impact on our results for each executive. An NEO’s salary is initially established based upon an evaluation of the competitive salaries for similar positions in the market. Absent a promotion or some other unusual circumstance, such as a change in responsibilities, salaries are reviewed once per year. In this process, the Compensation Committee considers the recommendation of the CEO along with the Executive Vice President of HRHuman Resources in reviewing and approving the base salaries of the executive officersExecutive Team (other than the CEO). In making his recommendation for the NEOs and other executive officers,Executive Team, the CEO considers the individual’s contribution to the Company’s performance and exercises judgment and discretion when considering any additional factors that should appropriately affect the executive’s salary such as current compensation data derived from the proxies of the peer companies described above and, as appropriate, compensation data gathered from third-party surveys generally available to the Company. No specific formula is used to weigh or evaluate these factors, butfactors; rather, the CEO considers such factors on the whole when making a base salary recommendation. As to the process for reviewing the base salary for the CEO, the Committee considers the Company’s performance, the CEO’s contribution and his responsibilities. No fixed formula or target percentile is established for setting the base salary. In May 2014, the Company increased the salaries of each of Mr. J. Corasanti, Mr. Shallish, Mr. Darling, Mr. Jonas and Mr. Pomilio by 3%, to $603,791, $333,087, $385,770, $301,777 and $328,474, respectively. Effective December 9, 2014, Mr. Pomilio’s annual base The salary was increased to $385,000, to reflect his transition to the role of our Chief Financial Officer upon Mr. Shallish’s retirementadjustments in March 2015.
2017 were as follows. | | | | | | | | | | | | | NEO | 2017 Base Salary | | 2016 Base Salary | | % Change | | Curt R. Hartman |
| $745,500 |
| |
| $710,000 |
| | 5.0 | % | | Luke A. Pomilio |
| $392,700 |
| |
| $385,000 |
| | 2.0 | % | | Patrick J. Beyer |
| £292,329 |
| 1 |
| £278,409 |
| 1 | 5.0 | % | | Nathan Folkert |
| $357,035 |
| |
| $353,500 |
| | 1.0 | % | | Stanley W. (Bill) Peters |
| $350,243 |
| |
| $343,375 |
| | 2.0 | % |
_________________ | | | (1) | Mr. Beyer is located in the U.K and his base salary for 2017 and 2016 was paid in British pounds. Mr. Beyer’s salary in U.S. dollars would be $396,110 and $343,291 for 2017 and 2016, respectively, using spot exchange rates at December 29, 2017 and December 30, 2016 (the last business day of the year) of £0.738 and £0.811 to U.S. $1.00 respectively. |
The Company maintains the shareholder-approved Executive Bonus Plan, or EBP,which may be used to pay incentive compensation to the Company executives, including our NEOs. The Executive Bonus Plan, which was adopted in connection with the Company’s 2017 Annual Meeting of Shareholders, replaced in its entirety the Company’s 2012 Executive Bonus Plan. The Executive Bonus Plan is effective for performance periods commencing on or after January 1, 2018; annual bonuses made to the NEOs in respect of 2017 were made under the 2012 Executive Bonus Plan. For the NEOs, annual bonus targets and performance metrics are established in the first quarter of the year by the Compensation Committee and the Board of Directors at the meeting typically held in late February or early March. 2014
Executive Bonus Plan Performance Goals for 2017 The target bonus percentage for NEOs in 2014, other than for Mr. Hartman, was 50% of base salary, and for Mr. J. Corasanti, it was 50% of base salary plus his contractual deferred compensation, which at the time was $225,000 (in each case, “Base Compensation”). Mr. Hartman’s target bonus percentage for 2014 per his employment letter (described below) was 100% of Base Compensation, with the earned amount pro-rated for the portion of the year he served as Interim CEO or CEO.The 2014 EBPExecutive Bonus Plan performance goals for 2017 were established by the Compensation Committee in February 2014 and are based on achievement of non-GAAP EPS and Net Sales. To reinforce profitability, the target bonus is weighted more heavily to earnings with 70% based on achievement of a non-GAAP EPS goal and 30% based on achievement of a Net Sales goal.2017. The bonus payment is basedconditioned upon the achievement of certain threshold goals and is measured on a sliding scale between threshold and maximum performance. For 2017, each NEO’s bonus was based on three metrics: (i) Total Company Net Sales (Fx Adjusted) ; (ii) non-GAAP adjusted Cash Earnings Per Share (“Adjusted EPS”); and (iii) individual performance goals. The weighting of each performance metric (in each case, expressed as a percentage of the NEO’s annual base salary) varies by position, as follows:
| | Threshold | Target | Maximum | | Non-GAAP EPS | $1.85 | $1.95 | $2.15 | | % of target performance | 95% | 100% | 110% | | Payout - % of target bonus | 50% | 100% | 200% | | Net Sales (in thousands) | $736,250 | $775,000 | $852,500 | | % of target performance | 95% | 100% | 110% | | Payout - % of target bonus | 25% | 100% | 200% |
Non-GAAP
| | | | | | | | | | | | Threshold | | Target | | Maximum | | Curt R. Hartman | |
| | |
| | |
| | Net Sales (FX Adjusted) | 22.5 | % | | 45.0 | % | | 90.0 | % | | Adjusted EPS | 22.5 | % | | 45.0 | % | | 90.0 | % | | CEO Goals | 0.0 | % | | 10.0 | % | | 20.0 | % | | Total | 45.0 | % | | 100.0 | % | | 200.0 | % | | | | | | | | | Luke A. Pomilio | |
| | |
| | |
| | Net Sales (FX Adjusted) | 15.0 | % | | 30.0 | % | | 60.0 | % | | Adjusted EPS | 12.5 | % | | 25.0 | % | | 50.0 | % | | CFO Goals | 0.0 | % | | 10.0 | % | | 20.0 | % | | Total | 27.5 | % | | 65.0 | % | | 130.0 | % | | | | | | | | | Patrick J. Beyer | |
| | |
| | |
| | Net Sales (FX Adjusted) | 10.0 | % | | 20.0 | % | | 40.0 | % | | Adjusted EPS | 10.0 | % | | 20.0 | % | | 40.0 | % | | International Goals | 7.5 | % | | 15.0 | % | | 30.0 | % | | Total | 27.5 | % | | 55.0 | % | | 110.0 | % | | | | | | | | | Nathan Folkert | |
| | |
| | |
| | Net Sales (FX Adjusted) | 10.0 | % | | 20.0 | % | | 40.0 | % | | Adjusted EPS | 10.0 | % | | 20.0 | % | | 40.0 | % | | Orthopedics Goals | 5.0 | % | | 10.0 | % | | 20.0 | % | | Total | 25.0 | % | | 50.0 | % | | 100.0 | % | | | | | | | | | Stanley W. (Bill) Peters | |
| | |
| | |
| | Net Sales (FX Adjusted) | 10.0 | % | | 20.0 | % | | 40.0 | % | | Adjusted EPS | 10.0 | % | | 20.0 | % | | 40.0 | % | | Advanced Surgical Goals | 5.0 | % | | 10.0 | % | | 20.0 | % | | Total | 25.0 | % | | 50.0 | % | | 100.0 | % |
The corporate goals were set and measured as follows:
Net sales (FX adjusted) goals were in the $770 million to $805 million range with payouts from 50% to 200%. The target
was $792.2 million for 100% payout. Net Sales (FX Adjusted) is calculated by taking GAAP sales and adjusting for the impact of actual foreign exchange rates versus budgeted foreign exchange rates and other non-eligible bonus elements.
Adjusted EPS goals were in the $1.85 to $2.09 range with payouts from 50% to 200%. The target was $1.97 for 100% payout. Adjusted EPS for these purposes is adjusted for unusual items, including restructuring charges, changes in tax or accounting rules, acquisitions or other special or nonrecurring events. No bonus will be paid unless the non-GAAP EPS threshold is met. The Compensation Committee structured this scale to incent executives with challenging targets based upon the Company’s internal goals and guidance to investors. The maximum 2014 bonus potential for all NEOs, except Mr. Hartman, was 100% of Base Compensation if achievement of 110% (i.e., $852,500 in Net Sales and $2.15 Non-GAAP EPS) or more of the target Net Sales and non-GAAP EPS performance goals were achieved. Under the terms of the EBP, the Compensation Committee reserves the right to exercise negative discretion with respect to
In addition, each participant’sNEO’s annual bonus amount. Mr. Hartman’s 2014 bonus potential was also 100% of Base Compensation, however his calculation was 50% based on the above calculation and 50% subjective as described in his Employment Letter. Mr. Hartman’s 2014 bonus payment was subject to proration for the portion of the year he served as Interim CEO or CEO under the terms of the Interim CEO Employment Letter and CEO Employment Letter. Mr. J. Corasanti did not receive a bonus in respect of the 2014 performance year (other than with respectgoals specific to the holdback fromindividual’s areas of responsibility:
Mr. Hartman’s goals included the 2013 bonus, as described below).development and implementation of strategic initiatives; Mr. Pomilio’s goals included the development and implementation of strategic and operational initiatives; Mr. Beyer’s goals included specific targets relative to the International business; Mr. Folkert’s goals included specific targets relative to the U.S. Orthopedics business; Mr. Peters’ goals included specific targets relative to the U.S. Advanced Surgical business.
2017 Actual Payouts For 2014,2017, the Company achieved non-GAAP earnings per shareachieved:
Net Sales (FX Adjusted) of $1.92,$785.6 million, which is 85.2% of target Adjusted EPS of $1.87, or 98%58.0% of target, and Net Sales of $740,055, or 95% of target. Applying these results, the actual bonus earned by the NEOs was 31.8% of Base Compensation at December 31, 2014includes a $0.02 adjustment for NEOs other than Mr. J. Corasanti. Mr. Hartman also received an additional payment of $157,562, based on the Compensation Committee’s assessment of his performance during 2014.non-bonus eligible elements.
Below is a reconciliation of GAAP to non-GAAPAdjusted EPS ($ in(in $ thousands): | Reported net income | | $ | 32,192 | | | Facility consolidation costs | | | 5,612 | | | Total cost of sales | | | 5,612 | | | Administrative consolidation costs | | | 3,354 | | | Costs associated with management restructuring | | | 12,546 | | | Costs associated with shareholder activism | | | 3,966 | | | Costs associated with the purchase of a business | | | 722 | | | Costs associated with patent disputes and other matters | | | 3,374 | | | Total other expense | | | 23,962 | | | Total adjusted expense before income taxes | | | 29,574 | | | Provision (benefit) for income taxes on adjusted expense | | | (10,646 | ) | | New York State corporate tax reform | | | 2,258 | | | Adjusted net income | | $ | 53,378 | | | Per share data: | | | | | | Reported net income | | | | | | Basic | | $ | 1.17 | | | Diluted | | | 1.16 | | | Adjusted net income | | | | | | Basic | | $ | 1.95 | | | Adjusted | | | 1.92 | |
In addition,
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Twelve Months Ended December 31, 2017 | | | | Gross Profit | | Selling & Administrative Expense | | Operating Income | | Tax Expense / (Benefit) | | Effective Tax Rate | | Net Income | | Diluted EPS | | As reported | | $ | 431,041 |
| | $ | 351,799 |
| | $ | 46,935 |
| | $ | (26,755 | ) | | (93.1 | )% | | $ | 55,487 |
| | $ | 1.97 |
| | % of sales | | 54.1 | % | | 44.2 | % | | 5.9 | % | | |
| | |
| | |
| | |
| | Restructuring costs | | 2,903 |
| | (1,347 | ) | | 4,250 |
| | 1,419 |
| | |
| | 2,831 |
| | 0.10 |
| | Business acquisition costs | | — |
| | (2,336 | ) | | 2,336 |
| | 847 |
| | |
| | 1,489 |
| | 0.05 |
| | Legal matters | | — |
| | (17,480 | ) | | 17,480 |
| | 5,681 |
| | |
| | 11,799 |
| | 0.42 |
| | Tax reform | | — |
| | — |
| | — |
| | 32,058 |
| | | | (32,058 | ) | | (1.14 | ) | | | | $ | 433,944 |
| | $ | 330,636 |
| | $ | 71,001 |
| | $ | 13,250 |
| | | | $ | 39,548 |
| | $ | 1.40 |
| | % of sales | | 54.5 | % | | | | | | |
| | |
| | |
| | |
| | Amortization of intangible assets | | $ | 6,000 |
| | (15,295 | ) | | 21,295 |
| | 7,530 |
| | |
| | 13,765 |
| | 0.49 |
| | Adjusted earnings | | |
| | $ | 315,341 |
| | $ | 92,296 |
| | $ | 20,780 |
| | 28.0 | % | | $ | 53,313 |
| | $ | 1.89 |
| | Non-bonus eligible elements | | | | | | | | | | | | | | (0.02 | ) | | Adjusted EPS | | | | | | | | | | | | | | $ | 1.87 |
|
Applying these results, as provided for inwell as the termsachievement of the 2013individual performance goals for each NEO, bonuses 20% of the incentive payout from 2013 was held backwere earned as follows: | | | | | | | | | | | | | NEO | Bonus Target (as % of Base Salary) | Net Sales (Fx Adjusted) Achieved | Adjusted EPS Performance Achieved | Individual Performance Achieved | FY 2017
Actual
Performance
Achieved (as
% of target
bonus) | FY 2017
Earned Bonus
(as % of base
salary) | FY 2017
Earned
Bonus
($) | | | Curt R. Hartman | 100% | 85% | 58% | 100% | 74% | 74% | $ | 554,950 |
| | | Luke A. Pomilio | 65% | 85% | 58% | 100% | 77% | 50% | $ | 196,586 |
| | | Patrick J. Beyer | 55% | 85% | 58% | 73% | 72% | 40% | $ | 156,523 |
| 1 | | Nathan Folkert | 50% | 85% | 58% | 25% | 62% | 31% | $ | 111,181 |
| | | Stanley W. (Bill) Peters | 50% | 85% | 58% | 30% | 63% | 32% | $ | 110,817 |
| |
_________________ 26 | | | (1) | Mr. Beyer is located in the U.K., and, while the amounts shown in this table are expressed in U.S. dollars, his bonus compensation is paid in British pounds. These components were converted to U.S. dollars using an exchange rate of £0.738 to U.S. $1.00, which was the spot rate as of December 29, 2017 (the last business day of the year). |
Discretionary Bonuses to be paid in 2015 based on achieving at least 85% of the 2014 non-GAAP EPS target, or a minimum of $1.66. This was achieved and the payout took place in March 2015, and resulted in payments of $157,241 to Mr. J. Corasanti (pursuant to his Separation and Release Agreement, described below), $64,677 to Mr. Shallish, Jr., $63,781 to Mr. Pomilio, $58,597 to Mr. Jonas and $74,907 to Mr. Darling.
The Compensation Committee has the discretion to award discretionary bonuses in recognition of exceptional individual performance, including awards upon the recommendation of the CEO, to review at year-endCEO. For 2017, the Company’s actual results,Committee recommended and may consider certain mitigating factors, such as one-time costs or other unique events not contemplated at the time the goals were established. The Committee in such circumstances may also consider the need to attract and retain executive talent and, in such instances,Board supported, a discretionary bonus may be awardedof $23,713 (6.0% of annual base salary) to adjust for these factors. Although the Committee generally reserves the right to pay discretionary bonuses from time to time, no NEOs were awarded aMr. Beyer based on his exceptional performance in 2017. As noted above, Mr. Beyer is paid in British pounds. This discretionary bonus in 2014. was converted to U.S. dollars using an exchange rate of £0.738 to U.S. $1.00, which was the spot rate as of December 29, 2017 (the last business day of the year). Annual Equity Compensation Equity compensation, in the form of stock options, Stock Appreciation Rights (“SARs”), Restricted Stock Units (“RSUs”), or Performance Share Units (“PSUs”), is awarded to
We believe our long-term incentive awards align the interests of NEOs with those of shareholders, to encourage long-term retention, and to provide a counter-balancean appropriate balance to the short-term incentives offered by the EBP which reward the achievement of comparatively short-term performance goals. Equity compensation awards to our NEOs are mainly granted under our Amended and Restated Long-Term Incentive Plan or, in certain circumstances, 2006 Stock Incentive Plan.The Company’s equity compensation awards generally provide vesting periods of four or five years. The exercise price on all outstanding options and SARs is equal to the quoted closing price of the stock on the date of grant.SARs are only settled in shares of the Company’s stock.RSUs and PSUs are valued at the market value or closing price of the underlying stock on the date of grant, and generally provide for settlement in shares of the Company’s stock. Stock options, SARs, RSUs and PSUs are generally non-transferable other than on death and expire ten years from date of grant. The Company has a policy against cash buyouts of underwater options or SARs.
The Compensation Committee has historically taken a multi-tiered approach to equity compensation grants to NEOs whereby, the CEO’s and CFO’s equity compensation reflect a larger percentage of the overall compensation so that the CEO and CFO have a greater incentive to focus on long-term growth and strategic positioning, as well as regulatory and ethics compliance. The Compensation Committee generally determines the amount of equity compensation for each NEO other than the CEO, based in part, on recommendations from the CEO and Executive Vice President of HR. Historically this was done in the April-May time frame, with all actual grants generally made in May to be effective on June 1st or the closest business day to this date for ease of administration. In 2015, the Compensation Committee made annual grants to the Company’s officers, including the NEOs, in February to coincide with the review of the performance in 2014 and expectations in 2015. This timing coincides with the Company’s otherCompany's annual incentive compensation actions. Although annual grants are generally intended to incentivize future performance, in determining the size of grants, the Committee may consider, among other factors, individual contributions and performance during the past fiscal year.
While there is no fixed formulabonus program for equity compensation grants, the Compensation Committee seeks to establishNEOs. Given our growth strategy, we believe that an appropriate balance between cashlong-term emphasis on stock price appreciation is appropriate, which creates an immediate, strong alignment of shareholder and non-cash compensation, short and long term incentives, at-risk compensation and the formmanagement interests. Accordingly, a significant portion of our long-term equity compensation. The Compensation Committee generally prefers a mix of equity grants to the NEOs but will alter such amounts to rebalance or alter the components of compensation to the extent it is deemed appropriate. In 2014 and 2015, NEOs receive a greater percentage of equity compensationawards are granted in the form of SARs. SARs emphasize stock priceoptions or stock appreciation given that value is only recognizedrights (“SARs”). We also utilize RSUs, when the stock price increases above the strike price. RSUsappropriate, to emphasize retention and stock ownership given the grants have value immediately upon vesting. We have evaluated the use of Performance Share Units (“PSUs”) and have elected not to use this vehicle in our current annual equity program at this time and instead have elected to use stock options which we believe more closely align the interests of our executives (including our NEOs) to the long term interests of shareholders. We have used PSUs in the instance of the 2015 grant of PSUs to Mr. Hartman as described below. The Compensation Committee believes that this mixapproach is consistent with its philosophy that those employees, the NEOs in particular, who are in a position to most directly impact corporate performance should have the highest risk/reward potential tied to corporate performance.
Consistent with past years, Equity compensation awards to our NEOs (otherare mainly granted under our Amended and Restated 2015 Long-Term Incentive Plan (the “LTIP”) or, in certain circumstances, the 2006 Stock Incentive Plan. If the proposed 2018 Long-Term Incentive Plan receives the requested shareholder approval, future equity compensation awards to our NEOs will be mainly granted under the 2018 Long-Term Incentive Plan. The Compensation Committee generally determines the amount of equity compensation for each NEO other than Mr. Hartman)the CEO, based in part, on recommendations from the CEO and Executive Vice President of Human Resources. Additionally, the Committee reviews the annual and aggregate dilutive impact of our equity grants. CONMED’s burn rate for 2017 as well as our 3-year average burn rate approximates the 50
th percentile of our 2017 Peer Group. For 2017, our executive equity grants consisted of RSUs and stock options, as set forth below: | | | | | | | NEO | # RSUs | # Options | | Curt R. Hartman | — |
| 159,150 |
| | Luke A. Pomilio | — |
| 48,000 |
| | Patrick J. Beyer | — |
| 57,000 |
| | Nathan Folkert | 1,600 |
| 36,000 |
| | Stanley W. (Bill) Peters | — |
| 33,000 |
|
Our NEOs were granted annual awards of RSUs and stock options effective March 1, 2017, following the review of 2016 performance at the February 2017 Board meeting. The RSUs and stock option awards vest ratably over four and five years, respectively, with 25% and 20% of each award vesting annually. Although annual grants are generally intended to incentivize future performance, in determining the size of grants, the Committee may consider, among other factors, individual contributions and performance during the preceding fiscal year. The exercise price on all outstanding stock options and SARs effective June 1, 2014.is equal to the quoted closing price of the stock on the date of grant. Stock options, SARs, RSUs and PSUs are generally nontransferable other than on death and expire ten years from date of grant. The Company has a policy against cash buyouts of underwater stock options or SARs, and such repurchases are expressly prohibited by the LTIP, unless approved by shareholders. These equity grants, as well as the annual equity grants made to NEOs in 2014since 2015 under the Amended and Restated Long-Term Incentive Plan have terms substantially similar to the terms of the June 1, 2013 equity grants, except that, upon a Change in Control of the Company, the 2014 annual NEO RSUs will not automatically vest and pay-out, butLTIP, are instead subject to “double-trigger” vesting on a termination of the NEO’s employment by the Company other than for “cause” or by the NEO for “good reason” (each as defined in the award agreement) within two and one-half years following the Change in Control.Employment Contracts
As a general matter, the Company does not provide employment agreements to members of management in the U.S. The exceptions to this general policy are Change in Control Severance Agreements with all NEOs (other than Mr. Hartman) and certain executives. As of April 7, 2015, there are no Change in Control Severance Agreements with any of the NEOs.
Mr. Hartman’s Compensation Arrangements
Certain terms of Mr. Hartman’s compensation as Interim CEO were set forth in an offer letter provided by the Company in connection with his appointment, dated July 23, 2014 (the “Interim CEO Employment Letter”). Upon the Board’s appointment of Mr. Hartman as President and CEO of the Company on November 9, 2014, the Interim Offer Letter was superseded by a letter agreement providing the terms of his employment as President & CEO (the “CEO Employment Letter”).
The CEO Employment Letter provides Mr. Hartman with a base salary of $710,000 and a target bonus equal to 100% of his annual base salary, increased from his $600,000 annual salary and bonus target of 50% of annual base salary under the Interim CEO Employment Letter. Mr. Hartman’s 2014 bonus was pro-rated based on the number of days he was employed during 2014 from his start date of July 23, 2014. Mr. Hartman was also eligible to receive a special cash transition award in the discretion of the independent members of the Board, with a target amount equal to $300,000 on an annualized basis. This transition bonus opportunity was eliminated by the CEO Employment Letter. While he was employed as Interim CEO, Mr. Hartman was entitled to a housing allowance of $3,200 per month and benefits available to employees of the Company generally, but was not eligible to receive the fees or equity awards provided to non-employee directors. Mr. Hartman’s monthly housing allowance ended upon his appointment as CEO in November 2014.
Under the CEO Employment Letter, Mr. Hartman would be entitled to participate in a general severance plan that the Company expects to adopt (with an expected severance level of two times salary plus bonus for a non-change in control involuntary termination and three times salary plus bonus for a change in control involuntary termination). The CEO Employment Letter also provides that Mr. Hartman is subject to certain restrictive covenants, including confidentiality and non-disparagement covenants, and two-year post-termination restrictions on competition and solicitation of the Company’s customers and employees.
Under the Offer Letter, as Interim CEO Mr. Hartman received a grant of 32,500 RSUs, vesting in equal monthly installments over the one-year period following his appointment as Interim CEO (with any RSUs remaining unvested at the end of his employment as Interim CEO forfeited). The Offer Letter and CEO Employment Letter also provided for the grant of a one-time performance-based equity award (the “CEO Performance Award”), and the CEO Employment Letter contemplated a 2015 long-term incentive award with an expected value of approximately $2.25 million to $2.5 million. In accordance with the terms of the Offer Letter, the RSUs granted to Mr. Hartman as Interim CEO ceased vesting upon the grant of the CEO Performance Award in February 2015, at which time any such RSUs that remained unvested were forfeited.
