UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
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| Preliminary Proxy Statement | ||
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| Definitive Proxy Statement | ||
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| Soliciting Material Pursuant to | ||
IDEX Corporation
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant)
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IDEX Corporation (Name of Registrant as Specified In Its Charter) | ||||||||
(Name of Person(s) Filing Proxy Statement, if Other Than The Registrant) | ||||||||
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1925 West Field Court, Suite 200
Lake Forest, IL 60045
March 5, 201417, 2017
Dear Stockholder:Stockholders,
You are cordially invited to attend the Annual Meeting of Stockholders of IDEX Corporation (the Company) which will be held on Tuesday,Wednesday, April 8, 2014,26, 2017, at 9:00 a.m. Central Time, at Thethe Westin Chicago North Shore, 601 North Milwaukee Avenue, Wheeling, Illinois 60090.
DetailsThe following pages contain our notice of annual meeting and proxy statement. Please review this material for information concerning the business to be conducted at the 2017 Annual Meeting, are givenincluding the nominees for election as directors.
This year, in accordance with the attachedSecurities and Exchange Commission’s rules for the electronic distribution of proxy materials, we have elected to provide access to our proxy materials and 2016 Annual Report on the Internet instead of mailing a full set of printed proxy materials. We believe that this process will provide you with prompt access to our proxy materials, lower our costs of printing and delivering proxy materials, and minimize the environmental impact of printing paper copies. You should have already received the Notice of Annual MeetingInternet Availability of Proxy Materials with instructions on how to access the proxy materials and Proxy Statement. Included with the Proxy Statement isvote. If you would like to receive a printed copy of our proxy materials, you should follow the Company’s 2013 Annual Report. We encourage you to read the Annual Report. It includes informationinstructions for requesting such materials set forth on the Company’s operations, markets, products and services, as well asNotice of Internet Availability of Proxy Materials. For further details, please refer to the Company’s audited financial statements.section entitled Summary beginning on page 1 of the proxy statement.
Whether or not you plan to attend the 2017 Annual Meeting, it is important that your shares be represented and voted. Therefore, we urge you to sign, date, and promptly return the accompanying proxy card in the enclosed envelope. Alternatively, you canrepresented. Please vote over thevia telephone, or the Internet as described on theor proxy card. If you decide to attendown shares through a bank, broker or other nominee, please execute your vote by following the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy card, or votedinstructions provided by telephone or over the Internet.such nominee.
On behalf of the Board of Directors, I would like to express our appreciation for your continued interest in the affairs of the Company. We look forward to seeing you at the Annual Meeting.
Sincerely,
ANDREWANDREW K. SILVERNAILSILVERNAIL
Chairman of the Board, President and
Chief Executive Officer
IDEX CORPORATION
NOTICE OF 2017 ANNUAL MEETING OF STOCKHOLDERS
APRIL 8, 2014
To the Stockholders:
The Annual Meeting of Stockholders of IDEX Corporation (the Company) will be held on Tuesday, April 8, 2014, at 9:00 a.m. Central Time, at The Westin Chicago North Shore, 601 North Milwaukee Avenue, Wheeling, Illinois 60090, for the following purposes:
| Date and Time | Wednesday,April 26, 2017 at 9:00 a.m. Central Time
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| Voting Recommendations | The Company’s Board of Directors recommends that you vote: | |||||||||||||||||||||
1. “FOR” all the director nominees | ||||||||||||||||||||||
2. “FOR” the approval of the compensation of our named executive officers | ||||||||||||||||||||||
3. “FOR” the approval to conduct an advisory vote on executive compensation every year | ||||||||||||||||||||||
4. “FOR” the ratification of the appointment of Deloitte & Touche LLP | ||||||||||||||||||||||
| Proxy Voting | Your vote is important. You can vote your shares by Internet, by telephone, or by mail. Instructions for each of these methods and the control number that you will need are provided on the proxy card. If your shares are held in “street name” in a stock brokerage account, or by a bank or other nominee, you must provide your broker with instructions on how to vote your shares in order for your shares to be voted on important matters presented at the 2017 Annual Meeting. | |||||||||||||||||||||
| March 17, 2017 | By Order of the Board of Directors
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DENISE R. CADE Senior Vice President, General Counsel and Corporate Secretary |
Important Notice Regarding the Availability of Proxy Materials for the 2017 Annual Meeting The Proxy Statement and 2016 Annual Report are available online at: http://phx.corporate-ir.net/phoenix.zhtml?c=83305&p=irol-reportsAnnual | ||
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STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR 2018 ANNUAL MEETING | 59 | |||
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FRANK J. NOTARO
Vice President — General Counsel
and Secretary
March 5, 2014
Lake Forest, Illinois
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON APRIL 8, 2014
The Proxy Statement and 2013 Annual Report of IDEX Corporation are available at:
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http://phx.corporate-ir.net/phoenix.zhtml?c=83305&p=irol-reportsAnnualSUMMARY
PROXY STATEMENT
IDEX Corporation (the Company or IDEX) has prepared this Proxy Statement in connection with the solicitation by the Company’s Board of Directors of proxies for the Annual Meeting of Stockholders to be held on Tuesday,Wednesday, April 8, 2014,26, 2017, at 9:00 a.m. Central Time, at Thethe Westin Chicago North Shore, 601 North Milwaukee Avenue, Wheeling, Illinois 60090.60090 (the Annual Meeting). The Company commenced distribution of, or otherwise made available, this Proxy Statement and the accompanying materials on March 5, 2014.17, 2017.
Who is entitled to vote at the Annual Meeting?
You are entitled to vote if you owned shares of IDEX’s Common Stock as of the close of business on March 1, 2017, the record date of the Annual Meeting. On the record date, a total of 76,326,261 shares of IDEX Common Stock were outstanding. Each share of Common Stock entitles its holder of record to one vote on each matter upon which votes are taken at the Annual Meeting. There is no cumulative voting. No other securities are entitled to be voted at the Annual Meeting.
How do I vote?
Even if you plan to attend the Annual Meeting in person, we encourage you to vote as soon as possible, using one of the methods listed below.
| By Internet | By Telephone | By Mail | In Person | |||
www.proxyvote.com Open until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you access the website and follow the instructions. | 1-800-690-6903 Open until 11:59 p.m. Eastern Time the day before the meeting date. Have your proxy card in hand when you call and follow the instructions. | Mark, sign and date your proxy card and return it in the postage-paid envelope or return it toVote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717 | If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously voted by Internet, telephone or mail. |
If you vote by telephone or over the Internet, you should not mail your proxy card. If your completed proxy card or telephone or Internet voting instructions are received prior to the Annual Meeting, your shares will be voted in accordance with your voting instructions.
If your shares are held in “street name” (that is, they are held in the name of a broker, financial institution or other nominee), you will receive instructions with your materials that you must follow in order to have your shares voted. Please review your voting instruction form to determine whether you will be able to vote via the telephone or over the Internet.
What is a quorum for the Annual Meeting?
A quorum of stockholders is necessary to take action at the Annual Meeting. A majority of outstanding shares of Common Stock present in person or represented by proxy will constitute a quorum. The Company will appoint election inspectors to determine whether or not a quorum is present, and to tabulate votes cast by proxy or in person. Under certain circumstances, a broker or other nominee may have discretionary authority to vote shares of Common Stock if instructions have not been received from the beneficial owner or other person entitled to vote.
The election inspectors will treat directions to withhold authority, abstentions and brokernon-votes (which occur when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because such broker or other nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner) as present and entitled to vote for purposes of determining the presence of a quorum for the transaction of business at the Annual Meeting.
What are the voting requirements?
| Proposal | Vote Required | Effect of Broker Non-Votes | Effect of Abstentions | |||
Election of Directors | “Plurality Plus” Standard | No effect | No effect | |||
Advisory Vote on Executive Compensation | The affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on the matter | No effect | “Against” | |||
| Advisory Vote on Frequency of Advisory Votes on Executive Compensation | The affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on the matter | No effect | “Against” | |||
| Ratification of Auditors | The affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on the matter | No effect | “Against” |
What is the “Plurality Plus” Standard?
The Company’s Corporate Governance Guidelines provide for a Plurality Plus Standard with respect to the election of directors. Any nominee who receives a greater number of withhold votes than affirmative votes in an uncontested election is required to submit an offer of resignation for consideration by the Nominating and Corporate Governance Committee of the Board of Directors within 90 days from the date of election.
The Nominating and Corporate Governance Committee must then consider all of the relevant facts and circumstances and recommend to the Board of Directors the action to be taken with respect to the offer of resignation.
How does the Company’s Board of Directors recommend that I vote?
The Company’s Board of Directors recommends that you vote:
1. FOR the election of the Company’s nominees as directors.
2. FOR the approval of the compensation of the Company’s named executive officers.
3. FOR the approval to conduct an advisory vote on executive compensation every year.
4. FOR approval of the ratification of the appointment of auditors.
What happens if I do not specify a choice for a matter when returning my proxy card?
If you sign and return your proxy card but do not give voting instructions, your shares will be voted as recommended by the Company’s Board of Directors, and in the discretion of the proxy holders as to any other business which may properly come before the Annual Meeting.
What can I do if I change my mind after I vote my shares?
You can revoke a proxy prior to the completion of voting at the Annual Meeting by:
1. Mailing a new proxy card with a later date.
2. Casting a new vote on the Internet or by telephone.
3. Sending a written notice of revocation addressed to Denise R. Cade, Senior Vice President, General Counsel and Corporate Secretary, IDEX Corporation, 1925 West Field Court, Suite 200, Lake Forest, Illinois 60045.
4. Voting in person at the Annual Meeting.
If your shares are held in “street name,” please contact your broker, financial institution or other nominee and comply with the broker’s, financial institution’s or other nominee’s procedures if you want to change or revoke your previous voting instructions.
Who will solicit the proxies and who will pay the cost of this proxy solicitation?
The Company will bear the costs of preparing and mailing this Proxy Statement and other costs of the proxy solicitation made by the Board of Directors. Certain of the Company’s officers and employees may solicit the submission of proxies authorizing the voting of shares in accordance with the Board of Directors’ recommendations, but no additional remuneration will be paid by the Company for the solicitation of those proxies. These solicitations may be made by personal interview, telephone, email or facsimile transmission.
The Company has made arrangements with brokerage firms and other record holders of its Common Stock for the forwarding of proxy solicitation materials to the beneficial owners of that stock. The Company will reimburse those brokerage firms and others for their reasonableout-of-pocket expenses in connection with this work.
In addition, the Company has engaged Morrow & Co.,Sodali LLC, 470 West Ave.,Avenue, Stamford, Connecticut to assist in proxy solicitation and collection at a cost of $6,000,$6,500, plusout-of-pocket expenses.
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VOTING AT THE MEETINGWhy did I receive a “Notice of Internet Availability of Proxy Materials” but no proxy materials?
The record of stockholders entitled to notice of, and to vote at, the Annual Meeting was taken asAs permitted under rules of the closeSecurities and Exchange Commission (SEC), we are making this Proxy Statement available to stockholders electronically via the Internet. We believe electronic delivery expedites receipt of business on February 14, 2014,our proxy materials by stockholders, while lowering the costs and each stockholder will be entitled to vote atreducing the meeting any sharesenvironmental impact of Common Stock held of record on that date. 80,851,529 shares of Common Stock were outstanding at the close of business on February 14, 2014. Each share entitles its holder of record to one vote on each matter upon which votes are taken at the Annual Meeting. No other securities are entitled to be voted at the Annual Meeting.
A quorumIf you receive a Notice of stockholders is necessary to take action at the Annual Meeting. A majorityInternet Availability of outstanding shares of Common Stock present in person or representedProxy Materials by proxymail, you will constitutenot receive a quorum. The Company will appoint election inspectors for the meeting to determine whether or not a quorum is present, and to tabulate votes cast by proxy or in person. Under certain circumstances, a broker or other nominee may have discretionary authority to vote shares of Common Stock if instructions have not been received from the beneficial owner or other person entitled to vote. The election inspectors will treat directions to withhold authority, abstentions and broker non-votes (which occur when a broker or other nominee holding shares for a beneficial owner does not vote on a particular proposal because such broker or other nominee does not have discretionary voting power with respect to that item and has not received instructions from the beneficial owner) as present and entitled to vote for purposes of determining the presence of a quorum for the transaction of business at the Annual Meeting. The following sets forth the voting procedures for each proposal at the Annual Meeting:
Proposal 1 — Election of Directors. Directors are elected by a pluralityprinted copy of the votes cast atproxy materials by mail unless you specifically request them. Instead, the Annual Meeting; provided however, thatNotice of Internet Availability will provide instructions as to how you may review the Company’s Corporate Governance Guidelines provide forproxy materials and submit your voting instructions over the Internet.
If you receive the notice by mail and would like to receive a “plurality plus” standard with respect to the election of directors, under which any nominee who receives a greater number of withhold votes than affirmative votes in an uncontested election is required to submit an offer of resignation for consideration by the Nominating and Corporate Governance Committeeprinted copy of the Boardproxy materials, you should follow the instructions in the Notice of Directors, as more fully described under Proposal 1 — Election of Directors. Abstentions and broker non-votes will have no effect onInternet Availability for requesting a printed copy. In addition, the election of directors.
Proposal 2 — Advisory Vote on Executive Compensation. Approval of the compensation of the Company’s named executive officers will require the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on the matter. Abstentions will have the effect of a vote against approval and broker non-votes will have no effect on the vote.
Proposal 3 — Ratification of Auditors. Approval of ratification of the auditors will require the affirmative vote of a majority of shares present in person or represented by proxy and entitled to vote on the matter. Abstentions will have the effect of a vote against approval and broker non-votes will have no effect on the vote.
The Company requests that you mark the accompanying proxy card contains instructions for electing to indicate your votes, sign and date it, and return it to the Company in the enclosed envelope, or vote by telephone orreceive proxy materials over the Internet as described on the proxy card. If you voteor by telephone or over the Internet, you should not mail your proxy card. If your completed proxy card or telephone or Internet voting instructions are received prior to the meeting, your shares will be voted in accordance with your voting instructions. If you sign and return your proxy card but do not give voting instructions, your shares will be voted FOR the election of the Company’s nominees as directors, FOR approval of the compensation of the Company’s named executive officers, FOR approval of the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2014, and in the discretion of the proxy holders as to any other business which may properly come before the meeting. Any proxy solicited hereby may be revoked by the person or persons giving it at any time before it has been exercised at the Annual Meeting by giving notice of revocation to the Company in writing prior to the meeting. If you decide to attend the Annual Meeting, you will be able to vote in person, even if you have previously submitted your proxy card, or voted by telephone or over the Internet. The Company requests that all such written notices of revocation be addressed to Frank J. Notaro, Vice President - General Counsel and Secretary, IDEX Corporation, 1925 West Field Court, Suite 200, Lake Forest, IL 60045.
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PROPOSALS TO BE VOTED ON AT THE 2017 ANNUAL MEETING
PROPOSAL 1 — ELECTION OF DIRECTORS
The Company’s Restated Certificate of Incorporation, as amended, provides for a three-class Board of Directors, with one class being elected each year for a term of three years. The Board of Directors currently consists of nine members, three of whom are Class I directors whose terms will expire at this year’s Annual Meeting, three of whom are Class II directors whose terms will expire at the Annual Meeting to be held in 2015,2018, and three of whom are Class III directors whose terms will expire at the Annual Meeting to be held in 2016.2019.
Overview of IDEX Board of Directors | ||||||||||
Our Directors Exhibit: High integrity Loyalty to the Company and commitment to its success Proven record of success Knowledge of corporate governance and practices Our Directors Bring to the Boardroom: High level of leadership experience | Board Composition Independent Directors: 8 of 9 Public Company Board Experience: 6 of 9 CEO Experience: 5 of 9 Average IDEX Board Tenure: 5.4 years Number of Directors Currently Serving on More Than Two Boards: 1 | |||||||||
Specialized industry expertise Financial expertise Extensive knowledge of the Company | ||||||||||
The Board of Directors has nominated threetwo individuals for election as Class I directors to serve for a three-year term expiring at the Annual Meeting to be held in 2017,2020, or upon the election and qualification of their successors. The nominees of the Board of Directors are Bradley J. Bell, Gregory F. Milzcik and Andrew K. Silvernail and Katrina L. Helmkamp, each of whom is currently serving as a director of the Company. Gregory F. Milzcik, the other current Class I director, has announced his retirement from the Board effective immediately following this year’s Annual Meeting, and thus is not standing for re-election.
The nominees and the directors serving in Class II and Class III whose terms expire in future years and who will serve or continue to serve after the Annual Meeting are listed below with brief statements setting forth their present principal occupations and other information, including any directorships in other public companies, and their particular experiences, qualifications, attributes and skills that lead to the conclusion they should serve as a director.
If for any reason any of the nominees are unavailable to serve, proxies solicited hereby may be voted for a substitute. The Board of Directors, however, expects the nominees to be available.
Under the Company’s Corporate Governance Guidelines, any director nominee who receives a greater number of withhold votes than affirmative votes in an uncontested election is required to submit an offer of resignation for consideration by the Nominating and Corporate Governance Committee of the Board of Directors within 90 days from the date of election. The Nominating and Corporate Governance Committee must then consider all of the relevant facts and circumstances and recommend to the Board of Directors the action to be taken with respect to the offer of resignation.
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Our Board of Directors recommends that you vote FOR the election of each of the 2017 director nominees |
The Company’s Board of Directors Recommends a Vote FOR
the Nominees in Class I Identified Below.
Nominees for Election
Class I: Nominees for Three-Year Term2017 DIRECTOR NOMINEES
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Mr. Bell served as Executive Vice President and Chief Financial Officer of Nalco Company from prior to 2008 until his retirement in 2010. Mr. Bell is a director of Compass Minerals International, Inc. and Hennessy Capital Acquisition Corp.
Mr. Bell’s business leadership skills, his knowledge of technology and manufacturing industries, his financial reporting expertise and his corporate governance and executive compensation experience led to the conclusion that he should serve on the Board of Directors. For over seven years, Mr. Bell served as executive vice president and chief financial officer of Nalco. In addition, Mr. Bell has over 30 years combined experience as an executive in the technology and manufacturing industries, including positions at Rohm and Haas Company, Whirlpool Corporation and Bundy Corporation. Through his experience, Mr. Bell has developed valuable financial expertise and experience in mergers and acquisitions, private equity and capital markets transactions. Mr. Bell has a long career in corporate finance, including more than 12 years of experience as chief financial officer of a publicly traded company, during which he obtained significant financial management and reporting expertise. He has held directorships at publicly traded companies for over 20 years, during which he chaired governance, audit and compensation committees. Through his executive experience and board memberships, Mr. Bell has acquired substantial training and experience in corporate governance and executive compensation. Mr. Bell received a bachelor of science degree in finance with high honors from the University of Illinois and a master of business administration degree with distinction from Harvard University.
Mr. Bell is Chairman of the Nominating and Corporate Governance Committee and a member of the Compensation Committee of the Board of Directors.
| Andrew K. Silvernail Age: 46 Director since Chairman, President and Chief Executive Officer | ||
| Mr. Silvernail was appointed Chairman of the Board effective January 1, 2012. Mr. Silvernail has served as President and Chief Executive Officer | ||
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Mr. Milzcik served as President and Chief Executive Officer of Barnes Group Inc. from prior to 2008 until his retirement in 2013. Mr. Milzcik is a director of Kulicke & Soffa Industries Inc.
Mr. Milzcik’s business leadership skills, his relevant experience in industrial manufacturing, his corporate governance and executive compensation training and his extensive technical and management education led to the conclusion that he should serve on the Board of Directors. Through his executive experience at Barnes Group, Mr. Milzcik obtained a unique understanding of the industrial manufacturing business environment and gained exposure to and familiarity with IDEX’s customer base. In addition, Mr. Milzcik gained experience with international commerce, government contracting, complex project management, intellectual property management and industry cyclicality, which enrich his perspective as a director of the Company. Mr. Milzcik has acquired substantial training in corporate governance and executive compensation through his executive experience, board memberships and attendance at the Harvard Directors College, Stanford Directors College and ODX/Columbia Director Education Program, and has been named a Board Leadership Fellow by the National Association of Corporate Directors. Mr. Milzcik received a bachelor of science degree in applied science and technology from Thomas Edison State College, a master’s degree in management and administration from Cambridge College, a certificate of graduate studies in administration and management from Harvard University and a doctorate from Case Western Reserve University, with
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research focusing on management systems in cyclical markets. Mr. Milzcik is a Certified Manufacturing Engineer through the Society of Manufacturing Engineers, and has an FAA Airframe and Power Plant License.
Mr. Milzcik is a member of the Compensation Committee of the Board of Directors. Effective April 8, 2014, Mr. Milzcik will become a member of the Audit Committee, and will cease to be a member of the Compensation Committee, of the Board of Directors.
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President Group Executive of the Company’s Health & Science Technologies, Global Dispensing and Fire & Safety/Diversified Products business segments. From February 2010 to December 2010, Mr. Silvernail was Vice President Group Executive of the Company’s Health & Sciences Technologies and Global Dispensing business segments. Mr. Silvernail joined IDEX | in January 2009 as Vice President Group Executive of Health & Science Technologies. | |||||
Mr. Silvernail was appointed Chairman of the Board effective January 1, 2012. Mr. Silvernail has served as President and Chief Executive Officer and a director of the Company since August 10, 2011. Prior to his appointment as President and Chief Executive Officer, Mr. Silvernail served since January 2011 as Vice President Group Executive of the Company’s Health & Science Technologies, Global Dispensing and Fire & Safety/Diversified Products business segments. From February 2010 to December 2010, Mr. Silvernail was Vice President Group Executive of the Company’s Health & Sciences Technologies and Global Dispensing business segments. Mr. Silvernail joined IDEX in January 2009 as Vice President Group Executive of Health & Science Technologies. Mr. Silvernail is a director of Stryker Corporation.
Mr. Silvernail’s relevant experience with engineering and technology industries in general, together with his extensive management experience, led to the conclusion that he should serve on the Board of Directors.
Mr. Silvernail received his bachelor of science degree in government from Dartmouth College and his masters of business administration degree from Harvard University.
Mr. Silvernail is a director of Stryker Corporation.
| Katrina L. Helmkamp Age: 51 Director since November 2015 Independent Committees: Compensation Nominating and Corporate Governance | Ms. Helmkamp has served as Chief Executive Officer of Lenox Corporation since November 2016. Previously, Ms. Helmkamp served as Chief Executive Officer of SVP Worldwide from 2010 through 2014, and as Senior Vice President, North America Product for Whirlpool Corporation from 2008 to 2010. |
Ms. Helmkamp’s operating leadership skills and her experience across multiple markets and technologies led to the conclusion that she should serve on the Board of Directors. During her time at SVP Worldwide and Whirlpool Corporation, Ms. Helmkamp was responsible for managing the operations and profitability of global businesses that derived a substantial portion of their revenues from outside of the United States.