The CEO Performance Award was granted to Mr. Hartman, on February 24, 2015, in the form of performance-based awards (“PSUs”) under the Amended and Restated Long-Term Incentive Plan. The CEO Performance Award provides for a target number of 100,000 PSUs, with the actual number of PSUs earned ranging from 0% to a maximum of 200% of target depending on the Company’s total shareholder return relative to the S&P 1500 Health Care Equipment Select Index over the performance period of January 1, 2015 to December 31, 2019:
Relative Performance | Percentage of Target Units Earned | +15.8% above index | 200% | +11.0% above index | 150% | +8.2% above index | 125% | +5.7% above index | 100% | +3.6% above index | 75% | +2.0% above index | 50% | Below +2.0% above index | 0% |
The PSUs will be earned, in three separate tranches, subject to adjustment from 0% to 200% based on the Company’s performance as of each of the three vesting dates: (1) 20,000 PSUs (at target) on December 31, 2017, (2) 20,000 PSUs (at target) on December 31, 2018 and (3) 100,000 PSUs (at target) on December 31, 2019, less the number of PSUs paid out based on actual performance in respect of earlier vesting dates. In general, Mr. Hartman must remain employed through the applicable vesting date in order to receive payment in respect of earned PSUs. If Mr. Hartman becomes disabled or dies during the performance period, unvested PSUs will immediately become vested on a pro rata basis measured based on the number of months completed from January 1, 2015 until the termination date, relative to 60 months, with the number of vested PSUs deemed to be earned based on the level of actual performance achieved through the termination date.
Upon a “change in control” of the Company (as defined in the CEO Performance Award agreement), outstanding unvested PSUs will be deemed to be earned based on the level of performance actually achieved through the change in control date. In order to balance the risks of an outsized payment for a change in control occurring early in the performance period and take into account Mr. Hartman’s influence on the Company’s stock price, the number of PSUs earned is subject to downward adjustment for a change in control prior to the fifth year of the performance period, with the magnitude of the adjustment based on the change in control price, as follows:
| | Percentage of Units Earned for a Change in Control (within the following periods after commencement of the Performance Period): | | Price at Change in Control Date | 0-12 months | 13-24 months | 25-36 months | 37-48 months | 49-60 months | | $60 or less | 20% | 40% | 60% | 80% | 100% | | $60-$80 | 30% | 40% | 60% | 80% | 100% | | $80-$105 | 45% | 50% | 60% | 80% | 100% | | Above $105 | 60% | 60% | 60% | 80% | 100% |
Earned PSUs will not automatically vest on a change in control, but will remain outstanding and continue to vest, subject to Mr. Hartman’s continued employment, upon the vesting dates described above, or earlier upon a termination of Mr. Hartman’s employment by the Company other than for “cause” or by Mr. Hartman for “good reason” (each as defined in the award agreement) within two years following the change in control.
The goal of the CEO Performance Award was to present Mr. Hartman with the opportunity to earn a superior payment for superior Company performance based on the Company’s total shareholder return relative to a peer index. The Company’s stock price performance is measured against total shareholder return over a five-year performance period, in order to motivate longer-term performance and provide incentives for Mr. Hartman to remain with the Company. The five-year period is balanced by opportunities to earn awards after the third and fourth years of the performance period to drive shorter-term business objectives.
Total shareholder return, compared to an index of our industry peers, was selected by the Compensation Committee
as the CEO Performance Award’s sole performance measure in order to provide strong alignment with shareholder interests and permit multi-year performance measurement without the need to establish multi-year goals. A rigorous payout schedule was established, so that substantial outperformance is required in order to earn awards above target levels. No PSUs will be earned unless the Company’s total shareholder return exceeds the S&P 1500 Health Care Equipment Select Index by at least 2.0%, and in order for Mr. Hartman to earn the maximum number of PSUs, our total shareholder return for the performance period must exceed the index by 15.8%.
Change In Control Severance Agreements
Historically, and throughout 2014, the Company maintained Change in Control Severance Agreements with its NEOs (other than Mr. Hartman) in recognition that, as is the case with many publicly-traded corporations, the possibility of a “Change in Control” (defined generally as an acquisition of 25% or more of the outstanding voting shares or a change in a majority of the Board of Directors) may arise and that such possibility may result in the departure or distraction of the NEOs to the detriment of the Company and its shareholders. As a result, the Company had entered into Change in Control Severance Agreements with Mr. Shallish, Mr. Jonas and Mr. Pomilio to encourage the retention and focus of the NEOs in the event of any threat or occurrence of a Change in Control. Prior to their separation from the Company, Messrs. J. Corasanti and Darling were also each a party to a Change in Control Severance Agreement with the Company.
These Change in Control Severance Agreements were first entered into by the Company in 2000, and were amended in 2008 in order to conform to technical requirements under Section 409A of the Code (other than Mr. Darling’s agreement, which was entered into in 2010). Each Change in Control Severance Agreement provides that the covered NEO will not, in the event of the commencement of steps to effect a Change in Control, voluntarily leave the employ of the Company until the potential Change in Control has been terminated or until a Change in Control has occurred.
On April 7, 2015, each of Messrs. Jonas and Pomilio agreed to the termination of their Change in Control Severance Agreements with the Company, effective immediately. Mr. Shallish’s Change in Control Severance Agreement expired upon his retirement on March 31, 2015. Accordingly, the terms of these agreements will not apply for any termination of employment after April, 2015. As of the date of this proxy statement, no NEO is entitled to an excise tax gross-up in connection with a Change in Control, and as of May 2011, the Company has committed to not enter into agreements to gross-up excise taxes in agreements with executives in the future.
Mr. J. Corasanti’s Employment Agreement and Separation and Release Agreement
Prior to his separation, Mr. J. Corasanti was party to an employment agreement with the Company dated as of October 30, 2009 (as amended and restated). The agreement was scheduled to expire December 31, 2014. Annual compensation under Mr. J. Corasanti’s employment agreement provided for annual base salary at a rate of no less than $511,000 per year, deferred compensation contributions of at least $175,000 per year (set at $225,000 per year as of May 2013), lifetime health and life insurance for Mr. J. Corasanti and his dependents and certain additional fringe benefits. Mr. J. Corasanti was also entitled to participate in the Company’s employee equity compensation plan, other employee benefit plans and other compensatory arrangements as determined by the Board of Directors.
The Company entered into a separation and release agreement with Mr. J. Corasanti on July 22, 2014 in connection with his employment termination on this same date. Pursuant to the separation agreement, Mr. J. Corasanti received certain severance payments and benefits under the terms of his employment agreement. Mr. J Corasanti will remain subject to a non-competition restriction for two years following his termination, and perpetual non-disparagement and confidentiality restrictions provided under his employment agreement. Subject to his release of claims in favor of the Company, outstanding equity awards previously granted to Mr. J. Corasanti for his prior service vested in full and immediately became exercisable (other than SARs granted in 2014, which were canceled as of the termination date).
Additional details of Mr. J. Corasanti’s employment agreement and separation and release agreement are described in the narratives following and/or footnotes to the Summary Compensation Table, Non-Qualified Deferred Compensation Table and Potential Payments on Termination or Change in Control Table.
Mr. Darling’s Separation and Release Agreement
Mr. Darling’s position as the Company’s Executive Vice President, Commercial Operations was eliminated effective as of December 31, 2014 and his employment as an officer and employee of the Company and its subsidiaries terminated on that date. In connection with his employment termination, the Company entered into a separation and release agreement with Mr. Darling, dated December 9, 2014. Pursuant to the separation agreement, Mr. Darling received a lump sum payment of $385,770 (equal to his base salary), and is eligible to receive, beginning in January 2016, an amount equal to up to one-half his base salary ($192,885), payable in six equal monthly installments that will cease upon Mr. Darling’s commencement of a
new employment or consulting arrangement. Mr. Darling is also eligible for reduced COBRA premiums for up to 18 months.
In addition, as described in further detail in the narratives following and/or footnotes to the Summary Compensation Table and Potential Payments on Termination or Change in Control Table, in March 2015, Mr. Darling also received $74,907 representing the 20% holdback from the 2013 Bonus Plan and $122,675 representing the amount earned under the 2014 Executive Bonus Plan. Mr. Darling remains subject to the non-disparagement and confidentiality restrictions pursuant to his confidentiality agreement with the Company, and the Company has waived certain post-employment restrictions that would have been applicable to Mr. Darling.
Prior to his separation, Mr. Darling was party to an Executive Severance Agreement with the Company. This Agreement provides that upon a change of control of Linvatec Corporation (as defined in the Executive Severance Agreement) where Mr. Darling did not retain the title of President and comparable responsibilities or is terminated without cause during the first eighteen months of such change in control, Mr. Darling is entitled to payment of his salary then in effect for eighteen months. If a Change in Control of the Company (as defined in the Change in Control Severance Agreement) occurred, Mr. Darling would not be eligible for payments under the Executive Severance Agreement. Mr. Darling’s Change in Control Severance Agreement and Executive Severance Agreement were extinguished upon his separation from the Company.
Retention Agreements
On July 23, 2014, the Company entered into retention letter agreements (the “Retention Letters”) with Mr. Jonas, Mr. Pomilio and Mr. Shallish. The Retention Letters provide for a cash bonus in the amount of the NEO’s annual base salary, payable on June 30, 2015, subject to the NEO’s continued employment with the Company through that date or earlier termination of employment by the Company without “cause” or by the NEO for “good reason” (as each term is defined in the Retention Letters). In the event of the NEO’s termination due to death or “disability” (as defined in the Retention Letters) prior to June 30, 2015, such bonus becomes payable, and is subject to proration.
The Retention Letters also provide, in the event of an employment termination by the Company without cause or by the NEO for good reason, in either case prior to June 30, 2016, for a special severance payment equal to one and one-half times the sum of the NEO’s annual base salary then in effect plus the target annual cash incentiveapplicable award and for accelerated vesting of outstanding equity awards (other than SARs granted in 2014, which will be cancelled upon such termination), subject in each case to a release of claims in favor of the Company. In addition, as a condition to eligibility for benefits thereunder, the Retention Letters provide that each covered NEO thereby waived any claim that a “change in control” has occurred or may occur in the future under the Company’s equity compensation plans and such NEO’s respective Change in Control Severance Agreement with the Company relating (in any way) to the changes in the Board of Directors in 2014.
Mr. Shallish’s Retirement Agreement
In December 2014, Mr. Shallish announced his intention to retire from his position as the Company’s Executive Vice President, Finance and CFO effective March 31, 2015. Mr. Pomilio was appointed as our Vice President, Finance and CFO effective April 1, 2015.
In connection with his retirement, the Company agreed that Mr. Shallish will receive payment of the retention bonus pursuant to his letter agreement with the Company dated July 23, 2014. Mr. Shallish’s retirement will be deemed to be with the consent of the Compensation Committee of the Board, and in accordance with their terms, any outstanding, unvested equity awards held by him as of March 31, 2015 vested, and any vested SARs will remain exercisable for one year after his retirement. These payments are described in further detail in the narratives following and/or footnotes to Potential Payments on Termination or Change in Control Table.
Executive Severance Plan
As described above in connection with the discussion of Mr. Hartman’s employment letter, the Company expects to adopt a general severance plan and expects certain executives, including the NEOs, to participate in such plan. As of the date of this proxy statement, no such plan has been adopted by the Company or finalized or approved by the Board or Compensation Committee, and as such the terms of any severance plan remain subject to the sole discretion of the Board and the Compensation Committee. It is generally anticipated that, as discussed above in the description of the CEO Employment Letter, Mr. Hartman’s expected severance level is two (2.0) times salary and bonus for a non-change in control involuntary termination and three (3.0) times salary and bonus for a change in control involuntary termination. Mr. Pomilio’s expected
agreement). 31 | | | VI. | Additional Compensation Policies and Practices |
severance level, as CFO, is one and one-half (1.5) times salary and bonus for a non-change in control involuntary termination and two and one-half (2.5) times salary and bonus for a change in control involuntary termination. Mr. Jonas’ expected severance level is one (1.0) times salary and bonus for a non-change in control involuntary termination without cause or for good reason and two (2.0) times salary and bonus level for a change in control involuntary termination without cause or for good reason.
Retirement Benefits
All employees in the United States, including the U.S. based NEOs, are eligible to participate in the Retirement Savings Plan and were eligible to participate in the Retirement Pension Plan if employed by the Company prior to May 14, 2009. The Company maintains the Benefits Restoration Plan for eligible employees including the NEOs.NEOs, except in the case of Mr. Beyer who participates in a program designed to compensate him in a similar fashion in accordance with practices in the UK. The following summary of the terms of these plans is qualified in its entirety by reference to the complete plan documents.
As of May 14, 2009, pension accruals under the CONMED Corporation Retirement Pension Plan were frozen and participants willdo not accrue any additional benefits after that date.
The Retirement Savings Plan (the “Savings Plan”) is a tax-qualified (401(k)) retirement savings plan pursuant to which all U.S. employees are eligible after completing three months of service, including the NEOs who meet the Savings Plan’s requirements. Effective January 1, 2010, the Savings Plan was amended to provide a 100% matching contribution up to a maximum of seven percent of the participant’s (including each NEO’s) compensation.
Benefits Restoration Plan The Company has established a Benefits Restoration Plan effective January 1, 2010. The Benefits Restoration Plan is a funded nonqualified deferred compensation plan that provides eligible employees, which include the NEOs, the opportunity to defer receipt of up to 50% of base salary and up to 100% of incentive compensation and to receive seven percent (7%) matching contributions or other contributions from the Company that would otherwise be unavailable under our Savings Plan because of limits imposed by the Internal Revenue Code of 1986, as amended (the “Code”). In addition, similar to the Savings Plan, the Company has discretion to contribute to the Benefits Restoration Plan in addition to the match. The funds are invested based upon the investments selected by the participant from the investments available under the Savings Plan. A participant is 100% vested in the participant’s contributions and any earnings. TheDuring 2017, the Company’s match and any discretionary contributions to a participant’s deferred compensation account vestvested subject to a “Rule of 65”, which is defined so that vesting occurs when the sum of the participant’s age plus years of service equal to 65. Upon a “change in control”, the unvested portion of a participant’s account will automatically become vested. For purposes of the Benefits Restoration Plan, a “change in control” has the meaning provided in any written agreement between any participant and the employer, if applicable, and if there is no such written agreement with the employer defining a change in control, then a change in control generally means an acquisition of 25% or more of the outstanding voting shares or a change in a majority of the Board of Directors. Split-Dollar Life Insurance
Prior During 2017, the Board of Directors amended the vesting requirements to December 31, 2001,bring them into alignment with those of the Savings Plan, which provides for vesting of 20% of any Company had paid certain premiums associated with split-dollar life insurance policies with face amounts totaling $2,500,000contributions for the benefiteach year of Joseph J. Corasanti.service, such that an employee is 100% vested in any Company contribution after five (5) years of service. The Company has not paid or accrued premiums since fiscal year 2001. Premiums paid by the Company in prior years are treated by the Company as a loan to Mr. J. Corasanti, and at December 31, 2014, the aggregate amount due the Company from Mr. J. Corasanti related to these split-dollar life insurance policies was $279,740. This amount (if any)new vesting provisions will be repaidapplied retroactively to the Company on Mr. J. Corasanti’s death and the balanceall participants effective as of the policy will be paid to his estate or beneficiaries.
Perquisites
The Company has historically provided certain perquisites to the NEOs to provide convenience and support services that the Company viewed as customary and necessary to attract, motivate and retain executive talent. Effective January 1,
2015, all executive officer perquisites were eliminated.
Prior to 2015 (and during 2014), the Company provided a perquisite allowance to each of the NEOs. The perquisite allowance paid to our NEOs in 2014 was $1,500 per month, other than for Mr. Hartman and Mr. J. Corasanti. This allowance replaces any other perquisite costs which may have previously been reimbursed. The Company also provides long-term care insurance to certain NEOs. Each of these benefits is reflected in the “All Other Compensation” column of the Summary Compensation Table. No perquisite provided to any NEO is “grossed up” for associated taxes.
Prior to his separation from the Company, Mr. J. Corasanti’s monthly perquisite allowance was $3,200, and he was reimbursed for certain life insurance policy premiums and provided with a car leased by the Company. During the period he served as our Interim CEO, Mr. Hartman received a $3,200 temporary monthly housing allowance intended to cover temporary housing, meals and incidental expenses limited to the period in which he was to serve as interim CEO. The temporary monthly allowance ended upon his appointment as our CEO on a non-interim basis.
In the interest of further aligning the interests of the NEOs with those of our shareholders, the Company’s Recoupment Policy allows the Committee to require any participant or former participant in the EBPExecutive Bonus Plan or recipient of performance basedperformance-based equity awards in any of the prior three years to repay to the Company all or a portion of the amount received in connection with a fiscal year in which either (i) there was a recalculation of a financial or other performance metric related to the determination of a bonus award or performance-based equity award due to an error in the original calculation or (ii) there was a restatement of earnings for the Company due to material noncompliance with any financial reporting requirement under either GAAP or federal securities laws, other than as a result of changes to accounting policy, rules or regulation; and (iii) the restated earnings or corrected performance measurement would have (or likely would have) resulted in a smaller award than the amount actually received by the participant. A similar recoupment provision is extended to non-executives who participate in other Company incentive programs.
Stock Ownership Guidelines and Hedging PoliciesThe Company’s stock ownership guidelines are designed to encourage share ownership so that our executives have a direct stake in the Company’s future and to directly align their interests with those long-term interests of the shareholder. The ownership guidelines cover the Executive Team of the Company, including all NEOs. The guidelines are as follows: NEO | | Ownership Guideline | | Position | Required Salary Multiple | President &and CEO | 4x base salary | | CFO | 3x base salary | All other NEOsexecutive officers | 1x base salary |
The following share types are included under these guidelines: shares directly owned, shares jointly owned and estimated net after tax shares of unvested RSUs. Share ownership guidelines for officers reaching the age of 62 are reduced by 50%.RSUs and vested in-the-money Stock Options, also on an after-tax basis. Executives are required to be in compliance with these guidelines within five years of becoming subject to this policy. These ownership guidelines also contain a holding periodretention requirement for equity-based awards until such time as the minimum share ownership is achieved. A complete copy of these guidelines is available on the Company’s website in the investor relations section. All NEOs were in compliance with the guidelines as assessed as of December 31, 2017. Anti-Hedging Policies The Company also prohibits its officersExecutive Team and directors from holding any derivatives of Common Stock other than those issued by the Company. The intention of this policy is to align the interests of senior management with those of the holders of the Common Stock. Mr. Hartman became subject to this policy as of July 2014, and as such must attain the required ownership guidelines (4.0x salary) by July 2019. As of December 31, 2014, Mr. Hartman’s eligible holdings were approximately 2.6x his salary. Accordingly, all continuing NEOs were in compliance with the guidelines as assessed as of December 31, 2014.
Deductibility of Executive Compensation Section 162(m) of the Code generally disallowslimits the tax deductibility of compensation in excess of $1,000,000 per year paid by a public company to its “covered employees.” Prior to federal tax deductionreform enacted in December 2017, Section 162(m) included an exception to public companiesthis limitation on deductibility for compensation over $1,000,000 paid to the Chief Executive Officer and the three other most highly compensated executive officers, other than the Chief Financial Officer, employed on the last day of any fiscal year. Qualifying performance-based compensation is not subject to the deduction limit if certain requirements are met.qualifying “performance-based compensation” (as defined under applicable tax regulations). The Committee considers deductibility as one factor when making a decision regarding executive compensation. In order to maximize the deductibility of the executives’ pay, the shareholder-approved EBP and Amended and Restated Long Term Incentive Plan are structured such that2017 performance-based annual incentive bonuses and performance basedperformance-based equity compensation paid under those plans for our most senior executives shouldthe shareholder-approved LTIP and Executive Bonus Plan were structured in a manner intended to constitute qualifying performance-based compensation“performance-based compensation” under Section 162(m). However,
Under the new tax legislation, for taxable years beginning after December 31, 2017, there is no longer an exception to the deductibility limit for qualifying “performance-based compensation” unless the compensation qualifies for transition relief applicable to certain arrangements in some cases,place as of November 2, 2017 (the scope of which is currently uncertain). Also under the new legislation, the definition of “covered employees” has been expanded to include a company’s chief financial officer, in addition to the chief executive officer and three other most highly paid executive officers, plus any individual who has been a “covered employee” in any taxable year beginning after December 31, 2016.
The Committee may determine it is appropriatecontinues to evaluate the changes to Section 162(m) and retains the ability to provide compensation that may exceedexceeds deductibility limits in orderas it determines appropriate, including to recognize performance, meet market demands and retain key executives.
Employment Contracts As a general matter, all Company employees are employed on an “at-will” basis, and the Company does not enter into employment agreements except as may be customary in regions outside of the United States. Mr. Hartman’s Compensation Arrangements Effective November 9, 2014, the Company entered into a letter agreement with Mr. Hartman, outlining the terms of his employment as President and CEO of the Company (the “CEO Employment Letter”). The CEO Employment Letter provides Mr. Hartman with a minimum base salary of $710,000 and a target bonus equal to 100% of his annual base salary. The CEO Employment Letter also provides that Mr. Hartman is subject to certain restrictive covenants, including confidentiality and non-disparagement covenants, and two-year post-termination restrictions on competition and solicitation of the Company’s customers and employees. Additionally, as outlined in the CEO Employment Letter, Mr. Hartman participates in the Executive Severance Plan as described below. Mr. Hartman was awarded an equity grant on February 24, 2015 (“CEO Performance Award”) in the form of PSUs under the LTIP. The CEO Performance Award provides for a target number of 100,000 PSUs, with the actual number of PSUs earned ranging from 0% to a maximum of 200% of target depending on the Company’s total shareholder return relative to the S&P 1500 Health Care Equipment Select Index over the performance period of January 1, 2015 to December 31, 2019: | | | | Relative Performance | Percentage of Target Units Earned | | +15.8% above index | 200% | | +11.0% above index | 150% | | +8.2% above index | 125% | | +5.7% above index | 100% | | +3.6% above index | 75% | | +2.0% above index | 50% | | Below +2.0% above index | 0% |
The PSUs will be earned, in three separate tranches, subject to adjustment from 0% to 200% based on the Company’s performance as of each of the three vesting dates: (1) 20,000 PSUs (at target) on December 31, 2017, (2) 20,000 PSUs (at target) on December 31, 2018 and (3) 100,000 PSUs (at target) on December 31, 2019, less the number of PSUs paid out based on actual performance in respect of earlier vesting dates. Mr. Hartman did not earn any portion of the 20,000 PSUs as of December 31, 2017. In general, Mr. Hartman must remain employed through the applicable vesting date in order to receive payment in respect of earned PSUs. If Mr. Hartman becomes disabled or dies during the performance period, unvested PSUs will immediately become vested on a pro rata basis measured based on the number of months completed from January 1, 2015 until the termination date, relative to 60 months, with the number of vested PSUs deemed to be earned based on the level of actual performance achieved through the termination date. Currently, the Company’s total shareholder return is below the index. Upon a “change in control” of the Company (as defined in the CEO Performance Award agreement), outstanding unvested PSUs will be deemed to be earned based on the level of performance actually achieved through the change in control date. In order to balance the risks of an outsized payment for a change in control occurring early in the performance period and take into account Mr. Hartman’s influence on the Company’s stock price, the number of PSUs earned is subject to downward adjustment for a change in control prior to the fifth year of the performance period, with the magnitude of the adjustment based on the change in control price, as follows:
| | | | | | | | | | | | | | | Percentage of Units Earned for a Change in Control (within the following periods after commencement of the Performance Period): | Price at Change in Control Date | | 0-12 months | | 13-24 months | | 25-36 months | | 37-48 months | | 49-60 months | | $60 or less | | 20% | | 40% | | 60% | | 80% | | 100% | | $60-$80 | | 30% | | 40% | | 60% | | 80% | | 100% | | $80-$105 | | 45% | | 50% | | 60% | | 80% | | 100% | | Above $105 | | 60% | | 60% | | 60% | | 80% | | 100% |
Earned PSUs will not automatically vest on a change in control, but will remain outstanding and continue to vest, subject to Mr. Hartman’s continued employment, upon the vesting dates described above, or earlier upon a termination of Mr. Hartman’s employment by the Company other than for “cause” or by Mr. Hartman for “good reason” (each as defined in the award agreement) within two years following the change in control. The goal of the CEO Performance Award was to present Mr. Hartman with the opportunity to earn a superior payment for superior Company performance based on the Company’s total shareholder return relative to a peer index. The Company’s stock price performance is measured against total shareholder return over a five-year performance period, in order to motivate longer-term performance and provide incentives for Mr. Hartman to remain with the Company. The five-year period is balanced by opportunities to earn awards after the third and fourth years of the performance period to drive shorter-term business objectives. Total shareholder return, compared to an index of our industry peers, was selected by the Compensation Committee as the CEO Performance Award’s sole performance measure in order to provide strong alignment with shareholder interests and permit multi-year performance measurement without the need to establish multi-year goals. A rigorous payout schedule was established, so that substantial outperformance is required in order to earn awards above target levels. No PSUs will be earned unless the Company’s total shareholder return exceeds the S&P 1500 Health Care Equipment Select Index by at least 2.0%, and in order for Mr. Hartman to earn the maximum number of PSUs, our total shareholder return for the performance period must exceed the index by 15.8%. As of December 31, 2017, the Company’s actual performance based on total shareholder return relative to the S&P 1500 Health Care Equipment Select Index is below the threshold level required for Mr. Hartman to earn any portion of his PSUs. Mr. Pomilio’s Letter Agreement
On November 2, 2017, the Company entered into a letter agreement with Mr. Pomilio (the “Letter Agreement”), pursuant to which Mr. Pomilio agreed to continue to serve as the Company’s Executive Vice President - Finance and Chief Financial Officer until a successor was named and commenced service, at which time Mr. Pomilio is to serve as Special Advisor to the next Chief Financial Officer until March 15, 2019, following which Mr. Pomilio will remain available for consultation through June 15, 2019. On January 2, 2018, Mr. Garner joined the Company as Executive Vice President and Chief Financial Officer.
In exchange for his agreement to continue in place as Chief Financial Officer until a successor commenced employment, and to provide advisory services to the successor Chief Financial Officer, Mr. Pomilio is to receive the following compensation.
For the period from November 2, 2017 through March 15, 2018, Mr. Pomilio will continue to be paid his current salary.
For his service from March 16, 2018 through March 15, 2019, Mr. Pomilio is to be paid an annualized salary of $872,635, which represents 1.5 times his 2017 annual salary, plus 1.5 times the average of his 2016 and 2017 bonus payments. During this period, Mr. Pomilio will be eligible to participate in the Company’s health, vision and dental benefit plans, and will be eligible to make contributions to the Company’s Benefits Restoration Plan and the Company Retirement Savings Plan, but will waive participation in other health and welfare plans and other benefit plans, including, without limitation, Company contributions in the Benefits Restoration Plan and the Company Retirement Savings Plan. Mr. Pomilio’s receipt of these payments and benefits, as well as the equity award treatment described in the following paragraph, are subject to his release of any claims under the Company’s Executive Management Severance Plan and Severance Plan and any other potential claims in favor of the Company.
In addition, subject to Mr. Pomilio’s continued service and execution of a release as described above, equity awards previously granted to Mr. Pomilio are to vest in accordance with the vesting schedules established in the original equity awards during 2018 and through June 15, 2019. Any equity awards with vesting dates scheduled to occur after June 15, 2019 will be canceled and forfeited. In the event of Mr. Pomilio’s death, disability, or termination of employment by the Company, any payments for his service as an advisor to the Chief Financial Officer which would otherwise have been payable from March 16, 2018 through
March 15, 2019 (and were not paid) shall become immediately due and payable.
Mr. Pomilio is subject to a non-competition restriction and non-solicitation obligations for one year following the termination of his service, as well as customary indefinite confidentiality and non-disparagement obligations.
Executive Severance Plan
The Company maintains an executive severance plan (the “Executive Severance Plan”) in which all of the NEOs as of December 31, 2017 participated, other than Mr. Pomilio, who waived his participation in connection with his retirement arrangement, as further described above in the section entitled “Mr. Pomilio’s Letter Agreement”. The CEO’s benefit under the Executive Severance Plan is two (2.0) times salary and the two-year average of the non-equity incentive plan compensation and discretionary bonus earned for a non-change in control involuntary termination and three (3.0) times salary and the three-year average of the non-equity incentive plan compensation and discretionary bonus earned for a change in control involuntary termination. Each other NEO’s severance benefit is one (1.0) times salary and the two-year average of the non-equity incentive plan compensation and discretionary bonus earned for a non-change in control involuntary termination without cause or for good reason and two (2.0) times salary and the three-year average of the non-equity incentive plan compensation and discretionary bonus earned level for a change in control involuntary termination without cause or for good reason.
For purposes of the Executive Severance Plan, “Cause” generally means the NEO’s willful and continued failure to substantially perform his duties or willfully engaging in illegal conduct or gross misconduct which is demonstrably and materially injurious to the Company or its affiliates. “Good Reason” generally includes any material and adverse change in the NEO’s duties, responsibilities, titles or offices with the Company, a material reduction in the rate of annual base salary or annual target bonus opportunity, or any requirement that the NEO be based more than 50 miles from the office where he is located. “Change in Control” generally means a change in the majority combined voting power of the Company (other than transactions involving related parties), the shareholders approve a plan of complete liquidation or dissolution of the Company, or a sale of all or substantially all of the Company’s assets. Change in Control benefits apply for involuntary terminations without Cause or for Good Reason within the two (2) year period following a Change in Control. The Executive Severance Plan also contains certain restrictive covenants, including a non-disparagement covenant and one-year post-termination restrictions on competition and solicitation of the Company’s customers and employees. The Compensation Committee is currently reviewing the Executive Severance Plan as part of its periodic review of the executive compensation program.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION The Compensation Committee has reviewed and discussed the foregoing Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussion, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement. Submitted by the Compensation Committee, Dirk M. Kuyper (Chair)
| | | | Dirk M. Kuyper (Chair) | Charles M. Farkas | | | | Martha Goldberg Aronson | Jerome J. Lande Stephen M. Mandia
SUMMARY COMPENSATION TABLE | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (a) | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | Name and Principal Position | Year | | Salary1($) | | Bonus2 ($) | | Stock Awards3 ($) | | Option/ SAR Awards4($) | | Non-Equity Incentive Plan Compensation5 ($) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings6 ($) | | All Other Compensation7 ($) | | Total | | Curt R. Hartman – | 2017 | | $ | 753,237 |
| | $ | — |
| | $ | — |
| | $ | 1,602,641 |
| | $ | 554,950 |
| | $ | — |
| | $ | 91,536 |
| | $ | 3,002,364 |
| | President & Chief | 2016 | | $ | 710,000 |
| | $ | — |
| | $ | 358,830 |
| | $ | 1,477,300 |
| | $ | 506,230 |
| | $ | — |
| | $ | 37,828 |
| | $ | 3,090,188 |
| | Executive Officer | 2015 | | $ | 724,318 |
| | $ | 213,000 |
| | $ | 4,156,140 |
| | $ | 1,685,815 |
| | $ | 106,500 |
| | $ | — |
| | $ | 70,936 |
| | $ | 6,956,709 |
| | | | | | | | | | | | | | | | | | | | | Luke A. Pomilio – | 2017 | | $ | 398,820 |
| | $ | — |
| | $ | — |
| | $ | 483,360 |
| | $ | 196,586 |
| | $ | 57,313 |
| | $ | 42,071 |
| | $ | 1,178,150 |
| | Executive Vice President, Finance | 2016 | | $ | 385,000 |
| | $ | — |
| | $ | 103,662 |
| | $ | 435,369 |
| | $ | 181,528 |
| | $ | 28,161 |
| | $ | 40,607 |
| | $ | 1,174,327 |
| & Chief Financial Officer9 | 2015 | | $ | 394,787 |
| | $ | 48,125 |
| | $ | 123,120 |
| | $ | 522,910 |
| | $ | 44,275 |
| | $ | — |
| | $ | 370,952 |
| | $ | 1,504,169 |
| | | | | | | | | | | | | | | | | | | | | Patrick J. Beyer – | 2017 | | $ | 392,966 |
| | $ | 23,713 |
| | $ | — |
| | $ | 573,990 |
| | $ | 156,523 |
| | $ | — |
| | $ | 79,183 |
| | $ | 1,226,375 |
| | President, CONMED | 2016 | | $ | 341,625 |
| | $ | — |
| | $ | 115,623 |
| | $ | 480,557 |
| | $ | 127,704 |
| | $ | — |
| | $ | 62,580 |
| | $ | 1,128,089 |
| International8
| 2015 | | $ | 425,959 |
| | $ | 59,690 |
| | $ | 138,510 |
| | $ | 576,337 |
| | $ | 92,321 |
| | $ | — |
| | $ | 65,326 |
| | $ | 1,358,143 |
| | | | | | | | | | | | | | | | | | | | Nathan Folkert – Vice President & | 2017 | | $ | 356,446 |
| | $ | — |
| | $ | 67,088 |
| | $ | 362,520 |
| | $ | 111,181 |
| | $ | — |
| | $ | 22,368 |
| | $ | 919,603 |
| General Manager, U.S. Orthopedics | 2016 | | $ | 352,827 |
| | $ | — |
| | $ | 79,740 |
| | $ | 330,220 |
| | $ | 128,568 |
| | $ | — |
| | $ | 115,646 |
| | $ | 1,007,001 |
| | | | | | | | | | | | | | | | | | | | | Stanley W. (Bill) Peters – Vice President & | 2017 | | $ | 355,701 |
| | $ | — |
| | $ | — |
| | $ | 332,310 |
| | $ | 110,817 |
| | $ | — |
| | $ | 39,653 |
| | $ | 838,481 |
| | General Manager, U.S. Advanced Surgical | 2016 | | $ | 341,603 |
| | $ | 8,584 |
| | $ | 67,779 |
| | $ | 284,163 |
| | $ | 127,736 |
| | $ | — |
| | $ | 43,108 |
| | $ | 872,973 |
|
Summary Compensation Table
| (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | Name and
Principal Position | | Year | | Salary1 ($) | | Stock
Awards2 ($) | | Option/
SAR Awards3 ($) | | Non-Equity
Incentive Plan
Compensation4 ($) | | Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings5 ($) | | All Other
Compensation6 ($) | | Total | Curt R. Hartman –
President & Chief Executive
Officer | | | 2014 | | | $ | 262,406 | | | $ | 1,305,670 | | | $ | 0 | | | $ | 257,771 | | | $ | 0 | | | $ | 49,020 | | | $ | 1,874,867 | | Joseph J. Corasanti –
Former President & Chief Executive
Officer7 | | | 2014 | | | $ | 360,378 | | | $ | 2,757,563 | | | $ | 1,591,749 | | | $ | 0 | | | $ | 119,476 | | | $ | 6,450,954 | | | $ | 11,280,120 | | | | | | 2013 | | | $ | 805,853 | | | $ | 823,250 | | | $ | 610,706 | | | $ | 405,412 | | | $ | 98,073 | | | $ | 184,074 | | | $ | 2,927,368 | | | | | | 2012 | | | $ | 764,185 | | | $ | 652,250 | | | $ | 460,981 | | | $ | 441,237 | | | $ | 153,107 | | | $ | 185,584 | | | $ | 2,657,344 | | Robert D. Shallish, Jr. -
Executive Vice President, Finance &
Chief Financial Officer | | | 2014 | | | $ | 330,851 | | | $ | 1,469,708 | | | $ | 799,222 | | | $ | 170,599 | | | $ | 31,913 | | | $ | 59,098 | | | $ | 2,861,391 | | | | | | 2013 | | | $ | 320,755 | | | $ | 230,510 | | | $ | 146,570 | | | $ | 166,276 | | | $ | 0 | | | $ | 61,491 | | | $ | 925,602 | | | | | | 2012 | | | $ | 311,454 | | | $ | 156,540 | | | $ | 103,260 | | | $ | 195,970 | | | $ | 80,199 | | | $ | 62,053 | | | $ | 909,476 | | Joseph G. Darling –
Executive Vice President,
Commercial Operations8 | | | 2014 | | | $ | 381,939 | | | $ | 116,740 | | | $ | 87,119 | | | $ | 197,582 | | | $ | 7,405 | | | $ | 28,392 | | | $ | 819,177 | | | | | | 2013 | | | $ | 371,858 | | | $ | 131,720 | | | $ | 97,713 | | | $ | 192,576 | | | $ | 0 | | | $ | 49,133 | | | $ | 843,000 | | | | | | 2012 | | | $ | 361,132 | | | $ | 104,360 | | | $ | 73,757 | | | $ | 156,359 | | | $ | 4,087 | | | $ | 48,618 | | | $ | 748,313 | | Daniel S. Jonas –
Executive Vice President, Legal Affairs
& General Counsel | | | 2014 | | | $ | 298,972 | | | $ | 145,925 | | | $ | 104,543 | | | $ | 154,562 | | | $ | 55,072 | | | $ | 48,704 | | | $ | 807,778 | | | | | | 2013 | | | $ | 290,622 | | | $ | 131,720 | | | $ | 97,713 | | | $ | 150,647 | | | $ | 0 | | | $ | 55,422 | | | $ | 726,124 | | | | | | 2012 | | | $ | 280,146 | | | $ | 104,360 | | | $ | 73,757 | | | $ | 176,496 | | | $ | 29,954 | | | $ | 57,092 | | | $ | 721,805 | | Luke A. Pomilio -
Executive Vice President, Controller
and Corporate General Manager | | | 2014 | | | $ | 328,692 | | | $ | 145,925 | | | $ | 104,543 | | | $ | 168,236 | | | $ | 73,126 | | | $ | 57,527 | | | $ | 878,049 | | | | | | 2013 | | | $ | 316,871 | | | $ | 331,800 | | | $ | 117,256 | | | $ | 163,974 | | | $ | 0 | | | $ | 51,595 | | | $ | 981,496 | | | | | | 2012 | | | $ | 307,516 | | | $ | 104,360 | | | $ | 73,757 | | | $ | 193,256 | | | $ | 39,773 | | | $ | 57,894 | | | $ | 776,556 | |
| | | (1) | Salary reflects actual salary earned and, for Mr. J. Corasanti, deferred compensation credited during 2013 and 2012.earned. Salary levels are adjusted annually, typically in May.March. Accordingly, any salary levels listed in the Compensation Discussion and Analysis (the “CD&A”) may not match amounts actually paid during the course of the year. In addition, the Company paid employees on a weekly basis (in arrears) until 2017 transitioning to a semi-monthly (current) payroll cycle in January 2017. As a result of the change in the payroll cycle, employees, including our NEOs, were paid for the last week of December 2016 and also received a semi-monthly salary in January 2017, resulting in 53 weeks of base salary pay in 2017. Further, as a result of the prior weekly payroll cycle, in 2015 employees of the Company, including our NEOs, received 53 weeks of base salary pay instead of 52 weeks. |
| | | (2) | The 2017 amount reflects the one-time discretionary payment to Mr. Beyer of $23,713 as described above in CD&A under “Discretionary Bonuses”. No other NEO received a discretionary bonus during 2017. |
| | | (3) | Amounts in this column reflect the grant date fair value of PSUs for Mr. Hartman in 2015 and RSUs for all NEOs in accordance with Compensation – Stock Compensation Topic 718 of FASB ASC. Mr. Hartman’s fair value of awards includes the 1,000 RSUs awarded as a Director of the Company as well as the 32,500 RSUs awarded on July 23, 2014 when he was appointed Interim Chief Executive Officer. In addition, this includes 66,250 unvested RSUs that accelerated upon Mr. J. Corasanti’s termination as defined in his termination agreement and, for Mr. Shallish, this includes the unvested awards that will vest upon his retirement. The acceleration of 11,440 unvested RSUs was first approved by the Board on July 20, 2014 if Mr. Shallish |
| | retired after June 30, 2015. Mr. Shallish’s retirement agreement was subsequently approved by the Board on December 9, 2014 stating that all unvested shares would accelerate upon his retirement date of March 31, 2015 and included a total of 17,350 RSUs. The assumptions made in the valuation of these awards are set forth in Note 7,8, (“Shareholders’ Equity”), to the Consolidated Financial Statements in Item 15 to the Company’s 20142017 Annual Report on Form 10-K (available athttp://www.conmed.com)www.conmed.com). |
| (3) | | (4) | Amounts in this column reflect the grant date fair value of SARsstock options in accordance with Compensation – Stock Compensation Topic 718 of FASB ASC. This includes 125,000 unvested SARs that accelerated upon Mr. J. Corasanti’s termination as defined in his termination agreement. For Mr. Shallish, this includes the unvested SARs that will vest upon his retirement. The acceleration of 23,800 unvested SARs was first approved by the Board on July 20, 2014 if Mr. Shallish retired after June 30, 2015. Mr. Shallish’s retirement agreement was subsequently approved by the Board on December 9, 2014 stating that all unvested shares would accelerate upon his retirement date of March 31, 2015 and included a total of 38,550 SARs. The assumptions made in the valuation of these awards are set forth in Note 7,8, (“Shareholders’ Equity”), to the Consolidated Financial Statements in Item 15 to the Company’s 20142017 Annual Report on Form 10-K. |
| (4) | | (5) | Non-Equity Incentive Plan Compensation represents earnings under the Company’s EBP2012 Executive Bonus Plan and for Mr. Hartman, his employment letter (as more fully described in the CD&A). For all NEOs, this is calculated as a percentage of their Base Compensationeach NEO’s Salary (as defined in the CD&A). See “Executive Bonus Plan Performance Goals for 2017” on page 29 in the CD&A for an additional discussion of 2017 annual incentive payments under the Company’s Executive Bonus Plan. |
| (5) | | (6) | Amounts in this column represent the increase in the actuarial present value of defined benefit plans during 2014 and 2012 of the executive’s accumulated benefit under the CONMED Corporation Retirement Pension Plan.Plan (a defined benefit plan) during 2017 and 2016. For 2013,2015, the actuarial value decreased by $44,357, $19,546, $2,821, $26,431 and $35,096$26,340 for Mr. J. Corasanti, Mr. Shallish, Mr. Darling, Mr. Jonas and Mr. Pomilio, respectively.Pomilio. Actuarial value computations are based on the assumptions established in accordance with Compensation – Retirement Benefits Topic of the FASB ASC 715 and discussed in Note 9,10, (“Employee Benefit Plans”), to the Consolidated Financial Statements in Item 15 to the Company’s 20142017 Annual Report on Form 10-K. |
In addition, Mr. J. Corasanti earned deferred compensation pursuant to his amended and restated employment agreement, as more fully described in the CD&A. This table reflects only that interest earned on deferred compensation amounts that is considered to be above-market. This above-market interest amounted to $77,467, $98,073 and $102,838 for 2014, 2013 and 2012, respectively.
| (6) | | (7) | All 2017 Other Compensation consists of the following: |
| | | 401k Employer
Contributions(a) | | Benefit Restoration
Plan Employer
Contributions(b) | | Director
Fees(c) | | Payments Upon
Termination(d) | | Certain Other
Payments(e) | | Total All Other
Compensation | | Curt R. Hartman | | $ | — | | | $ | — | | | $ | 37,500 | | | $ | — | | | $ | 11,520 | | | $ | 49,020 | | | Joseph J. Corasanti | | $ | 17,500 | | | $ | 36,042 | | | $ | — | | | $ | 6,357,403 | | | $ | 40,009 | | | $ | 6,450,954 | | | Robert D. Shallish, Jr. | | $ | 17,500 | | | $ | 17,643 | | | $ | — | | | $ | — | | | $ | 23,955 | | | $ | 59,098 | | | Joseph G. Darling | | $ | 10,392 | | | $ | — | | | $ | — | | | $ | — | | | $ | 18,000 | | | $ | 28,392 | | | Daniel S. Jonas | | $ | 7,800 | | | $ | 18,473 | | | $ | — | | | $ | — | | | $ | 22,431 | | | $ | 48,704 | | | Luke A. Pomilio | | $ | 15,485 | | | $ | 19,664 | | | $ | — | | | $ | — | | | $ | 22,378 | | | $ | 57,527 | |
| | | | | | | | | | | | | | | | | | | 401(k) Employer Contributions(a) | | Benefit Restoration Plan Employer Contributions(b) | | Certain Other Payments(c) | | Total All Other Compensation | | Curt R. Hartman | $ | 7,668 |
| | $ | 82,948 |
| | $ | 920 |
| | $ | 91,536 |
| | Luke A. Pomilio | $ | 15,845 |
| | $ | 25,306 |
| | $ | 920 |
| | $ | 42,071 |
| | Patrick J. Beyer | $ | — |
| | $ | — |
| | $ | 79,183 |
| | $ | 79,183 |
| | Nathan Folkert | $ | 18,000 |
| | $ | — |
| | $ | 4,368 |
| | $ | 22,368 |
| | Stanley W. (Bill) Peters | $ | 18,000 |
| | $ | 16,441 |
| | $ | 5,212 |
| | $ | 39,653 |
|
| | | (a) | Amounts represent 20142017 Company contributions to employee 401(k) plan accounts on the same terms offered to all other employees. |
| | | (b) | Amounts represent 20142017 Company contributions to the Benefits Restoration Plan. |
| (c) | Director fees include $37,500 for Mr. Hartman’s position as a Director of the Company (until the commencement of his employment as Interim CEO on July 23, 2014)Plan (“BRP”). |
| (d) | In connection with the termination of his employment, as further described in CD&A, Mr. J. Corasanti received certain payments and benefits under the terms of his amended and restated employment agreement with the Company, dated as of October 30, 2009 comprised of (i) $4,304,114 cash severance, (ii) $157,241 representing the |
| | hold back payment from the 2013 Bonus Plan that was payable in accordance with the terms of the 2014 Executive Bonus Plan, (iii) $1,002,945 representing the present value of interest earned on the outstanding balance of his fully vested deferred compensation plan as of his termination date and (iv) $893,103 in respect to life time health and life insurance benefits, and three years worth of long term care insurance, perk allowance and a car allowance. |
| (e)(c) | Certain other payments include retirement plan payments relatingof $62,923 to an automobile lease for Mr. J. Corasanti through July 22, 2014; payments for supplemental long-term care insurance policies for Messrs. J. Corasanti, Shallish, Jonas and Pomilio andBeyer who participates in a temporary housing allowance for Mr. Hartman until he assumedprogram designed to compensate him in a similar fashion as the role as permanent President and CEO on November 9, 2014. BeginningBRP in 2012, each NEO was provided a perquisite allowance that is included in Certain Other Payments as further describedaccordance with practices in the CD&A. The amount attributable to each perquisite or benefit for each NEO does not exceed the greaterUK, and payments of $25,000 or 10%$16,260 in respect of the total amount of perquisites received byhis car allowance. For Mr. Folkert and Mr. Peters, such NEOs.payments include $4,368 and $5,212, respectively, in costs associated with attending a sales force award trip in 2017. All other compensation does not include the costs for health insurance, long-term disability insurance, life insurance and other benefits generally available to other employees on the same terms as those offered to the officers listed above. |
| (7) | Mr. J. Corasanti resigned as President, Chief Executive Officer and Director effective July 22, 2014. |
| (8) | Mr. Darling resignedBeyer is located in the U.K., and, while the amounts shown in this table are expressed in U.S. dollars, all of his cash compensation is paid in British pounds. This was converted to U.S. dollars using the spot exchange rates as of December 29, 2017 and December 30, 2016, respectively, (the last business day of the year) of £0.738 and £0.811 to U.S. $1.00. If we had converted Mr. Beyer’s 2017 total compensation at the December 30, 2016 spot exchange rate, his total compensation would have been $1,167,652. |
| | | (9) | Mr. Pomilio retired from the Company effective December 31, 2014.position of Executive VP, Finance & Chief Financial Officer on January 2, 2018. He will continue to serve as a Special Advisor through March 15, 2019 and will serve as a consultant from March 16, 2019 through June 15, 2019. While the amounts under “Stock Awards” and “Option/SAR Awards” include all equity awards granted to Mr. Pomilio in 2017, as further described under "Employment Contracts - Mr. Pomilio's Letter Agreement", Mr. Pomilio will only earn equity awards that would vest through June 15, 2019. |
Grants of Plan-Based Awards
GRANTS OF PLAN-BASED AWARDS The table below summarizes the estimated cash awards under the Executive Bonus Plan (EBP) as well as equity compensation granted during 2014.2017. Information regarding the terms of these awards can be found under the headings “Non-Equity Incentive“Executive Bonus Plan” and “Equity“Annual Equity Compensation” in the CD&A. (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | | | Estimated Future Payouts Under
Non-Equity Incentive Plan
Awards1
| Estimated Future Payouts
Under Equity Incentive
Plan Awards
| | | | | Name
| Grant Date
| Threshold
($)
| Target
($)
| Maximum
($)
| Threshold
(#)
| Target
(#)
| Maximum
(#)
| All Other
Stock
Awards:
Number
of Shares
of Stock
or Units
(#)2
| All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)3
| Exercise
or Base
Price of
Option
Awards
($/sh)
| Grant Date
Fair Value
of Stock
and Option
Awards ($)5
| Curt R. Hartman | 3/01/2014
7/23/2014
N/A
| —
—
$55,147
| —
—
$315,123
| —
—
$315,123
| —
—
—
| —
—
—
| —
—
—
| 1,000
32,500
—
| —
—
—
| —
—
—
| $46,620
$1,259,050
$ —
| | | | | | | | | | | | | Joseph J. Corasanti6 | 6/01/2014
6/01/2014
N/A
7/22/2014
7/22/2014
| —
—
$105,663
—
—
| —
—
$301,896
—
—
| —
—
$603,791
—
—
| —
—
—
—
—
| —
—
—
—
—
| —
—
—
—
—
| —
16,250
—
66,250
—
| 40,625
—
—
—
125,000
| $44.90
—
—
—
$28.454
| $544,493
$729,625
$ —
$2,027,938
$1,047,256
| | | | | | | | | | | | | Robert D. Shallish, Jr.