In addition, Ms. Helmkamp successfully oversaw numerous new product development and technology initiatives, including the launch of new products and service categories with improved margins and quality. Ms. Helmkamp also has significant mergers and acquisitions experience, both in identifying and evaluating potential targets, as well as leading post-acquisition integration activities.
Ms. Helmkamp received her bachelor of science degree in industrial engineering and her masters of business administration from Northwestern University.
Other Incumbent DirectorsOTHER INCUMBENT DIRECTORS
Class II: Three-Year Term Expires in 20152018
| William M. Cook Age: 63 Director since February 2008 Independent Committees: Audit | Mr. Cook is our Lead Director. He served as Chairman of the Board of Donaldson Company, Inc. from prior to 2009 to April | ||
| Mr. Cook’s strong business and | |||
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| organizational leadership skills and his relevant experience in technology industries led to the conclusion that he should serve on the Board of Directors. Throughout his35-year career at Donaldson, a technology-driven global company that manufactures filtration systems designed to remove contaminants from air and liquids, Mr. Cook served in several senior executive positions, and was elected as a director in 2004. | ||||
Mr. Cook has served as Chairman, President and Chief Executive Officer of Donaldson Company, Inc. since prior to 2008. Mr. Cook is a director of Donaldson Company and Valspar Corporation.
Mr. Cook’s strong business and organizational leadership skills and his relevant experience in technological industries led to the conclusion that he should serve on the Board of Directors. Mr. Cook is a 33-year veteran of Donaldson Company, a technology-driven global company that manufactures filtration systems designed to remove contaminants from air and liquids. Throughout his career at Donaldson Company, Mr. Cook has served in several senior executive positions, and was elected as a director in 2004. Mr. Cook received a bachelor of science degree in business administration and a master of business administration degree from Virginia Polytechnic Institute and State University.
Mr. Cook is a memberdirector of the Audit Committee of the Board of Directors.Valspar Corporation and Neenah Paper, Inc.
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Mr. Tokarz has been a member of The Tokarz Group L.L.C. since prior to 2008. Mr. Tokarz is a director of CNO Financial Group, MVC Capital, Inc., Walter Investment Management Corp., Walter Energy, Inc., and Mueller Water Products, Inc.
Mr. Tokarz’s knowledge and experience in banking and finance, his entrepreneurial and business leadership skills, his extensive board experience, his corporate governance training and his prominent position in the business community led to the conclusion that he should serve on the Board of Directors. Mr. Tokarz is a senior investment professional with over 30 years of lending and investment
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experience. He has extensive experience in leveraged buyouts, financings, restructurings and dispositions. He is currently the Chairman of The Tokarz Group L.L.C., a private, New York-based merchant bank founded by Mr. Tokarz in 2002, and Chairman and Portfolio Manager of MVC Capital, Inc., a registered investment company advised by The Tokarz Group. Mr. Tokarz has served on the boards of publicly traded companies for over 20 years. Through his executive experience and board memberships, Mr. Tokarz has acquired substantial experience in corporate governance. Mr. Tokarz chairs the board of directors of the Illinois Emerging Technologies Fund and is a member of the Illinois VENTURES board of managers. Mr. Tokarz received a bachelor of arts degree in economics, with high distinction, and a master of business administration degree from the University of Illinois at Urbana-Champaign. Mr. Tokarz is a certified public accountant.
Mr. Tokarz is Lead Director of the Board of Directors, Chairman of the Compensation Committee and a member of the Nominating and Corporate Governance Committee of the Board of Directors.
 | Cynthia J. Warner Age: 58 Director since February 2013 Independent Committees: Compensation Nominating and Corporate Governance | |||
| Ms. Warner has been Executive Vice President, Operations for Tesoro Corporation since August 2016. Prior to that, Ms. Warner served as Tesoro’s Executive Vice President, Strategy and Business Development, since October 2014. From 2012 to 2014, Ms. Warner was Chairman and Chief Executive Officer | ||||
of Sapphire Energy, Inc. From | ||||
| 2009 to 2011, Ms. Warner was Chairman and President of Sapphire Energy. Prior to 2009, Ms. Warner was Group Vice President, Global Refining, BP plc. | ||||
Ms. Warner has been Chairman and Chief Executive Officer of Sapphire Energy, Inc. since 2012. From 2009 to 2011, Ms. Warner was Chairman and President of Sapphire Energy. From prior to 2008, Ms. Warner was Group Vice President, Global Refining, BP plc.
Ms. Warner’s operating leadership skills, international experience and extensive experience in the energy, refining and transportation industries led to the conclusion that she should serve on the Board of Directors. During her 25 years at BP and Amoco, Inc., Ms. Warner gained significant knowledge of the global energy industry and served in numerous leadership roles, including overseeing BP’s Global Refining business and its Health Safety Security Environment, with a consistent record of success in coordinating the operations of thousands of employees across BP’s global facilities.
In her current role as Chief Executive Officer of Sapphire Energy, an alternative energy venture, Ms. Warner has overseenhad oversight responsibility for the raising of substantial investment capital and the successful completion of a new demonstration facility for the company.
Ms. Warner received a bachelor of engineering degree in chemical engineering from Vanderbilt University and a masters of business administration degree from Illinois Institute of Technology.
Ms. Warner
 | Mark A. Buthman Age: 56 Director since April 2016 Independent Committees: Audit | Mr. Buthman retired fromKimberly-Clark Corporation in 2015, where he was Executive Vice President and Chief Financial Officer from January 2003 to April 2015. During his33-year career at Kimberly-Clark, Mr. Buthman held a wide range of leadership roles and was part of an executive team that created more | ||
| than $20 billion in shareholder value since the end of 2002. | ||||
Mr. Buthman’s experience as a Chief Financial Officer of a Fortune 150 company with significant international operations and as a public company director makes him a tremendous asset to IDEX. Mr. Buthman is a memberdisciplined financial leader with a track record of allocating capital in shareholder-friendly ways and his insight is extremely valuable to our Board and management.
Mr. Buthman graduated from the NominatingUniversity of Iowa with a degree in finance and Corporate Governance Committeebusiness.
Mr. Buthman is a director of the Board of Directors. Effective April 8, 2014, Ms. Warner will become a member of the Compensation Committee of the Board of Directors.West Pharmaceutical Services, Inc.
Class III: Three-Year Term Expires in 20162019
 | Ernest J. Mrozek Age: 63 Director since July 2010 Independent Committees: Audit (Chairman) | |||
| ||||
of The ServiceMaster Company until his retirement in March 2008. Mr. Mrozek’s strategic and operating leadership skills, his extensive experience and expertise in the | ||||
| business services industry and his financial reporting expertise led to the conclusion that he should serve on the Board of Directors. Through over 20 years of executive experience in various senior positions in general management, operations and finance at ServiceMaster, a residential and commercial service company, Mr. Mrozek developed extensive knowledge of the business services industry and gained valuable financial expertise and experience in mergers and acquisitions. | ||||
Mr. Mrozek served as Vice Chairman and Chief Financial Officer of The ServiceMaster Company from prior to 2008 until his retirement in March 2008. Mr. Mrozek is a director of G&K Services, Inc.
Mr. Mrozek’s strategic and operating leadership skills, his extensive experience and expertise in the business services industry and his financial reporting expertise led to the conclusion that he should serve on the Board of Directors. Through over 20 years of executive experience in various senior positions in general management, operations and finance at ServiceMaster, a residential and commercial service company, Mr. Mrozek developed extensive knowledge of the business services industry and gained valuable financial expertise and experience in mergers and acquisitions. Prior to joining ServiceMaster in 1987, Mr. Mrozek spent 12 years in public accounting with Arthur Andersen & Co. Mr. Mrozek has also acquired substantial experience in corporate governance as a director on the boards of several public and private companies.
Mr. Mrozek received a bachelor of science degree in accountancy with honors from the University of Illinois and is a certified public accountant.accountant, on inactive status.
Mr. Mrozek is Chairmana director of the Audit Committee of the Board of Directors.G&K Services, Inc.
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 | David C. Parry Age: 63 Director since December 2012 | |||
Committees: Compensation Nominating and Corporate Governance (Chairman) | ||||
Mr. Parry has served as Vice Chairman Mr. Parry’s strategic and operating | ||||
Mr. Parry has served as Vice Chairman of Illinois Tool Works Inc. (ITW) since 2010. From prior to 2008 until 2010, Mr. Parry was Executive Vice President of ITW with responsibility for the Polymers and Fluids Group.
Mr. Parry’s strategic and operating leadership skills and global commercial perspective gained from over 30 years of international business leadership experience, his significant acquisition experience and his extensive expertise in the industrial products manufacturing industry led to the conclusion that he should serve on the Board of Directors. During 18 years of executive and management experience in various senior management positions at ITW, a multinational manufacturer of a diversified range of industrial products and equipment, Mr. Parry has successfully grown the operations and profitability of multiple business units and helped ITW complete numerous acquisitions.
Prior to joining ITW in 1994, Mr. Parry spent 17 years in various executive and management positions at Imperial Chemical Industries, which at the time was one of the largest chemical producers in the world.
Mr. Parry received a bachelor of science degree in chemistry, a master of science degree in chemistry and a Ph.D. in polymer chemistry from Victoria University of Manchester, Manchester, England.
Mr. Parry is a memberdirector of the Audit Committee of the Board of Directors.Celanese Corporation.
 | Livingston L. Satterthwaite Age: 56 Director since April 2011 | |||
Committees: Compensation (Chairman) Nominating and Corporate Governance | ||||
Mr. Satterthwaite has served as Mr. Satterthwaite’s business leadership | ||||
| and sales skills, international experience and extensive experience in industrial manufacturing led to the conclusion that he should serve on the Board of Directors. Since joining Cummins in 1988, Mr. Satterthwaite has held various positions at Cummins Power Generation and other divisions of Cummins, including 14 years in managerial and sales positions in the United Kingdom and Singapore. | ||||
Mr. Satterthwaite has served as President of Cummins Power Generation, a unit of Cummins, Inc., since June 2008. From prior to 2008, Mr. Satterthwaite was Vice President, Generator Set Business at Cummins Power Generation.
Mr. Satterthwaite’s business leadership and sales skills, international experience and extensive experience in industrial manufacturing led to the conclusion that he should serve on the Board of Directors. Since joining Cummins in 1988, Mr. Satterthwaite has held various positions at Cummins Power Generation and other divisions of Cummins, including 14 years in managerial and sales positions in the United Kingdom and Singapore. Prior to joining Cummins, Mr. Satterthwaite spent four years at Schlumberger Limited, an oilfieldoil field services provider, as a General Field Engineer. general field engineer.
Mr. Satterthwaite received a bachelor of science degree in civil engineering from Cornell University and a mastersmaster in business administration degree from Stanford University.
Mr. Satterthwaite is a member of the Audit Committee of the Board of Directors. Effective April 8, 2014, Mr. Satterthwaite will become a member of the Compensation Committee, and will cease to be a member of the Audit Committee, of the Board of Directors.
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Information Regarding the Board of Directors and CommitteesFramework for Corporate Governance
The Board of Directors has the ultimate authority for the management of the Company’s business. In November 2013, the Board amended the Company’sThe Corporate Governance Guidelines, to add the plurality plus voting standard described in Proposal 1 and otherwise affirmed the Guidelines which, along with the charters of the Board committees, the Code of Business Conduct and Ethics, and the Standards for Director Independence provide the framework for the governance of the Company. The Corporate Governance Guidelines address matters such as composition, election of directors, size and retirement age for the Board, Board membership criteria, the role and responsibilities of the Board, director compensation, share ownership guidelines, and the frequency of Board meetings (including meetings to be held without the presence of management). The Code of Business Conduct and Ethics sets forth the guiding principles of business ethics and certain legal requirements applicable to all of the Company’s employees and directors. Copies of the current Corporate Governance Guidelines, the charters of the Board committees, the Code of Business Conduct and Ethics, and the Standards for Director Independence are available under the Investor Relations links on the Company’s website at www.idexcorp.com.
The Board selects the Company’s executive officers, delegates responsibilities for the conduct Corporate Governance Guidelines and Code
of the Company’s operations to those officers,Business Conduct and monitors their performance. Without limiting the generality of the foregoing, the Board of Directors oversees an annual assessment of enterprise risk exposure, and the management of such risk, conducted by the Company’s executives. When assessing enterprise risk, the Board focuses on the achievement of organizational objectives, including strategic objectives, to improve long-term performance and enhance stockholder value. Direct oversight allows the Board to assess management’s inclination for risk, to determine what constitutes an appropriate level of risk for the Company and to discuss with management the means by which to control risk. In addition, while the Board of Directors has the ultimate oversight responsibility for the risk management process, the Audit Committee focuses on financial risk management and exposure, and legal compliance. The Audit Committee receives an annual risk assessment report from the Company’s internal auditors and reviews and discusses the Company’s financial risk exposures and the steps management has taken to monitor, control and report those exposures.Ethics
The Company’s By-laws permit the Board to select its Chairman in the manner it determines to be most appropriate. The Corporate Governance Guidelines provide that, ifaddress matters such as election of directors, size and retirement age for the ChairmanBoard, Board composition and membership criteria, the role and responsibilities of the Board, is notdirector compensation, share ownership guidelines, and the Chief Executive Officer,frequency of Board meetings (including meetings to be held without the presence of management).
The Code of Business Conduct and is an independent director, there shall be no Lead Director. IfEthics sets forth the Chairmanguiding principles of business ethics and certain legal requirements applicable to all of the Board is the Chief Executive Officer or is not an independent director, the independent directors shall elect an independent Lead Director. In connection with Mr. Silvernail’s appointment as Chairman, the Board appointed Michael T. Tokarz as Lead Director. The responsibilities of the Lead Company’s employees and directors.
Coordinating the activities of the independent directors;
Reviewing the Board meeting agendas and providing the Chairman with input on the agendas;
Preparing the agendas for executive session of the independent directors and chairing those sessions;
Facilitating communications between the Chairman and other members of the Board; and
Coordinating the performance evaluation of the Chief Executive Officer.
The independent non-management directors of the Board meet separately as a group at every regularly scheduled Board meeting. The Lead Director generally presides at these non-management executive sessions. During 2013, the Board held six meetings.
The Board believes that its current leadership structure provides independent board leadership and engagement while deriving the benefit of having the CEO also serve as Chairman of the Board. The Chief Executive Officer, as the individual with primary responsibility for managing the Company’s
8
day-to-day operations, is best positioned to chair regular Board meetings and to oversee discussion on business and strategic issues. Coupled with the existence of a Lead Director and regular executive sessions of the non-management directors, this structure provides independent oversight, including risk oversight, while facilitating the exercise of the Board’s responsibilities.Independence
The Board has adopted standards for determining whether a director is independent. These standards are based upon the listing standards of the New York Stock Exchange (NYSE) and applicable laws and regulations, and are available on the Company’s website as described above. The Board also reviewed commercial relationships between the Company and organizations with which directors were affiliated by service as an executive officer. The
relationships with these organizations involved
the Company’s sale or purchase of products or services in the ordinary course of business that were made onarm’s-length terms and other circumstances that did not affect the relevant directors’ independence under applicable law and NYSE listing standards.
The Board has affirmatively determined, based on these standards and after considering the relationships described immediately above, that the following directors two of whom are standing for election to the Board, are independent: Messrs. Bell,Buthman, Cook, Milzcik1, Mrozek, Parry and Satterthwaite, and Tokarz,Mss. Helmkamp and Ms. Warner. The Board has also determined that Mr. Silvernail who is standing for election to the Board, is not independent. Mr. Silvernailindependent because he is the Chairman of the Board, President and Chief Executive Officer of the Company. The Board has also determined that all Board standing committees are, and throughout fiscal year 2016 were, composed entirely of independent directors.
Important functions ofDirector Nominations
The Board believes that maintaining a diverse membership with varying backgrounds, skills, expertise and other differentiating personal characteristics promotes inclusiveness, enhances the Board’s deliberations and enables the Board are performed by committees comprised of members of the Board. Subject to applicable provisionsbetter represent all of the Company’s By-laws and based on the recommendations of the Nominating and Corporate Governance Committee,constituents. Accordingly, the Board is committed to seeking out highly qualified women and minority candidates as a whole appoints the memberswell as candidates with diverse backgrounds, skills and experiences as part of each committee each year at its first meeting.Board search the Company conducts. The Board may, at any time, appoint or remove committee members or changeconsiders the authority or responsibility delegated to any committee, subject to applicable law and listing standards. There are three standing committees of the Board: the Nominating and Corporate Governance Committee, the Audit Committee, and the Compensation Committee. Each committee has a written charter that is available on the Company’s website as described above.
The Nominating and Corporate Governance Committee’s primary purpose and responsibilities are to: develop and recommend to the Board corporate governance principles and a code of business conduct and ethics; develop and recommend criteria forfollowing in selecting new directors; identify individuals qualified to become directors consistent with criteria approved by the Board, and recommend to the Board such individuals as nominees to the Board for its approval; make recommendations to the Board regarding any director who submits an offer of resignation by reason of the plurality plus voting standard under the Company’s Corporate Governance Guidelines; screen and recommend to the Board individuals qualified to become Chief Executive Officer and any other senior officer whom the committee may wish to approve; and oversee evaluations of the Board, individual Board members and Board committees. The members of the Nominating and Corporate Governance Committee are Messrs. Bell and Tokarz, and Ms. Warner. During 2013, the Nominating and Corporate Governance Committee held three meetings.
It is the policy of the Nominating and Corporate Governance Committee to consider nominees for the Board recommended by the Company’s stockholders in accordance with the procedures described under “STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR 2015 ANNUAL MEETING” below. Stockholder nominees who are nominated in accordance with these procedures will be given the same consideration as nominees for director from other sources.Board:
The Nominating and Corporate Governance Committee selects nominees for the Board who demonstrate the following qualities:
Experience(in (in one or more of the following):
high-levelhigh level leadership experience in business or administrative activities;
specialized expertise in the industries in which the Company competes;
financial expertise;
| 1 | Mr. Milzcik is retiring from the Board immediately following the Annual Meeting. |
ability and willingness to contribute special competencies to Board activities.
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Personal attributes:attributes and characteristics:
personal integrity;
loyalty to the Company and concern for its success and welfare, and willingness to apply sound independent business judgment;
awareness of a director’s vital part in the Company’s good corporate citizenship and corporate image;
time available for meetings and consultation on Company matters; and
willingness to assume fiduciary responsibilities.
Qualified candidates for membership on the Board are identified and considered based on the qualities described above, withoutshall not be discriminated against with regard to age, race, color, religion, sex, ancestry, national origin, sexual orientation or disability. In the past, the Company has engaged executive search firms to help identify and facilitate the screening and interviewing of director candidates. Any search firm retained by the Company to find director candidates is instructed to take into account all of the considerations used by our Nominating and Corporate Governance Committee, including diversity. After conducting an initial evaluation of a candidate, the Nominating and Corporate Governance Committee will interview that candidate if it believes the candidate is suitable
to be a director. The Committee may also ask the candidate to meet with other members of the Board.
If the Committee believes a candidate would be a valuable addition to the Board, it will recommend to the full Board appointment or election of that candidate. Annually, the Nominating and Corporate Governance Committee reviews the qualifications and backgrounds of the directors, as well as the overall composition of the Board, and recommends to the full Board the slate of directors for nomination for election at the annual meeting of stockholders.
The Audit Committee’s primary duties and responsibilities are to: monitorCompany’s Bylaws permit the integrityBoard to select its Chairman in the manner it determines to be most appropriate. The Corporate Governance Guidelines provide that, if the Chairman of the Company’s financial reporting process and systems of internal control regarding finance, accounting and legal compliance; monitor the independence and performance of the Company’s independent registered public accounting firm and monitor the performance of the Company’s internal audit and compliance functions; hire and fire the Company’s independent registered public accounting firm and approve any audit and non-audit work performed by the independent registered public accounting firm; provide an avenue of communication among the independent registered public accounting firm, management and the Board; prepare the report that the rules of the Securities and Exchange Commission (SEC) require to be included in the Company’s annual proxy statement; and administer the Company’s Related Person Transactions Policy (see “Transactions With Related Persons” below). The members of the Audit Committee are Messrs. Cook, Mrozek, Parry and Satterthwaite. Effective April 8, 2014, Mr. Satterthwaite will cease to be a member, and Mr. Milzcik will become a member of the Audit Committee. The Board has determined that each of Messrs. Cook and Mrozek is an “audit committee financial expert,” as defined by the rules of the SEC. During 2013, the Audit Committee held 10 meetings.
The Compensation Committee’s primary duties and responsibilities are to: establish the Company’s compensation philosophy and structure the Company’s compensation programs to be consistent with that philosophy; establish the compensation ofnot the Chief Executive Officer, and other senior officers; develop and recommend tois an independent director, there shall be no Lead Director. If the Chairman of the Board compensation foris the directors; and prepareChief Executive Officer or is not an independent director, the compensation committee reportindependent directors shall elect an independent Lead Director.
William M. Cook has served as Lead Director since immediately following the rules2015 Annual Meeting. The responsibilities of the SEC require to be included inLead Director include:
To assist the Compensation Committee in discharging its responsibilities, the Compensation Committee retained Towers Watson to act as an outside consultant. Towers Watson is engaged by, and reports directly to, the Compensation Committee. The Compensation Committee has reviewed the natureindependentnon-management directors of the relationship between itselfBoard meet separately as a group at every regularly scheduled Board meeting. The Lead Director generally presides at thesenon-management executive sessions. During 2016, the Board held eight meetings.
The Board believes that its current leadership structure provides independent board leadership and Towers Watson, including all personal and business relationships betweenengagement while deriving the committee members, Towers Watson andbenefit of having the Chief Executive Officer also serve as Chairman of the Board.
The Chief Executive Officer, as the individual compensation consultants who provide advicewith primary responsibility for managing the Company’sday-to-day operations, is best positioned to the Compensation Committee. Basedchair regular Board meetings and to oversee discussion on its review the Compensation Committee did not identify any actual or potential conflicts of interest in Towers Watson’s engagement as an independent consultant. Towers Watson worksbusiness and strategic issues. Coupled with the Compensation Committeeexistence of a Lead Director and management toregular executive sessions of thenon-management directors, this structure provides independent oversight, including risk oversight, while facilitating the Company’s compensation programs and evaluate the
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competitiveness of its executive compensation levels. Towers Watson’s primary areas of assistance to the Compensation Committee are:
Analyzing market compensation data for all executive positions;
Advising on the structureexercise of the Company’s compensation programs;
Advising on the terms of equity awards;
Reviewing the risk associated with the Company’s compensation programs; and
Reviewing materials to be used in the Company’s proxy statement.
Towers Watson periodically provides the Compensation Committee and management market data on a variety of compensation-related topics. The Compensation Committee authorized Towers Watson to interact with the Company’s management, as needed, on behalf of the Compensation Committee, to obtain or confirm information.Board’s responsibilities.