| 6/01/2014
6/01/2014
N/A
7/20/2014
7/20/2014
12/9/2014
12/9/2014
| —
—
$58,290
—
—
—
—
| —
—
$166,544
—
—
—
—
| —
—
$333,087
—
—
—
—
| —
—
—
—
—
—
—
| —
—
—
—
—
—
—
| —
—
—
—
—
—
—
| —
4,550
—
11,440
—
17,350
—
| 9,750
—
—
—
23,800
—
38,550
| $44.90
—
—
—
$34.934
—
$32.704
| $130,678
$204,295
$ —
$489,174
$203,004
$776,239
$465,540
| | | | | | | | | | | | | Joseph G. Darling7
| 6/01/2014
6/01/2014
N/A
| —
—
$67,510
| —
—
$192,885
| —
—
$385,770
| —
—
—
| —
—
—
| —
—
—
| —
2,600
—
| 6,500
—
—
| $44.90
—
—
| $87,119
$116,740
$ —
| | | | | | | | | | | | | Daniel S. Jonas
| 6/01/2014
6/01/2014
N/A
| —
—
$52,811
| —
—
$150,889
| —
—
$301,777
| —
—
—
| —
—
—
| —
—
—
| —
3,250
—
| 7,800
—
—
| $44.90
—
—
| $104,543
$145,925
$ —
| | | | | | | | | | | | | Luke A. Pomilio
| 6/01/2014
6/01/2014
N/A
| —
—
$57,483
| —
—
$164,237
| —
—
$328,474
| —
—
—
| —
—
—
| —
—
—
| —
3,250
—
| 7,800
—
—
| $44.90
—
—
| $104,543
$145,925
$ —
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | | (i) | | (j) | | (k) | | (l) | | | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards1 | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | | | | | Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | Threshold (#) | | Target (#) | | Maximum (#) | | All Other Stock Awards: Number of Shares of Stock or Units (#)2 | | All Other Option Awards: Number of Securities Underlying Options (#)2 | | Exercise or Base Price of Option Awards ($/sh) | | Grant Date Fair Value of Stock and Option Awards ($)3 | Curt R. Hartman | | 3/1/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 159,150 |
| |
| $41.93 |
| |
| $1,602,641 |
| | | N/A | |
| $335,475 |
| |
| $745,500 |
| |
| $1,491,000 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Luke A. Pomilio6 | | 3/1/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 48,000 |
| |
| $41.93 |
| |
| $483,360 |
| | | N/A | |
| $107,993 |
| |
| $255,255 |
| |
| $510,510 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Patrick J. Beyer 5 | | 3/1/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 57,000 |
| |
| $41.93 |
| |
| $573,990 |
| | | N/A | |
| $108,930 |
| |
| $217,860 |
| |
| $435,721 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | Nathan Folkert | | 3/1/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1,600 |
| | — |
| | — |
| |
| $67,088 |
| | | 3/1/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 36,000 |
| |
| $41.93 |
| |
| $362,520 |
| | | N/A | |
| $89,259 |
| |
| $178,518 |
| |
| $357,035 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | Stanley W. (Bill) Peters | | 3/1/2017 | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 33,000 |
| |
| $41.93 |
| |
| $332,310 |
| | | N/A | |
| $87,561 |
| |
| $175,122 |
| |
| $350,243 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | (1) | Non-Equity Incentive Compensation represents earnings under the Company’s EBP.Executive Bonus Plan. The threshold, target and targetmaximum compensation for Mr. J. Corasanti, Mr. Shallish, Mr. Darling, Mr. Jonas and Mr. Pomilio represents 17.5% and 50%, respectivelyall NEOs is a percentage of Base CompensationSalary (as defined in the CD&A) at December 31, 2014.2017. The maximum compensation represents 100%is based on financial factors as well as individual goals as further described in the Executive Bonus Plan section of Base Compensation.the CD&A. During 2014, NEOs with corporate responsibility2017, Mr. Hartman, Mr. Pomilio, Mr. Beyer, Mr. Folkert and Mr. Peters earned non-equity incentive compensation equal to 31.8% of salary as reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. The threshold74%, 50%, 40%, 31% and target compensation for Mr. Hartman represents 17.5% and 100%32%, respectively, of Base Compensation (as defined in the CD&A) at December 31, 2014. Mr. Hartman earned 81.8% of salary on a pro-rata basis as further described in his employment letter.their base salaries. |
| | | (2) | The amounts shown in column (i) represent the total RSUs awarded to the named executive officers. AwardsMr. Folkert. RSU awards granted on Juneas of March 1, 20142017 vest annually over a period of five years and are valued at the market price of the stock on the date of grant. The 1,000 RSUs granted to Mr. Hartman on March 1, 2014 represent the amount granted when he became a Director of the Company and vested over 90 days. Mr. Hartman was subsequently granted 32,500 RSUs upon his |
| | appointment to the interim Chief Executive Officer position on July 23, 2014. These RSUs were scheduled to vest in equal installments of 2,708 shares per month until the earlier of July 23, 2015 or the grant of his one-time performance award as described in his employment letter with the Company dated November 9, 2014. This performance award was granted on February 27, 2015 and, therefore, Mr. Hartman received 18,956 of the RSUs and the remaining 13,544 were forfeited. Mr. J. Corasanti’s RSUs accelerated upon his resignation from the Company effective July 22, 2014, and Mr. Shallish’s RSUs accelerated upon his retirement effective March 31, 2015, as described in his December 9, 2014 retirement agreement. The acceleration of Mr. Shallish’s unvested equity awards was first approved by the Board on July 20, 2014, based on a retirement date following June 30, 2015, and subsequently re-approved by the Board on December 9, 2014, based on a retirement date of March 31, 2015. |
| (3) | four years. The amounts shown in column (j) represent the total number of SARsstock options awarded to the NEOs. TheseStock option awards granted as of March 1, 2017 vest annually in equal installments over a period of five years. Mr. J. Corasanti’s SARs granted in 2014 were cancelled upon his resignation from the Company effective July 22, 2014. Mr. Shallish’s outstanding SARs accelerated upon his retirement effective March 31, 2015 as described in his December 9, 2014 retirement agreement. The acceleration of Mr. Shallish’s unvested equity awards was first approved by the Board on July 20, 2014, based on a retirement date following June 30, 2015, and subsequently re-approved by the Board on December 9, 2014, based on a retirement date of March 31, 2015. |
| (4) | | (3) | Amounts in this column reflect the grant date fair value of RSUs and stock options in accordance with Compensation – Stock Compensation Topic 718 of FASB ASC. The exercise price represents a weighted average exercise priceassumptions made in the valuation of all SARs thatthese awards are subjectset forth in Note 8, (“Shareholders’ Equity”), to accelerated vesting for Mr. J. Corasanti and Mr. Shallish as noted above.the Consolidated Financial Statements in Item 15 to the Company’s 2017 Annual Report on Form 10-K. |
| (5) | | (4) | During 2014,2017, all NEOs earned RSUs and SARsand/or stock options as reported in the “Stock Awards” and “Option/SAR Awards” columns of the Summary Compensation Table. |
| (6) | | (5) | Mr. J. Corasanti resignedBeyer is located in the U.K., and, while the amounts shown in this table are expressed in U.S. dollars, his non-equity incentive plan compensation is paid in British pounds. This was converted to U.S. dollars using the spot exchange rate as President, Chief Executive Officer and Director effective July 22, 2014.of December 29, 2017 (the last business day of the year) of £0.738 to U.S. $1.00. |
| (7) | | (6) | Effective January 2, 2018, Mr. Darling resignedPomilio retired from the Company effective December 31, 2014.position of Executive VP, Finance & Chief Financial Officer and assumed the role of Special Adviser to the CFO through March 15, 2019. Subject to his continued service through June 15, 2019, Mr. Pomilio will receive awards granted in the above chart that vest through June 15, 2019 which is equivalent |
to options to purchase 19,200 shares which would have had a grant date fair value of $193,344 (and any portion of any outstanding equity award which remains unvested following June 15, 2019 shall be forfeited).
Material terms related to the NEOs’ compensation are described in the CD&A, footnotes to the Summary Compensation Table, Grants of Plan-Based Awards table and under the section “Potential Payments on Termination or Change-in-Control”. Outstanding Equity Awards at Fiscal Year-End(a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | | Option Awards15 | Stock Awards | Name | Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#)
| Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#)
| Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
| Option
Exercise
Price
($)
| Option
Expiration
Date | Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
| Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)16
| Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Yet Vested
(#)
| Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
($)
| Curt R. Hartman | —
| —
| —
| —
| —
| 18,9591
| $852,397
| —
| —
| | | | | | | | | | | Joseph J. Corasanti2 | — | — | — | — | — | — | — | — | — | | | | | | | | | | | Robert D. Shallish, Jr.3
| 10,000
—
—
8,400
—
—
—
3,000
—
—
—
| —
2,800
—
5,600
—
8,400
—
12,000
—
—
9,750
| —
—
—
—
—
—
—
—
—
—
—
| $29.92
$19.26
—
$27.63
—
$26.09
—
$32.93
—
—
$44.90
| 3/31/2016
3/31/2016
—
3/31/2016
—
3/31/2016
—
3/31/2016
—
—
3/31/2016
| —
—
1,200
—
2,400
—
3,600
—
5,600
4,550
—
| —
—
$53,952
—
$107,904
—
$161,856
—
$251,776
$204,568
—
| —
—
—
—
—
—
—
—
—
—
—
| —
—
—
—
—
—
—
—
—
—
—
| | | | | | | | | | | Joseph G. Darling4 | 10,000
4,000
2,000
| —
—
—
| —
—
—
| $26.69
$26.09
$32.93
| 3/31/2015
3/31/2015
3/31/2015
| —
—
—
| —
—
—
| —
—
—
| —
—
—
| | | | | | | | | | | Daniel S.
Jonas
| —
—
—
—
—
—
—
—
—
—
| 2,0005
—
4,0006
—
6,0007
—
8,0008
—
—
7,8009
| —
—
—
—
—
—
—
—
—
—
| $19.26
—
$27.63
—
$26.09
—
$32.93
—
—
$44.90
| 6/1/2020
—
6/1/2021
—
6/1/2022
—
6/1/2023
—
—
6/1/2024
| —
8005
—
1,60010
—
2,40012
—
3,20013
3,25014
—
| —
$35,968
—
$71,936
—
$107,904
—
$143,872
$146,120
—
| —
—
—
—
—
—
—
—
—
—
| —
—
—
—
—
—
—
—
—
—
| | | | | | | | | | | Luke A. Pomilio
| 10,000
10,000
8,000
8,000
—
6,000
—
—
4,000
—
2,400
—
—
—
—
| —
—
—
2,0005
—
4,0006
—
—
6,0007
—
9,6008
—
—
—
7,8009
| —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
| $29.92
$26.69
$16.46
$19.26
—
$27.63
—
—
$26.09
—
$32.93
—
—
—
$44.90
| 5/17/2017
6/1/2018
6/1/2019
6/1/2020
—
6/1/2021
—
—
6/1/2022
—
6/1/2023
—
—
—
6/1/2024
| —
—
—
—
8005
—
1,60010
2,00011
—
2,40012
—
4,00013
4,00013
3,25014
—
| —
—
—
—
$35,968
—
$71,936
$89,920
—
$107,904
—
$179,840
$179,840
$146,120
—
| —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
| —
—
—
—
—
—
—
—
—
—
—
—
—
—
—
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (a) | | (b) | | (c) | | | (d) | | (e) | | (f) | | (g) | | | (h) | | (i) | | | (j) | | | | Option Awards11 | | Stock Awards | | Name | | Number of Securities Underlying Unexercised Options Exercisable (#) | | Number of Securities Underlying Unexercised Options Unexercisable (#) | | | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | | Option Exercise Price ($) | | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | | Market Value of Shares or Units of Stock That Have Not Vested ($)12 | | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Yet Vested (#) | | | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Curt R. Hartman | | — |
| | — |
| | | — |
| | — |
| | — |
| | — |
| | | — |
| | 100,000 |
| 1 | |
| $5,097,000 |
| | | 59,320 |
| | 88,980 |
| 5 | | — |
| |
| $51.30 |
| | 2/27/2025 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 3,900 |
| 6 | |
| $198,783 |
| | — |
| | | — |
| | | 34,000 |
| | 136,000 |
| 7 | | — |
| |
| $39.87 |
| | 3/1/2026 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 6,750 |
| 8 | |
| $344,048 |
| | — |
| | | — |
| | | — |
| | 159,150 |
| 9 | | — |
| |
| $41.93 |
| | 3/1/2027 |
| | — |
| | | — |
| | — |
| | | — |
| | | | |
| | |
| | | |
| | |
| | |
| | |
| | | |
| | |
| | | |
| Luke A. Pomilio13 | | — |
| | 2,400 |
| 2 | | — |
| |
| $32.93 |
| | 6/1/2023 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 1,000 |
| 2 | |
| $50,970 |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 1,000 |
| 2 | |
| $50,970 |
| | — |
| | | — |
| | | — |
| | 3,120 |
| 3 | | — |
| |
| $44.90 |
| | 6/1/2024 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 1,300 |
| 4 | |
| $66,261 |
| | — |
| | | — |
| | | 18,400 |
| | 18,400 |
| 5 | | — |
| |
| $51.30 |
| | 2/27/2025 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 1,200 |
| 6 | |
| $61,164 |
| | — |
| | | — |
| | | — |
| | 20,040 |
| 7 | | — |
| |
| $39.87 |
| | 3/1/2026 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 1,300 |
| 8 | |
| $66,261 |
| | — |
| | | — |
| | | — |
| | 19,200 |
| 9 | | — |
| |
| $41.93 |
| | 3/1/2027 |
| | — |
| | | — |
| | — |
| | | — |
| | | | |
| | |
| | | |
| | |
| | |
| | |
| | | |
| | |
| | | |
| | Patrick J. Beyer | | 20,280 |
| | 30,420 |
| 5 | | — |
| |
| $51.30 |
| | 2/27/2025 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 1,350 |
| 6 | |
| $68,810 |
| | — |
| | | — |
| | | 11,060 |
| | 44,240 |
| 7 | | — |
| |
| $39.87 |
| | 3/1/2026 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 2,175 |
| 8 | |
| $110,860 |
| | — |
| | | — |
| | | — |
| | 57,000 |
| 9 | | — |
| |
| $41.93 |
| | 3/1/2027 |
| | — |
| | | — |
| | — |
| | | — |
| | | | |
| | |
| | | |
| | |
| | |
| | |
| | | |
| | |
| | | |
| | Nathan Folkert | | 7,600 |
| | 30,400 |
| 7 | | — |
| |
| $39.87 |
| | 3/1/2026 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 1,500 |
| 8 | |
| $76,455 |
| | — |
| | | — |
| | | — |
| | 36,000 |
| 9 | | — |
| |
| $41.93 |
| | 3/1/2027 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 1,600 |
| 10 | |
| $81,552 |
| | — |
| | | — |
| | | | |
| | |
| | | |
| | |
| | |
| | |
| | | |
| | |
| | | |
| Stanley W. (Bill) Peters | | 12,000 |
| | 18,000 |
| 5 | | — |
| |
| $51.30 |
| | 2/27/2025 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 800 |
| 6 | |
| $40,776 |
| | — |
| | | — |
| | | 6,540 |
| | 26,160 |
| 7 | | — |
| |
| $39.87 |
| | 3/1/2026 |
| | — |
| | | — |
| | — |
| | | — |
| | | — |
| | — |
| | | — |
| | — |
| | — |
| | 1,275 |
| 8 | |
| $64,987 |
| | — |
| | | — |
| | | — |
| | 33,000 |
| 9 | | — |
| |
| $41.93 |
| | 3/1/2027 |
| | — |
| | | — |
| | — |
| | | — |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | (1) | Mr. Hartman was granted 32,500 RSUs upon his appointment100,000 PSUs on February 24, 2015. The PSUs will be earned, in three separate tranches, subject to adjustment from 0% to 200% based on the Interim Chief Executive Officer positionCompany’s performance as of each of the three vesting dates: (1) 20,000 PSUs (at target) on JulyDecember 31, 2017, (2) 20,000 PSUs (at target) on December 31, 2018 and (3) 100,000 PSUs |
(at target) on December 31, 2019, less the number of PSUs paid out based on actual performance in respect of earlier vesting dates. As of December 31, 2017, the Company’s actual performance is below threshold level of achievement required for any of the PSUs to be earned. The amount above is recorded at target.
| | 23, 2014. These RSUs were scheduled to vest in equal installments of 2,708 shares per month until the earlier of July 23, 2015 or the grant of his one-time performance award as described in his employment agreement with the Company dated November 9, 2014. This performance award was granted on February 27, 2015, and, therefore, he received 18,956 of these RSUs and the remaining 13,544 were forfeited. |
| (2) | Mr. J. Corasanti resigned as President, Chief Executive Officer and Director effective July 22, 2014. All unvested equity awards (other than SARs granted in 2014) became vested and exercisable as of the date of his termination and remained exercisable for a period of 90 days. |
| (3) | Mr. Shallish retired from the Company on March 31, 2015. In accordance with his retirement agreement, all unvested equity awards became vested and will remain exercisable for a period of one year from his retirement date. |
| (4) | Mr. Darling resigned from the Company effective December 31, 2014 and forfeited all unvested awards. For exercisable SARs, he was permitted 90 days from his termination date to exercise. |
| (5) | Scheduled to vest on June 1, 2015.2018. |
| (6) | Scheduled to vest in equal installments of 2,000 shares per year for Mr. Jonas and Mr. Pomilio on June 1, 2015 and June 1, 2016. |
| (7) | Scheduled to vest in equal installments of 2,000 shares per year for Mr. Jonas and Mr. Pomilio on June 1, 2015, June 1, 2016 and June 1, 2017. |
| (8) | Scheduled to vest in equal installments of 2,400 shares per year for Mr. Pomilio and 2,000 shares per year for Mr. Jonas beginning on June 1, 2015, June 1, 2016, June 1, 2017 and June 1, 2018. |
| (9)(3) | Scheduled to vest in equal installments of 1,560 shares per year for Mr. Jonas and Mr. Pomilio beginning on June 1, 2015 and each June 1st thereafter until 2019. |
| (10) | Scheduled to vest in equal installments of 800 shares per year for Mr. Jonas and Mr. Pomilio on June 1, 20152018 and June 1, 2016.2019. |
| (11) | Scheduled to vest in equal installments of 1,000 shares per year for Mr. Pomilio on June 1, 2015 and June 1, 2016. |
| (12) | Scheduled to vest in equal installments of 800 shares per year for Mr. Jonas and Mr. Pomilio on June 1, 2015, June 1, 2016 and June 1, 2017. |
| (13) | Scheduled to vest in equal installments of 1,000 shares per year for Mr. Pomilio and 800 shares per year for Mr. Jonas on June 1, 2015, June 1, 2016, June 1, 2017 and June 1, 2018. |
| (14)(4) | Scheduled to vest in equal installments of 650 shares per year for Mr. Pomilio and Mr. Jonas on June 1, 20152018 and June 1, 2019. |
| | | (5) | Schedule to vest in equal installments of 29,660, 10,140 and 6,000 shares per year for Mr. Hartman, Mr. Beyer and Mr. Peters, respectively, on March 1, 2018, March 1, 2019 and March 1, 2020. Mr. Pomilio's shares will vest in equal installments of 9,200 shares per year on March 1, 2018 and March 1, 2019. |
| | | (6) | Scheduled to vest in equal installments of 1,950, 600, 675 and 400 shares per year for Mr. Hartman, Mr. Pomilio, Mr. Beyer and Mr. Peters, respectively, on March 1, 2018 and March 1, 2019. |
| | | (7) | Scheduled to vest in equal installments of 34,000, 11,060, 7,600 and 6,540 shares per year for Mr. Hartman, Mr. Beyer, Mr. Folkert and Mr. Peters, respectively, on March 1, 2018, March 1, 2019, March 1, 2020 and March 1, 2021. Mr. Pomilio's shares will vest in equal installments of 10,020 shares per year on March 1, 2018 and March 1, 2019. |
| | | (8) | Scheduled to vest in equal installments of 2,250, 725, 500 and 425 shares per year for Mr. Hartman, Mr. Beyer, Mr. Folkert and Mr. Peters, respectively, on March 1, 2018, March 1, 2019 and March 1, 2020. Mr. Pomilio's shares will vest in equal installments of 650 shares per year on March 1, 2018 and March 1, 2019. |
| | | (9) | Scheduled to vest in equal installments of 31,830, 11,400, 7,200 and 6,600 shares per year for Mr. Hartman, Mr. Beyer, Mr. Folkert and Mr. Peters, respectively, beginning on March 1, 2018 and each JuneMarch 1st thereafter untilthrough 2022. Mr. Pomilio's shares will vest in equal installments of 9,600 shares per year on March 1, 2018 and March 1, 2019. |
| (15) | | (10) | Scheduled to vest in equal installments of 400 shares per year for Mr. Folkert beginning on March 1, 2018 and each March 1st thereafter through 2021. |
| | | (11) | All outstanding option awards are SARs.SARs or stock options. |
| (16) | | (12) | Value shown for unvested RSUs and PSUs is based on the December 31, 2014 year-end29, 2017 (the last trading day of the year) closing stock price on the NASDAQ of $44.96.$50.97. |
Option Exercises and Stock Vested
| (a) | (b) | (c) | (d) | (e) | | | Option Awards1 | Stock Awards3 | | Name | Number of Shares
Acquired On Exercise
(#) | Value Realized
on Exercise2
($) | Number of Shares
Acquired on Vesting (#) | Value Realized on
Vesting4
($) | | Joseph J. Corasanti5 | 540,000 | $7,985,725 | 95,250 | $3,911,025 | | | | | | | | Curt R Hartman | 0 | $0 | 14,541 | $591,470 | | | | | | | | Robert D. Shallish, Jr.6 | 32,600 | $366,833 | 5,800 | $260,420 | | | | | | | | Joseph G. Darling7 | 10,000 | $255,000 | 8,100 | $363,690 | | | | | | | | Daniel S. Jonas | 10,000 | $174,020 | 4,000 | $179,600 | | | | | | | | Luke A. Pomilio | 0 | $0 | 6,200 | $278,380 |
| | | (13) | Mr. Pomilio retired from the position of Executive VP, Finance & Chief Financial Officer on January 2, 2018. He will continue to serve as a Special Advisor through March 15, 2019. As described in CD&A and in the above notes, Mr. Pomilio's outstanding unvested equity awards will continue to vest in accordance with vesting schedules established in the original equity awards through June 15, 2019. Any awards with vesting dates scheduled to occur after June 15, 2019 will be forfeited. |
OPTION EXERCISES AND STOCK VESTED | | | | | | | | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | | | Option Awards1 | | Stock Awards3 | | Name | | Number of Shares Acquired On Exercise (#) | | Value Realized on Exercise2 ($) | | Number of Shares Acquired on Vesting (#) | | Value Realized on Vesting4 ($) | | Curt R. Hartman | | — |
| | $ | — |
| | 4,200 |
| | $ | 176,106 |
| | | | | | | | | | | | Luke A. Pomilio | | 62,300 |
| | $ | 1,539,718 |
| | 4,700 |
| | $ | 231,468 |
| | | | | | | | | | | | Patrick J. Beyer | | — |
| | $ | — |
| | 1,400 |
| | $ | 58,702 |
| | | | | | | | | | | | Nathan Folkert | | — |
| | $ | — |
| | 500 |
| | $ | 20,965 |
| | | | | | | | | | | | Stanley W. (Bill) Peters | | — |
| | $ | — |
| | 825 |
| | $ | 34,592 |
| | | | | | | | | | |
| | | (1) | Amount relates to stockSAR and option and SAR exercises during 2014.2017. |
| | | (2) | Calculated by multiplying the number of shares purchased by the difference between the exercise price of the stockSAR or option or SAR and the market price of the Common Stock on the date of exercise. |
| | | (3) | Amount relates to the RSUs and in the case of Mr. Darling the PSUs, that vested during 2014.2017. |
| | | (4) | Calculated by multiplying the number of shares vested by the market price of the Common Stock on the date of vesting. |
| (5) | Mr. J. Corasanti resigned as President, Chief Executive Officer and Director effective July 22, 2014. |
| (6) | Mr. Shallish retired from the Company on March 31, 2015. |
| (7) | Mr. Darling resigned from the Company effective December 31, 2014. |
PENSION BENEFITS As discussed in the CD&A under the heading “Retirement Pension BenefitsUnderPlan”, the Company sponsors the CONMED Corporation Retirement Pension Plan (“the Retirement Plan”),. Under the Retirement Plan, upon the later of the attainment of age 65 or the completion of 5five years of participation, our NEOs area participant is entitled to annual pension benefits equal to the greater of: (a) 1.65% of a participant'sparticipant’s average monthly compensation multiplied by years of benefit service with the product being reduced by 0.65% of a participant’s monthly covered wages multiplied by years of benefit service (not to exceed 35) or (b) the benefit the participant would have been entitled to prior to December 31, 2003. Special plan provisions exist for early retirement, deferred retirement, death or disability prior to eligibility for retirement and lump sum benefit payments. A participant is 100% vested after five years of service. The participant may elect one of the following forms of payment: lump sum distribution for benefits earned through December 31, 2003, single life annuity or joint and survivor annuity.
The table below shows the present value of accumulated benefits payable to each of the NEOs, except Mr. Hartman as he was not a participant in the Retirement Plan, including the number of years of service credited to each such NEO, under the CONMED Corporation Retirement Pension Plan determined using interest rate and mortality rate assumptions consistent with those used in the Company’s financial statements. As discussed in the CD&A under the heading “Retirement Pension Plan”, pension accruals were frozen under the Retirement Plan effective May 14, 2009, therefore no additional benefits accrued after that date. As a result, years of actual service for NEOs will not equal the years of credited service noted below. During 2017, the only NEO with years of credited service under the plan is our Executive VP, Finance & Chief Financial Officer. The below table reflects the present value of accumulated benefits payable and years of credited service, determined using interest rate and mortality assumptions consistent with those used in the Company’s financial statements. | (a) | (b) | (c) | (d) | (e) | Name | Plan Name | Number of Years
of Credited
Service (#) | Present Value of
Accumulated Benefit ($)1 | Payments During the
Last Fiscal Year ($) | | | | | | | | Joseph J. Corasanti2 | CONMED Corporation Retirement Pension Plan | 15 | $154,904 | $131,622 | | | | | | | | Robert D. Shallish, Jr.3 | CONMED Corporation Retirement Pension Plan | 18 | $316,543 | $23,014 | | | | | | | | Joseph G. Darling4 | CONMED Corporation Retirement Pension Plan | 1 | $32,563 | $0 | | | | | | | | Daniel S. Jonas | CONMED Corporation Retirement Pension Plan | 9 | $203,074 | $0 | | | | | | | | Luke A. Pomilio | CONMED Corporation Retirement Pension Plan | 12 | $269,645 | $0 | | | | | | |
| | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | Name | | Plan Name | | Number of Years of Credited Service (#) | | Present Value of Accumulated Benefit ($)1 | | Payments During the Last Fiscal Year ($) | | | | | | | | | | | | Luke A. Pomilio | | CONMED Corporation Retirement Pension Plan | | 12 | | $328,779 | | $— | | | | | | | | | | |
| | | (1) | Amounts in this column reflect the present value of accumulated benefits in accordance with Compensation – Retirement Benefits Topic 715 of FASB ASC. The assumptions made in the valuation of these awards are set forth in Note 9,10, (“Employee Benefit Plans”), to the Consolidated Financial Statements in Item 15 to the Company’s 20142017 Annual Report on Form 10-K. |
| (2) | Mr. J. Corasanti resigned as President, Chief Executive Officer and Director effective July 22, 2014. |
| (3) | Mr. Shallish retired from the Company on March 31, 2015. |
| (4) | Mr. Darling resigned from the Company effective December 31, 2014. |
Non-Qualified Deferred CompensationNON-QUALIFIED DEFERRED COMPENSATION The table below shows the executive contributions, Company contributions and aggregate earnings related to deferred compensation for all NEOs except Mr. Hartman as he was not eligible to participant in the Benefits Restoration Plan during 2014. Deferred compensation was provided to Mr. J. Corasanti as described in his employment agreement. Refer to the section title “CEO Employment Agreement” in the CD&A for further details.2017. Effective January 1, 2010, the Company began offering a Benefits Restoration Plan to eligible employees, including all NEOs. This Planplan provides the opportunity to defer receipt of up to 50% of base salary and up to 100% of annual cash incentive compensation and to receive 7% matching contributions from the Company that would otherwise be unavailable under our 401(k) plan because of limits imposed by the Code. Refer to the section “Retirement Benefits - Benefits Restoration Plan” in the CD&A for further details. | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | Name | | Executive
Contributions in
Last FY2 ($) | | Registrant
Contributions
in Last FY3 ($) | | Aggregate
Earnings in
Last FY ($) | | Aggregate
Withdrawals/ Distributions ($) | | Aggregate
Balance at Last FYE ($) | | | | | | | | | | | | | | Joseph J. Corasanti1 | | $52,730 | | $36,042 | | $1,183,557 | | ($50,784) | | $4,994,399 | | | | | | | | | | | | | | Robert D. Shallish, Jr. | | $49,384 | | $17,643 | | $19,493 | | $0 | | $300,695 | | | | | | | | | | | | | | Joseph G. Darling4 | | $20,980 | | $0 | | $8,836 | | ($136,346) | | $108,506 | | | | | | | | | | | | | | Daniel S. Jonas | | $52,565 | | $18,473 | | $16,606 | | $0 | | $288,779 | | | | | | | | | | | | | | Luke A. Pomilio | | $119,505 | | $19,664 | | ($14,505) | | $0 | | $861,207 |
| | | | | | | | | | | | | | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | (f) | | Name | | Executive Contributions in Last FY1 ($) | | Registrant Contributions in Last FY2 ($) | | Aggregate Earnings in Last FY ($) | | Aggregate Withdrawals/ Distributions ($) | | Aggregate Balance at Last FYE ($) | | | | | | | | | | | | | | Curt R. Hartman | | $ | 239,040 |
| | $ | 82,948 |
| | $ | 91,892 |
| | $ | — |
| | $ | 866,992 |
| | | | | | | | | | | | | | Luke A. Pomilio | | $ | 229,904 |
| | $ | 25,306 |
| | $ | 146,246 |
| | $ | — |
| | $ | 1,763,539 |
| | | | | | | | | | | | | | Stanley W. (Bill) Peters | | $ | 75,000 |
| | $ | 16,441 |
| | $ | 13,145 |
| | $ | — |
| | $ | 200,573 |
| | | | | | | | | | | | |
| (1) | Mr. J. Corasanti resigned as President, Chief Executive Officer and Director effective July 22, 2014. As described above, Mr. J. Corasanti received deferred compensation pursuant to his employment agreement as well as his participation in the Benefits Restoration Plan. Amounts credited pursuant to his employment agreement in the “Registrant Contributions” column were fully vested when credited and payable over a period of up to 120 months with interest. Amount in the “Aggregate Earnings” column includes above market interest of $77,467 for 2014 and all interest earned as of his date of termination, totaling $1,002,945, which is included in the “Deferred Compensation” and “Other” columns, respectively, of the Summary Compensation Table. Mr. J. Corasanti earns 10% interest on the portion of the outstanding balance he earned through December 31, 2004 and earned interest at the prime rate of JP Morgan at December 31st of each year plus two percent on the portion of the outstanding balance he earned subsequent to December 31, 2004, for total market interest of $63,081. |
| (2)(1) | Executive contributions related to the Benefit Restoration Plan were included in aggregate earnings in 2014.2017. |
| (3) | | (2) | Registrant contributions related to the Benefit Restoration Plan were included in earnings in 2014.2017. |
| (4) | Mr. Darling resigned from the Company effective December 31, 2014 and was not vested in the Benefit Restoration Plan. As a result, all employer contributions and earnings thereon were forfeited. |
POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL
Potential Payments on Termination or Change in ControlTermination/No Change in Control
TERMINATION/NO CHANGE IN CONTROL The table below represents the earnings Mr. Shallish, Mr. Jonas and Mr. Pomiliopayments the NEOs would receive if they were terminated by the Company without cause or resigned for good reason on December 31, 20142017 and no change in control had occurred. The table assumes the termination by the Company without cause (each as(as defined in the Retention Letters).Executive Severance Plan) with respect to each NEO other than Mr. Hartman’s CEO Employment Letter in effect as of December 31, 2014 does not includePomilio. Solely with respect to Mr. Pomilio, the table assumes any termination by the Company. No payments will be made, other than accrued benefits, if an entitlementNEO, other than Mr. Pomilio, is terminated for paymentscause or benefits upon a termination of employment. However, as described in the CD&A, under the CEO Employment Letter, Mr. Hartman is entitled to participate in a general severance plan that the Company expects to adopt (with an expected severance level of two times salary plus bonus for a non-change in control involuntary termination and three times salary plus bonus for a change in control involuntary termination). | | Salary
Continuation or
Severance1 ($) | Benefits or Perquisites ($) | Accelerated
SAR Vesting2 ($) | Accelerated
RSU Vesting2 ($) | Total ($) | | Robert D. Shallish, Jr.3 | | $999,261 | $0 | $471,876 | $780,056 | $2,251,193 | | Daniel S. Jonas | | $905,331 | $0 | $330,180 | $505,800 | $1,741,311 | | Luke A. Pomilio | | $985,422 | $0 | $349,428 | $811,528 | $2,146,378 |
| | | | | | Name | Salary Continuation or Severance ($)1 | | | |
| | Curt R. Hartman | $ | 2,552,180 |
| | | |
| Luke A. Pomilio2 | $ | 872,635 |
| | | |
| Patrick J. Beyer3 | $ | 556,396 |
| | | |
| | Nathan Folkert | $ | 476,909 |
| | | |
| | Stanley W. (Bill) Peters | $ | 473,812 |
|
| | | (1) | Amount is determined pursuant to the Retention Letters discussed in the CD&A, andFor each NEO other than Mr. Pomilio, amount represents a lump sum equal to one and one-half (1.5) multiplied by the sum of annualthe executive’s base salary in effect on July 23, 2014 and the targettwo-year average of the non-equity incentive plan compensation plusand discretionary bonus earned as of December 31, 2017 multiplied by the cash retention bonus due on June 30, 2015, equal to $333,087, $301,777applicable severance multiple as defined in the Executive Severance Plan payable as a lump sum. The severance multiple is defined as two (2.0) for Mr. Hartman and $328,474, respectively,one (1.0) for Messrs. Shallish, JonasBeyer, Folkert and Pomilio. See footnote 3 below for a discussion of the payments and benefits that Mr. Shallish actually received in connection with his retirement from the Company on March 31, 2015.Peters. |
| (2) | Amount represents the accelerated vesting of all outstanding RSUs and all outstanding SARs (other than SARs granted in 2014 which would not accelerate and would be canceled). Vested SARs remain exercisable for 90 days following the termination date. The value shown for unvested SARs represents the difference between the exercise |
| | price and December 31, 2014 year-end closing stock price(2) | Mr. Pomilio retired from the position of Executive VP, Finance & Chief Financial Officer on the NASDAQ of $44.96.January 2, 2018. He will continue to serve as a Special Advisor through March 15, 2019. The value shown for unvested RSUsabove amount is based on the terms of his Letter Agreement as more fully described in the CD&A. Under the terms of the Letter Agreement, if Mr. Pomilio were terminated on December 31, 2014 year-end closing stock price on the NASDAQ2017, he would receive a lump-sum payment in an amount that would otherwise be payable in respect of $44.96.his service as Special Advisor between March 16, 2018 and March 15, 2019. |
| | | (3) | Mr. Shallish retiredBeyer is located in the U.K., and, while the amounts shown in this table are expressed in U.S. dollars, his compensation is paid in British pounds. This was converted to U.S. dollars using the spot exchange rate as our Chief Financial Officer effective March 31, 2015. In connection with his retirement, he received paymentof December 29, 2017 (the last business day of the $333,087 retention bonus pursuantyear) of £0.738 to his letter agreement with the Company dated July 23, 2014, but was not eligible to receive any additional amounts in respect to his severance entitlement or benefit and perquisite continuation. In addition, Mr. Shallish’s unvested equity awards held by him as of March 31, 2015 vested, and vested SARs will remain exercisable for one year after his retirement.U.S. $1.00. |
The table below represents the earnings Mr. J. Corasanti earned upon his resignation as President, Chief Executive Officer and Director of the Company effective July 22, 2014. Pursuant to the terms of his employment agreement, Mr. J. Corasanti is subject to a two year post-termination non-compete following the termination of his employment and a perpetual non-disclosure covenant. The table below does not include payments in respect to Mr. J. Corasanti’s deferred compensation, which is reported in the Non-Qualified Deferred Compensation Table, as Mr. J. Corasanti was fully vested in his deferred compensation benefits and did not receive any enhanced payments upon termination of employment.
| Salary
Continuation
or Severance ($) | Benefits or
Perquisites ($) | Accelerated SAR
Vesting3 ($) | Accelerated
RSU Vesting3 ($) | Non-Equity
Incentive Plan
Compensation ($) | Total ($) | | Payments and Benefits for Joseph J. Corasanti | $4,304,1141 | $893,1032 | $1,783,625 | $2,830,200 | $157,2414 | $9,968,283 |
| (1) | Amount represents a lump sum equal to three multiplied by the sum of salary and the average of bonus, deferred compensation and incentive compensation earned over the past three years. |
| (2) | Amount includes the present value total of all previously-vested life time benefits (including life and health insurance) and the present value of total perquisites for three years. |
| (3) | Amount represents the accelerated vesting of all outstanding RSUs and SARs (other than SARs granted in 2014 which were not accelerated and were canceled). The value shown for unvested SARs represents the difference between the exercise price and the July 22, 2014 closing stock price on the NASDAQ of $42.72. The value shown for unvested RSUs represents the July 22, 2014 closing stock price on the NASDAQ of $42.72 multiplied by the number of RSUs that vested. |
| (4) | Amount represents earnings from the 20% “holdback” from the 2013 Bonus Plan. |
Mr. Joseph Darling resigned from the Company effective December 31, 2014. In accordance with his termination agreement, Mr. Darling received a lump sum cash payment equal to $385,770. He is also entitled to an additional amount of up to $192,885 paid in six equal monthly installments beginning in January 2016, provided Mr. Darling certifies on a monthly basis to the Company that he remains unemployed and is not acting as a consultant or agent earning income since his date of termination. Mr. Darling also received $74,907 representing the 20% holdback from the 2013 Bonus Plan and $122,675 representing the amount earned under the 2014 Executive Bonus Plan.
Under the terms of the Company’s pre-2015 equity award programs, the vesting date for all outstanding stock options, SARs and RSUs granted to any NEO would accelerate to the date of termination due to death or disability. These amounts are identical toIn those circumstances, the amounts reported undervalue of equity awards vesting would be the headings “Accelerated SAR Vesting” and “Accelerated RSU Vesting”same as described below for a termination in the Termination/Change in Control Table.Termination/Change in Control
On April 7, 2015, each of Messrs. Jonas and Pomilio agreed to the termination of their Change in Control Severance Agreementsconnection with the Company, effective immediately. Accordingly, the compensation and benefits payable under the Change in Control Severance Agreements (including the Code Section 280G excise tax “gross-up” provision) will not apply for any termination of employment after April 2015, and as of the date of this proxy statement no NEO (or other executive officer of the Company) is covered by an arrangement providing for such an excise tax gross-up. During 2014, each NEO (except Mr. Hartman) was party to a Change in Control Severance Agreement withControl. Upon disability or death, Mr. Hartman’s PSUs would immediately become vested on a pro rata basis measured based on the Company. The description below sets forthnumber of months completed from the payments and benefits thatbeginning of the performance period. These PSUs would have beenbe payable as a resultbased on actual achievement of a Change in Controlthe performance goals. Based on December 31, 2014 and qualifying termination for each NEO on that date. As described above,the Company’s total shareholder return relative to the S&P 1500 Healthcare Equipment Select Index as of December 31, 2014,2017, no PSUs would be earned upon Mr. Hartman is underHartman’s death or disability. Upon Mr. Hartman’s death or disability, if threshold level performance were achieved, the CEO Employment Letter, Mr. Hartman is entitled to participatevalue of PSUs vesting would be $1,529,100; if target performance were achieved the value of PSUs vesting would be $3,058,200; and at maximum performance the value of PSUs vesting would be $6,116,400, in each case based on the Company’s stock price as of December 29, 2017 (the last business day of the year).
TERMINATION/CHANGE IN CONTROL The table below represents the earnings the NEOs would receive upon a general severance plan that the Company expects to adopt (with an expected severance level of two times salary plus bonus for a non-changequalifying termination in control involuntary termination and three times salary plus bonus forconnection with a change in control involuntary termination).The Change in Control Severance Agreements that were in effect as ofon December 31, 2014 provided that if, within two2017 under the Executive Severance Plan (or, solely with respect to Mr. Pomilio, in connection with any termination under the terms of the Letter Agreement) and one-half years after a Change in Control,under the NEO’s employment withterms of the Company was terminated by the Company other than for Cause or by the NEO for Good Reason (as such capitalized terms were definedBenefits Restoration Plan as further described in the Change in Control Severance Agreements), the NEO would have been entitled to receive (a) a lump sum payment equal to three times the sum of (i) his base salary plus (ii) the highest of the bonuses earned during the three years prior to such termination; (b) continuation of all medical, dental, accident, disability, long-term care and life insurance benefits or other fringe benefits and reimbursement of certain expenses for a period of three years and (c) a pro-rated annual bonus for the calendar year of such termination. “Cause” generally meant the NEO’s willful and continued failure to substantially perform his duties or willfully engaging in illegal conduct or gross misconduct which is demonstrably and materially injurious to the Company or its affiliates. “Good Reason” included, following a Change in Control, any material and adverse change in the NEO’s duties, responsibilities, titles or offices with the Company, a material reduction in the rate of annual base salary or annual target bonus opportunity, any requirement that the NEO be based more than 50 miles from the office where he is located at the time of the Change in Control, a substantial increase in obligations to travel on Company business and the discontinuation of (or material reduction of benefits under) any material employee benefit compensation welfare benefit or fringe benefit plan in which the NEO is eligible to participate in immediately prior to such Change in Control. For the NEOs, the Change in Control Severance Agreements that were in effect as of December 31, 2014 provided for gross-up for any excise tax that may have become due as a result of such Change in Control (to the extent that the amounts giving rise to the excise tax are greater than 10% of the “golden parachute” safe-harbor amount). The Company remains committed to not enter into agreements to gross-up excise taxes in future Change in Control Severance agreements with future executives.
Name | | Salary
Continuation
or Severance1 ($) | Benefits or
Perquisites2 ($) | Deferred
Compensation3 ($) | Accelerated
Option/SAR
Vesting4 ($) | Accelerated
RSU
Vesting4 ($) | Section
280G
Gross-Up5 ($) | Total | | Robert D. Shallish, Jr. | | $2,123,542 | $123,803 | $0 | $472,461 | $780,056 | $0 | $3,499,862 | | | | | | | | | | | | Daniel S. Jonas | | $1,913,346 | $94,203 | $0 | $330,648 | $505,800 | $0 | $2,843,997 | | | | | | | | | | | | Luke A. Pomilio | | $2,094,133 | $141,358 | $0 | $349,896 | $811,528 | $1,008,607 | $4,405,522 | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | Name | | Salary Continuation or Severance1 ($) | | Intrinsic Value of Unvested Stock Awards ($)2 | | Intrinsic Value of Unvested Options and SARs ($)2 | | Value of Unvested Company BRP Contributions ($) | | Total ($) | Curt R. Hartman3 | | $ | 3,617,180 |
| | $ | 542,831 |
| | $ | 2,948,316 |
| | $ | 199,528 |
| | $ | 7,307,855 |
| | | | | | | | | | | | | Luke A. Pomilio4 | | $ | 872,635 |
| | $ | 295,626 |
| | $ | 458,246 |
| | $ | — |
| | $ | 1,626,507 |
| | | | | | | | | | | | | Patrick J. Beyer5 | | $ | 1,099,105 |
| | $ | 179,669 |
| | $ | 1,006,344 |
| | $ | — |
| | $ | 2,285,118 |
| | | | | | | | | | | | | | Nathan Folkert | | $ | 948,569 |
| | $ | 158,007 |
| | $ | 662,880 |
| | $ | — |
| | $ | 1,769,456 |
| | | | | | | | | | | | | | Stanley W. (Bill) Peters | | $ | 948,994 |
| | $ | 105,763 |
| | $ | 588,696 |
| | $ | 40,397 |
| | $ | 1,683,850 |
|
| | | (1) | Amount represents the highest annual executive bonussum of the executive’s base salary and the three-year average of the non-equity incentive plan compensation and discretionary bonus earned over the past three completed fiscal years plus threeas of December 31, 2017 multiplied by the sum of the highest salary earned over the past twelve monthsapplicable severance multiple. The severance multiple is defined as three (3.0) for Mr. Hartman and highest annual executive bonus plan compensation earned over the past three completed fiscal years. It also includes the Retention Bonus due on June 30, 2015 as definedtwo (2.0) for each other NEO (other than Mr. Pomilio, who has waived his participation in the Retention Letters, equalExecutive Severance Plan). |
| | | (2) | As described above under “CD&A – Annual Equity Awards”, unvested equity awards held by each NEO (other than Mr. Hartman’s PSU awards) are subject to$333,087, $301,777 and $328,474, respectively, for Messrs. Shallish, Jonas and Pomilio. See footnote 3 to the “Termination/No Change in Control” table above, for accelerated vesting upon a discussion of the payments and benefits that Mr. Shallish actually receivedqualifying termination in connection with a change in control. The intrinsic value of unvested equity awards is calculated by taking the product of (a) $50.97, which was the closing market price of our common stock as of December 29, 2017, (the last business day of the year) less the exercise price of any stock option or SAR, and (b) the number of stock awards subject to acceleration. See “Grants of Plan-Based Awards” and “Outstanding Equity Awards at Fiscal Year-End” for information on the awards and the unvested portion of such awards. |
| | | (3) | The Intrinsic Value of Unvested Stock Awards disclosed for Mr. Hartman assumes no vesting of his retirementoutstanding PSU awards given the Company’s total shareholder return relative to the S&P 1500 Healthcare Equipment Select Index. Upon a change in control in connection with a qualifying termination, if threshold level performance were achieved, the value of PSUs vesting would be $1,529,100; if target performance were achieved the value of PSUs vesting would be $3,058,200; and at maximum performance the value of PSUs vesting would be $6,116,400, in each case based on the Company’s stock price as of December 29, 2017 (the last business day of the year). The terms of Mr. Hartman’s PSU awards are described in greater detail above under “Employment Contracts – Mr. Hartman’s Compensation Arrangements.” |
| | | (4) | Mr. Pomilio retired from the Companyposition of Executive VP, Finance & Chief Financial Officer on January 2, 2018. He will continue to serve as a Special Advisor through March 15, 2019. The above amount is based on the terms of his Letter Agreement as more fully described in the CD&A. Under the terms of the Letter Agreement, if Mr. Pomilio were terminated on December 31, 2015.2017, he would receive a lump-sum payment in an amount that would otherwise be payable in respect of his service as Special Advisor between March 16, 2018 and March 15, 2019. The intrinsic value of unvested equity awards set forth in the table is for such awards that could continue to vest in accordance with vesting schedules established in the original equity awards through June 15, 2019. |
| (2) | | (5) | Amount includesMr. Beyer is located in the present valueU.K., and, while the amounts shown in this table are expressed in U.S. dollars, his salary continuation or severance is paid in British pounds. This was converted to U.S. dollars using the spot exchange rate as of medical, dental, disability, long-term care (as applicable), life insurance and total perquisites for three years.December 29, 2017 (the last business day of the year) of £0.738 to U.S. $1.00. |
| (3) | | (6) | No NEOs would receive any other accelerated or enhanced deferred compensation payments or benefits upon a Changechange in Control. |
| (4) | control other than as described in this table. As provided to all participantsdescribed in the pre-2014 equity award compensation plans,CD&A under “Retirement Benefits – Benefits Restoration Plan”, upon a Changechange in Control,control, the vesting date for all outstanding SARs, RSUs and PSUsunvested portion of each NEO’s account will accelerate to the date of the Change in Control. RSUs granted in 2014 will not automatically vest, but are instead subject to “double-trigger” as further described under “Annual Equity Compensation” in CD&A. The value shown for unvested SARs, represents the difference between the exercise price and December 31, 2014 year-end closing stock price on the NASDAQ of $44.96. Value shown for unvested RSUs and PSUs is based on the December 31, 2014 year-end closing stock price on the NASDAQ of $44.96.become vested. |
| (5) | Compensation and benefits in excess of three times an executive’s five-year average compensation may be subject to a non-deductible 20% excise tax under Section 280G of the Code. To provide that the actual economic value of Change in Control benefits is equivalent for all participants, Change in Control Severance Agreements that were in effect as of December 31, 2014 provided for a gross-up of this tax to the extent that the amounts giving rise to the excise tax levied on the executive are greater than 10% of the “golden parachute” safe-harbor amount. Amounts in this column estimate the tax gross-up assuming a Change in Control date of December 31, 2014 at a stock price of $44.96 per share. As a result of the expiration or termination of the Change in Control Severance Agreements for Messrs. Shallish, Jonas and Pomilio, as of the date of this proxy statement none of our NEOs are eligible for an excise tax gross-up in connection with Section 280G of the Code. |
The Company uses a mix of cash and equity-based incentive compensation to attract and retain qualified candidates to serve on the Board of Directors. Director compensation consists of a mix of an annual retainer and equity compensation for non-employee directors. The Compensation Committee and the full Board of Directors generally review director fees at least every three years. TheAs disclosed in last year’s Proxy Statement, the Compensation Committee reviewed the fees in 20132015 with the assistance of Semler Brossy,Radford, the Compensation Committee’s compensation consultant. During 2015, Radford recommended that director equity compensation be changed from fixed-share equity awards to value-based equity awards. These recommendations were implemented in 2016, with the Compensation Committee and Board of Directors concluding, based on the Radford recommendation, that directors should receive equity with a compensation consultancy, and did not make any changes.Black Scholes valuation of $150,000 with a value ratio of 1:3 of stock options to RSUs, with the Chairman of the Board to receive equity awards with a total Black Scholes value of $200,000 with the same 1:3 value ratio of stock options to RSUs. Cash Compensation Paid to Directors For 2014,2017, each director received cash fee compensation as described below: Director Cash Fee Compensation Plan Annual Retainers | | | | | Annual Retainer Total (Paid Quarterly) | (Paid Quarterly) | (None if Executive Officer) | $90,000
(two times director fee)
| | Lead Independent Director | $60,000 | | Directors (Non-Executive only) | $45,000 | | Audit Committee Chair | $30,000 | | Audit Committee Member | $15,000 | | Governance/ Compensation Chair | $15,000 | | Governance/ Compensation Committee Member | $7,500 |
During 2014, the Search Committee was formed to identify candidates for the permanent Chief Executive Officer position. The Chair of the Search Committee earned $15,000 and the Search Committee Members each earned $12,000.