During 2013,2016, each director attended more than 75% of the aggregate number of meetings of the Board and of committees of the Board of which he or she was a member. The Company encourages its directors to attend the annual meeting of stockholders but has no formal policy with respect to that attendance. All of the directors attended the 20132016 Annual Meeting of Stockholders.
Compensation Committee InterlocksRisk Oversight
The Board of Directors oversees an annual assessment of enterprise risk exposure, and Insider Participationthe management of such risk, conducted by the Company’s executives.
During 2013, Messrs. Bell, MilzcikWhen assessing enterprise risk, the Board focuses on the achievement of organizational objectives, including strategic objectives, to improve long-term performance and Tokarz served asenhance stockholder value. Direct oversight allows the members
Board to assess management’s inclination for risk, to determine what constitutes an appropriate level of the Compensation Committee. Neither Mr. Bell, Mr. Milzcik nor Mr. Tokarz (i) was an officer or employee ofrisk for the Company or any of its subsidiaries during 2013, (ii) was formerly an officer ofand to discuss with management the Company or any of its subsidiaries, or (iii) had any relationship requiring disclosuremeans by the Company under Item 404 of Regulation S-K under the Securities Act of 1933, as amended. There were no relationships betweenwhich to control risk.
The Board selects the Company’s executive officers, delegates responsibilities for the conduct of the Company’s operations to those officers, and monitors their performance.
Stockholders and other interested parties may contact the Board and the directors by writing to Denise R. Cade, Senior Vice President, General Counsel and Corporate Secretary, IDEX Corporation, 1925 West Field Court, Suite 200, Lake Forest, Illinois 60045. Inquiries sent by mail will be reviewed, sorted and summarized by Ms. Cade before they are forwarded to any director.
Important functions of the Board are performed by committees comprised of members of the Board. There are three standing committees of the Board: the Audit Committee, the Compensation Committee, and the Nominating and Corporate Governance Committee. Each committee has a written charter that is available on the Company’s website as described above.
Subject to applicable provisions of the Company’s Bylaws and based on the recommendations of the Nominating and Corporate Governance Committee, the Board as a whole appoints the members of each committee each year at its first meeting. The Board may, at any time, appoint or remove committee members or change the Compensationauthority or responsibility delegated to any committee, subject to applicable law and NYSE listing standards.
The following table summarizes the current membership of the committees of the Board. Mr. Buthman joined the Audit Committee
following his appointment to the Board in April 2016.
| Director | Audit Committee2 | Compensation Committee | Nominating and Corporate Governance Committee | |||
| Mark A. Buthman | Ö | |||||
| William M. Cook | Ö | |||||
| Katrina L. Helmkamp | Ö | Ö | ||||
| Gregory F. Milzcik | Ö | |||||
| Ernest J. Mrozek | Ö | |||||
| David C. Parry | Ö | Ö | ||||
| Livingston L. Satterthwaite | Ö | Ö | ||||
| Cynthia J. Warner | Ö | Ö |
Pursuant to its charter, the Audit Committee has the authority and responsibility to:
2 Mr. Milzcik is retiring from the Board immediately following the Annual Meeting.
While the Board of Regulation S-K.
Transactions with Related PersonsDirectors has the ultimate oversight responsibility for the risk management process, the Audit Committee focuses on financial risk management and exposure, and legal compliance. The Audit Committee receives an annual risk assessment report from the Company’s internal auditors and reviews and discusses the Company’s financial risk exposures and the steps management has taken to monitor, control and report those exposures.
The Board has determined that each of Messrs. Buthman, Cook, Milzcik and Mrozek is an “audit committee financial expert,” as defined by SEC rules, and is independent, as defined by the NYSE listing standards.
The Audit Committee has adopted a written Related Person Transactions Policy regarding the review, approval and ratification of transactions with related persons. All related person transactions are approved by the Audit Committee. If the transaction involves a related person who is a directoran Audit Committee member or immediate family member of a director,an Audit Committee member, that directorAudit Committee member will not be included in the deliberations regarding approval. In approving the transaction, the Audit Committee must determine that the transaction is fair and reasonable to the Company. At the first Audit Committee meeting of each calendar year, or a subsequent meeting if the Audit Committee so chooses, the Audit Committee reviews any previously approved or ratified related person transactions that remain ongoing and have a remaining term of more than six months or remaining amounts payable to or receivable from the Company of more than $10,000. Based on all relevant facts and circumstances, taking into consideration the Company’s contractual obligations, the Audit
Committee determines if it is in the best interests of the Company and its stockholders to continue, modify or terminate any such related person transactions.
During 2016, the Audit Committee held eleven meetings.
The Compensation Committee’s primary duties and responsibilities are to:
To assist the Compensation Committee in discharging its responsibilities, the Compensation Committee retained Frederic W. Cook & Co., Inc. (F.W. Cook) to act as an outside consultant. F.W. Cook is engaged by, and reports directly to, the Compensation Committee.
The Compensation Committee has reviewed the nature of the relationship between itself and F.W. Cook, including all personal and business relationships between the committee members, F.W. Cook and the individual compensation consultants who provide advice to the Compensation Committee. Based on its review, the Compensation Committee did not identify any actual or potential conflicts of interest in F.W. Cook’s engagement as an independent consultant.
F.W. Cook works with the Compensation Committee and management to structure the
Company’s compensation programs and evaluate the competitiveness of its executive compensation levels. F.W. Cook’s primary areas of assistance to the Compensation Committee are:
F.W. Cook periodically provides the Compensation Committee and management market data on a variety of compensation-related topics. The Compensation Committee authorized F.W. Cook to interact with the Company’s management, as needed, on behalf of the Compensation Committee, to obtain or confirm information.
During 2016, Ms. Helmkamp, Mr. Parry, Mr. Satterthwaite and Ms. Warner served as members of the Compensation Committee. None of these directors (i) was an officer or employee of the Company or any of its subsidiaries during 2016, (ii) was formerly an officer of the Company or any of its subsidiaries, or (iii) had any relationship requiring disclosure by the Company under Item 404 of RegulationS-K under the Securities Act of 1933, as amended. There were no relationships between the Company’s executive officers and the members of the Compensation Committee that require disclosure under Item 407(e)(4) of RegulationS-K.
During 2016, the Compensation Committee held six meetings.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee’s primary purpose and responsibilities are to:
vacancy and any other senior officer whom the committee may wish to approve; and |
It is the policy of the Nominating and Corporate Governance Committee to consider nominees for the Board recommended by the Company’s stockholders in accordance with the procedures described under “STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR 2018 ANNUAL MEETING” below. Stockholder nominees who are nominated in accordance with these procedures will be given the same consideration as nominees for director from other sources.
During 2016, Ms. Helmkamp, Mr. Parry, Mr. Satterthwaite and Ms. Warner served as members of the Nominating and Corporate Governance Committee.
During 2016, the Nominating and Corporate Governance Committee held three meetings.
Compensation of DirectorsCOMPENSATION OF DIRECTORS
The objectives of our director compensation program are to attract highly-qualified individuals to serve on our Board of Directors and to align our directors’ interests with the interests of our stockholders. The Compensation Committee reviews the program at least annually to ensure that it continues to meet these objectives.
The Company believes that to attract and retain qualified directors, pay levels should be targeted at the 50th percentile (or median) of pay levels for directors at comparable companies. From time to time, the Compensation Committee, with the assistance of Towers Watson,F.W. Cook, evaluates the competitiveness of director compensation. The primary reference point for the determination of market pay is the peer group of companiescompanies. For 2016, the peer group used to benchmarkin this analysis was the same peer group used for the Company’s executive compensation. compensation analysis.
For further details on this topic, refer to “Market Benchmarking”“Use of Market Data” under “Compensation Process and Oversight”“Setting Executive Compensation” in the Compensation Discussion and Analysis below. Market composite data derived from pay surveys available to Towers WatsonF.W. Cook and to the Company is also used.
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Our director compensation for 20132016 was based on the following:as follows:
Annual Retainer and Meeting Fees | $ | 65,000 | ||
Committee Chair Retainer | ||||
Audit Committee | $ | 15,000 | ||
Compensation Committee | $ | 10,000 | ||
Nominating and Corporate Governance Committee | $ | 8,000 | ||
Lead Director Fees | ||||
Annual Retainer | $ | 15,000 | ||
Annual Equity Grant | $ | 15,000 | ||
Stock Options | 50% of Value | |||
Restricted Stock | 50% of Value | |||
Value of Equity Grants Upon Initial Election to the Board | $ | 127,500 | ||
Stock Options | 50% of Value | |||
Restricted Stock | 50% of Value | |||
Value of Annual Equity Grants | $ | 85,000 | ||
Stock Options | 50% of Value | |||
Restricted Stock | 50% of Value |
Annual Retainer and Meeting Fees | $ 85,000 | |
Committee Chair Retainer | ||
Audit Committee | $ 15,000 | |
Compensation Committee | $ 10,000 | |
Nominating and Corporate Governance Committee | $ 8,000 | |
Lead Director Fees | ||
Annual Retainer | $ 15,000 | |
Annual Equity Grant | $ 15,000 | |
Restricted Stock Units | 100% of Value | |
Value of Equity Grants Upon Initial Election to the Board | Pro-rated annual grant | |
Restricted Stock Units | 100% of Value | |
Value of Annual Equity Grants | $ 120,000 | |
Restricted Stock Units | 100% of Value |
Equity grants upon initial election to the Board of Directors are made on the date of appointment. Annual equity grants are made on the first regularly scheduled meeting of the Board held each year. All grants are structured to provide approximately 50% of the expected value in the form of stock options and 50%100% of the expected value in the form of restricted stock unit awards, and are made under the IDEX Corporation Incentive Award Plan (Incentive Award Plan). The exercise price of each option is equal to the closing price of the Company’s Common Stock on the trading day the option is granted. The options become exercisable one year following their date of grant.
The restricted stock vestsunits vest in full on the earliest of the third anniversary of the grant, retirement, failure of the director to bere-elected to the Board, or a change in control of the Company. The restricted stock is units arenon-transferable until the recipient is no longer serving as a director, and isare subject to forfeiture if the director terminates service as a director for reasons other than death, disability, retirement, or retirement.failure to bere-elected to the Board.
Since the start of 2015, directors have had the ability to defer payment of all or a portion of their annual equity grant.
Directors Deferred Compensation Plan
Under the Company’s Directors Deferred Compensation Plan, directors are permitted to defer their cash compensation as of the date their compensation would otherwise be payable. In general, directors must make elections to defer fees payable during a calendar year by the end of the preceding calendar year. Newly elected directors have up to 30 days to elect to defer future fees.
All amounts deferred are recorded in a memorandum account for each director and are credited or debited with earnings or losses as if such amounts had been invested in an interest-bearing account or receive an investment return as if the funds were invested in certain mutual funds, at the option of the director. The deferred compensation credited to the interest-bearing account is adjusted on at least a quarterly basis with hypothetical earnings equal to the lesser of the Barclays Capital Long Term Bond AAA — Corporate Bond Index as of the first business day in November of the calendar year preceding the year for which the earnings are to be credited
or 120% of the long-term applicable Federalfederal rate (AFR) as of the first business day in November.
In accordance with SEC rules, no earnings on deferred compensation are shown in the Director Compensation table below because no “above market” rates were earned on deferred amounts in 2013.2016. Directors must elect irrevocably to receive the deferred funds either in a lump sum or in equal annual installments of up to 10 years, and to begin receiving distributions either at termination of Board service or at a future specified date.
If a director should die before all amounts credited under the Directors Deferred Compensation Plan have been paid, the unpaid balance in the participating director’s account will be paid to the director’s beneficiary. The memorandum accounts are not funded, and the right to receive future payments of amounts
recorded in these accounts is an unsecured claim against the Company’s general assets.
12
Non-management directors are subject to stock ownership guidelines.Non-management directors must comply with the guidelines within five years of their initial election to the Board. The guidelines dictate that allnon-management directors must purchase or acquire shares of the Company’s Common Stock having an aggregate value at the time of purchase or acquisition equal to threefive times the current annual retainer in effect upon their election to the Board. retainer.
As of December 31, 2013,2016, all directors were either compliedin compliance with the ownership guidelines or were proceeding towards meeting the ownership guidelines within the applicable five-year period.
The following table summarizes the total compensation earned in 20132016 for the Company’s non-management directors. Ruby Chandy served as a director from January 1, 2013 until her retirement on April 9, 2013. She earned $16,250 for her services as a director. Mr. Silvernail receives no additional compensation for his service as a director.
2013 Director Compensation
Name | Fees Earned or Paid in Cash | Stock Awards(1)(2) | Option Awards(1)(2) | Total | Fees Earned or Paid in Cash
| Stock Awards (1) (2) | All Other Compensation (3) | Total | ||||||||||||||||
Bradley J. Bell | $ | 73,000 | $ | 42,630 | $ | 40,710 | $ | 156,340 | ||||||||||||||||
Mark A. Buthman
|
$63,750
|
$104,722
|
$—
|
$168,472
| ||||||||||||||||||||
William M. Cook | 68,750 | 42,630 | 40,710 | 152,090 |
100,000
|
135,000
|
10,000
|
245,000
| ||||||||||||||||
Katrina L. Helmkamp
|
85,000
|
120,000
|
—
|
205,000
| ||||||||||||||||||||
Gregory F. Milzcik | 65,000 | 42,630 | 40,710 | 148,340 |
85,000
|
120,000
|
10,000
|
215,000
| ||||||||||||||||
Ernest J. Mrozek | 76,250 | 42,630 | 40,710 | 159,590 |
100,000
|
120,000
|
10,000
|
230,000
| ||||||||||||||||
David C. Parry | 65,000 | 42,630 | 40,710 | 148,340 |
93,000
|
120,000
|
10,000
|
223,000
| ||||||||||||||||
Livingston L. Satterthwaite | 65,000 | 42,630 | 40,710 | 148,340 |
95,000
|
120,000
|
—
|
215,000
| ||||||||||||||||
Michael T. Tokarz | 90,000 | 50,198 | 47,925 | 188,123 | ||||||||||||||||||||
Cynthia J. Warner | 56,875 | 63,819 | 61,031 | 181,725 |
85,000
|
120,000
|
—
|
205,000
| ||||||||||||||||
| (1) | Reflects the aggregate grant date fair value in accordance with FASB ASC Topic 718 using the assumptions set forth in the footnotes to financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, |
| (2) | The following table provides information on the restricted stock, restricted stock units and stock option awards held by the Company’s non-management directors and the value of those awards as of December 31, |
Directors’ Outstanding Equity Awards at 2016 Fiscal Year End
13
| Option Awards | Stock Awards | Option Awards | Stock Awards
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Securities Underlying Unexercised Options | Option Exercise Price | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested(b) | Market Value of Shares or Units of Stock that Have Not Vested(c) | Number of Securities
| Number of
| Market Value Stock that
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Exercisable(a) | Unexercisable(a) | Grant Date | Type | # Shares | Shares
| Exercisable (a)
| Unexercisable (a)
| Option Price ($)
| Option
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Bradley J. Bell | 6,750 | 0 | $ | 25.70 | 02/02/2015 | 2,765 | $ | 204,195 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,375 | 0 | 30.67 | 02/02/2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,375 | 0 | 33.99 | 02/12/2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,250 | 0 | 30.85 | 02/20/2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,250 | 0 | 19.98 | 02/24/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,080 | 0 | 30.82 | 02/23/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,190 | 0 | 40.89 | 02/22/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,530 | 0 | 42.86 | 02/21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 3,075 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mark A. Buthman | 1,290 | 116,177 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
William M. Cook | 3,375 | 0 | 32.95 | 04/08/2018 | 2,765 | 204,195 | 04/08/08 | NQSO | 3,375 | 0 | 3,375 | 0 | 32.95 | 04/08/2018 | 4,920 | 443,095 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 2,250 | 0 | 19.98 | 02/24/2019 | 02/24/09 | NQSO | 2,250 | 0 | 2,250 | 0 | 19.98 | 02/24/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,080 | 0 | 30.82 | 02/23/2020 | 02/23/10 | NQSO | 4,080 | 0 | 4,080 | 0 | 30.82 | 02/23/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,190 | 0 | 40.89 | 02/22/2021 | 02/22/11 | NQSO | 3,190 | 0 | 3,190 | 0 | 40.89 | 02/22/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,530 | 0 | 42.86 | 02/21/2022 | 02/21/12 | NQSO | 3,530 | 0 | 3,530 | 0 | 42.86 | 02/21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 3,075 | 50.45 | 02/15/2023 | 02/15/13 | NQSO | 3,075 | 0 | 3,075 | 0 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Katrina L. Helmkamp | 2,025 | 182,372 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gregory F. Milzcik | 3,375 | 0 | 32.95 | 04/08/2018 | 2,765 | 204,195 | 4,530 | 407,972 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,250 | 0 | 19.98 | 02/24/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,080 | 0 | 30.82 | 02/23/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,190 | 0 | 40.89 | 02/22/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,530 | 0 | 42.86 | 02/21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 3,075 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ernest J. Mrozek | 6,650 | 0 | 28.20 | 07/01/2020 | 2,765 | 204,195 | 07/01/10 | NQSO | 6,650 | 0 | 6,650 | 0 | 28.20 | 07/01/2020 | 4,530 | 407,972 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 3,190 | 0 | 40.89 | 02/22/2021 | 02/22/11 | NQSO | 3,190 | 0 | 3,190 | 0 | 40.89 | 02/22/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,530 | 0 | 42.86 | 02/21/2022 | 02/21/12 | NQSO | 3,530 | 0 | 3,530 | 0 | 42.86 | 02/21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 3,075 | 50.45 | 02/15/2023 | 02/15/13 | NQSO | 3,075 | 0 | 3,075 | 0 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
David C. Parry | 4,930 | 0 | 45.08 | 12/06/2022 | 2,260 | 166,901 | 12/06/12 | NQSO | 4,930 | 0 | 4,930 | 0 | 45.08 | 12/06/2022 | 4,530 | 407,972 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 3,075 | 50.45 | 02/15/2023 | 02/15/13 | NQSO | 3,075 | 0 | 3,075 | 0 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Livingston L. Satterthwaite | 4,800 | 0 | 45.16 | 04/05/2021 | 3,095 | 228,566 | 04/05/11 | NQSO | 4,800 | 0 | 4,800 | 0 | 45.16 | 04/05/2021 | 4,530 | 407,972 | ||||||||||||||||||||||||||||||||||||||||||||||||
| 3,530 | 0 | 42.86 | 02/21/2022 | 02/21/12 | NQSO | 3,530 | 0 | 3,530 | 0 | 42.86 | 02/21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 3,075 | 50.45 | 02/15/2023 | 02/15/13 | NQSO | 3,075 | 0 | 3,075 | 0 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael T. Tokarz | 10,125 | 0 | 18.78 | 01/30/2014 | 3,085 | 227,827 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 6,750 | 0 | 25.70 | 02/02/2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,375 | 0 | 30.67 | 02/02/2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,375 | 0 | 33.99 | 02/12/2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,250 | 0 | 30.85 | 02/20/2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2,250 | 0 | 19.98 | 02/24/2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,080 | 0 | 30.82 | 02/23/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,190 | 0 | 40.89 | 02/22/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 4,160 | 0 | 42.86 | 02/21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 3,620 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cynthia J. Warner | 0 | 4,610 | 50.45 | 02/15/2023 | 1,265 | 93,420 | 02/15/13 | NQSO | 4,610 | 0 | 4,610 | 0 | 50.45 | 02/15/2023 | 4,530 | 407,972 | ||||||||||||||||||||||||||||||||||||||||||||||||
| (a) | All options expire on the |
| (b) | See footnote 1 to table under “SECURITY OWNERSHIP” below for vesting provisions. |
| (c) | Determined based upon the closing price of the Company’s Common Stock on December 31, |
| (3) | Reflects matching gifts of up to $10,000 per year directed to Internal Revenue Code 501(c)(3) tax-exempt, non-profit organizations under the IDEX Corporation Matching Gift Program. |
14
For 2014, the annual cash retainer was increased from $65,000 to $75,000, the annual equity award was increased from $85,000 to $110,000, and the initial equity award was reduced from 150% of the annual award to pro-ration of the annual award. Additionally, the equity awards are now granted 100% in restricted stock and the equity ownership guidelines were increased to five times the annual cash retainer (achievable in five years).
Communications with the Board of Directors
Stockholders and other interested parties may contact the Board, the non-management directors as a group or any of the individual directors, including the Lead Director, by writing to Frank J. Notaro, Vice President - General Counsel and Secretary, IDEX Corporation, 1925 West Field Court, Suite 200, Lake Forest, Illinois 60045. Inquiries sent by mail will be reviewed, sorted and summarized by Mr. Notaro before they are forwarded to any director.
15
The following table furnishes information as of February 14, 2014,March 1, 2017, except as otherwise noted, with respect to shares of the Company’s Common Stock beneficially owned by (i) each director and nominee for director, (ii) each officer named in the Summary Compensation Table, (iii) directors, nominees and executive officers of the Company as a group, and (iv) any person who is known by the Company to be a beneficial owner of more than five percent of the outstanding shares of Common Stock.
Except as indicated by the notes to the following table, the holders listed below have sole voting power and investment power over the shares beneficially held by them. Under SEC rules, the number of shares shown as beneficially owned includes shares of Common Stock subject to options that are exercisable currently or will be exercisable within 60 days of February 14, 2014.March 1, 2017. Shares of Common Stock subject to options that are exercisable within 60 days of February 14, 2014,March 1, 2017, are considered to be outstanding for the purpose of determining the percentage of the shares held by a holder, but not for the purpose of computing the percentage held by others. An * indicates ownership of less than one percent of the outstanding Common Stock.
For purposes of the following table, the addressesaddress for each of the directors, nominees for director and executive officers of the Company is c/o 1925 West Field Court, Suite 200, Lake Forest, Illinois 60045.