47Strategy Committee Chair | $15,000 | | Strategy Committee Member | $7,500 |
Beginning in 2014, no director compensation was paid to employee Directors (other than compensation earned by Mr. Hartman as an independent director prior to his appointment as Interim CEO). In addition, it is anticipated in 2015 a comprehensive review of the Director fees will occur. We believe the Company’s director compensation continues to be below the median for the Company’s peer companies.
Equity Compensation Awarded to Directors
In 2014,2017, each non-employee directorsdirector, other than Mr. Lande, received 3,000grants of approximately $150,000 which equated to 3,669 stock options and 2,167 RSUs, with the Chairman of the Board receiving grants of approximately $200,000 equating to 4,892 stock options and 1,000 SARs2,890 RSUs, which, in each case, will vest on June 1, 2015. In 2015, non-employee directors will receive 3,000 RSUs and 1,000 SARs, annually, which will vest one year from the grant date.2018. The 2014 and 20152017 awards will bewere issued from the 2007Amended and Restated 2016 Non-Employee Director Equity Compensation Plan. As Mr. Daniels and Dr. Schwartz did not stand for re-election, they received cash payments calculated as the 90 day trailing valueLande, in order to comply with internal compensation requirements from Scopia Capital Management LP, Mr. Lande’s employer (and a shareholder of Common Stock as of June 1, 2014 multiplied by 3,000 and then pro-rated for one-third of the year for a total payment of $45,650 each.CONMED), was awarded no equity compensation in 2017.
Director Compensation Table | (a) | (b) | | (c) | | (d) | | (e) | | (f) | | (g) | | (h) | Name | Fees Earned or Paid in Cash ($) | | Stock Awards ($)1 | | Option Awards ($)2 | | Non-Equity
Incentive Plan Compensation ($) | | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | | All Other Compensation ($) | | Total ($) | | Brian Concannon | $68,250 | | $118,920 | | $11,524 | | $0 | | $0 | | $0 | | $198,694 | | | | | | | | | | | | | | | | | Eugene R. Corasanti3 | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | | | | | | | | | | | | | | | | Joseph J. Corasanti4 | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | | | | | | | | | | | | | | | | Bruce F. Daniels5 | $100,025 | | $0 | | $0 | | $0 | | $0 | | $0 | | $100,025 | | | | | | | | | | | | | | | | | Charles M. Farkas | $42,000 | | $118,920 | | $11,524 | | $0 | | $0 | | $0 | | $172,444 | | | | | | | | | | | | | | | | | Jo Ann Golden | $71,250 | | $118,920 | | $11,524 | | $0 | | $0 | | $0 | | $201,694 | | | | | | | | | | | | | | | | | Curt R. Hartman | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | $0 | | | | | | | | | | | | | | | | | Dirk M. Kuyper | $60,000 | | $118,920 | | $11,524 | | $0 | | $0 | | $0 | | $190,444 | | | | | | | | | | | | | | | | | Jerome J. Lande | $68,250 | | $165,540 | | $11,524 | | $0 | | $0 | | $0 | | $245,314 | | | | | | | | | | | | | | | | | Stephen M. Mandia | $77,625 | | $118,920 | | $11,524 | | $0 | | $0 | | $0 | | $208,069 | | | | | | | | | | | | | | | | | Stuart J. Schwartz5 | $92,525 | | $0 | | $0 | | $0 | | $0 | | $0 | | $92,525 | | | | | | | | | | | | | | | | | Mark E. Tryniski | $127,500 | | $118,920 | | $11,524 | | $0 | | $0 | | $0 | | $257,944 |
| | | | | | | | | | | | | | | | | | | (a) | | (b) | | (c) | | (d) | | (e) | | Name | | Fees Earned or Paid in Cash ($)1 | | Stock Awards ($)2 | | Option Awards ($)2 | | Total ($) | | | | | | | | | | | | Mark E. Tryniski | | $ | 116,250 |
| | $ | 149,991 |
| | $ | 49,996 |
| | $ | 316,237 |
| | | | | | | | | | | | David Bronson | | $ | 67,500 |
| | $ | 112,467 |
| | $ | 37,497 |
| | $ | 217,464 |
| | | | | | | | | | | | Brian P. Concannon | | $ | 67,500 |
| | $ | 112,467 |
| | $ | 37,497 |
| | $ | 217,464 |
| | | | | | | | | | | | Charles M. Farkas | | $ | 67,500 |
| | $ | 112,467 |
| | $ | 37,497 |
| | $ | 217,464 |
| | | | | | | | | | | | Martha Goldberg Aronson | | $ | 58,125 |
| | $ | 112,467 |
| | $ | 37,497 |
| | $ | 208,089 |
| | | | | | | | | | | | Jo Ann Golden | | $ | 60,000 |
| | $ | 112,467 |
| | $ | 37,497 |
| | $ | 209,964 |
| | | | | | | | | | | | Dirk M. Kuyper | | $ | 67,500 |
| | $ | 112,467 |
| | $ | 37,497 |
| | $ | 217,464 |
| | | | | | | | | | | | Jerome J. Lande | | $ | 60,000 |
| | $ | — |
| | $ | — |
| | $ | 60,000 |
| | | | | | | | | | | | John L. Workman | | $ | 75,000 |
| | $ | 112,467 |
| | $ | 37,497 |
| | $ | 224,964 |
| | | | | | | | | | |
| | | (1) | Cash fees paid to directors may not match the amounts listed in the Director Cash Fee Compensation Plan above due to changes in the committee assignments during the course of 2017. The fees earned or paid in cash with respect to Mr. Lande include amounts paid directly to Scopia Capital Management LP (“Scopia”) pursuant to the arrangement as further described below. |
| | | (2) | Amounts in this columnthese columns reflect the grant date fair value of RSUs and stock options in accordance with Compensation – Stock Compensation Topic 718 of FASB ASC. The assumptions made in the valuation of these awards are set forth in Note 7,8, (“Shareholders’ Equity”), to the Consolidated Financial Statements in Item 15 to the Company’s 20142017 Annual Report on Form 10-K (available at http://www.conmed.com)www.conmed.com). |
| (2) | Amounts in this column reflect the grant date fair value of SARs in accordance with Compensation – Stock Compensation Topic 718 of FASB ASC. The assumptions made in the valuation of these awards are set forth in Note 7, (“Shareholders’ Equity”), to the Consolidated Financial Statements in Item 15 to the Company’s 2014 Annual Report on Form 10-K. |
| (3) | Mr. E. Corasanti resigned from the Board effective July 23, 2014. |
| (4) | Mr. J. Corasanti resigned from the Board effective July 22, 2014. |
| (5) | Mr. Daniels and Mr. Schwartz retired from the Board effective September 10, 2014. In lieu of equity, Mr. Daniels and Mr. Schwartz received cash payments calculated as the 90 day trailing value of Common Stock as of June 1, 2014 multiplied by 3,000 and then pro-rated for one-third of the year for a total payment of $45,650 each. These amounts are included in the “Fees Earned and Paid in Cash” column of the table. |
Below is a summary of the stock options, SARs and RSUs outstanding for non-employee Directors as of December 31, 2014.| Name | Option/SAR Awards
Outstanding (#) | | Stock Awards Outstanding (#) | | Brian Concannon | 2,000 | | 3,000 | | | | | | | Bruce F. Daniels(1) | 4,000 | | 0 | | | | | | | Charles M. Farkas | 1,000 | | 3,000 | | | | | | | Jo Ann Golden | 2,500 | | 3,000 | | | | | | | Dirk M. Kuyper | 2,000 | | 3,000 | | | | | | | Jerome J. Lande | 1,000 | | 3,000 | | | | | | | Stephen M. Mandia | 12,500 | | 3,000 | | | | | | | Stuart J. Schwartz(1) | 9,500 | | 0 | | | | | | | Mark E. Tryniski | 12,500 | | 3,000 |
| (1) | Mr. Daniels and Mr. Schwartz retired from the Board effective September 10, 2014. Upon retirement, they were given one year to exercise any outstanding SARs. |
2017. | | | | | | | Name | | Stock Option & SAR Awards Outstanding (#) | | Stock Awards Outstanding (#) | | | | | | | | Mark E. Tryniski | | 23,087 | | 2,890 | | | | | | | | David Bronson | | 10,065 | | 2,167 | | | | | | | | Brian P. Concannon | | 12,065 | | 2,167 | | | | | | | | Charles M. Farkas | | 11,065 | | 2,167 | | | | | | | | Martha Goldberg Aronson | | 9,065 | | 2,167 | | | | | | | | Jo Ann Golden | | 12,565 | | 2,167 | | | | | | | | Dirk M. Kuyper | | 12,065 | | 2,167 | | | | | | | | Jerome J. Lande | | 2,000 | | — | | | | | | | | John L. Workman | | 10,065 | | 2,167 |
Since the third quarter of 2016, at the request of Mr. Lande, in order to comply with internal compliance and compensation policies of Scopia, Mr. Lande’s employer (and a shareholder of CONMED), Mr. Lande’s cash director fees have been paid by the Company directly to Scopia. Other than redirecting Mr. Lande’s cash fees to Scopia, Mr. Lande’s cash fees are the same as the fees that any other director serving on the same committees would receive. Director Stock Ownership Requirements and Hedging Policy In order to give the directors a direct stake in the Company’s future and to directly align their interests with those long-term interests of the shareholders, effective July 31, 2009 (and subsequently amended effective December 31, 2013), the Company adopted guidelines to encourage outright share ownership by directors. The ownership guidelines required directors to own 2,000 shares. As of December 31, 2013, the Company amended the ownership guidelines to require directors to own four times thetheir annual board retainer and the existing directors were given three years to comply.fee. Any new directors will be required to be in compliance with these guidelines within five years of becoming subject to this policy. The following share types are included under these guidelines: shares directly owned, shares jointly owned, estimated net after tax shares of unvested RSUs and shares held in saving plan accounts. These ownership guidelines also contain a holding periodretention requirement for equity-based awards until such time as the minimum share ownership is achieved. A complete copy of these guidelines is available on the Company’s website in the investor relations section. The Company also prohibits its directors from holding any derivatives other than those issued by the Company. The intention of this policy is to align the interests of the Board of Directors with those of the holders of the Common Stock. All directors were in compliance with these guidelines as assessed as of December 31, 2014.Vice Chairman Separation Benefits
2017. PAY RATIO We are required by SEC rules adopted under Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, to disclose the ratio of our median employee’s annual total compensation to the annual total compensation of our principal executive officer. During fiscal 2017, the principal executive officer of the Company was our President and Chief Executive Officer, Curt Hartman. For 2017, Mr. Eugene Corasanti resigned fromHartman’s total annual compensation was $3,002,364 and for our median employee was approximately $25,624 resulting in an estimated pay ratio of 117:1.
We identified the Boardmedian employee by using all 3,492 active employees and his rolecontractors of the Company and its
consolidated subsidiaries (excluding Mr. Hartman) as Vice Chairman effective July 23, 2014, and was entitledof November 1, 2017, whether employed full-time, part-time or on a contractual basis. For individuals hired prior to payments and benefits upon his termination pursuant to an agreement withDecember 31, 2016, we used each applicable individual's taxable earnings as of December 31, 2016. For individuals hired after December 31, 2016, we used each applicable individual's non-annualized taxable earnings as of November 1, 2017 (the median employee determination date). Taxable earnings consisted of (A) base salary, (B) the Company. The benefits included payment of his vested lifetime benefits for life and health insurance, car allowances and club membership dues (the presenttarget bonus, commission and/or management bonus paid during the period, (C) the estimated accounting value of which totaled $283,180)any equity awards granted during the period, (D) other miscellaneous compensation items. Where applicable, currency of earnings was converted to U.S. dollars using an exchange rate as of our determination date.
After identifying our median employee, who is located in the U.S., in accordance with SEC rules we calculated 2017 annual total compensation for both the median employee and Mr. Hartman using the same methodology that we use to determine our NEOs’ annual total compensation for the Summary Compensation Table.
The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the accelerationmethodology described above. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of all unvested RSUsmethodologies, to apply certain exclusions, and SARs,to make reasonable estimates and assumptions that reflect their employee populations and compensation practices, the value of which totaled $80,521. This total doespay ratio reported by other companies may not include paymentsbe comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in respect of Mr. E. Corasanti’s deferred compensation as Mr. E. Corasanti was fully vested in his deferred compensation benefits and did not receive any enhanced payments upon termination of employment.calculating their own pay ratios. BOARD OF DIRECTORS AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION; CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Company’s Board of Directors, which is presently composed of David Bronson, Brian P. Concannon, Charles M. Farkas, Martha Goldberg Aronson, Jo Ann Golden, Curt R. Hartman, Dirk M. Kuyper, Jerome J. Lande, Stephen M. Mandia and Mark E. Tryniski and John L. Workman, establishes the compensation plans and specific compensation levels for Mr. Hartman and for other executive officers through the Compensation Committee, and administers the Company’s equity incentive plans through the Compensation Committee. Until July 23, 2014, Eugene R. Corasanti served as a director of the Company, and until July 22, 2014, Joseph J. Corasanti, the son of Eugene R. Corasanti and the former President and Chief Executive Officer of the Company, served as a director of the Company and an officer of several of the Company’s subsidiaries.
As of December 31, 2014, the Company employed the following persons who are related to certain persons who were officers of the Company in 2014 in the manner indicated below. Employees who are related to officers and/or directors whose total compensation is less than $120,000 are not listed below.
Employee Name and Position | Officer(s) and/or Director(s) to
whom Employee is Related | Relationship of Employee to Officer | David Corasanti4, Marketing Manager | Eugene R. Corasanti1 | Son | | Joseph J. Corasanti2 | Brother | | | | Alan Rust4, Corporate Distribution Director | William W. Abraham3 | Son-in-law |
| (1) | Mr. E. Corasanti resigned as Vice Chairman and Director effective July 23, 2014. |
| (2) | Mr. J. Corasanti resigned as President, Chief Executive Officer and Director effective July 22, 2014. |
| (3) | Mr. Abraham retired from the Company effective September 30, 2014. |
| (4) | As of February 3, 2015 Mr. D. Corasanti and Mr. Rust are no longer employed by the Company. |
Compensation for the above-referenced employees, consisting solely of salary and bonus, ranged from $131,000 to $180,000 during 2014.
In March 2003, the Audit Committee adopted a written charter specifying that it would pre-approve all transactions in which the Company is a participant and in which a related person has or will have a direct or indirect material interest, including without limitation any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness) or any series of similar transactions, arrangements or relationships.relationships, other than related party transactions to any person or entity that are, individually or in the aggregate on an annual basis, less than $5,000. The charter requirement was incorporated into a policy in November 2003 under which requests for pre-approvals can be submitted to the Chair of the Audit Committee for pre-approval, with the Chair to report any such pre-approvals at the next scheduled meeting of the Audit Committee. Under the policy, such related-person transactions as further defined in the Company’s related-party policy must be approved or ratified by the Audit Committee. Further, any related-party transaction in which the projected spending is over $50,000 requires management to secure competitive bids to ensure that any proposal is reasonable with respect to costs. The Committee may also determine that the approval or ratification of such transaction should be considered by all of the disinterested members of the Board. Related persons include any of our directors or executive officers and their family members. In considering whether to approve or ratify any related-person transaction, the chair or Committee, as applicable, may consider all factors that they deem relevant to the transaction, including, but not limited to: the size of the transaction and the amount payable to or receivable from a related person; the nature of the interest of the related person in the transaction; the Company’s prior dealings, if any, with the related party; whether the transaction may involve a conflict of interest; and whether the transaction involves the provision of goods or services to the Company that are available from unaffiliated third parties and, if so, whether the transaction is on terms and made under circumstances that are at least as favorable to the Company as would be available in comparable transactions with or involving unaffiliated third parties. To identify related-person transactions, at least once a year all directors and executive officers of the Company are required to complete questionnaires seeking, among other things, disclosure with respect to such transactions of which such director or executive officer may be aware.
INSURANCE FOR DIRECTORS AND OFFICERS
The Company has entered into directors’ and officers’ insurance policies with Travelers Casualty and Surety Company of America, Federal Insurance Company, Illinois National Insurance Company, Liberty Insurance Underwriters Inc. and XL
Specialty Insurance Co. covering the period from May 31, 20142017 through May 31, 201530, 2018 at a total cost of $633,855$477,588 which covers directors and officers of the Company and its subsidiaries.
The Company’s Annual Report to Shareholders, including the Annual Report on Form 10-K for the fiscal year ended December 31, 20142017 is being mailed with this proxy statement to shareholders of record on April 9, 2015.5, 2018. The annual report does not constitute a part of the proxy soliciting material and is not deemed “filed” with the SEC.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information with respect to the beneficial ownership of the Company’s Common Stock as of April 9, 2015,5, 2018, by each shareholder known by the Company to be the beneficial owner of more than 5% of its outstanding Common Stock, by each director and director nominee, by each of the NEOs and by all directors and executive officers as a group. | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percent of Class | | Brian Concannon | 8,000 | * | | Joseph J. Corasanti(1) | 3,737 | * | | Charles M. Farkas | 4,235 | * | | Jo Ann Golden | 20,543 | * | | Curt R. Hartman | 20,529 | * | | Daniel S. Jonas | 26,222 | * | | Dirk M. Kuyper | 8,000 | * | | Jerome J. Lande(2) | 1,635,800 | 5.93 | | Stephen M. Mandia | 37,900 | * | | Luke A. Pomilio | 88,868 | * | | Robert D. Shallish, Jr. | 124,916 | * | | Mark E. Tryniski | 31,500 | * | | Directors and executive officers as a group (19 persons)(3) | 2,197,509 | 7.87 | BlackRock, Inc.(4) 55 East 52nd Street New York, NY 10055 | 2,445,108 | 8.86 | Dimensional Fund Advisors LP(5) Building One 6300 Bee Cave Road Austin, TX 78746 | 2,323,731 | 8.42 | FMR LLC(6) 245 Summer Street Boston, MA 02210 | 1,958,247 | 7.10 | Visium Asset Management, LP(7) 888 Seventh Avenue New York, NY 10019 | 1,912,376 | 6.93 | The Vanguard Group, Inc.(8) 100 Vanguard Blvd. Malvern, PA 19355 | 1,698,142 | 6.15 | Coppersmith Capital Management, LLC(9) 1370 Sixth Ave, 25th Floor New York, New York 10019 | 1,630,800 | 5.91 |
| | | | | | Name of Beneficial Owner | | Amount and Nature of Beneficial Ownership | | Percent of Class | | Patrick J. Beyer | | 70,622 | | * | | David Bronson | | 19,471 | | * | | Brian P. Concannon | | 25,971 | | * | | Charles M. Farkas | | 24,939 | | * | | Nathan Folkert | | 23,368 | | * | | Martha Goldberg Aronson | | 14,971 | | * | | Jo Ann Golden | | 31,514 | | * | | Curt R. Hartman | | 231,314 | | * | | Dirk M. Kuyper | | 24,971 | | * | | Jerome J. Lande | | 9,000 | | * | | Stanley W. (Bill) Peters | | 40,663 | | * | | Luke A. Pomilio | | 6,610 | | * | | Mark E. Tryniski | | 57,655 | | * | | John L. Workman | | 22,471 | | * | Directors and executive officers as a group (20 persons)(1) | | 899,439 | | 3.13 | BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | | 3,281,817 | | 11.70 | The Vanguard Group, Inc.(3) 100 Vanguard Blvd. Malvern, PA 19355 | | 2,320,809 | | 8.28 | Victory Capital Management Inc.(4) 4900 Tiedeman Rd., 4th Floor Brooklyn, OH 44144 | | 2,225,574 | | 7.94 | Scopia Capital Management LP(5) 152 West 57th Street, 33rd Floor New York, New York 10019 | | 2,174,045 | | 7.75 | Dimensional Fund Advisors LP(6) Building One 6300 Bee Cave Road Austin, TX 78746 | | 2,147,161 | | 7.66 | Champlain Investment Partners, LLC(7) 180 Battery St. Burlington, VT 05401 | | 1,477,470 | | 5.27 |
Unless otherwise set forth above, the address of each of the above listed shareholders is c/o CONMED Corporation, 525French Road, Utica, New York 13502
| | | (1) | Includes 750 shares owned beneficially by the wife and 2,100 shares owned beneficially by the children of Joseph J. Corasanti. Mr. Corasanti resigned as President, Chief Executive Officer and Director effective July 22, 2014. |
| (2) | Includes 1,630,800 shares that Mr. Lande is deemed to indirectly beneficially own as a Managing Member of Coppersmith Capital Management, LLC based on his shared voting power and shared dispositive power with respect to such shares. (Refer to footnote 9). |
| (3) | Includes 48,21022,149 RSUs that will vest within 60 days held by the Directors, NEOs and the executive officers of the Company. As of April 9, 20155, 2018 the Company’s directors and executive officers as a group (19(20 persons) are the beneficial owners of 1,859,229227,858 shares of Common Stock (excluding options, RSUs, Stock Options and SARs), which is approximately 6.74%0.81% of the Common Stock outstanding. Effective January 2, 2018, Mr. Pomilio retired from the position of Executive VP, Finance & Chief Financial Officer and assumed the role of Special Adviser to the CFO through March 15, 2019. Mr. Pomilio's shares are shown in the above chart, but excluded from this total. |
| (4) | | (2) | An Amendment to Schedule 13G filed with the SEC by BlackRock, Inc. on January 22, 201519, 2018 indicates beneficial ownership of 2,445,1083,281,817 shares of Common Stock by virtue of having sole voting power over 2,378,6753,218,105 shares of Common Stock and sole power to dispose of 2,445,1083,281,817 shares of Common Stock in its role as investment advisor for certain funds. |
| (5) | An Amendment to Schedule 13G filed with the SEC by Dimensional Fund Advisors LP on February 5, 2015 indicates beneficial ownership of 2,323,731 shares of Common Stock by virtue of having sole power to vote over 2,269,544 shares and sole power to dispose of 2,323,731 shares of Common Stock. |
| (6) | An Amendment to Schedule 13G filed with the SEC by FMR LLC on February 13, 2015 indicates beneficial ownership of 1,958,247 shares of Common Stock by virtue of having sole power to vote over 647 shares and sole power to dispose of 1,958,247 shares of Common Stock. |
| (7) | A Schedule 13G filed with the SEC by Visium Asset Management, LP and certain other persons on February 12, 2015 indicates that (1) Visium Asset Management, LP; Visium Balanced Master Fund, Ltd.; JG Asset, LLC and Jacob Gottlieb beneficially own 1,912,376 shares of Common Stock by virtue of having shared voting power over 1,912,376 shares of Common Stock and shared power to dispose of 1,912,376 shares of Common Stock and (2) Visium Balanced Master Fund, Ltd. beneficially owns 1,666,408 shares of Common Stock by virtue of having shared voting power over 1,666,408 shares of Common Stock and shared power to dispose of 1,666,408 shares of Common Stock. According to the Schedule 13G, the shares of Common Stock reported therein have been acquired on behalf of discretionary clients of Visium Asset Management, LP, including 1,666,408 shares of Common Stock on behalf of Visium Balanced Master Fund, Ltd. |
| (8)(3) | An Amendment to Schedule 13G filed with the SEC by The Vanguard Group, Inc. on February 9, 20152018 indicates beneficial ownership of 1,698,1422,320,809 shares of Common Stock by virtue of having sole voting power over 37,33029,519 shares of Common Stock, shared voting power over 3,335 shares of Common Stock, sole power to dispose of 1,663,6122,289,920 shares of Common Stock and shared power to dispose of 34,53030,889 shares of Common Stock. |
| (9) | | (4) | An Amendment toA Schedule 13D13G filed with the SEC by CoppersmithVictory Capital Management LLCInc. on February 27, 20147, 2018 indicates beneficial ownership of 1,630,8002,225,574 shares of Common Stock by virtue of having sole voting power to vote over 1,630,8002,171,219 shares and having sole power to dispose 1,630,800of 2,225,574 shares of Common Stock. |
| | | (5) | An Amendment to the Schedule 13D filed with the SEC by Scopia Capital Management L.P. (“Scopia Management”), Scopia Management Inc. (“Scopia Inc.”), Matthew Sirovich and Jeremy Mindich, on March 12, 2018 indicates beneficial ownership of 2,174,045 shares of Common Stock by virtue of each filing person having shared voting power and shared power to dispose all such shares of Common Stock. Scopia Management is the investment manager of certain funds and a certain managed account, which have delegated to Scopia Management the sole authority to vote and dispose of the shares of Common Stock held by Scopia Management. Scopia Inc. is the general partner of Scopia Management, and Matthew Sirovich and Jeremy Mindich are each a Managing Director of Scopia Management Inc. |
| | | (6) | An Amendment to Schedule 13G filed with the SEC by Dimensional Fund Advisors LP on February 9, 2018 indicates beneficial ownership of 2,147,161 shares of Common Stock by virtue of having sole power to vote over 2,058,957 shares and sole power to dispose of 2,147,161 shares of Common Stock. |
| | | (7) | A Schedule 13G filed with the SEC by Champlain Investment Partners, LLC on February 21, 2018 indicates beneficial ownership of 1,477,470 shares of Common Stock by virtue of having sole power to vote over 1,021,900 shares and sole power to dispose of 1,477,470 shares of Common Stock. |
On April 9, 2015,5, 2018, the record date, there were 678563 shareholders of record of the Company’s Common Stock.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Pursuant to regulations promulgated by the Securities and Exchange Commission, the Company is required to identify, based solely on a review of reports filed under Section 16(a) of the Exchange Act, and furnished to the Company pursuant to Rule 16a-3(e) thereunder, each person who, at any time during its fiscal year ended December 31, 2014,2017, was a director, officer or beneficial owner of more than 10% of the Company’s Common Stock that failed to file on a timely basis any such reports. Based solely on such reports,the review of the Forms 3, 4 and 5 and amendments thereto furnished to the Company is not aware of any such failureand certain representations made to file on a timely basis any such reports by any such personthe Company, the Company believes that has not previously been disclosed.there were no late filings during 2017. Exhibit
CONMED CORPORATION AMENDED AND RESTATED 2015 LONG TERM
2018 LONG-TERM INCENTIVE PLAN As amended on February 25, 2015
The purpose of the Amended and Restated 20152018 Long-Term Incentive Plan of CONMED Corporation (the(as amended from time to time, the “Plan”) is to promote the long term financial interests of CONMED Corporation (the “Company”), including its growth and performance, by encouraging employees of the Company and its subsidiaries who provide important services to the Company and its subsidiaries to acquire an ownership position in the Company, enhancing the ability of the Company and its subsidiaries to attract and retain employees of outstanding ability, and providing employees with an interest in the Company parallel to that of the Company’s stockholders. To achieve these purposes, the Company may grant Awards of Stock Options, Restricted Shares, Restricted Share Units, Stock Appreciation Rights, Performance Shares, Performance Share Units and Other Awards to key employees selected by the Compensation Committee, all in accordance with the terms and conditions set forth in the Plan.
The Plan amends and restates the CONMED Corporation 1999Amended and Restated 2015 Long-Term Incentive Plan, was originally adopted by the Board of Directors of CONMED Corporation on March 3, 1999, andwhich was approved by the Company’s stockholders ofat the 2015 Annual Stockholder Meeting and effective on February 25, 2015, as well as the CONMED Corporation 2006 Stock Incentive Plan, which was approved by the Company’s stockholders at the 2006 Annual Stockholder Meeting and effective on May 18, 1999. The CONMED Corporation 1999 Long-Term Incentive Plan expired16, 2006 (collectively, the “Prior Plans”), for awards granted on December 31, 2008, was amended and restated effective as of February 24, 2009, again as of February 29, 2012, and is hereby further amended and restated effective as of February 25, 2015or after the Effective Date, subject to the approval by the stockholders of CONMED Corporation at the May 28, 201523, 2018 Annual ShareholderStockholder Meeting.The amendments made to
Awards may not be granted under the Plan shall affect only Awards grantedPrior Plans beginning on or after the “Effective Date” (as hereinafter defined)., but this Plan will not affect the terms and conditions of any equity award grants under the Prior Plans (or any predecessor plans) granted prior to the Effective Date. Awards granted prior to the Effective Date shall be governed by the terms of the Planapplicable to such awards and Award Agreements as in effect prior to the Effective Date. The terms of the Plan as hereby amended and restated are not intended to affect the interpretation of the terms of the Plan as they existed prior to the Effective DatePrior Plans for Awards granted prior to the Effective Date. In the event that this Amended and Restated 20152018 Long-Term Incentive Plan is not approved by the stockholders of CONMED Corporation, the Amended and Restated 20152018 Long-Term Incentive Plan shall be null and void and of no force or effect, but the Plan as amended and restated effective as of February 29, 2012Prior Plans and the Awards granted thereunder (or under any prior version of the Plan)predecessor plans) on or prior to May 28, 2015the Effective Date shall remain in full force and effect. | 2 | | 2. | DEFINITIONS. The following definitions are applicable to the Plan: |
| 2.1 | | 2.1. | “Award” shall mean an award determined in accordance with the terms of the Plan. |
| 2.2 | | 2.2. | “Award Agreement”Agreement” shall mean the agreement evidencing an Award as described in Section 12.1 of the Plan. |
| 2.3 | | 2.3. | “Board of Directors” shall mean the Board of Directors of the Company. |
| 2.4 | | 2.4. | “Cause” shall mean, unless otherwise provided in an Award Agreement, (a) with respect to a Participant employed pursuant to a written employment or similar agreement which includes a definition of “Cause,” “Cause” as defined in that agreement, (b) the willful and continued failure by a Participant to substantially perform his or her duties with the Company (other than any such failure resulting from his incapacity due to physical or mental illness), or (c) the willful engaging by the Participant in conduct which is demonstrably and materially injurious to the Company or its affiliates. |
| 2.5 | | 2.5. | “Committee” shall mean the Compensation Committee of the Board of Directors, or such other committee of the Board as the Board may select from time to time to administer the Plan pursuant to Section 4. The Committee shall be composed of not less than two directors of the Company. The Board of Directors may also appoint one or more directors as alternate members of the Committee. No officer or employee of the Company or of any subsidiary shall be a member or alternate member of the Committee. The Committee shall at all times be comprised solely of “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code and in such a manner as to |
| | satisfy the “non-employee” director standard contained in Rule 16b-316b‑3 promulgated under the Exchange Act. |
| | | 2.6. | | | | 2.6 | “Common Stock” shall mean the common stock, par value $.01 per share, of the Company. |
| 2.7 | | 2.7. | “Covered Employee” means, at the time of an Award (or such other time as required or permitted by Section 162(m) of the Internal Revenue Code) (i) the Company’s Chief Executive Officer (or an individual acting in such capacity), (ii) any employee of the Company or its subsidiaries who, in the discretion of the Committee for purposes of determining those employees who are “covered employees” under Section 162(m) of the Internal Revenue Code, is likely to be among the four other highest compensated officers of the Company for the year in which an Award is made or payable, and (iii) any other employee of the Company or its subsidiaries designated by the Committee in its discretion. |
| 2.8 | “Effective Date” means the date the Plan is approved by the stockholders of CONMED Corporation. |
| 2.9 | | 2.8. | “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. |
| 2.10 | | 2.9. | “Fair Market Value” shall mean, per share of Common Stock, the closing price of the Common Stock on the NASDAQ Stock Market or, if applicable, principal securities exchange on which the shares of Common Stock are then traded, or, if not traded, the price set by the Committee. |
| 2.11 | | 2.10. | “Good Reason” means, unless otherwise provided in an Award Agreement, (a) with respect to a Participant employed pursuant to a written employment or similar agreement which includes a definition of “Good Reason,” “Good Reason” as defined in that agreement or (b) with respect to any other Participant, the occurrence of any of the following in the absence of the Participant’s written consent: (i) any material and adverse change in the Participant’s position or authority with the Company as in effect immediately before a Change in Control, other than an isolated and insubstantial action not taken in bad faith and which is remedied by the Company within 30 days after receipt of notice thereof given by the Participant; (ii) the transfer of the Participant’s primary work site to a new primary work site that is more than 50 miles from the Participant’s primary work site in effect immediately before a Change in Control; or (iii) a diminution of the Participant’s base salary in effect immediately before a Change in Control by more than 10%, unless such diminution applies to all similarly situated employees, provided that (x) if the Participant does not deliver to the Company a written notice of termination within 60 days after the Participant has knowledge that an event constituting Good Reason has occurred, the event will no longer constitute Good Reason and (y) the Participant must give the Company 30 days to cure the event constituting Good Reason. |
| 2.12 | | 2.11. | “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended. |
| 2.13 | | 2.12. | “Participant” shall mean an employee of the Company or any subsidiary, in each case who is selected by the Committee to participate in the Plan. |
| 3 | | 3. | SHARES SUBJECT TO THE PLAN. |
| 3.1 | | 3.1. | Subject to adjustment as provided in Section 17 of the Plan, the number of shares of Common Stock which shall be available for the grant of Awards under the Plan shall be equal to 4,400,000 shares, plus the number of shares available for grant or reserved under the Amended and Restated Long-Term Incentive Plan, plus an additional 2,000,000 shares,Prior Plans as of the Effective Date (including as permitted pursuant to the operation of Section 3.2 thereof), all of which are available for the grant of incentive stock options. Notwithstanding anything contained herein to the contrary, in no eventAny shares granted as Awards other than Stock Options or SARs shall more than 2,000,000be counted against this limit as 3.29 shares of Common Stock (subject to adjustment as provided in Section 17 of this Plan) be available in the aggregate for the issuance of Common Stock pursuant to Performance Shares, Performance Share Units, Restricted Shares, Restricted Share Units and Other Awards granted under the Plan.every share granted. The shares of Common Stock issued under the Plan may be authorized and unissued shares, treasury shares or shares acquired in the open market specifically for distribution under the Plan, as the Company may from time to time determine. The maximum number of shares with respect to which Stock Options or Stock Appreciation Rights may be granted to an individual in any calendar year is 300,000 shares of Common Stock. The maximum number of shares of Common Stock with respect to which Restricted Shares, Restricted Share Units, Performance Shares, Performance Share Units or Other Awards that, in each case, are intended to qualify as performance-based compensation under Section 162(m) of the Code may be granted to an individual Participant in any calendar year is, in each case, 300,000 shares of Common Stock (or, to the extent that such Award is paid in cash, the maximum dollar amount of any such Award is the equivalent cash value of such number of shares of Common Stock at the closing price on the last trading day of |
| | the performance period), subject to adjustment pursuant to Section 17. For purposes of the immediately preceding sentence, “trading day” shall mean a day in which the shares of Common Stock are traded on the NASDAQ Stock Market or, if applicable, the principal securities exchange on which the shares of Common Stock are then traded. |
| 3.23.2. | Except as described below, if any Award under the Plan or the Prior Plans, in whole or in part, expires unexercised, is forfeited or otherwise terminates or is canceled without the delivery of shares of Common Stock, if shares of Common Stock are surrendered or withheld from any Award to satisfy a Participant’s income tax or other withholding obligations (other than any shares of Common Stock surrendered or withheld from any restricted stock award outstanding and granted under the CONMED Corporation 2006 Stock Incentive Plan), or if shares of Common Stock owned by the Participant are tendered to pay for the exercise of a stock option under the Plan, then those shares covered by such expired, forfeited, terminated or canceled Awards or the number of shares equal to the number of shares surrendered or withheld in respect thereof (but, in the case of withheld shares, no greater than the number of shares that would have been withheld pursuant to the minimum statutory withholding rate) shall again become available to be delivered pursuant to Awards granted under the Plan. The number of shares that are returned to the Plan pursuant to the immediately preceding sentence shall be returned at the same ratio at which such Award counted against the total shares available for Award at the time of grant. Shares of Common Stock that are subject to a SAR granted in tandem with a Stock Option but not issued on exercise of the Stock Option shall not thereafter be available to be delivered pursuant to Awards under the Plan. Any shares of Common Stock (a) delivered by the Company, (b) with respect to which Awards are made by the Company and (c) with respect to which the Company becomes obligated to make Awards, in each case through the assumption of, or in substitution for, outstanding awards previously granted by an acquired entity, shall not be counted against the shares of Common Stock available for Awards under this Plan. Shares of Common Stock which may be delivered pursuant to Awards may be authorized but unissued Common Stock or authorized and issued Common Stock held in the Company’s treasury or otherwise acquired for the purposes of the Plan. |
which may be delivered pursuant to Awards may be authorized but unissued Common Stock or authorized and issued Common Stock held in the Company’s treasury or otherwise acquired for the purposes of the Plan.
| 4.1 | | 4.1. | The Plan shall be administered by the Committee. A majority of the Committee shall constitute a quorum, and the acts of a majority of its members present at a meeting (which may be held telephonically) shall be the acts of the Committee. Any determinationaction of the Committee may be made,taken, without a meeting, by a writing or writings signed by all of the members of the Committee.Committee, and action so taken shall be fully as effective as if it has been taken by a vote at a meeting. In addition, the Committee may authorize any one or more of its number or any officer of the Company to execute and deliver documents on behalf of the Committee and the Committee may allocate among its members and, to the extent permitted by applicable law (including the Exchange Act and the Internal Revenue Code) delegate to one or more employees, agents or officersany person who is not a member of the Company, or to one or more third party consultants, accountants, lawyers or other advisors, such ministerial duties relatedCommittee any of its administrative responsibilities. The determination of the Committee on all matters relating to the operation of the Plan as it may deem appropriate.or any Award Agreement shall be final, binding and conclusive. |
| 4.2 | | 4.2. | Subject to the provisions of the Plan, the Committee (or its delegate, within limits established by the Committee, with respect to non-Covered Employees and employees who are not subject to Section 16 of the Exchange Act) shall have the authority in its sole discretion to (i) exercise all of the powers granted to it under the Plan (including but not limited to, selection of the Participants, determination of the type, size and terms of Awards to be made to Participants, determination of the shares, share units or types of Other Awards subject to Awards, the restrictions, conditions and contingencies to be applicable in the case of specific Awards, and the time or times at which Awards shall be exercisable or at which restrictions, conditions and contingencies shall lapse), (ii) construe, interpret, and implement the Plan and all Award Agreements, (iii) establish, prescribe, amend and rescind any rules and regulations relating to the Plan, including rules governing its own operations, (iv) determine the terms and provisions of any agreements entered into hereunder, (v) make all other determinations necessary or advisable for the administration of the Plan, (vi) correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent it shall deem desirable to carry it into effect, (vii) amend any outstanding Award Agreement to accelerate the time or times at which the Award becomes vested, unrestricted or may be exercised, or, to the extent permitted under applicable tax laws, to waive or amend any goals, restrictions or conditions set forth in such Award Agreement, or reflect a change in the Participant’s circumstances (e.ge.g., a change to part time employment status) and (viii) determine whether, to what extent and under what circumstances and method or methods (1) Awards may be (A) settled in cash, shares of Common Stock, other securities, other Awards or other property, (B) exercised or (C) canceled, forfeited or suspended (including, without limitation, canceling underwater optionsStock Options or SARs without payment to the Participant)Participant in connection with a Change in Control), (2) shares of Common Stock, other securities, other Awards or other property and other amounts payable with respect to an Award may be deferred either automatically or at the election of the Participant thereof or of the Committee and (3) Awards may be settled by the Company, any of its subsidiaries or affiliates or any of its or their designees. Other than as provided in Section 17, the Committee shall not be permitted to reduce the exercise price of a Stock Option (or reduce the reference price of a Stock Appreciation Right) after such Award has been granted. |
| 4.3 | | 4.3. | Subject to the terms of this Plan and terms and limitations as the Committee shall determine, the Committee may delegate its authority to grant Awards to Participants to the Company’s Chief Executive Officer, who may with the written concurrence of at least one other executive officer, grant Awards, subject to annual calendar year limits of |
| | 20,000 shares subject to Awards per Participant and 300,000 shares subject to Awards in the aggregate, in the case of Awards made (a) in situations where the Company is seeking to attract a new hire or recognize employees for special achievements, (b) to new employees as a result of the acquisition by the Company of another company, whether by merger or purchase of stock or substantially all of its assets, which Awards are deemed appropriate by the Chief Executive Officer in connection with the retention of newly acquired employees or (c) in other special circumstances except that no such delegation may be made in the case of Awards to Covered Employees or persons who are subject to the provisions of Section 16 of the Exchange Act. If the Company’s Chief Executive Officer grants Awards to Participants under this Section 4.3, the Chief Executive Officer will promptly thereafter provide written notice to the Committee that such Awards were granted. To the extent that the Committee delegates its authority as provided by this Section 4.3, all references in this Plan to the Committee'sCommittee’s authority to make Awards shall be deemed to include the Chief Executive Officer. The annual limits described in this Section 4.3 may be modified by the Committee with respect to any year or all future years and shall be subject to adjustment as provided in Section 17.1. |
| 4.4 | | 4.4. | Actions of the Committee may be taken by the vote of a majority of its members present at a meeting (which may be held telephonically). Any action may be taken by a written instrument signed by a majority of the Committee members, and action so taken shall be fully as effective as if it had been taken by a vote at a meeting. The determination of the Committee on all matters relating to the Plan or any Award Agreement shall be final, binding and conclusive. The Committee may allocate among its members and delegate to any person who is not a member of the Committee any of its administrative responsibilities. |
| 4.5 | No Liability. No member of the Board of Directors or the Committee or any employee of the Company or its subsidiaries or affiliates (each such person, a “Covered Person”) shall have any liability to any person (including any Participant) for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award. Each Covered Person shall be indemnified and held harmless by the Company against and from (a) any loss, cost, liability or expense (including attorneys’ fees) that may be imposed upon or incurred by such Covered Person in connection with or resulting from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan or any Award Agreement and (b) any and all amounts paid by such Covered Person, with the Company’s approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person,provided that the Company shall have the right, at its own expense, to assume and defend any such action, suit or proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case not subject to further appeal, determines that the acts or omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person’s bad faith, fraud or willful criminal act or omission. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which Covered Persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such persons or hold them harmless. |
| 5 | | 5. | ELIGIBILITY. All employees of the Company and its subsidiaries, in each case who have demonstrated significant management potential or who have the capacity for contributing in a substantial measure to the successful performance of the Company, as determined by the Committee in its sole discretion, are eligible to be Participants in the Plan. In addition, the Committee may from time to time deem other employees of the Company or its subsidiaries eligible to participate in the Plan to receive equity awards consistent with legal requirements. The granting of any Award to a Participant shall not entitle that Participant to, nor disqualify that Participant from, participation in any other grant of an Award. |
| 6 | | 6. | AWARDS. Awards under the Plan may consist of: (i) stock options (either incentive stock options within the meaning of Section 422 of the Internal Revenue Code or nonstatutory stock options) granted pursuant to Section 7 (“Stock Options”), (ii) performance shares granted pursuant to Section 8.18 (“Performance Shares”), (iii) performance share units granted pursuant to Section 8.18 (“Performance Share Units”), (iv) stock appreciation rights granted pursuant to Section 9 (“Stock Appreciation Rights” or “SARs”), (v) restricted shares granted pursuant to Section 10 (“Restricted Shares”), (vi) restricted share units granted pursuant to Section 10 (“Restricted Share Units”) and (vii) other types of equity-based Awards which the Committee determines to be consistent with the purpose of the Plan and the interests of the Company, granted pursuant to Section 11 (“Other Awards”). Awards of Performance Shares, Performance Share Units, Restricted Shares, Restricted Share Units and Other Awards may provide the Participant with voting rights but may not provide for the payment of dividends or dividend equivalents, in each case, prior to vesting. Notwithstanding any other provision of |
| | the Plan to the contrary, all Awards under the Plan shall be subject to (a) a 12-month minimum vesting scheduleperiod for all awards made under the Plan; during this 12-month period, no portion of at least twelve months followingan award made under the date of grant of the Award,provided that such vesting schedule (1) may be on a monthly or quarterly pro-rata basis and (2)Plan shall vest, however this shall not apply to Awards that are assumed, or substituted for, in connection with Section 21 of the Plan;Plan and (b) the Company’s Recoupment Policy, as it may be amended from time to time. Notwithstanding the foregoing, Awards in respect of up to 5% of the shares of the Company’s Common Stock that shall be available for grant under the Plan may be granted with a minimum vesting schedule that is shorter than that mandated in this Section 6. Any Award agreement may also provide that shares of Common Stock issued or acquired in connection with the applicable Award will be subject to additional holding requirements specified in such Award agreement. |
| 7 | | 7. | STOCK OPTIONS. The Award Agreement pursuant to which any Stock Option that is intended to qualify as an incentive stock option is granted shall specify that the option granted thereby shall be treated as an incentive stock option. The Award Agreement pursuant to which any nonstatutory stock option is granted shall specify that the option granted thereby shall not be treated as an incentive stock option. The Committee shall establish the option price at the time each Stock Option is granted, which price shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant. Stock Options shall be exercisable for such period as specified by the Committee, but in no event may options be exercisable for a period of more than ten years after their date of grant. The option price of each share as to which a Stock Option is exercised shall be paid in full at the time of such exercise. Such payment shall be made in cash, by tender of shares of Common Stock owned by the Participant valued at Fair Market Value as of the date of exercise, subject to such guidelines for the tender of Common Stock as the Committee may establish, in such other consideration as the Committee deems appropriate, or by a combination of cash, shares of Common Stock and such other consideration. The Committee, in its sole discretion, may grant to a Participant the right to transfer Common Stock acquired upon the exercise of a part of a Stock Option in payment of the exercise price payable upon immediate exercise of a further part of the Stock Option. |
in its sole discretion, may grant to a Participant the right to transfer Common Stock acquired upon the exercise of a part of a Stock Option in payment of the exercise price payable upon immediate exercise of a further part of the Stock Option.