Name and Address of Beneficial Owner | Shares Beneficially Owned | Percent of Class | Shares Beneficially Owned | Percent of Class | ||||||||
Directors and Nominees (other than Named Executive Officers): | ||||||||||||
Bradley J. Bell(1) | 75,626 | * | ||||||||||
Mark A. Buthman(1) | 2,580 | * | ||||||||||
William M. Cook(1) | 28,690 | * | 32,358 | * | ||||||||
Katrina L. Helmkamp(1) | 3,315 | * | ||||||||||
Gregory F. Milzcik(1) | 26,690 | * | 9,980 | * | ||||||||
Ernest J. Mrozek(1) | 21,725 | * | 26,030 | * | ||||||||
David C. Parry(1) | 11,780 | * | 16,085 | * | ||||||||
Livingston L. Satterthwaite(1) | 16,102 | * | 20,407 | * | ||||||||
Michael T. Tokarz(1) | 367,801 | * | ||||||||||
Cynthia J. Warner(1) | 7,390 | * | 11,695 | * | ||||||||
Named Executive Officers: | ||||||||||||
Andrew K. Silvernail(2)(3) | 217,817 | * | 373,858 | * | ||||||||
Heath A. Mitts(2)(3) | 134,074 | * | ||||||||||
Frank J. Notaro(2)(3) | 96,749 | * | ||||||||||
Jeffrey D. Bucklew(2)(3) | 11,134 | * | ||||||||||
Michael J. Yates(2)(3) | 104,584 | * | ||||||||||
Heath A. Mitts(2) | 0 | * | ||||||||||
Eric D. Ashleman(2)(3) | 59,452 | * | ||||||||||
Denise R. Cade(2)(3) | 7,444 | * | ||||||||||
Daniel J. Salliotte(2)(3) | 56,084 | * | 62,853 | * | ||||||||
Directors, Nominees and All Executive Officers as a Group: (14 persons)(4) | 1,187,215 | 1.5 | ||||||||||
Directors, Nominees and All Executive Officers as a Group: (17 persons)(4) | 785,494 | 1.0% | ||||||||||
Other Beneficial Owners: | ||||||||||||
T. Rowe Price Associates, Inc.(5) | 7,838,430 | 9.6 | 8,193,262 | 10.7% | ||||||||
100 East Pratt Street Baltimore, Maryland 21202 | ||||||||||||
100 East Pratt Street, Baltimore, MD 21202 | ||||||||||||
BlackRock Inc.(6) | 5,110,673 | 6.3 | 6,044,747 | 7.9% | ||||||||
40 East 52nd Street New York, New York 10022 | ||||||||||||
The Vanguard Group(7) | 4,763,224 | 5.9 | ||||||||||
100 Vanguard Blvd. Malvern, Pennsylvania 19355 | ||||||||||||
Prudential Financial(8) | 4,257,509 | 5.3 | ||||||||||
751 Broad Street Newark, New Jersey 07102 | ||||||||||||
JPMorgan Chase & Co.(9) | 4,115,988 | 5.0 | ||||||||||
270 Park Ave. New York, New York 10017 | ||||||||||||
55 East 52nd Street New York, NY 10055 | ||||||||||||
Capital World Investors(7) | 5,977,829 | 7.8% | ||||||||||
333 South Hope Street, Los Angeles, CA 90071 | ||||||||||||
The Vanguard Group(8) | 5,918,426 | 7.8% | ||||||||||
100 Vanguard Blvd. Malvern, PA 19355 | ||||||||||||
Eaton Vance Management(9) | 4,432,589 | 5.8% | ||||||||||
2 International Place Boston, MA 02110 | ||||||||||||
| (1) | Includes |
16
| (2) | Includes |
| (3) | Includes shares of restricted stock awarded by the Company as |
Mr. Silvernail was awarded 4,540 shares of restricted stock under the Incentive Award Plan on February 22, 2011, which vest on February 22, 2014; 43,441 shares of restricted stock under the Incentive Award Plan on August 10, 2011, which vest on August 10, 2014; 18,670 shares of restricted stock under the Incentive Award Plan on February 21, 2012, which vest on February 21, 2015; 18,505 shares of restricted stock under the Incentive Award Plan on February 15, 2013, which vest on February 15, 2016; and 9,320 shares of restricted stock under the Incentive Award Plan on February 13, 2014, which vest on February 13, 2017; provided he is employed by the Company on such vesting dates.
Mr. Mitts was awarded 17,130 shares of restricted stock under the Incentive Award Plan on February 22, 2011, which vest on February 22, 2014; 5,840 shares of restricted stock under the Incentive Award Plan on February 21, 2012, which vest on February 21, 2015; 4,560 shares of restricted stock under the Incentive Award Plan on February 15, 2013, which vest on February 15, 2016; and 2,225 shares of restricted stock under the Incentive Award Plan on February 13, 2014, which vest on February 13, 2017; provided he is employed by the Company on such vesting dates.
Mr. Notaro was awarded 9,340 shares of restricted stock under the Incentive Award Plan on February 22, 2011, which vest on February 22, 2014; 5,840 shares of restricted stock under the Incentive Award Plan on February 21, 2012, which vest on February 21, 2015; 2,600 shares of restricted stock under the Incentive Award Plan on February 15, 2013, which vest on February 15, 2016; and 930 shares of restricted stock under the Incentive Award Plan on February 13, 2014, which vest on February 13, 2017; provided he is employed by the Company on such vesting dates.
Mr. Bucklew was awarded 3,220 shares of restricted stock under the Incentive Award Plan on March 5, 2012, which vest on March 5, 2015; 1,985 shares of restricted stock under the Incentive Award Plan on February 15, 2013, which vest on February 15, 2016; and 1,235 shares of restricted stock under the Incentive Award Plan on February 13, 2014, which vest on February 13, 2017; provided he is employed by the Company on such vesting dates.
Mr. Salliotte was awarded 2,380 shares of restricted stock under the Incentive Award Plan on February 22, 2011, which vest on February 22, 2014; 3,500 shares of restricted stock under the Incentive Award Plan on February 21, 2012, which vest on February 21, 2015; 1,820 shares of restricted stock under the Incentive Award Plan on February 15, 2013, which vest on February 15, 2016; and 520 shares of restricted stock under the Incentive Award Plan on February 13, 2014, which vest on February 13, 2017; provided he is employed by the Company on such vesting dates.
Name of restricted stock | Shares of Restricted stock awarded under Incentive Award Plan | Dates Awarded | Vesting Dates | |||
Mr. Silvernail | 9,565 | 02/20/2015 | 02/20/2018 | |||
Mr. Yates | 510 5,355 | 02/20/2015 08/31/2016 | 02/20/2018 08/31/2019 | |||
Mr. Ashleman | 1,630 4,835 | 02/20/2015 07/15/2015 | 02/20/2018 07/15/2018 | |||
Ms. Cade | 2,120 | 10/26/2015 | 10/26/2018 | |||
Mr. Salliotte | 500 2,680 | 2/20/2015 08/31/2016 | 02/20/2018 08/31/2019 | |||
| (4) | Includes |
| (5) | Based solely on information in Schedule 13G, as of December 31, |
| on a discretionary |
| (6) | Based solely on information in Schedule 13G, as of December 31, |
| (7) | Based solely on information in Schedule 13G, as of December 30, 2016, filed by Capital World Investors , a division of Capital Research Management Company (Capital World), with respect to Common Stock owned by Capital World and certain other entities which Capital World directly or indirectly controls or for which Capital World is an investment advisor on a discretionary basis. These Capital World entities have sole power to vote or to direct the vote of 5,977,829 shares of Common Stock and sole power to dispose or to direct the disposition of all 5,977,829 shares of Common Stock. |
| (8) | Based solely on information in Schedule 13G, as of December 31, |
| (9) | Based solely on information in Schedule 13G, as of December 31, |
18
The Compensation Committee periodically reviews the potential risks arising from our compensation policies, practices and programs to determine whether any potential risks are material to the Company. In approving the 20132016 compensation program design, the Compensation Committee engaged in discussions with its independent compensation consultant and management regarding any potential risks and concluded that the Company’s compensation policies and practices are designed with the appropriate balance of risk and reward in relation to the Company’s overall business strategy, do not incentivize employees, including executive officers, to take unnecessary or excessive risks, and that any risks arising from the Company’s policies and practices are not reasonably likely to have a material adverse effect on the Company.
In thethis review, the Compensation Committee considered the attributes of the Company’s policies and practices, including:
Thethe mix of fixed and variable compensation opportunities;
Thethe balance between annual cash and long-term, stock-based performance opportunities;
Multiplemultiple performance factors tied to key measures of short-term and long-term performance that motivate sustained performance and are based on quantitative measures;
Capscaps on the maximum payout for cash incentives;
Stockstock ownership requirements for executives that encourage a long-term focus on performance;
Anan insider trading policy that prohibits hedging and pledging;
A clawbacka claw-back policy that applies to performance-based compensation, including stock-based awards, for directors and officers; and
Oversightoversight by an independent compensation committee.
The Compensation Committee has reviewed the following Compensation Discussion and Analysis and discussed its contents with management. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Michael T. Tokarz,
Bradley
Gregory F. Milzcik
19
Compensation Discussion and Analysis
Executive Summary
This Compensation Discussion and Analysis describes our executive compensation philosophy and programs, and compensation decisions made under those programs for our named executive officers (NEOs) for fiscal year 2016, who are listed below.
| Name | Title | |
| Andrew K. Silvernail | Chairman, President and Chief Executive Officer | |
| Michael J. Yates(1) | Vice President, Interim Chief Financial Officer and Chief Accounting Officer | |
| Heath A. Mitts(2) | Former Senior Vice President and Chief Financial Officer | |
| Eric D. Ashleman | Senior Vice President and Chief Operating Officer | |
| Denise R. Cade | Senior Vice President, General Counsel and Corporate Secretary | |
| Daniel J. Salliotte | Senior Vice President, Mergers & Acquisitions and Treasury |
| (1) | Mr. Yates served as our Interim Chief Financial Officer from September 9, 2016 to December 31, 2016. |
| (2) | Mr. Mitts’ employment with the Company terminated on September 9, 2016. |
Principles of Our Compensation Programs
| Pay-for-Performance | The key principle of our compensation philosophy is pay-for-performance. | |
| Alignment with Stockholders’ Interests | We reward performance that meets or exceeds the performance goals that the Compensation Committee establishes with the objective of increasing stockholder value. | |
Variation Based on Performance | We favor variable pay opportunities that are based on performance over fixed pay. The total compensation received by our named executive officers varies based on corporate and individual performance measured against annual and long-term goals. |
Highlights of our Compensation Programs
Executive SummaryWHAT WE DO
We started 2013
| Ö | Pay-for-Performance: A significant portion of each named executive officer’s target annual compensation is tied to corporate and individual performance. |
| Ö | AnnualSay-on-Pay Vote: We conduct an annualsay-on-pay advisory vote. At our 2016 Annual Meeting of Stockholders, more than 98% of the votes cast on thesay-on-pay proposal were in favor of the fiscal year 2015 compensation of our named executive officers. |
| Ö | Clawback Policy: Our Clawback Policy allows the Board of Directors to recoup any excess incentive compensation paid to our executive officers if the financial results on which the awards were based are materially restated due to fraud, intentional misconduct or gross negligence of the executive officer. |
| Ö | Short-Term and Long-Term Incentives/Measures: Our annual and long-term plans provide a balance of incentives and include different measures of performance. |
| Ö | Independent Compensation Consultant: The Compensation Committee engages an independent compensation consultant, who does not also provide services to management. |
| Ö | Stock Ownership Guidelines: To further align the interests of management and our directors with our stockholders, we have significant stock ownership guidelines, which require our executive officers and directors to hold a multiple of their annual compensation in equity. |
| Ö | Limited Perquisites and Related TaxGross-Ups: We provide limited perquisites and taxgross-ups. |
| Ö | Mitigate Inappropriate Risk Taking: In addition to our clawback policy, stock ownership guidelines and prohibition of hedging and pledging, we structure our compensation programs so that they minimize inappropriate risk taking by our executive officers and other employees, including using multiple performance metrics and multi-year performance periods and capping our annual incentive awards and performance share awards. |
WHAT WE DON’T DO
| × | Gross-ups for Excise Taxes: Our executive severance agreements do not contain agross-up for excise taxes that may be imposed as a result of severance or other payments deemed made in connection with a change in control. |
| × | Reprice Stock Options:Our equity incentive plan prohibits the repricing of stock options and stock appreciation rights without prior stockholder approval. |
| × | Fixed Term Employment Agreements: Employment of our executive officers (other than our CEO) is “at will” and may be terminated by either the Company or the employee at any time. |
| × | Hedging and Pledging: Our insider trading policy prohibits all employees and directors from hedging their economic interest in the Company shares they hold. |
Fiscal Year 2016 Financial Highlights
Despite the objectivechallenging market conditions in 2016, orders and sales were up 6% and 5%, respectively, compared to the prior year, while gross margin of executing against our strategic priorities and we are proud of the results.44% was down 80 basis points. The following are 20132016 financial highlights:
Sales of $2.0$2.1 billion were up 5 percent compared to the prior year, down 1 percent organically.
Earnings per share (EPS) of $3.09 was 41 cents, or 15 percent, higher than the prior year adjusted EPS of $2.68.
Free cash flow of $379 million was 28 percent higher than the prior year, and was 148 percent of net income.
Net income of $255 million increased 14 percent compared to the adjusted prior year.
We repurchased 2.9 million shares of common stock for $166 million.
We increased the quarterly dividend by 15six percent in April 2013.
We acquired FTL Seals Technology, Ltd., a leader in the designdivested four non-strategic businesses and application of high integrity rotary seals, specialty bearings, and other custom products for the oil & gas, mining, power generation and marine markets.
A number of these
| ○ | Akron Brass, a leader in engineered life-safety products for the safety and emergency response markets; |
| ○ | AWG Fittings, a European leader in the manufacturing of safety and emergency response equipment; and |
| ○ | SFC Koenig, a leader in the production of highly engineered expanders and check valves for critical applications across the transportation, hydraulic, aviation and medical markets. |
| * | A reconciliation from GAAP to non-GAAP financial measures and other related information is included in Item 6 of the Company’s Annual Report on Form 10-K for the fiscal year-ended December 31, 2016. In addition to the adjustments noted in the Form 10-K, additional adjustments are used to determine the short-term incentive payouts, including adjustments related to acquisitions and divestitures, actual capital expenditures and actual share count compared to the annual plan. |
These financial highlights and significant recent accomplishments are directly tiedclosely related to performance metrics under our executive compensation plans. For 2013,2016, the executive compensation programs were designed to directly link compensation opportunities to the financial performance metrics that we believe are the best measures of success in our business: earnings per share (EPS), cash flow conversion, organic sales growth and total shareholder return. The changes we made in the 2013 executive compensation programs were designed to meet the goals defined by the Compensation Committee at the beginning of the review process: tighten the linkage between performance and pay, and minimize subjectivity. To meet these goals, for 2013, the Compensation Committee:
Eliminated the qualitative objectives and the personal performance modifier from the short-term incentive program thereby focusing solely on measureable quantitative performance objectives, and
Introduced performance stock units (PSUs) into the long-term incentive mix with a three-year relative total shareholder return metric.
The 2016 bonus payouts were 126% of target reflecting the higher than expected adjusted EPS and adjusted cash flow conversion, and lower than expected organic sales growth performance. Our TSR for the 2014-2016 period was 35%, which ranked as the 58th percentile versus the companies in the S&P Midcap 400 Industrials index and resulted in a 141% payout of performance stock units.
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Linkage Between Performance andHow Fiscal Year 2016 Named Executive PayOfficer Compensation is Tied to Company Performance
The compensation opportunities of our executives are directly tied to the performance of the Company. Ourpay-for-performance philosophy is demonstrated by the following elements of our executive compensation program for 2013:2016:
Approximately 81%83% of our CEO’s 20132016 total targeted pay was tied to Company performance,performance-based, and an average of approximately 63%67% of our other named executives officers’ total targeted pay in 20132016 was composed of incentives tied to Company performance.performance-based. The charts below show the allocation of 20132016 targeted pay across base salary, the annual cash incentive award, and the long-term incentive award for our CEO and for our other named executive officers in the 2013 Summary Compensation Table.
In 2013,2016, our long-term incentives continued to represent the single largest component of our CEO’s and other named executive officers’ targeted pay, representing approximately 62%66% and 45% of total targeted pay, for our CEO; long-term incentives represent an average of approximately 38% of total targeted pay for our other named executive officers.respectively.
Our 20132016 incentive awards are directly tied to the performance metrics that we believe are the best measures of our financial success and that will lead torepresent value created for our stockholders: earnings per share,EPS, cash flow conversion, organic sales growth, and total shareholder returnTSR (measured on a relative basis).
Our performance metrics are largely focused on absolute performance goals. We balance these absolute goals with a relative performance goal that measures our long-term total shareholder return as compared to companies in the S&PRussell Midcap 400 Industrials Index. This structure reinforces a focus on performance versus our financial plan and asperformance compared to a group of industrial companies.
The value of all three components of our 20132016 long-term incentive awards is tied to our stock price performance, which links executive pay directly to the creation of value for our stockholders.
Setting Executive Compensation Role of Compensation Committee The Compensation Committee establishes the Company’s compensation philosophy, structures the Company’s compensation programs to be consistent with that philosophy, and approves each element of named executive officer The Compensation Committee performs periodic reviews of executive pay tally sheets. The tally sheets outline each executive’s annual target and actual pay, unvested equity holdings and termination payments under various scenarios. Data from the tally sheets is considered by the Compensation Committee when setting target total compensation. Generally, the Compensation Committee reviews and adjusts target total compensation levels annually. Actual total compensation may vary from target based on performance and changes in stock price over time. Generally, the amount of compensation realized historically, or potentially realizable in the future, from past equity awards does not directly impact the level at which future pay opportunities are set. When granting equity awards, the Compensation Committee Our Compensation Committee has the sole authority to retain and replace, as necessary, compensation consultants to provide it with independent advice. The Compensation Committee has engaged F.W. Cook as its independent consultant to advise it on executive andnon-employee director compensation matters. This selection was made without the input or influence of management. Under the terms of its agreement with the Compensation Committee, F.W. Cook will not provide any other services to the Company, unless directed to do so by the Compensation Committee. During fiscal year 2016, F.W. Cook provided no services to the Company other than to advise the Compensation Committee on executive andnon-employee director compensation issues. The Compensation Committee has not identified any conflict of interest raised by the work F.W. Cook performed in fiscal year 2016. Setting Individual Executive Pay The Compensation Committee formulates a recommendation of CEO pay based on the financial and operating performance of the Company, the Committee’s assessment of the CEO and a thorough review of the market benchmarking data discussed below. The CEO pay recommendations put forth by the Compensation Committee are then reviewed and subject to approval by the Board. The pay packages for the other NEOs are set by the Compensation Committee after taking into consideration the recommendations of the CEO. Individual pay decisions are based on an assessment of the individual executive, utilizing the following criteria:Our Governance PracticesOur executive compensation policies and practices include the following features, which illustrate our commitment to the principles stated above:Pay for performance is the foundation of our executive compensation program, with the majority of executive pay tied to Company performance.21We assess the market competitiveness of our programs by assessing the practices of our peer group and through review of market survey data.We target base salary, annual cash incentives and long-term incentives at median of competitive market for each position, while allowing high performers to exceed median based on performance.We utilize multiple performance metrics to motivate and reward achievements that we believe are complementary of one another and that contribute to the long-term creation of stockholder value.We utilize performance metrics that emphasize absolute performance goals, which provide the primary links between incentive compensation and the Company’s business strategy and financial results, while providing balance through one relative performance goal.Our annual cash incentive awards and performance stock unit awards include a limit on the maximum payout opportunities.We have executive stock ownership guidelines ranging from two to five times base salary.We have adopted an annual policy for our say-on-pay vote as recommended by shareholders at our 2011 annual meeting.We reduce the risk of improper or short-sighted compensation decisions by maintaining programs that vest over multiple years, actively engaging the Compensation Committee in executive and senior management compensation, and aligning programs with business-supporting measures.We incorporate “clawback” provisions into our annual and long-term incentive awards to protect the Company and stockholders.We do not enter into new agreements that include excise tax gross-up provisions.The Company has an insider trading policy under which we prohibit transactions in which executives may profit from short-term speculative swings in the value of the Company’s share price (hedging), pledging and holding Company shares in margin accounts.With the exception of the Chief Executive Officer, we do not enter into employment contracts with executive officers.We maintain a consistent severance policy for our executive officers, with no payments for termination for cause.We work to reduce earnings dilution by limiting participation in our equity-based programs.The Compensation Committee is comprised solely of independent directors and approves all compensation for our senior officers; the Compensation Committee develops and recommends to the Board for approval the compensation of the Chief Executive Officer.The Compensation Committee has retained an independent compensation consultant, who provides services directly to the Compensation Committee.Our peer group for compensation benchmarking purposes was carefully selected to include well-run companies with a primary focus on manufacturing of highly-engineered products, similar to those produced by the Company and primarily within a range of 0.5 to 2.0 times the Company’s annual revenue.The Company held an advisory vote on executive compensation (say-on-pay) at the Company’s 2013 Annual Meeting of Stockholders. The say-on-pay advisory vote received support from over 94% of the shares voted at the Annual Meeting. The Compensation Committee believes this affirms stockholders’ support of the Company’s approach to executive compensation. The Compensation Committee will continue to consider the outcome of the Company’s say-on-pay votes when making future compensation decisions for the named executive officers.22Philosophy and Objectives of Our Executive Compensation ProgramThe Company’s executive compensation philosophy is that its compensation program should: (1) align the interests of management and stockholders, (2) motivate and retain the management team, and (3) result in executives holding meaningful amounts of the Company’s Common Stock.Aligning the interests of management and stockholders. Our 2013 executive compensation program elements were aligned with the interests of our stockholders by linking our incentive compensation performance metrics to the following key indicators of the Company’s overall financial performance: earnings per share, cash flow conversion, organic sales growth, and total shareholder return relative to companies in the S&P Midcap 400 Industrials Index. We believe that our executives should have a financial stake in our long-term success. As described in greater detail below, the Board of Directors established stock ownership guidelines in 2006 that require covered executive officers, including the named executive officers, to maintain a stake in the long-term success of our business. In addition, the Company’s insider trading policy prohibits speculative and derivative trading and short selling by all employees and directors. The policy further prohibits pledging Company securities and hedging transactions with respect to Company securities. We believe these requirements along with our incentive programs effectively align the interests of management and stockholders and motivate the creation of long-term stockholder value.Motivate and retain the management team. We believe that the mix of base salary, short-term and long-term incentives with appropriate performance metrics and targets provide a motivational element whereby executives are paid according to how the Company performs, and that they have direct line of sight to what it takes to outperform and thus achieve pay above market median. We seek to retain our executives primarily by setting our compensation and benefits at competitive levels relative to companies of similar size, scope and complexity. We believe that our executives have skills that are transferrable across industries and are sought after by similar-sized as well as larger diversified manufacturing companies. As a result, we do include companies in our peer group that are more than two times the Company’s revenue level.Result in executives holding meaningful amounts of the Company’s common stock. Our long-term incentive program consists of performance-based stock units, restricted stock and stock options. Our long-term incentive award grants are targeted to be competitive with the market and, depending upon Company performance, can result in significant share ownership opportunities for our executives. As stated above and detailed below, our stock ownership guidelines require our executives to maintain certain stock ownership levels. When combining the long-term incentive grant levels that are paid out in the Company’s common stock and the required ownership levels, the result is that our executives hold meaningful amounts of the Company’s Common Stock.Compensation Process and Oversight and Data Used.(NEO) compensation. In the case of the CEO, the Board of Directors reviews, ratifies and approves compensation recommendations made by the Compensation Committee.23reviewsconsiders market data and individual performance.Market Benchmarking.Role of Compensation Consultant1. Contribution Value to IDEX; short and long-termIndividual contribution and impact to team performance2. Market attractiveness Supply-demand of roleExperience, background, track record3. Replacement difficulty Challenge of replacing the role with equivalent capability
| 4. | Experience in role |
The Compensation Committee reviews pay data from various sources (as discussed below) as one input in determining appropriate target compensation levels. Individual pay decisions are made onThe Compensation Committee utilizes the basisexpertise of individual performance, years of experience, skill set, value ofits independent compensation consultant, F.W. Cook, in developing compensation recommendations for the position (orNEOs, including the individual) to the organization, as well as the market data.CEO. The Compensation Committee believes that to attract and retain qualified management, total direct compensation should be competitively targeted within a range of +/- 20% of the 50th percentile (Targeted Range) ofthat includes market median for comparable positions at comparable companies. However, cases may exist where thesecompanies, with market compensation data being only one of many factors considered by the Compensation Committee when setting the compensation levels for any particular executive. While an individual executive’s target compensation levels fall outside thisis positioned within the competitive range based on the individual factors listed above. Actualabove, actual compensation in any given year should and does vary from target based on Company and individual performance. For 2013, compensation levels for the NEOs were within the Targeted Range.
The Compensation Committee undertook a review and analysis to ensure that the 20132016 executive compensation programs appropriately reflected the market for talent. The Committee considered relevant market pay practices to ensure the Company’s ability to recruit and retain high performing talent across its diversified markets and global footprint. Two surveys and a peer group analysis were utilized for the 20132016 executive compensation market analysis for the NEOs:NEOs.
Survey Data
Companies that participate in theThe Willis Towers Watson executive compensation databaseExecutive Compensation Database survey (excluding energy and financial service companies) as well as the Equilar Top 25 Survey both matched by job content. Two surveys were used because they include a broad range of manufacturing companies that are comparable to the Company in size, geography and industry; andindustry.
Peer Companies
The peer group of companies identified below which consists of companies that are similar to the Company in terms of their size (i.e., revenue, net income, and market capitalization), diversified industry profile (ranging from customized manufacturing solutions to emerging markets in highly specialized health science technology), investment in research and development, investment, global presence, and have executive officer positions that are comparable to the Company’s in terms of breadth, complexity and scope of responsibilities. PriorThe companies listed below are the same group of companies used to conducting the benchmarking review for 2013 compensation decisions, Towers Watson reviewed the composition of the peer group listedbenchmark pay in last year’s proxy statement with the Compensation Committee. Based on that review, the Committee removed Millipore Corporation, and added Bruker Corporation, JDS Uniphase Corporation and KLA-Tencor Corporation. Millipore was removed as it was acquired by Merck KGaA. Bruker, JDS Uniphase and KLA-Tencor were added based on their status as well-respected companies having operations that involve the photonics and life sciences industries, and their annual revenues which are within a reasonable range of the Company’s annual revenue.2015.
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Actuant Corporation |
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AMETEK, Inc. |
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Bruker |
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CIRCOR International Inc. | ||||
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Donaldson Company, Inc. | ||||
Dover Corporation | ||||
Dresser-Rand Group Inc. | ||||
Flowserve Corporation | ||||
Graco Inc. | ||||
ITT Corporation | ||||
KLA-Tencor Corporation | ||||
Nordson Corporation | ||||
Pall Corporation | ||||
Pentair Ltd. | ||||
PerkinElmer, Inc. | ||||
Roper Industries, Inc. | ||||
SPX Corporation | ||||
Viavi Solutions Inc. | ||||
Watts Water Technologies, Inc. | ||||
Xylem Inc. |
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The Compensation Committee believes that multiple data sources provide for a clearer perspective of the market. As such, with the assistance of Towers Watson,management and F.W. Cook, the Compensation Committee developed an aggregate composite of the market data to establish target compensation levels for the executives weighted as follows:
Position(s) | Survey Weighting | Peer Group Weighting | Rationale | |||||||
CEO and CFO | 20 | % | 80 | % | Positions are required to be represented in all of the proxy peer group companies; closest representation of the corporate profile; balance of peer and survey data. | |||||
General Counsel and Chief Human Resources Officer |
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70 |
% |
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30 |
% |
Limited number of position matches in the proxy group; pool for talent would include the broader industry representation in the survey data. | |||
VP Mergers, Acquisitions and Treasury |
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100 |
% |
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0 |
% |
Very limited number of position matches in the proxy group; pool for talent would include the broader industry representation in the survey data. | |||
| Position(s) | Survey Weighting | Peer Group Weighting | Rationale | |||
| President and Chief Executive Officer; and Senior Vice President and Chief Financial Officer | 20% | 80% | Positions are required to be represented in all of the proxy peer group companies; closest representation of the corporate profile; balance of peer and survey data. | |||
| Senior Vice President and Chief Operating Officer; and Senior Vice President, General Counsel and Corporate Secretary | 70% | 30% | Limited number of position matches in the proxy group; pool for talent would include the broader industry representation in the survey data. | |||
Senior Vice President, Mergers & Acquisitions and Treasury; and Vice President, Interim Chief Financial Officer and Chief Accounting Officer
| 100% | 0% | No position matches in the proxy group; pool for talent would include the broader industry representation in the survey data.
|
ProcessRole of Setting Compensation.Say-on-Pay
The CEO’s pay package is developed byCompany held an advisory vote on executive compensation(say-on-pay) at the Company’s 2016 Annual Meeting of Stockholders. Thesay-on-pay advisory vote received support from over 98% of the shares voted at the 2016 Annual Meeting. The Compensation Committee believes this affirms stockholders’ support of the Company’s approach to executive compensation. Accordingly, the Compensation Committee based ondid not make any material changes to the financial and operating performanceunderlying structure of the Company, the Committee’s assessment of his individual performance and based on a thorough review of the market benchmarking data identified above. The CEO pay recommendations put forth by the Compensation Committee are then reviewed and approved by the Board of Directors. The pay packagesour executive compensation program for the other NEOs are set by the Compensation Committee based on the recommendations of the CEO.fiscal year 2016. The Compensation Committee considerswill continue to review and consider the CEO’s recommendations, taking into account each NEO’s individual responsibility, experience and overall performance, as well as internal comparisonsoutcome of pay within the executive group and the market benchmarking data. The Compensation Committee utilizes the expertise of itsCompany’ssay-on-pay votes when making future compensation consultant, Towers Watson, in developing compensation recommendationsdecisions for the named executive officers.
Compensation Philosophy and Objectives
As more fully discussed below, the Company’s executive compensation philosophy is that its compensation program should: (1) align the interests of management and stockholders, (2) motivate and retain the management team with a focus onpay-for-performance, and (3) result in executives holding meaningful amounts of the Company’s Common Stock.
Our 2016 executive compensation program elements were aligned with the interests of our stockholders by linking our incentive compensation performance metrics to the following key indicators of the Company’s overall financial performance: EPS, cash flow conversion, organic sales growth, and TSR relative to companies in the Russell Midcap Index. We believe that our executives should have a financial stake in our long-term success. As described in greater detail below, the Board of Directors established stock ownership guidelines in 2006 that require covered executive officers, including the CEO.NEOs, to maintain a stake in the long-term success of our business.
In developing compensationaddition, the Company’s insider trading policy prohibits speculative and derivative trading and short selling by all employees and directors. The policy further prohibits pledging Company securities and hedging transactions with respect to Company securities. We believe these requirements along with our incentive programs effectively align the Compensation Committee reviewsinterests of management and stockholders and motivate the estimated accountingcreation of long-term stockholder value.
We believe that the mix of base salary, short-term and tax impact of all elements of the executive compensation program. Generally, an accounting expense is accrued over the requisite service period of the particular paylong-term incentives with appropriate performance metrics and targets provide a motivational element (generally equalwhereby executives are paid according to the performance period) andhow the Company realizesperforms, and that they have direct line of sight to what it takes to outperform and thus achieve pay above market median. We seek to retain our executives primarily by setting our compensation and benefits at competitive levels relative to companies of similar size, scope and
complexity. We believe that our executives have skills that are transferrable across industries and are sought after bysimilar-sized as well as larger diversified manufacturing companies. As a tax deduction upon payment to, or realization by,result, we do include companies in our peer group that are more than two times the executive. The Compensation Committee has been advised that cash awards, performanceCompany’s revenue level.
Our long-term incentive program consists of performance-based stock units, restricted stock and stock options granted under the Incentive Award Plan should satisfy the requirements for performance-based compensation under Internal Revenue Code (IRC) Section 162(m). The Compensation Committee has been advised that restricted stock awards (which vest based on continued employmentoptions. Our long-term incentive award grants are targeted to be competitive with the Company) do not qualify as performance-based compensationmarket and, therefore, may not be tax-deductible as adepending upon Company performance, can result ofin significant share ownership opportunities for our executives. As stated above and detailed below, our stock ownership guidelines require our executives to maintain specified stock ownership levels.
When combining the limitations of IRC Section 162(m).
IRC Section 162(m) limits the tax deductibility by the Company of annual compensation in excess of $1,000,000long-term incentive grant levels that are paid to the CEO and any of the three other most highly compensated executive officers, other than the CFO. While the tax impact of any compensation arrangement is one factor to be considered, that impact is evaluated in light of the Compensation Committee’s overall compensation philosophy and objectives. While it is a goal of the Compensation Committee to maximize the deductibility of executive compensation, the Committee retains the discretion to compensate officers in
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a manner commensurate with performance and the competitive environment for executive talent. Accordingly, the Compensation Committee may award compensation to the executive officers that is not fully deductible if it determines the compensation is consistent with its philosophy and isout in the Company’s common stock and its stockholders’ best interests.the required ownership levels, the result is that our executives hold meaningful amounts of the Company’s Common Stock.
2016 Executive Compensation Program The following discussion describes our our Vice President, Interim Chief Financial Officer and Chief Accounting Officer; Heath A. Mitts, our former Senior Vice President and Chief Financial Officer; The material elements of Our 201320132016 compensation elements and 20132016 compensation decisions related to our NEOs. Our NEOs consist of our Chief Executive Officer, our Chief Financial OfficerOfficers and our three other most highly compensated executive officers. For 2013,2016, our named executive officers arewere Andrew K. Silvernail, our Chairman of the Board, President and Chief Executive Officer; Michael J. Yates,Frank J. Notaro,Eric D. Ashleman, our Senior Vice President –and Chief Operating Officer; Denise R. Cade, our Senior Vice President, General Counsel and Corporate Secretary; Jeffrey D. Bucklew, our Chief Human Resources Officer; and Daniel J. Salliotte, our Senior Vice President, Mergers & Acquisitions and Treasury.20132016 Key Compensation Elements. 20132016 compensation for the NEOs are outlined below:
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| Purpose | General Characteristics | ||||
| Base Salary | Fixed | Provides a fixed level of current cash compensation consonant with the executive’s primary duties and | ||||
Short-Term Incentives — Annual Bonus | Based | Variable cash payments. Annual awards based on performance againstpre-determined individual and corporate performance goals. | ||||
Long-Term Incentives — Stock Options | Based | Provides retention through vesting schedules, and aligns each named executive officer’s interests with long-term stockholder interests by linking a substantial portion of each executive’s compensation | ||||
Long-Term Incentives — Restricted Stock Awards | Restricted stock cliff vests in three years. | |||||
Long-Term Incentives — Performance Stock Units |
| Ties long-term compensation | ||||
| Voluntary | Provides overall wealth accumulation and retention. | Various market-based retirement and welfare benefits and perquisites. |
A Balanced Perspective
Maintaining a balanced perspective is a core part of the Company’s business strategy. While short-term performance is vital to the financial well-being of the Company, the long-term health of the Company requires the appropriate emphasis on new products, technologies and investments that will enable future growth and deliver long-term stockholder value. The latter requires that employees take calculated risks to capitalize on anticipated changes in the Company’s numerous businesses.
The Compensation Committee believes that balancing the proportion of cash andnon-cash awards, as well as short-term versus long-term awards, is important to motivate performance while mitigating risk. Cash-based awards are important in motivating executives for the short-term, while long-term incentives focus executives withwho have the greatest ability to impact business results on managing the business for the long-term, and reinforce the link between their earnings opportunity and the long-term growth of the Company.
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Base Salary.Salary
Base salaries are reviewed annually and may be adjusted to reflect market data, as well as individual responsibility, experience and tenure.performance. The table below highlights the change in 2016 base salary for each NEO, reflecting an annual merit increase for each NEO.
| NEO | 2016 Base | 2015 Base Salary Rate | Percentage Increase | |||||||||
| Andrew K. Silvernail | $954,800 | $ | 927,000 | 3% | ||||||||
| Michael J. Yates | $365,000 | $ | 354,400 | 3% | ||||||||
| Heath A. Mitts | $502,500 | $ | 487,900 | 3% | ||||||||
| Eric D. Ashleman | $515,000 | $ | 500,000 | 3% | ||||||||
| Denise R. Cade | $432,600 | $ | 420,000 | 3% | ||||||||
| Daniel J. Salliotte | $324,500 | $ | 315,000 | 3% | ||||||||
Short-Term Incentives — Incentive Award Plan
Messrs. Silvernail and Ashleman’s and Ms. Cade’s 2016 annual incentive bonus took the form of a cash performance award under the stockholder-approved Incentive Award Plan in order to allow their bonuses to be deductible under IRC Section 162(m). In 2016, the Compensation Committee granted Messrs. Silvernail and Ashleman and Ms. Cade cash performance awards with a maximum aggregate payment amount equal to 2% of the Company’s 2016 operating income contingent on the Company achieving a minimum adjusted EPS of $3.09.
Adjusted EPS excludes from earnings per share the impact of acquisition and divestiture-related income and charges, and restructuring charges. Under the terms of the awards, no bonus would be paid if the Company did not achieve adjusted EPS of $3.09. The Compensation Committee set Mr. Silvernail’s actual performance award for 2016 at $1,203,048, Mr. Ashleman’s actual performance award at $486,675 and Ms. Cade’s actual performance award at $327,046.
In setting the actual awards, the Compensation Committee considered the actual performance of the Company using the metrics in the Business Performance Factor described below, individual performance and the amounts that the NEOs
would have earned as an annual cash bonus if they participated in the Management Incentive Compensation Plan (MICP—described below) on substantially the same terms as other company executives. Similar to the awards under the MICP, the Compensation Committee limits maximum payouts to 200% of target payout for each executive.
Short-Term Incentives — Management Incentive Compensation Plan.Plan All NEOs, other than Messrs. Silvernail
Mr. Yates, as Interim Chief Financial Officer, was not subject to the deduction limitations under IRC Section 162(m), and Notaro,therefore he participated in the Company’s Management Incentive Compensation Plan (MICP).MICP, as did Mr. Salliotte. Mr. Mitts resigned from the Company effective September 9, 2016, and therefore did not earn a cash bonus under the MICP. The MICP provides participants with the opportunity to earn annual cash bonuses. As compared to the 2012 MICP, we eliminated the qualitative objectives and the personal performance modifier from the 2013 MICP thereby focusing solely on measurable performance objectives and resulting in a tightening of the linkage between performance and pay.
The amount of the annual cash bonus paid to each participant under the MICP is determined under the following formula:
Annual Bonus = Base Salary x Individual Target Bonus Percentage x Business Performance Factor
Individual Target Bonus Percentage for the year is a percentage of the participant’s base salary and is based on the participant’s position and market data. For the NEOs eligible to receive a bonus under the MICP for 2013, the Individual Target Bonus Percentages were as follows: Mr. Mitts — 75%; Mr. Bucklew — 60%; and Mr. Salliotte — 65%.
The Business Performance Factor (discussed in more detail below) is calculated based on measurable corporate quantitative objectives, which are given a combined 75%70% weighting, and one strategic measure with a 25%30% weighting.
For 2013,2016, the measurable quantitative objectives within the Business Performance Factor were adjusted EPS and adjusted cash flow conversion. Adjusted EPS excludes from reported earnings per share the impact of acquisition-relatedacquisition and divestiture-related income and charges, and restructuring charges (EPS Adjustments). Adjusted cash flow conversion is cash flow as a percent of net income excluding the impact of the EPS Adjustments. The payout of each quantitative objective is a function of the amount by which actual performance exceeds or falls short of goal, with a maximum payout of
200% of target for each objective. For 2013,2016, no bonus was payable unless a minimum threshold for adjusted EPS was met. The adjusted EPS threshold for 20132016 was $2.55.$3.09.
For 2013,2016, the 25%30% strategic measure was organic sales growth. Organic sales growth is a critical business metric and helps identify the underlying health of the businesses and management’s ability to increase sales through innovation and customer-focus.customer focus. Organic sales is defined as net sales of the Company adjusted to exclude the impact of foreign currency translation and sales from acquired businesses during the first twelve months of ownership. The goal for organic sales growth is established relative to expected growth in key markets, such as industrial, health and science instrumentation, energy and fire and rescue.
For 2013,2016, the relative weightings and the performance against the quantitative and strategic measure resulted in a recommended Business Performance Factor of 142%126%, as shown in the table below.
MICP Objective | Goal | Actual | Payout | MICP Weighting | Business Performance Factor | Goal | Actual* | Payout | MICP Weighting | Business Performance Factor | ||||||||||||||||||||||||||||||
Adjusted EPS | $ | 2.85 | $ | 3.10 | 165.6 | % | 50 | % | 82.8 | % | $3.55 | $ | 3.74 | 148% | 50% | 74% | ||||||||||||||||||||||||
Adjusted Cash Flow Conversion | 115 | % | 147 | % | 171.1 | % | 25 | % | 42.8 | % | 115% | 119% | 120% | 20% | 24% | |||||||||||||||||||||||||
Organic Sales Growth | 2.5 | % | 1.5 | % | 66.7 | % | 25 | % | 16.7 | % | -1.0% | -1.2% | 95% | 30% | 28% | |||||||||||||||||||||||||
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Total | 100 | % | 142 | % | 100% | 126% | ||||||||||||||||||||||||||||||||||
As indicated, above adjusted EPS and adjusted cash flow conversion far exceeded goals. Organic sales growth results did not meet the targeted level
| * | A reconciliation from GAAP to non-GAAP financial measures and other related information is included in Item 6 of the Company’s Annual Report on Form 10-K for the fiscal year-ended December 31, 2016. In addition to the adjustments noted in the Form 10-K, additional adjustments are used to determine the short-term incentive payouts, including adjustments related to acquisitions and divestitures, actual capital expenditures and actual share count compared to the annual plan. |
The payments under the MICP calculation reflects those results. Payments under the MICPto Messrs. Yates and Salliotte are included in the 20132016 Summary Compensation Table under the “Non-Equity“Non-Equity Incentive Plan Compensation” column.
Michael J. Yates Daniel J. Salliotte27NEO Base Salary Rate Target Incentive Business
Performance
Factor 2016 Short-
Term
Incentive
Award $365,000 55% 126% $ 252,945 $324,500 65% 126% $ 265,766
Sign-On BonusShort-Term Incentives — Incentive Award Plan.Messrs. Silvernail’s and Notaro’s annual incentive bonus took
In certain circumstances, we may offer cash sign-on bonuses to attract executive talent as determined on a case-by-case basis after taking into account the form of a cash performance award underspecific circumstances involving hiring the stockholder-approved Incentive Award Plan rather than the MICPexecutive. Pursuant to Ms. Cade’s employment offer letter and in order to allow their bonuses to be deductible under IRC Section 162(m). If Messrs. Silvernailattract and Notaro were participantsretain Ms. Cade, the Company paid Ms. Cade a sign-on bonus of $228,000 in the MICP (which is not shareholder approved and permits upward adjustments instead of only downward adjustments as permitted under the Company’sMarch 2016.
2016 Long-Term Incentive Award Plan), their annual cash bonuses under the MICP would not be deductible under IRC Section 162(m).Awards
In 2013, the Compensation Committee granted Messrs. Silvernail and Notaro cash performance awards with a maximum aggregate payment amount equal to 2% of the Company’s 2013 operating income contingent on the Company achieving the same minimum $2.55 adjusted EPS as for other named executive officers under the MICP. Adjusted EPS excludes from earnings per share the impact of acquisition-related income and charges, and restructuring charges. Under the terms of the awards, no bonus would be paid if the Company did not achieve adjusted EPS of $2.55. The Compensation Committee set Messrs. Silvernail’s and Notaro’s actual performance awards for 2013 at $1,235,400 and $441,000, respectively. In setting the actual awards, the Compensation Committee considered the actual performance of the Company using the metrics in the Business Performance Factor described above, its assessment of Messrs. Silvernail’s and Notaro’s individual performance and the amounts that Messrs. Silvernail and Notaro would have earned as an annual cash bonus if they participated in the MICP on substantially the same terms as the other NEOs with targets awards of 100% and 75% of their base salaries respectively.
2013 Long-Term Incentive Awards. In 2013,2016, NEOs received annual long-term incentive awards that were granted in three components:consisting of performance stock units (PSUs) and stock optionsoptions. The Company eliminated restricted stock awards from the 2016 annual long-term incentive grant to the NEOs in order to emphasize the link between pay and restricted stock. The 2013 total long-term target opportunities areperformance. Restricted stock awards represented approximately equally weighted among each15% of the three long-term incentive award componentsgrants to reflect the Compensation Committee’s belief that relative total shareholder return (TSR), stock price appreciation, retention of executivesNEOs in 2014 and executive stock ownership are all important objectives. Long-term incentive awards in the past consisted of only stock options and restricted stock. The performance stock units were added in 2013 to more tightly align pay and performance.2015.
TSR Measure
The performance stock units (PSUs)PSUs have a three-year performance period and utilize a relative TSR measure. The Company’s relative TSR will be measured against the TSR of companies in the S&PRussell Midcap 400 Industrials Index at the end of the three-year performance period. If the Company achieves 50th50th percentile TSR performance as compared to the group of companies, each NEO will receive the target number of performance units paid out in shares of the Company’s common stock. Performance below or aboveCommon Stock. Threshold performance is at the 5033thrd percentile, which will result in a payout equal to 33% of target and performance below this level will result in zero payout. Maximum payout is 250% of target number of shares delivered belowfor 80th percentile achievement or above target, respectively.higher. Payouts are interpolated between the 33rd percentile and 50th percentile and between the 50th percentile and 80th percentile performance. Cumulative dividend equivalent payments will be made at the end of the performance period based on the number of shares of common stock received by each executive.
In selecting relative TSR as the measure, the Compensation Committee noted that TSR is highly correlated with a combination of other metrics that are important to the Company and to investors, notably: return on invested capital, operating profit margin and compound annual sales growth rate (CAGR).