| 8.1 | Performance Shares and Performance Share Units.SHARES AND PERFORMANCE SHARE UNITS. Performance Shares may be granted in the form of actual shares of Common Stock or as Performance Share Units having a value equal to an identical number of shares of Common Stock. In the event that a stock certificate is issued in respect of Performance Shares, such certificate shall be registered in the name of the Participant but shall be held by the Company until the time the Performance Shares are earned. The performance conditions and the length of the performance period shall be determined by the Committee in accordance with Section 8.2 below, and shall be reflected in the Award Agreement pursuant to which the Performance Shares or Performance Share Units are granted. The Committee shall determine in its sole discretion whether Performance Share Units shall be paid in cash, Common Stock, or a combination of cash and Common Stock. |
| 8.2 | | 9. | Performance Goals. The Committee may establish performance goals with respect to any Award using one or more of the following objectives: (a) market share (including, without limitation, the market share of trading volume in certain types of securities), (b) earnings, (c) earnings per share, (d) operating profit, (e) operating margin, (f) return on equity, (g) return on assets, (h) total return to stockholders, (i) technology improvements, (j) return on investment capital, (k) revenue growth, (l) cash flow, (m) reliability and (n) quality objectives. In addition, Awards may be subject to comparisons of the performance of other companies, such performance to be measured by one or more of the foregoing business criteria. If an Award of Performance Shares or Performance Share Units is made on such basis, the Committee shall establish the relevant performance conditions, in writing, within 90 days after the commencement of the performance period (or such later date as may be required or permitted by Section 162(m) of the Internal Revenue Code). Following the completion of each performance period and prior to the payment of any Award, the Committee shall certify in writing whether the performance goals for such performance period have been met. The Committee may, in its discretion, reduce or eliminate the amount of payment with respect to an Award of Performance Shares or Performance Share Units to a Covered Employee, notwithstanding the achievement of a specified performance condition, but may not increase the amount of payment with respect to such an Award. An Award of Performance Shares or Performance Share Units to a Participant who is a Covered Employee shall (unless the Committee determines otherwise) provide that in the event of the Participant’s termination of employment prior to the end of the performance period for any reason, such Award will be payable only (A) if the applicable performance conditions are achieved and (B) to the extent, if any, as the Committee shall determine. |
| 9 | STOCK APPRECIATION RIGHTS. Stock Appreciation Rights (“SARs”) may be granted either alone or in connection with a Stock Option, as the Committee determines and as reflected in the Award Agreement pursuant to which such SAR is granted. A SAR granted in connection with an incentive stock option may be granted only when the incentive stock option is granted. A SAR granted in connection with a nonstatutory stock option may be granted either when the related nonstatutory stock option is granted or at any time thereafter, including, in the case of any nonstatutory stock option resulting from the conversion of an incentive stock option to a nonstatutory stock option, simultaneously with or after the conversion. A Participant electing to exercise a SAR shall deliver written notice to the Company of the election |
| | identifying the SAR and, if applicable, the related option with respect to which the SAR was granted to the Participant, and specifying the number of whole shares of Common Stock with respect to which the Participant is exercising the SAR. Upon exercise of the SAR, if applicable, the related option shall be deemed to be surrendered to the extent that the SAR is exercised. SARs may be exercised only (i) on a date when the Fair Market Value of a share of Common Stock exceeds the exercise price stated in the Award Agreement or, if applicable, the Award Agreement for the Stock Option related to that SAR and (ii) in compliance with any restrictions that may be set forth in the Award Agreement pursuant to which the SAR was granted. The amount payable upon exercise of a SAR may be paid by the Company in cash, or, if the Committee shall determine in its sole discretion, in shares of Common Stock (taken at their Fair Market Value at the time of exercise of the SAR) or in a combination of cash and shares of Common Stock;provided,however, that if the SAR is granted in connection with a Stock Option, in no event shall the total number of shares of Common Stock that may be paid to a Participant pursuant to the exercise of a SAR exceed the total number of shares of Common Stock subject to the related Stock Option. A SAR shall terminate and may no longer be exercised upon the first to occur of (a) if applicable, exercise or termination of the related Stock Option or (b) any termination date specified in the Award Agreement pursuant to which the SAR is granted. In addition, the Committee may, in its sole discretion at any time before the occurrence of a Change in Control, amend, suspend or terminate any SAR theretofore granted under the Plan without the holder’s consent;provided that, in the case of amendment, no provision of the SAR, as amended, shall be in conflict with any provision of the Plan. If the SAR is granted in connection with a Stock Option, the amendment, suspension or termination of any such SAR by the Committee as described in the immediately preceding sentence shall not affect the holder’s rights in any related Stock Option. |
| 10 | | 10. | RESTRICTED SHARES and RESTRICTED SHARE UNITS. Restricted Shares may be granted in the form of actual shares of Common Stock or Restricted Share Units having a value equal to an identical number of shares of Common Stock. In the event that a stock certificate is issued in respect of Restricted Shares, such certificate shall be registered in the name of the Participant but shall be held by the Company until the end of the restricted period. The employment conditions and the length of the period for vesting of Restricted Shares or Restricted Share Units shall be reflected in the Award Agreement pursuant to which such Restricted Shares or Restricted Share Units are granted. The Committee shall determine in its sole discretion whether Restricted Share Units shall be paid in cash, Common Stock, or a combination of cash and Common Stock. |
| 11 | | 11. | OTHER AWARDS. The Committee may grant types of equity-based Awards (including the grant or offer for sale of unrestricted shares of Common Stock and other performance shares) other than Stock Options, SARs, Restricted Shares, Restricted Share Units, Performance Shares and Performance Share Units in such amounts and subject to such terms and conditions, as the Committee shall determine. Such Other Awards may entail the transfer of actual shares of Common Stock to Plan participants, or payment in cash or otherwise of amounts based on the value of shares of Common Stock. The terms of such Other Awards shall be reflected in the Award Agreement pursuant to which such Other Award is granted. |
| 12 | | 12. | AWARDS UNDER THE PLAN. |
| 12.1 | | 12.1. | Award Agreements. Each Award under the Plan shall be evidenced by an agreement setting forth the terms and conditions, as determined by the Committee, which shall apply to such Award, in addition to the terms and conditions specified in the Plan. The Committee may grant Awards in tandem with or in substitution for any other Award or Awards granted under this Plan or any award granted under any other plan of the Company. By accepting an Award pursuant to the Plan, a Participant thereby agrees that the Award shall be subject to all of the terms and provisions of the Plan and the applicable Award Agreement. |
| 12.2 | | 12.2. | Rights as a Stockholder. The Award Agreement shall specify whether (and under what circumstances) a Participant (or other person having rights pursuant to an Award) shall have any of the rights of a stockholder of the Company with respect to shares of Common Stock subject to an Award. Except as otherwise provided in Section 17, no adjustments shall be made for dividends or distributions (whether ordinary or extraordinary, and whether in cash, Common Stock, other securities or other property) on, or other events relating to, shares of Common Stock subject to an Award for which the record date is prior to the date such shares are delivered. |
| 12.3 | | 12.3. | Required Shareholder Consent. Unless otherwise approved by the Company’s stockholders, Stock Options and SARs will not be (x) repriced (other than in accordance with the adjustment provisions of Section 17.1), (y) repurchased for cash or other consideration, or cancelled in conjunction with the grant of a new Stock Option or SAR with a lower exercise price, in each case on a date when the exercise price of such Stock Option or SAR is equal to or exceeds the Fair Market Value a share of Common Stock or (z) be subject to automatic reload provisions. |
| 13.1 | | 13.1. | Unless otherwise provided in an Award Agreement or the Committee determines otherwise, in the event of a Change in Control, as hereinafter defined, in which Awards are not assumed, substituted or otherwise continued, (i) the restrictions applicable to all Restricted Shares and Restricted Share Units shall lapse and such shares and share units shall be deemed fully vested, (ii) all Restricted Shares granted in the form of share units shall be paid in cash, (iii) all Performance Shares granted in the form of shares of Common Stock or Performance Share Units shall be deemed to be earned based on the level of actual performance through the date of the Change in Control with respect to all open performance periods, (iv) all Performance Shares granted in the form of share units shall be paid in cash, and (v) each Stock Option and SAR that is not exercisable in full shall be deemed fully vested.vested and may be settled in cash. The amount of any cash payment in respect of a Restricted Share Unit or Performance Share Unitan Award shall be equal to: (A) in the event the Change in Control is the result of a tender offer or exchange offer for Common Stock, the final offer price per share paid for the Common Stock or (B) in the event the Change in Control is the result of any other occurrence, the aggregate per share value of Common Stock as determined by the Committee at such time.time, in each case, less the exercise price or reference price of a Stock Option or SAR. In addition, if the consideration paid to the Company’s stockholders in respect of any Change in Control transaction includes contingent value rights, the Committee may determine if the Awards (including as may be assumed, substituted or otherwise continued as set forth in the paragraph below) are (x) valued at the consummation of such Change in Control taking into account such contingent consideration (with the value determined by the Committee in its sole discretion) or (y) entitled to a share of the contingent consideration. The Committee may, in its discretion, include such further provisions and limitations in any agreement documenting such Awards as it may deem equitable and in the best interests of the Company. |
Unless otherwise provided in the applicable Award Agreement or the Committee determines otherwise, in the event of a Change in Control in which Awards are assumed, substituted or otherwise continued, the Awards will not automatically vest upon a Change in Control, but if a Participant’s employment is terminated by the Company or any successor entity thereto without Cause or resigns for Good Reason, in each case, within two (2) years after a Change in Control, (i) the restrictions applicable to all Restricted Shares and Restricted Share Units shall lapse and such shares and share units shall be deemed fully vested, (ii) all Performance Shares granted in the form of shares of Common Stock or Performance Share Units shall be deemed to be earned based on the level of actual performance through the date of the employment termination with respect to all open performance periods, and (iii) each Stock Option and SAR that is not exercisable in full shall be deemed fully vested. The Committee may, in its discretion, include such further provisions and limitations in any agreement documenting such Awards as it may deem equitable and in the best interests of the Company.
| 13.2 | | 13.2. | A “Change in Control” shall mean the occurrence of any one of the following events: (i) any “person” (as such term is defined in Section 3(a)(9) of the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-313d‑3 under the Exchange Act), directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities eligible to vote for the election of the Board of Directors (the “Company Voting Securities”);provided,however, that the event described in this paragraph (i) shall not be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by the Company or any of its subsidiaries, (B) by any employee benefit plan sponsored or maintained by the Company or any of its subsidiaries, (C) by any underwriter temporarily holding securities pursuant to an offering of such securities, or (D) pursuant to a Non-Control Transaction (as defined in clause (ii) below), (ii) the consummation of a merger, consolidation, share exchange or similar form of corporate reorganization of the Company (or any such type of transaction involving the Company or any of its subsidiaries that requires the approval of the Company’s stockholders, whether for the transaction or the issuance of securities in the transaction or otherwise) (a “Business Combination”), unless immediately following such Business Combination: (a) more than 60% of the total voting power of the corporation resulting from such Business Combination (including, without limitation, any corporation which directly or indirectly has beneficial ownership of 100% of the Company Voting Securities) eligible to elect directors of such corporation is represented by shares that were Company Voting Securities immediately prior to such Business Combination (either by remaining outstanding or being converted), and such voting power is in substantially the same proportion as the voting power of such Company Voting Securities immediately prior to the Business Combination, (b) no person (other than any holding company resulting from such Business Combination, any employee benefit plan sponsored or maintained by the Company (or the corporation resulting from such Business Combination)) immediately following the consummation of the Business Combination becomes the beneficial owner, directly or indirectly, of 25% or more of the total voting power of the outstanding voting securities eligible to elect directors of the corporation resulting from such Business Combination, and (c) at least a majority of the members of the boardBoard of directorsDirectors of the corporation resulting from such Business Combination were members of the Board of Directors at the time of the approval of the execution of the initial agreement providing for such Business Combination (any Business Combination which satisfies the conditions in clauses (a), (b) and (c) is referred to hereunder as a “Non-Control Transaction”);; or (iii) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or the sale of all or substantially all of its assets. Notwithstanding the foregoing, a Change in Control of the Company shall not be |
| | deemed to occur solely because any person acquires beneficial ownership of more than 25% of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which reduces the number of Company Voting Securities outstanding;provided, that if after such acquisition by the Company such person becomes the beneficial owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in Control of the Company shall then occur. |
| 14 | | 14. | WITHHOLDING.The Company shall have the right to deduct from any payment to be made pursuant to the Plan the amount of any taxes required by law to be withheld therefrom, or to require a Participant to pay to the Company such amount required to be withheld prior to the issuance or delivery of any shares of Common Stock or the payment of cash under the Plan.Plan, in each case in an amount not to exceed the maximum individual tax withholding rates applicable to the Participant, as determined by the Company. The Committee may, in its discretion, permit a Participant to elect to satisfy such withholding obligation by having the Company retain the number of shares of Common Stock whose Fair Market Value equals the amount required to be withheld. Any fraction of a share of Common Stock required to satisfy such obligation shall be disregarded and the amount due shall instead be paid in cash to the Participant. |
| 15 | | 15. | NONTRANSFERABILITY.No Award shall be assignable or transferable, and no right or interest of any Participant shall be subject to any lien, obligation or liability of the Participant, except by will or the laws of descent and distribution. Notwithstanding the immediately preceding sentence, the Committee may, subject to the terms and conditions it may specify, permit a Participant to transfer any nonstatutory stock options granted to him pursuant to the Plan to one or more of his immediate family members or to trusts established in whole or in part for the benefit of the Participant and/or one or more of such immediate family members. During the lifetime of the Participant, a nonstatutory stock option shall be exercisable only by the Participant or by the immediate family member or trust to whom such Stock Option has been transferred pursuant to the immediately preceding sentence. For purposes of the Plan, (i) the term “immediate family” shall mean the Participant’s spouse and issue (including adopted and step children) and (ii) the phrase “immediate family members and trusts established in whole or in part for the benefit of the Participant and/or one or more of such immediate family members” shall be further limited, if necessary, so that neither the transfer of a nonstatutory stock option to such immediate family member or trust, nor the ability of a Participant to make such a transfer shall have adverse consequences to the Company or the Participant by reason of Section 162(m) of the Internal Revenue Code.. |
| 16 | | 16. | NO RIGHT TO EMPLOYMENT.No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any subsidiary. Further, the Company and its subsidiaries expressly reserve the right at any time to dismiss a Participant free from any liability, or any claim under the Plan, except as provided herein or in any agreement entered into hereunder. Any obligation of the Company under the Plan to make any payment at any future date merely constitutes the unsecured promise of the Company to make such payment from its general assets in accordance with the Plan, and no Participant shall have any interest in, or lien or prior claim upon, any property of the Company or any subsidiary by reason of that obligation. |
liability, or any claim under the Plan, except as provided herein or in any agreement entered into hereunder. Any obligation of the Company under the Plan to make any payment at any future date merely constitutes the unsecured promise of the Company to make such payment from its general assets in accordance with the Plan, and no Participant shall have any interest in, or lien or prior claim upon, any property of the Company or any subsidiary by reason of that obligation.
| 17 | | 17. | ADJUSTMENT OF AND CHANGES IN COMMON STOCK. |
| 17.1 | | 17.1. | The Committee shall adjust the number of shares of Common Stock authorized pursuant to Section 3.1 and shall adjust the terms of any outstanding Awards (including, without limitation, the number of shares of Common Stock covered by each outstanding Award, the type of property to which the Award relates (including whether such Award may be terminated and settled by payment of cash) and the exercise or strike price of any Award), in such manner as it deems appropriate to prevent the enlargement or dilution of rights, or otherwise deems it appropriate, for any increase or decrease in the number of issued shares of Common Stock (or issuance of shares of stock other than shares of Common Stock) resulting from a recapitalization, stock-split, reverse stock split, stock dividend, spin-off, split-up, combination or reclassification or exchange of the shares of Common Stock, merger, consolidation, rights offering, separation, reorganization or any other change in corporate structure or event the Committee determines in its sole discretion affects the capitalization of the Company, including a Change in Control or any extraordinary dividend or distribution. After any adjustment made pursuant to this Section 17.1, the number of shares of Common Stock subject to each outstanding Award shall be rounded up or down to the nearest whole number, as determined by the Committee and consistent with the requirements of applicable tax law. Notwithstanding anything in the Plan to the contrary, any adjustments, modifications or changes of any kind made pursuant to this Section 17.1 shall be made in a manner compliant with Section 409A of the Internal Revenue Code (“Section 409A”). |
| 17.2 | | 17.2. | Except as provided in Section 3.1 or under the terms of any applicable Award Agreement, there shall be no limit on the number or the value of shares of Common Stock that may be subject to Awards to any individual under the Plan. |
| 17.3 | | 17.3. | There shall be no limit on the amount of cash, securities (other than shares of Common Stock as provided in Section 3.1, as adjusted by 17.1) or other property that may be delivered pursuant to any Award. |
| 18 | | 18. | AMENDMENT.The Board of Directors may amend, suspend or terminate the Plan or any portion thereof at any time,provided that no amendment shall be made without stockholder approval if such approval is necessary in order for the Plan to continue to comply with Rule 16b-316b‑3 under the Exchange Act, and that such amendments shall be effected in a manner compliant with applicable tax law and subject to Section 23 of the Plan. |
| 19 | | 19. | EFFECTIVE DATE AND TERMINATION.The This 2018 Long-Term Incentive Plan of CONMED Corporation 1999 Long Term Incentive Plan was originally effective as of January 1, 1999, the Amended and Restated 1999 Long Term Incentive Plan was effective as of February 24, 2009, the Amended and Restated Plan was effective as ofFebruary 29, 2012and this Amended and Restated 2015 Long Term Incentive Plan is effective as of the Effective Date. Subject to earlier termination pursuant to Section 18 of the Plan or by the action of the Board of Directors, the Plan shall remain in effect until May 28, 2025.June 30, 2028. |
| 20 | | 20. | PURCHASE FOR INVESTMENT.Each person acquiring Common Stock pursuant to any Award may be required by the Company to furnish a representation that he or she is acquiring the Common Stock so acquired as an investment and not with a view to distribution thereof if the Company, in its sole discretion, determines that such representation is required to ensure that a resale or other disposition of the Common Stock would not involve a violation of the Securities Act of 1933, as amended, or of applicable blue sky laws. Any investment representation so furnished shall no longer be applicable at any time such representation is no longer necessary for such purposes. |
| 21 | | 21. | AWARDS THROUGH THE ASSUMPTION OF OR IN SUBSTITUTION FOR AWARDS GRANTED BY OTHER COMPANIES.Awards may be granted under the Plan through the assumption of or substitution for awards held by employees of a company who become employees of the Company or any subsidiary as a result of the merger or consolidation of the employer company with the Company or any subsidiary, or the acquisition by the Company or any subsidiary of the assets of the employer company, or the acquisition by the Company or any subsidiary of stock of the employer company as a result of which it becomes a subsidiary. The terms, provisions, and benefits of the assumed or substitute Awards so granted may vary from the terms, provisions, and benefits set forth in or authorized by the Plan to such extent as the Committee at the time of the grant may deem appropriate to conform, in whole or in part, to the terms, provisions, and benefits of the awards assumed or in substitution for which they are granted. The vesting requirement of Section 6(a) shall not apply to Awards that are assumed or substituted for in connection with this Section 21. |
| 22 | | 22. | GOVERNING LAW.The provisions of the Plan shall be governed and construed in accordance with the laws of the State of New York. |
| 23 | | 23. | SECTION 409A.It is the Company’s intent that the Plan and Awards granted hereunder comply with or be exempt from the requirements of Section 409A and that agreements evidencing Awards be administered and interpreted accordingly. If and to the extent that any payment or benefit under this Plan is determined by the Company to constitute “non-qualified deferred compensation” subject to Section 409A and is payable to a Participant by reason of the Participant’s termination of employment, then (a) such payment or benefit shall be made or provided to the Participant only upon a “separation from service” as defined for purposes of Section 409A under applicable regulations and (b) if the Participant is a “specified employee” (within the meaning of Section 409A and as determined by the Company), to the extent required by Section 409A, such payment or benefit shall be made or provided on the date that is six months and one day after the date of the Participant’s separation from service (or earlier death). Any amount not paid in respect of the six-month period specified in the preceding sentence will be paid to the Participant in a lump sum on the date that is six months and one day after the Participant’s separation from service (or earlier death). Each payment made under the Plan shall be deemed to be a separate payment for purposes of Section 409A. If and to the extent that any Award is determined by the Company to constitute “non-qualified deferred compensation” subject to Section 409A and such Award is payable to a Participant |
| | upon a Change in Control, then no payment shall be made pursuant to such Award unless such Change in Control constitutes a “change in the ownership of the corporation”, “a change in effective control of the corporation”, or “a change in the ownership of a substantial portion of the assets of the corporation” within the meaning of Section 409A;409A; provided that if such Change in Control does not constitute a “change in the ownership of the corporation”, “a change in effective control of the corporation”, or “a change in the ownership of a substantial portion of the assets of the corporation” within the meaning of Section 409A, then the Award shall still fully vest upon such Change in Control, but shall be payable upon the original schedule contained in the Award. If and to the extent that any Award is determined by the Company to constitute “non-qualified deferred compensation” subject to Section 409A and such Award is payable to a Participant upon disability, then no payment shall be made pursuant to such Award unless such disability constitutes “disability” within the meaning of Section 409A;provided that if such disability does not constitute “disability” within the meaning of Section 409A, then the Award shall still fully vest upon such disability, but shall be payable upon the original schedule contained in the Award. Neither the Company nor its affiliates shall have any liability to any Participant, Participant’s spouse or other beneficiary of any Participant’s spouse or other beneficiary of any Participant or otherwise if the Plan or any amounts paid or payable hereunder are subject to the additional tax and penalties under Section 409A. |
A-10 | | | 24. | FOREIGN PARTICIPANTS. To the extent the Committee deems it necessary, appropriate or desirable to comply with foreign law or practices and to further the purposes of the Plan, the Committee may, in its sole discretion and without amending the Plan, (a) establish special rules applicable to Awards to Participants who are foreign nationals, are employed outside the United States or both and grant Awards (or amend existing Awards) in accordance with those rules and (b) cause the Company to enter into an agreement with any local subsidiary pursuant to which such subsidiary will reimburse the Company for the cost of such equity incentives. |
Table of Contents | | | 25. | OTHER PAYMENTS. Nothing contained in the Plan will be deemed in any way to limit or restrict the Company from making any award or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter in effect. |
[THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK]
Heather L. Cohen Secretary ConMed Corporation 525 French Road Utica, New York 13502 Direct Dial (315) 624-3215
To: RecipientsOwners of CommonCONMED Stock from the Company’sFund held in CONMED's Retirement Savings Plan As described in the attached materials, proxies are being solicited in connection with the proposals to be considered at the upcoming Annual Meeting of Shareholders of CONMED Corporation (the “Company”). We hope you will take advantage of the opportunity to direct the manner in which shares of the CONMED Common Stock of the Company granted toFund owned by you pursuant toin the Retirement Savings Plan (the “Plan”“Shares”) will be voted. Enclosed with this letter is a voting instruction ballot, which will permit you to vote the shares, granted to you.Shares. The Proxy Statement and Annual Financials are available at www.edocumentview.com/ www.investorvote.com/CNMD. After you have reviewed the Proxy Statement, we urge you to vote your shares held pursuant to the PlanShares by marking, dating, signing and returning the enclosed voting instruction ballot, no later than May 18, 2015,14, 2018, to: Proxy Services c/o Computershare 250 Royall Street
Canton, MA 02021
Investor Services P.O. Box 30202 College Station, TX 77842-9909 Computershare will certify the totals to Fidelity Investments (“Fidelity”) for the purpose of having those shares voted by Fidelity. We urge each of you to vote, as a means of participating in the governance of the affairs of the company.Company. If your voting instructions for the shares held in the PlanShares are not received, the sharesShares will not be voted. While I hope that you will vote in the manner recommended by the Board of Directors, the most important thing is that you vote in whatever manner you deem appropriate. Please take a moment to do so.
**Please note that the enclosed material relates only to those shares which have been granted to you own under theRetirement Savings Plan.Plan. You will receive separate voting material for shares related to other plans that are voted independently from this ballot. Heather L. Cohen Secretary
April 17, 2015
To: Recipients of Common Stock from the Company’s Employee Stock Purchase Plan
As described in the attached materials, proxies are being solicited in connection with the proposals to be considered at the upcoming Annual Meeting of Shareholders of CONMED Corporation (the “Company”). We hope you will take advantage of the opportunity to direct the manner in which shares of Common Stock of the Company granted to you pursuant to the Employee Stock Purchase Plan (the “Plan”) will be voted.
Enclosed with this letter is a voting instruction ballot, which will permit you to vote the shares, granted to you. The Proxy Statement and Annual Financials are available at www.edocumentview.com/CNMD. After you have reviewed the Proxy Statement, we urge you to vote your shares held pursuant to the Plan by marking, dating, signing and returning the enclosed voting instruction ballot, no later than May 18, 2015, to:
Computershare
250 Royall Street
Canton, MA 02021
Computershare will certify the totals to Solium Capital (“Solium”) for the purpose of having those shares voted by Solium.
We urge each of you to vote, as a means of participating in the governance of the affairs of the company. If your voting instructions for the shares held in the Plan are not received, the shares will not be voted. While I hope that you will vote in the manner recommended by the Board of Directors, the most important thing is that you vote in whatever manner you deem appropriate. Please take a moment to do so.
**Please note that the enclosed material relates only to those shares which have been granted to you under theEmployee Stock Purchase Plan. You will receive separate voting material for shares related to other plans that are voted independently from this ballot.
Sincerely,
/s/ Heather L. Cohen
Heather L. Cohen
Secretary
| | | 525 French Road , Utica, New York 13502 ● 315-797-8375 ● 800-765-8375 |
|
|