Comparator Group
For the 2016 PSU grant, the Committee selected the Russell Midcap Index companies as the comparator group for relative TSR. In selecting the Russell Midcap Index companies, the Committee’s objective was to have a sizeable group of companies similar in revenue and market capitalization to the Company. In addition, the Committee seeks to align with the mutual funds within our top shareholder firms as they generally hold a broad range of investments covering multiple industries. The current outstanding, unvested 2015 PSU grant continues to be measured on TSR compared to companies in the S&P Midcap 400 Industrials Index companies as a comparator group for relative TSR, the Compensation Committee’s objective was to have a group of 50-100 manufacturing companies which was broader than the peer group of companies used for benchmarking compensation of the named executive officers, but that was not too broad or not representative of the Company’s business. Towers Watson helped the Compensation Committee select from the S&P Midcap 400 Industrials Index a group of 60-70 companies that are similar to the Company. The Company is included in the index.Index.
Difference between Long-Term Incentive Components
The Compensation Committee believes that performance stock units,PSUs, stock options and restricted stock all incent management actions that drive the creation of stockholder value and promote executive stock ownership. However, each long-term incentive component has different characteristics. The value of the performance stock unitsPSUs after the three-year performance period is directly linked to the
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relative TSR as described above as well as the stock price movement during the performance period. Stock options provide value only to the extent that the Company’s stock price appreciates above the stock price on the date of grant. Restricted stock awards provide value regardless of whether the Company’s stock price appreciates, and help retain executives over the course of business and market cycles that may negatively impact the Company’s operations and stock price in the short term. While the Company did not include restricted stock awards in the annual grant to the
NEOs, the Company continues to provide restricted stock awards for special equity awards and for annual grants below the executive leadership level. In 2016, Mssrs. Yates and Salliotte each received off-cycle restricted stock awards at the time of Mr. Mitts’ departure to aid in retention and reward them for their additional efforts during the CFO transition period.
Long-term incentive awards are generally made on an annual basis, or at the time of a special event (such as upon hiring or promotion). Historically, we have usually madeWe typically grant awards on the date of the first Board of Directors meeting of a year, or the date of the annual meeting of stockholders. However, we have not adopted specific guidelines as to the timing of such awards, butWe attempt to not make awards during any periods when we do not havenon-public information which could impact our stock price. Working with its independent compensation consultant, the Compensation Committee granted long-term incentive awards to the NEOs in early 2016. Other than the CEO, each NEO has a long-term incentive target stated as a percentage of base salary. The long-term incentive targets are established on an individual basis taking into consideration market median practice for each role, and individual impact and performance.
The Compensation Committee may grant awards above or below target based on individual and Company performance and did grant awards above target in 2016 based on individual performance and Company performance, including top quartileone-year cumulative TSR in 2015 as compared to the peer group of companies used to benchmark executive pay listed above. The Company’s three-year cumulative TSR was ranked at the 92nd percentile as compared to the same group of peer companies.
For the CEO, the Compensation Committee recommended a long-term incentive award based on an assessment of the CEO’s performance and pay position as described under “Setting Executive Compensation.”
Our PSU grant for the 2014-2016 performance period resulted in a 141% payout based on a
35% TSR, which ranked as the 58th percentile when compared to companies in the S&P 400 Midcap Industrials Index.
Employee Benefits.Benefits
The NEOs participate in group health, welfare and qualified retirement programs available to all of the Company’s employees. The NEOs also participate in nonqualified supplemental retirement plans, deferred compensation arrangements and supplemental disability benefits. Participation in these nonqualified plans is intended to provide the NEOs with the opportunity to accumulate retirement benefits at levels above the limitations imposed by tax qualified plans. For a more complete explanation of these plans, see the narrative following the 20132016 Summary Compensation Table, the Pension Benefits at 20132016 Fiscal Year End table below, the Nonqualified Deferred Compensation at 20132016 Fiscal Year End table, and the discussion under “Potential Payments upon Termination or Change in Control.”
Severance and Change in Control Benefits.Benefits
Each of the NEOs are entitled to severance benefits under the terms of written agreements in the event that their employment is actually or constructively terminated without cause. The amount of the benefit, which varies with the individual, depends on whether or not the termination is in connection with a change in control. The level of each NEO’s severance benefits reflects the Company’s perception of the market for their positions at the time the agreements were put in place. For additional information, see the section below entitled Potential Payments upon Termination or Change in Control.
Perquisites.Perquisites
The Compensation Committee believes in providing limited perquisites in line with market practice. The NEOs are provided with a car allowance. The CEO is entitled to limited use of
the Company’s leased aircraft fornon-business purposes. For further details on these perquisites, see the “Narrative to the Summary Compensation Table.”Table” below.
Other Executive Compensation Matters
Stock Ownership.Grant Practices
For all newly issued stock option awards, the exercise price of the stock option award will be the closing price of our Common Stock on the NYSE on the date of the grant. If the grant date for the annual awards falls on a weekend, the exercise price of stock option awards will be the closing price of our Common Stock on the NYSE on the last trading day preceding the date of grant.
Stock Ownership
Consistent with its executive pay philosophy, the Company requires that executive officers maintain minimum ownership levels of the Company’s Common Stock. The following stock ownership guidelines for NEOs were established by the Board of Directors in 2006.2006 and modified in 2015.
Executive | Ownership as a Multiple of Base Salary | |||
CEO | 5x | |||
CFO, COO | 3x | |||
Other NEOs | 2x | |||
The CEO, CFO and the other NEOs must comply with these ownership requirements within five years of date of hire or promotion. Counted for purposes of satisfying ownership requirements are shares directly owned and unvested restricted shares.shares and performance stock units at target. As of December 31, 2013, the CEO, CFO and the other2016, all NEOs had met or were proceeding towards meeting the ownership guidelines within the applicable five-year period.
Hedging.Hedging and Pledging
All directors and officers of the Company are prohibited from (i) pledging Company securities (including through holding Company securities in margin accounts) and (ii) engaging in any transaction in which they may profit from short-term speculative swings in the value of the Company’s securities (“hedging”). For this purpose, “hedging” includes “short-sales” (selling borrowed securities that the seller hopes can be purchased at a lower price in the future) or “short sales against the box” (selling, but not delivering, owned securities), “put” and “call” options (publicly available rights to sell or
29
buy securities within a certain period of time at a specified price or the like), and other hedging transactions designed to minimize the risk inherent in owning the Company’s stock, such aszero-cost collars and forward sales contracts.
Clawbacks.Clawbacks Consistent with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and to
To the extent not in violation of applicable law, the Company reserves the right to recover, or clawback, from current or former directors and officers any wrongfully earned performance-based compensation, including stock-based awards, upon the determination by the Compensation Committee that:
Thethe Company’s financial statements have been restated due to material noncompliance with any financial reporting requirement;
Thethe cash incentive or equity compensation to be recouped was calculated on, or its realized value was affected by, the financial results that were subsequently restated;
Thethe cash incentive or equity compensation would have been less valuable than that actually awarded or paid based upon the application of the correct financial results; and
The
The Compensation Committee has exclusive authority to modify, interpret and enforce this provision in compliance with applicable law.
TaxGross-Up Provisions. Provisions
In February 2011, the Compensation Committee adopted a policy that the Company will not enter into any new agreements that include excise taxgross-up provisions with respect to payments contingent upon a change in control of the Company. ThereNo executives are eligible for an excise taxgross-up.
The Compensation Committee has exclusive authority to modify, interpret and enforce this provision in compliance with applicable law.
Accounting and Tax Implications — Deductibility of Executive Compensation
In developing compensation programs, the Compensation Committee reviews the estimated accounting and tax impact of all elements of the executive compensation program. Generally, an accounting expense is accrued over the requisite service period of the particular pay element (generally equal to the performance period) and the Company realizes a tax deduction upon payment to, or realization by, the executive. Cash awards, performance stock units and stock options granted under the Incentive Award Plan
are intended to satisfy the requirements for performance-based compensation under Internal Revenue Code (IRC) Section 162(m). Restricted stock awards (which vest based on continued employment with the Company) do not qualify as performance-based compensation and, therefore, may not betax-deductible as a result of the limitations of IRC Section 162(m).
IRC Section 162(m) limits the tax deductibility by the Company of annual compensation in excess of $1 million paid to the CEO and any of the three other most highly compensated executive officers, other than the CFO. While the tax impact of any compensation arrangement is one legacy agreementfactor to be considered, that wasimpact is evaluated in light of the Compensation Committee’s overall compensation philosophy and objectives. While it is a goal of the Compensation Committee to maximize the deductibility of executive compensation, the Committee retains the discretion to compensate officers in a manner commensurate with performance and the competitive environment for executive talent. Accordingly, the Compensation Committee may award compensation to the executive officers that is not affected by this policy.fully deductible if it determines the compensation is consistent with its philosophy and is in the Company’s and its stockholders’ best interests.
30
20132016 Summary Compensation Table
The table below summarizesand related footnotes summarize the total compensation earned or paid in 2013, 20122016, 2015 and 20112014 for the Company’s CEO, CFO, and each of the three most highly compensated executive officers other than the CEO and CFO. Mr. Silvernail’s compensation for a portion of 2011 was earned as the Company’s Vice President, Group Executive Health & Science Technologies and Global Dispensing.
Name and Principal | Year | Salary | Stock Awards(1) | Option Awards(2) | Non-Equity Incentive Compensation Plan(3) | Change in Pension Value and Non- Qualified Deferred Compensation Earnings(4) | All Other Compensation(5) | Total | ||||||||||||||||||||||||
Andrew K. Silvernail, | 2013 | $ | 856,808 | $ | 2,036,105 | $ | 931,221 | $ | 1,235,400 | $ | 298,296 | $ | 5,357,830 | |||||||||||||||||||
Chairman, President and Chief Executive Officer | | 2012 2011 | | | 790,769 538,615 | | | 800,196 1,685,658 | | | 818,174 192,466 | | | 732,500 767,000 | | | 261,083 190,945 | | | 3,402,723 3,374,684 | | |||||||||||
Heath A. Mitts, | 2013 | 455,289 | $ | 501,737 | $ | 229,515 | $ | 489,900 | $ | 98,514 | $ | 1,774,954 | ||||||||||||||||||||
Vice President and Chief Financial Officer | | 2012 2011 | | | 431,308 392,000 | | | 250,302 700,446 | | | 255,680 768,226 | | | 298,700 461,895 | | | 109,508 82,921 | | | 1,345,497 2,405,489 | | |||||||||||
Frank J. Notaro, | 2013 | 411,362 | $ | 286,078 | $ | 130,840 | $ | 441,000 | -69,565 | $ | 92,519 | $ | 1,292,233 | |||||||||||||||||||
Vice President, General Counsel and Secretary | | 2012 2011 | | | 391,692 352,346 | | | 250,302 381,913 | | | 255,680 416,781 | | | 269,700 395,115 | | | 77,377 68,118 | | | 103,196 102,731 | | | 1,347,947 1,717,003 | | ||||||||
Jeffrey D. Bucklew, | 2013 | 331,231 | $ | 218,410 | $ | 99,831 | $ | 285,500 | $ | 70,454 | $ | 1,005,425 | ||||||||||||||||||||
Chief Human Resources Officer | ||||||||||||||||||||||||||||||||
Daniel J. Salliotte, | 2013 | 284,362 | $ | 200,255 | $ | 91,485 | $ | 265,000 | -6,985 | $ | 63,207 | 897,324 | ||||||||||||||||||||
Vice President Mergers, Acquisitions and Treasury | 2012 | 270,600 | 150,010 | 153,408 | 147,300 | 8,495 | 69,754 | $ | 799,567 | |||||||||||||||||||||||
| Name and Principal Position | Year | Salary | Bonus | Stock Awards (1) | Option Awards (2) | Non-Equity Incentive Compensation Plan (3) |
Change in Qualified
| All Other Compensation (5) | Total | |||||||||||||||||||||||||||
Andrew K. Silvernail, Chairman, President and Chief Executive Officer | 2016 | $949,347 | $3,726,999 | $2,500,008 | $1,203,048 | $268,444 | $8,647,846 | |||||||||||||||||||||||||||||
| 2015 | 921,808 | 3,781,015 | 1,750,014 | 593,280 | 368,274 | 7,414,391 | ||||||||||||||||||||||||||||||
|
| 2014
|
|
| 895,385
|
|
| 3,614,094
|
|
| 1,584,274
|
|
| 1,350,000
|
|
| 340,046
|
|
| 7,783,799
|
| ||||||||||||||||
Michael J. Yates, Vice President, Interim Chief Financial Officer and Chief Accounting Officer (6) (7) | 2016 | $362,921 | $704,827 | $136,988 | $252,945 | $70,104 | $1,527,785 | |||||||||||||||||||||||||||||
Heath A. Mitts, Former Senior Vice President and Chief Financial Officer (8) | 2016 | $364,348 | $693,032 | $464,876 | $- | $78,212 | $1,600,468 | |||||||||||||||||||||||||||||
| 2015 | 485,169 | 832,011 | 385,050 | 234,192 | 123,611 | 2,060,033 | ||||||||||||||||||||||||||||||
|
| 2014
|
|
| 471,592
|
|
| 862,913
|
|
| 378,198
|
|
| 533,000
|
|
| 118,256
|
|
| 2,363,959
|
| ||||||||||||||||
Eric D. Ashleman, Senior Vice President, Chief Operating Officer | 2016 | $512,058 | $768,241 | $515,016 | $486,675 | $129,653 | $2,411,643 | |||||||||||||||||||||||||||||
| 2015 | 453,704 | 1,018,365 | 672,774 | 213,071 | 113,576 | 2,471,490 | ||||||||||||||||||||||||||||||
|
| 2014
|
|
| 404,138
|
|
| 735,379
|
|
| 322,245
|
|
| 430,500
|
|
| 90,191
|
|
| 1,982,454
|
| ||||||||||||||||
Denise R. Cade, Senior Vice President, General Counsel and Corporate Secretary (7) | 2016 | $430,128 | $228,000 (9) | $354,873 | $238,004 | $327,046 | $72,659 | $1,650,710 | ||||||||||||||||||||||||||||
Daniel J. Salliotte, Senior Vice President, Mergers & Acquisitions and Treasury (7) | 2016 | $322,637 | $549,025 | $200,008 | $265,766 | $3,604 | $66,589 | $1,407,629 | ||||||||||||||||||||||||||||
| (1) | Reflects the aggregate grant date fair value of restricted stock awards and PSUs for the |
| (2) | Reflects the aggregate grant date fair value for the year indicated in accordance with FASB ASC Topic |
| (3) | Reflects Messrs. Silvernail’s and |
| (4) | Represents the aggregate increase/decrease in actuarial value under the Pension Plan |
31
| (5) | Consists of the following for |
Name | Year | Contribution to 401(k) Plan, Defined Contribution Plan and Accrued SERP Benefits | Automotive(a) | Aircraft(b) | Other Payments | Total | Contribution to Defined SERP Benefits
| Automotive,
| Aircraft (b)
| Other
| Total
| |||||||||||||||||||||||||||||||||
Andrew K. Silvernail | 2013 | $ | 159,946 | $ | 26,786 | $ | 111,564 | $ | 0 | $ | 298,296 | $151,998 | $27,411 | $86,509 | $2,526 | $268,444 | ||||||||||||||||||||||||||||
Michael J. Yates | 49,817 | 19,990 | - | 297 | 70,104 | |||||||||||||||||||||||||||||||||||||||
Heath A. Mitts | 2013 | 77,322 | 21,192 | 0 | 0 | 98,514 | 60,753 | 16,752 | - | 707 | 78,212 | |||||||||||||||||||||||||||||||||
Frank J. Notaro | 2013 | 73,377 | 19,142 | 0 | 0 | 92,519 | ||||||||||||||||||||||||||||||||||||||
Jeffrey D. Bucklew | 2013 | 53,648 | 16,806 | 0 | 0 | 70,454 | ||||||||||||||||||||||||||||||||||||||
Eric D. Ashleman | 74,326 | 21,689 | - | 33,638 | 129,653 | |||||||||||||||||||||||||||||||||||||||
Denise R. Cade | 50,299 | 22,360 | - | - | 72,659 | |||||||||||||||||||||||||||||||||||||||
Daniel J. Salliotte | 2013 | 46,514 | 16,694 | 0 | 0 | 63,207 |
| 47,613
|
|
| 18,714
|
|
| -
|
|
| 262
|
|
| 66,589
|
| |||||||||||||||||||||||
| (a) | Consists of auto allowance and |
| (b) | The Company’s methodology for calculating the value of the personal use of the Company aircraft is to calculate the incremental costs of such usage to the Company, which includes fuel, landing fees, hangar fees, catering, additional expenses related to the crew and other expenses, which would not have otherwise been incurred by the Company if the aircraft had not been used for personal travel. |
| (c) | Represents one-time reimbursement for taxes withheld in connection with FICA on SERP contributions for Messrs. Silvernail, Yates, Ashleman and Salliotte, one-time reimbursement for taxes withheld in connection with automotive allowance and supplemental disability for Mr. Mitts, and relocation expenses for Mr. Ashleman of $32,603. |
| (6) | Mr. Yates served as our Interim Chief Financial Officer from September 9, 2016 to December 31, 2016. |
| (7) | None of Messrs. Yates or Salliotte or Ms. Cade were named executive officers in 2015 or 2014. |
| (8) | Mr. Mitts’ employment with the Company terminated on September 9, 2016. |
| (9) | Represents the signing bonus paid to Ms. Cade in March 2016 pursuant to the terms of her employment offer letter. |
Narrative to Summary Compensation Table
Perquisites and Supplemental Disability
In addition to benefits generally available to all other U.S.-basednon-union employees, the CEO and other NEOs receive an auto allowance and participate in a supplemental long-term disability program. The supplemental disability benefit is in addition to the group long-term disability benefit generally available to all U.S.-basednon-union employees. The group long-term disability plan provides an annual benefit of 60% of the first $300,000 of base salary, or an annual maximum benefit of $180,000 per year. For the NEOs, the supplemental program provides an annual benefit of 60% of their base salary above $300,000, with a maximum supplemental benefit of $60,000 per year. The CEO is also offered the personal use of the Company leased aircraft (limited to 25 hours per year).
Retirement Benefits
The Company maintains three twotax-qualified retirement plans for all employees in which the CEO and other NEOs participate: the IDEX Corporation Defined Contribution Plan (Defined Contribution Plan), the IDEX Corporation Savings Plan, which isconsists of a 401(k) plan with a prescribed matching contribution (401(k) Plan)) and a defined contribution portion (Defined Contribution), and the IDEX Corporation Retirement Plan, which is a defined benefit plan (Pension Plan). Two NEOs haveMr. Salliotte is the only NEO who has accrued benefits under the Pension Plan. None of the NEOs actively accrued any benefits under the Pension Plan in 2013.2016.
Defined Contribution Plan
The Defined Contribution portion of the IDEX Corporation Savings Plan is an ongoingtax-qualified “defined contribution” plan that provides an annual contributioncontributions based on a participant’s compensation for that year and a combination of the participant’s age and years of service as shown below:
Age + Years of Service | Company | |
Less than 40 | 3.5% of Eligible Compensation | |
40 but less than 55 | 4.0% of Eligible Compensation | |
55 but less than 70 | 4.5% of Eligible Compensation | |
70 or more | 5.0% of Eligible Compensation |
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Under the Defined Contribution Plan,plan, participants are entitled to receive thelump-sum value of their vested account at termination of employment subject to distribution rules under the law. Account balances are 100% vested after three years of service.
401(k) Plan
The 401(k) Plan is an on-going tax-qualifiedon-goingtax-qualified “401(k)” plan that provides a matching contribution based on the employee’s contribution up to 8% of eligible compensation. The maximum matching contribution by the Company is 4% of eligible compensation. The matching contribution vests 20% for each year of service and is 100% vested after 5 years of service.
Pension Plan
During 2005, the Company redesigned its retirement plans to eliminate the Pension Plan for employees hired after 2004. Employees who participated in the Pension Plan as of December 31, 2005 who met certain age and service requirements were given theone-time opportunity to choose:
Tochoose to stay in the Pension Plan with the then current match in the 401(k)
Plan (maximum match of 2.8% of eligible pay); or
To to begin participating in the Defined Contribution Plan as of January 1, 2006, with an enhanced match in the 401(k) Plan (maximum match of 4% of eligible pay). Employees who chose this option retain, by law, a frozen benefit in the Pension Plan as of December 31, 2005.
Messrs. Notaro and Mr. Salliotte chose to begin participation in the Defined Contribution Plan. EachHe has a frozen
benefit under the Pension Plan as of December 31, 2005. The monthly accrued benefit for Messrs. Notaro andMr. Salliotte under the Pension Plan upon retirement at age 65 will not change, although the present value of such benefit will change from year to year. Messrs. Silvernail, MittsThe other NEOS are not Pension Plan participants and Bucklewwere never participated ineligible for the Pension Plan.
2013
The following table provides information on plan-based awards for all NEOs for 2013.2016.
| Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | All Other Stock Awards: Number of Shares of Stock(3) | All Other Option Awards: Number of Securities Underlying Options | Exercise or Base Price of Option Awards ($ per Share)(4) | Grant Date Fair Value of Stock and Option Awards | Estimated Future Payouts Under Non- Equity Incentive Plan Awards (1) | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | All Other Stock Awards: Number of Shares of Stock (3) |
All Other |
Exercise or |
Grant Date | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Threshold | Target | Maximum | Threshold | Target | Maximum | Grant Date | Threshold | Target | Maximum | Threshold | Target | Maximum | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Andrew K. Silvernail | 02/15/2013 | $ | 0 | $ | 870,000 | $ | N/A | 6,168 | 18,505 | 37,010 | 18,505 | 72,525 | $ | 50.45 | $ | 2,967,326 | 02/19/2016 | $0 | $954,800 | N/A | 11,150 | 33,450 | 83,625 | - | 135,870 | 74.74 | $6,227,007 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael J. Yates | 02/19/2016 | 0 | 200,750 | 401,500 | 612 | 1,835 | 4,588 | - | 7,445 | 74.74 | $341,444 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 08/31/2016 | 5,355 | - | - | $500,371 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Heath A. Mitts | 02/15/2013 | 0 | 345,000 | 690,000 | 1,520 | 4,560 | 9,120 | 4,560 | 17,875 | $ | 50.45 | $ | 731,252 | 02/19/2016 | 0 | 376,875 | 753,750 | 2,073 | 6,220 | 15,550 | - | 25,265 | 74.74 | $1,157,908 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Frank J. Notaro | 02/15/2013 | 0 | 310,500 | N/A | 867 | 2,600 | 5,200 | 2,600 | 10,190 | $ | 50.45 | $ | 416,918 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey D. Bucklew | 02/15/2013 | 0 | 201,000 | 402,000 | 662 | 1,985 | 3,970 | 1,985 | 7,775 | $ | 50.45 | $ | 318,241 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric D. Ashleman | 02/19/2016 | 0 | 386,250 | N/A | 2,298 | 6,895 | 17,238 | - | 27,990 | 74.74 | $1,283,257 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Denise R. Cade | 02/19/2016 | 0 | 259,560 | N/A | 1,062 | 3,185 | 7,963 | - | 12,935 | 74.74 | $592,877 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Daniel J. Salliotte | 02/15/2013 | 0 | 186,550 | 373,100 | 607 | 1,820 | 3,640 | 1,820 | 7,125 | $ | 50.45 | $ | 291,740 | 02/19/2016 | 0 | 210,925 | 421,850 | 893 | 2,680 | 6,700 | - | 10,870 | 74.74 | $498,614 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 08/31/2016 | 2,680 | - | - | $250,419 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | For Messrs. Silvernail and |
| (2) | Reflects the range of the number of shares of Common Stock that could be issued pertaining to the performance stock units awarded in |
33
| (3) | Reflects the number of shares of restricted |
| (4) | Reflects closing price of the Company’s Common Stock on the grant date, which is the fair market value of the stock under the terms of the Incentive Award Plan. |
| (5) | Represents the grant date fair value of restricted stock awards, PSUs and stock options granted to each NEO in accordance with FASB ASC Topic 718. For a discussion of the assumptions made in the valuation of those awards, see note 13 “Share-Based Compensation” of the financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. For PSUs, the grant date fair value is based on the probable outcome of the related performance conditions which reflects the target level of performance. The grant date fair value of the PSUs granted in 2016 based on the maximum level of performance is as follows: Mr. Silvernail, $9,317,498; Mr. Yates, $511,195; Mr. Mitts, $1,732,581; Mr. Ashleman, $1,920,658; Ms. Cade, $887,237; and Mr. Salliotte, $746,514. All shares of restricted stock are eligible for dividend equivalent payments when paid on the Company’s Common Stock and, with respect to PSUs, cumulative dividend equivalents are paid based on actual number of shares delivered at the end of the performance period. |
Narrative to 20132016 Grants of Plan-Based Awards Table
Stock options awarded to the NEOs in 20132016 had the following characteristics:
Allall are nonqualified stock options;
Allall have an exercise price equal to the closing price of the Company’s stockCommon Stock on the grant date;
Allall vest annually in equal amounts over a four-year period;period based on the NEO’s continued service;
Allall vest upon retirement if retirement eligible (NEO is at least age 50, with a minimum of five years of service, and the NEO’s age plus years of service equals 70); and
Allall expire 10 years after the date of grant.
Restricted stock awards to the NEOs in 2013 had the following characteristics:
All annual awards cliff-vest three years after the grant date;
All shares vest upon retirement if retirement eligible (NEO is at least age 50, with a minimum of five years of service, and the NEO’s age plus years of service equals 70); and
All shares receive dividend equivalent payments in the same amount as dividends paid on the Company’s Common Stock at the time such dividends are paid.
Performance stock units awarded to the NEOs in 20132016 had the following characteristics:
Allall have a three-year performance period with vesting based on relative total shareholder return;
Allall shares vest upon retirement if the NEO is retirement eligible (NEO is at least age 50, with a minimum of five years of service, and the NEO’s age plus years of service equals 70); but are paid out only based on actual achievement of the Company against the relative TSR goal determined as if the last day of the year in which the individual retires is the last day of the performance period; and
Cumulativecumulative dividend equivalents are paid based on actual number of shares delivered at the end of the performance period.
Restricted stock awards granted to Messrs.Yates and Salliotte in 2016 had the following characteristics:
34
Outstanding Equity Awards at 20132016 Fiscal Year End
The following table provides information on all performance stock unit, restricted stock and stock option awards held by the NEOs and the value of those awards as of December 31, 2013. All outstanding equity awards are in or exercisable for shares of the Company’s Common Stock.2016.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Number of Securities Underlying Unexercised Options | Option Exercise Price | Option Expiration Date | Number of Shares of Stock that Have Not Vested(2) | Market Value of Shares of Stock that Have Not Vested(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(4) | Number of Securities Underlying Unexercised Options | Option ($) | Option Expiration Date | Number of Shares of Stock that Have Not Vested (2) | Market Value of Shares of Stock that Have Not Vested (3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (4) |
Equity Incentive | |||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Exercisable(1) | Unexercisable(1) |
Exercisable (1)
|
Unexercisable (1)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Andrew K. Silvernail | 33,165 | 11,055 | 31.77 | 03/02/2020 | 85,156 | $ | 6,288,771 | 36,640 | $ | 2,705,857 | 71,520 | - | 42.86 | 02/21/2022 | 18,885 | $1,700,783 | 99,077 | $8,922,875 | ||||||||||||||||||||||||||||||||||||||||||||||
| 7,880 | 7,880 | 40.89 | 02/22/2021 | 54,393 | 18,132 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 17,880 | 53,640 | 42.86 | 02/21/2022 | 40,560 | 40,560 | 72.73 | 02/13/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 72,525 | 50.45 | 02/15/2023 | 21,446 | 64,339 | 78.43 | 02/20/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Heath A. Mitts | 9,750 | 0 | 34.03 | 04/03/2017 | 27,530 | 2,033,091 | 9,029 | $ | 666,777 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| - | 135,870 | 74.74 | 02/19/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Michael J. Yates | 8,947 | - | 31.77 | 03/02/2020 | 6,400 | 576,384 | 5,358 | 482,541 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 9,000 | 0 | 32.95 | 04/08/2018 | 10,533 | - | 31.77 | 03/02/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 16,388 | 5,462 | 31.77 | 03/02/2020 | 12,740 | - | 40.89 | 02/22/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8,495 | 8,495 | 40.89 | 02/22/2021 | 21,230 | - | 40.89 | 02/22/2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 42,460 | 40.89 | 02/22/2021 | 13,410 | - | 42.86 | 02/21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5,587 | 16,763 | 42.86 | 02/21/2022 | 4,665 | 1,555 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 17,875 | 50.45 | 02/15/2023 | 2,317 | 2,318 | 72.73 | 02/13/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Frank J. Notaro | 15,795 | 5,265 | 31.77 | 03/02/2020 | 17,780 | 1,313,053 | 5,148 | $ | 380,180 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1,141 | 3,424 | 78.43 | 02/20/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| - | 7,445 | 74.74 | 02/19/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Eric D. Ashleman | 5,058 | 1,687 | 50.45 | 02/15/2023 | 13,318 | 1,199,419 | 18,754 | 1,688,986 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5,585 | 5,585 | 40.89 | 02/22/2021 | 8,250 | 8,250 | 72.73 | 02/13/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 21,230 | 40.89 | 02/22/2021 | 3,646 | 10,939 | 78.43 | 02/20/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 5,587 | 16,763 | 42.86 | 02/21/2022 | - | 17,700 | 77.61 | 07/15/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 10,190 | 50.45 | 02/15/2023 | - | 27,990 | 74.74 | 02/19/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Jeffrey D. Bucklew | 0 | 8,250 | 40.79 | 03/05/2022 | 5,205 | 384,389 | 3,930 | $ | 290,253 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Denise R. Cade | 2,091 | 6,274 | 76.79 | 10/26/2025 | 2,120 | 190,927 | 5,033 | 453,272 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 7,775 | 50.45 | 02/15/2023 | - | 12,935 | 74.74 | 02/19/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Daniel J. Salliotte | 10,665 | 3,555 | 31.77 | 03/02/2020 | 7,700 | 568,645 | 3,604 | $ | 266,126 | 4,240 | - | 40.89 | 02/22/2021 | 3,700 | 333,222 | 6,642 | 598,178 | |||||||||||||||||||||||||||||||||||||||||||||||
| 4,120 | 4,120 | 40.89 | 02/22/2021 | 11,410 | - | 42.86 | 02/21/2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3,352 | 10,058 | 42.86 | 02/21/2022 | 5,343 | 1,782 | 50.45 | 02/15/2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 0 | 7,125 | 50.45 | 02/15/2023 | 2,245 | 2,245 | 72.73 | 02/13/2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1,116 | 3,349 | 78.43 | 02/20/2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| - | 10,870 | 74.74 | 02/19/2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) | All options expire on the 10th anniversary of the grant date. Except as provided in the following sentence, all options vest 25% per year on the anniversary of the grant |
35
| (2) | The following table sets forth grant and vesting information for the outstanding restricted stock awards for all NEOs. |
| Grant Date | Number of Shares | Market Value Per Share at Grant | Number of Shares of Stock that Have Not Vested | Market Value of Shares of Stock that Have Not Vested | Vesting | |||||||||||||||||||
Andrew K. Silvernail | 02/22/2011 | 4,540 | 40.89 | 4,540 | $ | 335,279 | 100% vest on 02/22/2014 | |||||||||||||||||
| 08/10/2011 | 43,441 | 34.53 | 43,441 | 3,208,118 | 100% vest on 08/10/2014 | |||||||||||||||||||
| 02/21/2012 | 18,670 | 42.86 | 18,670 | 1,378,780 | 100% vest on 02/21/2015 | |||||||||||||||||||
| 02/15/2013 | 18,505 | 50.45 | 18,505 | 1,366,594 | 100% vest on 02/15/2016 | |||||||||||||||||||
Heath A. Mitts | 02/22/2011 | 17,130 | 40.89 | 17,130 | 1,265,051 | 100% vest on 02/22/2014 | ||||||||||||||||||
| 02/21/2012 | 5,840 | 42.86 | 5,840 | 431,284 | 100% vest on 02/21/2015 | |||||||||||||||||||
| 02/15/2013 | 4,560 | 50.45 | 4,560 | 336,756 | 100% vest on 02/15/2016 | |||||||||||||||||||
Frank J. Notaro | 02/22/2011 | 9,340 | 40.89 | 9,340 | 689,759 | 100% vest on 02/22/2014 | ||||||||||||||||||
| 02/21/2012 | 5,840 | 42.86 | 5,840 | 431,284 | 100% vest on 02/21/2015 | |||||||||||||||||||
| 02/15/2013 | 2,600 | 50.45 | 2,600 | 192,010 | 100% vest on 02/15/2016 | |||||||||||||||||||
Jeffrey D. Bucklew | 03/05/2012 | 3,220 | 40.79 | 3,220 | 237,797 | 100% vest on 03/05/2015 | ||||||||||||||||||
| 02/15/2013 | 1,985 | 50.45 | 1,985 | 146,592 | 100% vest on 02/15/2016 | |||||||||||||||||||
Daniel J. Salliotte | 02/22/2011 | 2,380 | 40.89 | 2,380 | 175,763 | 100% vest on 02/22/2014 | ||||||||||||||||||
| 02/21/2012 | 3,500 | 42.86 | 3,500 | 258,475 | 100% vest on 02/21/2015 | |||||||||||||||||||
| 02/15/2013 | 1,820 | 50.45 | 1,820 | 134,407 | 100% vest on 02/15/2016 | |||||||||||||||||||
|
| Grant Date | # Shares | Market Value Per Share at Grant ($) |
Number of
| Market Value of Shares of Stock that Have Not Vested ($) | Vesting | ||||||||||||||||
Andrew K. Silvernail | 02/13/2014 | 9,320 | 72.73 | 9,320 | 839,359 | 100% vest on 02/13/2017 | ||||||||||||||||
|
| 02/20/2015
|
|
| 9,565
|
|
| 78.43
|
|
| 9,565
|
|
| 861,424
|
| 100% vest on 02/20/2018
| |||||||
Michael J. Yates | 02/13/2014 | 535 | 72.73 | 535 | 48,182 | 100% vest on 02/13/2017 | ||||||||||||||||
| 02/20/2015 | 510 | 78.43 | 510 | 45,931 | 100% vest on 02/20/2018 | |||||||||||||||||
|
| 08/31/2016
|
|
| 5,355
|
|
| 93.44
|
|
| 5,355
|
|
| 482,271
|
| 100% vest on 08/31/2019
| |||||||
Eric D. Ashleman | 02/15/2013 | 9,915 | 50.45 | 4,958 | 446,517 | 100% vest on 02/15/2017 | ||||||||||||||||
| 02/13/2014 | 1,895 | 72.73 | 1,895 | 170,664 | 100% vest on 02/13/2017 | |||||||||||||||||
| 02/20/2015 | 1,630 | 78.43 | 1,630 | 146,798 | 100% vest on 02/20/2018 | |||||||||||||||||
|
| 07/15/2015
|
|
| 4,835
|
|
| 77.61
|
|
| 4,835
|
|
| 435,440
|
| 100% vest on 07/15/2018
| |||||||
Denise R. Cade
|
| 10/26/2015
|
|
| 2,120
|
|
| 76.79
|
|
| 2,120
|
|
| 190,927
|
| 100% vest on 10/26/2018
| ||||||
Daniel J. Salliotte | 02/13/2014 | 520 | 72.73 | 520 | 46,831 | 100% vest on 02/13/2017 | ||||||||||||||||
| 02/20/2015 | 500 | 78.43 | 500 | 45,030 | 100% vest on 02/20/2018 | |||||||||||||||||
|
| 08/31/2016
|
|
| 2,680
|
|
| 93.44
|
|
| 2,680
|
|
| 241,361
|
| 100% vest on 08/31/2019
| |||||||
| (3) | Determined based upon the closing price of the Company’s Common Stock on December 31, |
| (4) | Represents the number and value of |
Market or Andrew K. Silvernail Michael J. Yates Eric D. Ashleman Denise R. Cade Daniel J. Salliotte 36 Grant Date Number of
PSUs
Payout Value of
Unearned
Shares, Units or
Other Rights
That Have Not
Vested ($) Vesting 02/20/2015 31,880 4,163,114 Award vests on 12/31/2017 02/19/2016 33,450 4,759,761 Award vests on 12/31/2018 02/20/2015 1,695 221,367 Award vests on 12/31/2017 02/19/2016 1,835 261,174 Award vests on 12/31/2018 02/20/2015 5,420 707,782 Award vests on 12/31/2017 02/19/2016 6,895 981,204 Award vests on 12/31/2018 02/19/2016 3,185 453,272 Award vests on 12/31/2018 02/20/2015 1,660 216,774 Award vests on 12/31/2017 02/19/2016 2,680 381,404 Award vests on 12/31/2018
20132016 Option Exercises and Stock Vested
The following table provides information on stock option exercises and stock vesting for all NEOs in 2013.2016.
| Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized Upon Exercise(1) | Number of Shares Acquired on Vesting | Value Realized Upon Vesting(2) | Number of Shares
| Value Realized
| Number of Shares
| Value Realized
| ||||||||||||||||||||||||
Andrew K. Silvernail | 54,200 | $ | 1,725,490 | 5,670 | $ | 287,923 | - | $- | 62,293 | $5,271,466 | ||||||||||||||||||||||
Michael J. Yates | 8,000 | 508,771 | 4,093 | 339,519 | ||||||||||||||||||||||||||||
Heath A. Mitts | 83,100 | 2,788,388 | 2,920 | 148,278 | 98,816 | 4,026,666 | 4,560 | 327,226 | ||||||||||||||||||||||||
Frank J. Notaro | 67,983 | 1,986,120 | 6,300 | 319,914 | ||||||||||||||||||||||||||||
Jeffrey D. Bucklew | 2,750 | 40,934 | 0 | 0 | ||||||||||||||||||||||||||||
Eric D. Ashleman | 15,650 | 638,583 | 15,594 | 1,282,115 | ||||||||||||||||||||||||||||
Denise R. Cade | - | - | - | - | ||||||||||||||||||||||||||||
Daniel J. Salliotte | 75,880 | 2,504,868 | 4,250 | 215,815 | 4,000 | 165,594 | 4,246 | 349,089 | ||||||||||||||||||||||||
| (1) | Calculated |
| (2) | Calculated based |
Pension Benefits at 20132016 Fiscal Year End
The following table provides information related to the potential pension benefits payable to each NEO determined as described in the footnotes below.
Name | Plan Name | Number of Years Credited Service(1) | Present Value of Accumulated Benefits(2) | Plan Name | Number of Years Credited Service (1) | Present Value of Accumulated Benefits (2) | ||||||||||||||||||
Andrew K. Silvernail | Pension Plan | N/A | N/A | Pension Plan | N/A | N/A | ||||||||||||||||||
| SERP | ||||||||||||||||||||||||
Michael J. Yates | Pension Plan | N/A | N/A | |||||||||||||||||||||
Heath A. Mitts | Pension Plan | N/A | N/A | Pension Plan | N/A | N/A | ||||||||||||||||||
| SERP | ||||||||||||||||||||||||
Frank J. Notaro | Pension Plan | 7.75 | $ | 194,586 | ||||||||||||||||||||
| SERP | 7.75 | 101,323 | ||||||||||||||||||||||
Jeffrey D. Bucklew | Pension Plan | N/A | N/A | |||||||||||||||||||||
| SERP | ||||||||||||||||||||||||
Eric D. Ashleman | Pension Plan | N/A | N/A | |||||||||||||||||||||
Denise R. Cade | Pension Plan | N/A | N/A | |||||||||||||||||||||
Daniel J. Salliotte | Pension Plan | 1.17 | 27,738 | Pension Plan | 1.17 | $ | 37,566 | |||||||||||||||||
| SERP | ||||||||||||||||||||||||
| (1) | Credited service is determined under the Pension Plan as of December 31, |
| (2) | The present value of accumulated benefits as of December 31, |
| The interest and mortality assumptions are thePPA-required three-segment interest rates (for December 31, |
37
Narrative to Pension Benefits at 20132016 Fiscal Year End Table
Pension Plan
The Pension Plan is an on-going tax-qualifiedon-goingtax-qualified “career average” retirement plan that provides a level of benefit based on a participant’s compensation for a year with periodic updates to average compensation over a fixed five-year period. Under the Pension Plan, participants are entitled to receive an annual benefit on retirement equal to the sum of the benefit earned through 1995 using the five-year average compensation of a participant through 1995, plus the benefit earned under the then current formula for each year of employment after 1995. For each year of participation through 1995, a participant earned a benefit equal to 1.25% of the first $16,800 of such average compensation through 1995, and 1.65% of such compensation in excess of $16,800.
Beginning January 1, 1996, the benefit earned equals the sum of 1.6% of the first $16,800 of each year’s total compensation, and 2.0% for such compensation in excess of $16,800, for each full year of service credited after 1995. As required by law, compensation counted for purposes of determining this benefit is limited.
The normal form of retirement benefit is payable in the form of a life annuity with five years of payments guaranteed. Other optional forms of payment are available.
Only Mr. Salliotte has accrued benefits under the Pension Plan. None of the other NEOs have accrued any benefits under the Pension Plan in 2016.
Supplemental Executive Retirement andNonqualified Deferred Compensation Planat 2016 Fiscal Year End
The Supplemental Executive Retirement and Deferred Compensation Plan (SERP) is an unfunded, nonqualified plan designed to provide supplemental executive retirement benefits to employees who participate or have participated in the Pension Plan, and deferred compensation benefits to certain officers and other key employees designated by the Compensation Committee (see “Narrative to the Nonqualified Deferred Compensation at 2013 Fiscal Year End Table” below). The supplemental executive retirement portion of the SERP provides that if the employee participates or had participated in the Pension Plan, then the employee will receive an excess benefit (SERP Benefit) under a formula equivalent to the tax-qualified Pension Plan formula. This formula will only consider eligible compensation above the Internal Revenue Code limits and will restore any limits on the maximum amount of benefits that may be accrued under a qualified retirement plan. A SERP Benefit will only be accrued for the appropriate period of service during which the employee was an active participant in the Pension Plan. SERP Benefits are paid as an actuarially equivalent single lump-sum amount and are payable upon separation of service within the meaning of Internal Revenue Code Section 409A; however, no benefits are payable prior to the date that is six months after the date of separation of service, or the employee’s date of death, if earlier.
Nonqualified Deferred Compensation at 2013 Fiscal Year End
benefits. The following table provides information related to the benefits payable to each NEO under the defined contribution portion of the SERP, which is the Company’s only defined contribution nonqualified deferred compensation plan:
Name | Executive Contributions in Last Fiscal Year(1) | Registrant Contributions in Last Fiscal Year(2) | Aggregate Earnings in Last Fiscal Year | Aggregate Withdrawls / Distributions | Aggregate Balance at Last Fiscal Year End(3) | Executive Contributions in Last Fiscal Year (1) | Registrant Contributions in Last Fiscal Year (2) | Aggregate Earnings in Last Fiscal Year | Aggregate Withdrawals / Distributions | Aggregate Balance at Last Fiscal Year End (3) | ||||||||||||||||||||||||||
Andrew K. Silvernail | $ | 143,308 | $ | 77,867 | $ | 490,387 | $- | $134,663 | $109,152 | $3,165 | $1,166,760 | |||||||||||||||||||||||||
Michael J. Yates | - | 30,280 | 8,311 | 712 | 294,795 | |||||||||||||||||||||||||||||||
Heath A. Mitts | 58,372 | 6,407 | 258,475 | - | 41,922 | 14,344 | - | 501,816 | ||||||||||||||||||||||||||||
Frank J. Notaro | 53,152 | 8,453 | 328,994 | |||||||||||||||||||||||||||||||||
Jeffrey D. Bucklew | 35,305 | 789 | 47,915 | |||||||||||||||||||||||||||||||||
Eric D. Ashleman | - | 55,214 | 26,465 | 1,298 | 355,381 | |||||||||||||||||||||||||||||||
Denise R. Cade | - | 37,087 | 1,316 | - | 36,202 | |||||||||||||||||||||||||||||||
Daniel J. Salliotte | 26,289 | 18,975 | 171,595 | - | 26,711 | 21,072 | 628 | 308,835 | ||||||||||||||||||||||||||||
| (1) | None of the NEOs contributed to the SERP in |
| (2) | Amounts are reflected in “All Other Compensation” column of the Summary Compensation Table. |
| (3) | The following amounts have been previously reported as “All Other Compensation” in the Summary Compensation Table for prior years: Mr. Silvernail — |
38
Narrative to the Nonqualified Deferred Compensation at 20132016 Fiscal Year End Table
Supplemental Executive Retirement and Deferred Compensation Plan
The defined contribution portion of the SERP is designed to provide deferred compensation for certain officers and other key employees designated by the Compensation Committee. Under the defined contribution portion of the SERP, eligibleEligible employees may defer until a future date payment of all or any portion of their annual salary or bonus.bonus under the defined contribution portion of the SERP. Deferral elections may be made annually. These amounts are fully vested. The Company also contributes to an eligible employee’s account additional amounts, as described below, that are fully vested after the employee has completed three years of service.
The Company contributes an amount equal to 4% of the eligible employee’s compensation up to the IRS limit on compensation reduced by the amount of any Company matching contribution that is made to the 401(k) Plan. Additionally, the Company makes annual contributions to the accounts of eligible employees who are not actively accruing benefits under the Pension Plan. The contribution is based on the employee’s compensation above the IRS limit on compensation in the Defined Contribution Plan, and is determined based on the following table:
Sum of Participant’s Age Plus Years of Service | Contribution Percentage | |||
Less than 40 | 7.5 | |||
40 but less than 55 | 8.0 | |||
55 but less than 70 | 8.5 | |||
70 or more | 9.0 | |||
Certain eligible employees designated by the Compensation Committee including the NEOs also will receive an additional contribution equal to 2% of the employee’s compensation.
Deferred Compensation Account
All amounts deferred are recorded in a memorandum account for each employee and are credited or debited with earnings or losses as if such amounts had been invested in either an interest-bearing account or receive an investment return as if the funds were invested
in certain mutual funds, as selected by the employee. The deferred compensation credited to the interest-bearing account is adjusted on at least a quarterly basis with hypothetical earnings equal to the lesser of the Barclays Capital Long Term Bond AAA — Corporate Bond Index as of the first business day in November of the calendar year preceding the year for which the earnings are to be credited or 120% of the long-term applicable Federal rate as of the first business day in November. The memorandum accounts are not funded, and the right to receive future payments of amounts recorded in these accounts is an unsecured claim against the Company’s general assets.
The deferred compensation account amounts are payable upon separation of service within the meaning of Internal Revenue Code Section 409A; however, no benefits are payable prior to the date that is six months after the date of separation of service, or the date of death of the employee, if earlier. Account balances will be paid either in a single lump sum or in up to ten substantially equal annual installments, as elected by the employee at the time they first become eligible for the Deferred Compensation Plan.
Prior to separation from service, amounts may be paid only on the occurrence of an unforeseeable emergency, within the meaning of Internal Revenue Code Section 409A. On the happening of a change ofin control event within the meaning of Internal Revenue Code Section 409A, all amounts become vested and are distributed at that time in a singlelump-sum payment.
Potential Payments upon Termination or Change in Control
Mr. Silvernail
The Company entered into an employment agreement with Mr. Silvernail on February 19, 2016, effective as of November 8, 2013.2015. The employment agreement provides for a term of two
approximately three years (expiring February 28, 2019) and is substantially similar to Mr. Silvernail’s initial two-yearprior employment agreement. If Mr. Silvernail’s employment is terminated by
39
the Company other than for cause,“cause” and not in connection with a “change in control” (each as defined in the employment agreement), then, subject to his execution and non-revocation of a general release of claims and his continued compliance with applicable restrictive covenants, he will receive (i) continuing salary payments and health benefits for 24 months following termination, (ii) a bonus equal to a pro-ratapro rata portion of 100% of his base salaryannual bonus for the year in which his termination occurs (based on the portion of the year he was employed), and(iii) a payment equal to 200% of his base salary payable over 24 months commencing approximately 60 days after his termination. termination, (iv) fully accelerated vesting and immediate exercisability of all unvested time-based equity awards (the “time-based acceleration”), and (v) vesting of all unvested performance-based equity awards on the December 31 next following his termination of employment with respect to that number of shares of the Company’s Common Stock (or performance units or dividend equivalents, as applicable) based on the performance level achieved with respect to the performance goal(s) under each such award from the beginning date of the performance period applicable thereto through such December 31 (the “performance-based acceleration”).
If Mr. Silvernail’s employment is terminated because ofdue to his disability or death, he or his estate, as applicable, will receive a bonus payment equal to a pro-ratapro rata portion of 100% of his base salaryannual bonus for the year in which his termination occurs (based on the portion of the year he was employed). Additionally, if Mr. Silvernail should die during the term of the agreement,, time-based acceleration and performance-based acceleration.
If Mr. Silvernail’s spouseemployment is terminated by the Company without cause or estateby him for “good reason” (as defined in the employment agreement), in either case, in contemplation of or within the 24 month period following a change in control, then, subject to his execution
and non-revocation of a general release of claims and his continued compliance with applicable restrictive covenants, he will receive (i) continuing salary payments and health benefits for 36 months following termination, (ii) a bonus payment equal to a pro-ratapro rata portion of 100% of his base salaryannual bonus for the year in which his termination occurs (based on the portion of the year he was employed). If his employment is terminated without cause or he terminates for certain specified reasons following a change in control, Mr. Silvernail will receive his full salary and health insurance for a period of 36 months following termination, a pro-rata portion of his bonus for the year of his termination, and, (iii) a payment equal to 300% of his base salary, payable over 36 months all commencing six monthsapproximately 60 days after his termination.termination, (iv) time-based acceleration and (v) in lieu of performance-based acceleration, a cash payment in respect of all performance-based equity awards with respect to which he has not yet received payment, based on the performance level achieved with respect to the performance goal(s) under each such award from the beginning date of the performance period applicable thereto through such change in control, with such cash payment adjusted to reflect hypothetical earnings (equal to the lesser of the Barclays Long Aaa US Corporate Index or 120% of the applicable federal long-term rate, in each case, determined as of the first business day of November of the calendar year preceding the change in control and compounded) for the period between such change in control and the date of payment.
In addition, to the extent that any payment or benefit received in connection with a change in control would be subject to an excise tax under Section 4999 of the Internal Revenue Code, such payments and/or benefits will be subject to a “best pay cap” reduction if such reduction would result in a greater net after-tax benefit to Mr. Silvernail than receiving the full amount of such payments.
The employment agreement contains confidentiality covenants by Mr. Silvernail which apply indefinitely and non-competition and employee and business non-solicitation covenants by Mr. Silvernail which apply during the term of his employment and for a two-year period thereafter.
Messrs. Yates, Ashleman and Salliotte and Ms. Cade
The Company has entered into letter agreements with Messrs. Mitts, BucklewYates, Ashleman and Salliotte and Ms. Cade providing for (a) severance pay in an amount equal to two times the sum of the executive’s annual base salary and target MICP bonus in the event of an involuntary termination within two years following a change in control, payable over the 24 month period following termination and (b) severance pay in an amount equal to the sum of one year (or up to one year, in the case of Mr. Ashleman and Ms. Cade) of salary and target MICP bonus in the event of termination without cause within two years following a change in control, and (b) one year of salary and target MICP bonus in the event ofan involuntary termination without cause other than in connection with a change in control.control, in exchange for a signed release.
The Company has entered intoEquity Awards
Occurrence of a letter agreement with Mr. Notaro providingChange in Control for (a) three yearsAwards Granted Prior to February 20, 2015
For awards granted prior to February 20, 2015, the Incentive Award Plan provides that if a change in control occurs, then immediately prior to such change in control, all awards will become fully exercisable and all forfeiture restrictions on such awards will lapse.
Occurrence of salary and bonus and two yearsa Change in Control for Awards Granted On or After February 20, 2015
For awards granted on or after February 20, 2015, the Incentive Award Plan provides that if a change in control occurs, then each outstanding award will continue in effect, or be assumed or an equivalent award substituted by the Company’s successor; provided, that if the grantee incurs a termination of fringe benefitsservice without cause or for good reason (each as defined in the event heIncentive Award Plan) within 24 months following such change in control, the awards will become fully exercisable and all forfeiture restrictions will lapse. If an outstanding award is terminated without cause within two yearsnot assumed or substituted upon a change in control or if, following a change in control, neither the Company nor its successor has equity
securities that are readily tradable on a regulated securities exchange, then the awards will vest in full.
2015 and (b) one year of salary2016 PSU Grants
Notwithstanding the foregoing, the award agreements for PSUs granted in 2015 and target bonus2016 provide that if he is terminated without cause other than in connection with a change in control.control occurs, the grantee will receive a cash payment in respect of such PSUs valued based on the actual level of achievement of the performance goals against target measured as of the date of the change in control, including dividend equivalents earned up to the change in control, with such value adjusted to the date of payment to reflect hypothetical earnings (equal to the lesser of the Barclays Long Aaa U.S. Corporate Index or 120% of the applicable federal long-term rate, in each case, determined as of the first business day of November of the calendar year preceding the change in control and compounded) for the period between such change in control and the date of payment. The cash payment will be paid as soon as practicable following the earliest to occur of the following events: (i) if, as of the time of the change in control, the grantee is eligible for retirement, as of the date of the change in control, (ii) as of the date the grantee first becomes eligible for retirement following the change in control if that date occurs prior to the end of the performance period, (iii) if the grantee’s service is terminated by the Company without cause or by the grantee for good reason and the date of termination occurs (or the event giving rise to good reason occurs), in each case, within 24 months following the change in control, on the date of such termination, (iv) if the grantee remains employed through the end of the applicable performance period, as of the end of the applicable performance period, or (v) if the grantee’s employment is terminated due to death or disability prior to the end of the performance period, as of the date of death or disability.
Termination due to Death, Disability or Retirement
The award agreements for stock options and restricted stock awards provide that if the grantee’s service is terminated by reason of death, disability or retirement, the award will become fully vested and exercisable. The award agreements for the 2015 and 2016 PSU grants provide that if the grantee’s service is terminated by reason of death, disability or retirement, the PSUs and any dividend equivalents thereon will become fully vested and earned based on the actual level of achievement of the performance goals against target measured through the December 31 following the date of termination.
SERP
Pursuant to the SERP, if a change in control occurs then not later than the closing date for the change in control event the amount credited to each participant’s deferred compensation account shall be distributed in one lump sum in cash and/or Common Stock.
Quantification of Termination Payments and Benefits — Mr. Mitts
Mr. Mitts resigned from the Company effective September 9, 2016. Mr. Mitts exercised his vested stock options per the terms of those awards, and did not receive any termination payments or benefits or any other special payments connected to his resignation.
Quantification of Termination Payments and Benefits — Change in Control
The following table setstables set forth the amount each NEO would receive upon a change in control or, in the event of a termination of employment, as severance or as a result of accelerated vesting if his or her employment was terminated without cause or for good reason, or for disability or death (in the case of Mr. Silvernail), in connection with or absent a change in control, using the following assumptions:
Terminationchange in control and/or termination of employment on December 31, 2013.
Accelerationaccelerated vesting of vesting in options and restricted stock, and exercise of all accelerated vested options based on the closing market price of $73.85$90.06 per share of the Company’s Common Stock on December 31, 2013.
Accelerated
Name | Involuntary Termination Not for Cause/Good Reason | Termination in Connection with Change in Control | ||||||
Andrew K. Silvernail | $ | 13,888,509 | $ | 17,029,288 | ||||
Heath A. Mitts | 805,000 | 6,830,983 | ||||||
Frank J. Notaro | 724,500 | 5,638,401 | ||||||
Jeffrey D. Bucklew | 536,000 | 2,059,428 | ||||||
Daniel J. Salliotte | 473,550 | 2,415,584 | ||||||
Change in Control and Termination Payments and Benefits for Andrew K. Silvernail
| Incremental Benefits Due to Termination Event | Involuntary Not for Cause Termination | Disability or Death | Change in Control | Involuntary Not for Cause Termination or Voluntary Good Reason
| ||||||||||||
Cash Severance (incl. Incentives) | $ | 3,819,200 | $ | - | $ | - | $ | 5,728,800 | ||||||||
Unvested Restricted Stock | 1,700,783 | 1,700,783 | - | 1,700,783 | ||||||||||||
Unvested Options | 4,250,904 | 4,250,904 | - | 4,250,904 | ||||||||||||
Unvested Performance Shares | 9,114,940 | 9,114,940 | - | 9,114,940 | ||||||||||||
SERP | 1,166,760 | 1,166,760 | 1,166,760 | 1,166,760 | ||||||||||||
Health and Welfare Benefits | 40,098 | - | - | 60,147 | ||||||||||||
Tax Cut Back | - | - | - | (3,825,244 | ) | |||||||||||
Total | $ | 20,092,685 | $ | 16,233,387 | $ | 1,166,760 | $ | 18,197,090 | ||||||||
40Change in Control and Termination Payments and Benefits for Michael J. Yates
Incremental Benefits Due to Termination Event | Involuntary Not for Cause Termination | Disability or Death | Change in Control | Involuntary Not for Cause Termination or Voluntary Good Reason
| ||||||||||||
Cash Severance (incl. Incentives) | $ | 565,750 | $ | - | $ | - | $ | 1,131,500 | ||||||||
Unvested Restricted Stock | 482,271 | 576,384 | 48,182 | 576,384 | ||||||||||||
Unvested Options | - | 255,643 | 101,764 | 255,643 | ||||||||||||
Unvested Performance Shares | - | 492,876 | - | 492,876 | ||||||||||||
SERP | 294,795 | 294,795 | 294,795 | 294,795 | ||||||||||||
Total | $ | 1,342,816 | $ | 1,619,698 | $ | 444,741 | $ | 2,751,198 | ||||||||
Change in Control and Termination Payments and Benefits for Eric D. Ashleman
Incremental Benefits Due to Termination Event | Involuntary Not for Cause Termination | Disability or Death | Change in Control | Involuntary Not for Cause Termination or Voluntary Good Reason
| ||||||||||||
Cash Severance (incl. Incentives) | $ | 901,250 | $ | - | $ | - | $ | 1,802,500 | ||||||||
Unvested Restricted Stock | - | 1,199,419 | 617,181 | 1,199,419 | ||||||||||||
Unvested Options | - | 986,187 | 209,795 | 986,187 | ||||||||||||
Unvested Performance Shares | - | 1,724,236 | - | 1,724,236 | ||||||||||||
SERP | 355,381 | 355,381 | 355,381 | 355,381 | ||||||||||||
Total | $ | 1,256,631 | $ | 4,265,223 | $ | 1,182,357 | $ | 6,067,723 | ||||||||
Change in Control and Termination Payments and Benefits for Denise R. Cade
Incremental Benefits Due to Termination Event | Involuntary Not for Cause Termination | Disability or Death | Change in Control | Involuntary Not for Cause Termination or Voluntary Good Reason
| ||||||||||||
Cash Severance (incl. Incentives) | $ | 692,160 | $ | - | $ | - | $ | 1,384,320 | ||||||||
Unvested Restricted Stock | - | 190,927 | - | 190,927 | ||||||||||||
Unvested Options | - | 281,420 | - | 281,420 | ||||||||||||
Unvested Performance Shares | - | 460,117 | - | 460,117 | ||||||||||||
SERP | - | 36,202 | 36,202 | 36,202 | ||||||||||||
Total | $ | 692,160 | $ | 968,666 | $ | 36,202 | $ | 2,352,986 | ||||||||
Change in Control and Termination Payments and Benefits for Daniel J. Salliotte
Incremental Benefits Due to Termination Event | Involuntary Not for Cause Termination | Disability or Death | Change in Control | Involuntary Not for Cause Termination or Voluntary Good Reason
| ||||||||||||
Cash Severance (incl. Incentives) | $ | 535,425 | $ | - | $ | - | $ | 1,070,850 | ||||||||
Unvested Restricted Stock | - | 333,222 | 46,831 | 333,222 | ||||||||||||
Unvested Options | - | 314,968 | 109,491 | 314,968 | ||||||||||||
Unvested Performance Shares | - | 610,196 | - | 610,196 | ||||||||||||
SERP | 308,835 | 308,835 | 308,835 | 308,835 | ||||||||||||
Total | $ | 844,260 | $ | 1,567,221 | $ | 465,157 | $ | 2,638,071 | ||||||||
Events After End of Fiscal Year
On December 30, 2016, the Company appointed William K. Grogan to serve as the Company’s Senior Vice President and Chief Financial Officer, effective January 1, 2017. The Company entered into an offer letter with Mr. Grogan on December 30, 2016 in connection with his promotion to Chief Financial Officer, as described in the Company’s Current Report on Form 8-K filed on January 4, 2017. Mr. Grogan succeeded Mr. Yates, who had been serving as the Company’s interim Chief Financial Officer and Vice President and Chief Accounting Officer through December 31, 2016. Mr. Yates has continued in his role as Vice President and Chief Accounting Officer.
Our Board of Directors recommends that you vote FOR the approval of the Company’s executive compensation |
PROPOSAL 2 — ADVISORY VOTE ON EXECUTIVE COMPENSATION
We are soliciting anon-binding advisory vote(say-on-pay) on the compensation of the Company’s NEOs, as described in the Compensation Discussion and Analysis section, the compensation tables, and the accompanying narrative disclosure set forth in this Proxy Statement.Statement, as required under Section 14A of the Securities Exchange Act of 1934, as amended.
The Company maintains a balanced approach to executive compensation with a mix of both cash andnon-cash awards and short and long-term incentives, with total direct compensation targeted within a range of +/- 20% of 50th percentile ofthat includes market median for comparable positions at comparable companies. Where an individual executive’s target compensation is positioned within the market.competitive range is based on the individual factors listed in the Compensation Discussion and Analysis. Actual compensation in any given year should and does vary from target based on Company and individual performance. In this way, the Company motivates and rewards both vital short termshort-term performance and long-term value creation. The Board of Directors strongly endorses the Company’s executive compensation program and recommends that the stockholders vote in favor of the following resolution:
RESOLVED, that the stockholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers as disclosed in this Proxy Statement pursuant to Item 402 of RegulationS-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion contained in this Proxy Statement.
Because the vote is advisory, it will not be binding on the Company. However, the Compensation Committee will carefully consider the outcome of the vote in determining future compensation policies and decisions.
Our Board of Directors recommends that you vote FOR the approval to conduct an advisory vote on executive compensation every year |
PROPOSAL 3 — ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTES ON
EXECUTIVE COMPENSATION
As required under Section 14A of the Securities Exchange Act of 1934, as amended, we are also soliciting anon-binding advisory vote on whether thesay-on-pay vote should occur every one, two or three years. You have the option to vote for any one of the three options, or to abstain on the matter.
The Company implemented annualsay-on-pay voting following the preference expressed by stockholders in 2011, and the Board has determined that annualsay-on-pay voting continues to be the best approach for the Company. Annualsay-on-pay voting provides the Company with direct and timely stockholder input regarding our executive compensation practices, which are disclosed annually. Notwithstanding the Board’s recommendation, the Board may in the future determine that less frequentsay-on-pay voting is more appropriate for the Company based on the relevant considerations at the time.
Stockholders are being asked to vote on the following resolution:
RESOLVED, that the stockholders of the Company approve, on an advisory basis, that the frequency with which the stockholders of the Company shall have an advisory vote on the compensation of the Company’s named executive officers as disclosed in the Company’s Proxy Statement is:
This advisory vote on the frequency of thesay-on-pay vote is not binding on the Company. However, the Board of Directors Recommends a Vote FORwill take into account the approvalresult of the Company’s executive compensation.vote when determining the frequency of futuresay-on-pay votes.
Stockholders are not voting to approve or disapprove the Board of Directors’ recommendation. Stockholders may choose among the four choices included in the resolution set forth above.
41
For the year ended December 31, 2013,2016, the Audit Committee has reviewed and discussed the audited financial statements with management and the Company’s independent registered public accounting firm, Deloitte & Touche LLP. The Committee discussed with Deloitte & Touche LLP the matters required to be discussed by the Statement on Auditing StandardsStandard No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU section 380),16, as adopted by the Public Company Accounting Oversight Board in Rule 3200T,PCAOB ReleaseNo. 2012-004 and approved by the SEC in ReleaseNo. 34-68453, and reviewed the results of the independent registered public accounting firm’s examination of the financial statements.
The Committee also received the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte & Touche LLP’s communications with the Audit Committee concerning independence, discussed with the auditors their independence, and satisfied itself as to the auditors’ independence.
Based on the above reviews and discussions, the Audit Committee recommends to the Board of Directors that the financial statements be included in the Annual Report on Form10-K for the year ended December 31, 2013,2016, for filing with the SEC.
Notwithstanding anything to the contrary set forth in any of the Company’s previous filings under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, that might incorporate future filings made by the Company under those statutes, in whole or in part, this report shall not be deemed to be incorporated by reference into any such filings, nor will this report be incorporated by reference into any future filings made by the Company under those statutes.
Ernest J. Mrozek, Chairman
Mark A. Buthman
William M. Cook
David C. Parry
Livingston L. SatterthwaiteGregory F. Milzcik
42
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed to the Company for each of the last two fiscal years for professional services rendered by the Company’s principal accounting firm, Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their respective affiliates (collectively, the Deloitte Entities), are set forth in the table below. All such fees werepre-approved by the Audit Committee in accordance with thepre-approval policy discussed below.
| 2013 | 2012 | 2016 | 2015 | |||||||||||||
Audit fees(1) | $ | 2,861,000 | $ | 3,019,000 | | $3,131,000 | | $2,953,000 | ||||||||
Audit-related fees(2) | 0 | 192,000 | - | - | ||||||||||||
Tax fees(3) | 770,000 | 620,000 | 1,068,000 | 775,000 | ||||||||||||
All other fees(4) | 0 | 0 | - | - | ||||||||||||
|
| |||||||||||||||
Total | $ | 3,631,000 | $ | 3,831,000 | $4,199,000 | $3,728,000 | ||||||||||
|
| |||||||||||||||
| (1) | Audit fees represent the aggregate fees billed for the audit of the Company’s financial statements, review of the financial statements included in the Company’s quarterly reports, and services in connection with statutory and regulatory filings or engagements. |
| (2) | Audit-related fees represent the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under |
| (3) | Tax fees represent the aggregate fees billed for professional services for tax compliance, tax advice and tax planning. |
| (4) | All other fees represent the aggregate fees billed for products and services that are not included in the audit fees, audit-related fees, and tax fees. The Audit Committee has determined that the provision of these services is not incompatible with maintaining the Deloitte Entities’ independence. |
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy that requires thepre-approval of audit andnon-audit services rendered by the Deloitte Entities. For audit services, the accounting firm provides the Audit Committee with an audit services plan during the second quarter of each fiscal year outlining the scope of the audit services proposed to be performed for the fiscal year and the associated fees. This audit services plan must be formally accepted by the Audit Committee.
Fornon-audit services, management submits to the Audit Committee for approval during the second quarter of each fiscal year and fromtime-to-time during the fiscal year a list ofnon-audit services that it recommends the Audit Committee engage the accounting firm to provide for the current year, along with the associated fees. Company management and the accounting firm each confirm to the Audit Committee that anynon-audit service on the list is permissible under all applicable legal requirements.
The Audit Committee approves both the list of permissiblenon-audit services and the budget for such services. The Audit Committee delegates to its Chairman the authority to amend or modify the list of approved permissiblenon-audit services and fees. The Chairman reports any such actions taken to the Audit Committee at a subsequent Committee meeting.
Our Board of Directors recommends that you vote FOR the ratification of the appointment of Deloitte & Touche LLP |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s officers, directors and persons who own more than 10% of the Company’s Common Stock to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. Based solely on its review of the copies of the forms it received, or written representations from reporting persons, the Company believes that all filing requirements applicable to its officers, directors and greater than 10% stockholders were met during the year ended December 31, 2013.
43
PROPOSAL 34 — APPROVAL OF AUDITORS
The Audit Committee has appointed Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2014.2017. Representatives of Deloitte & Touche LLP will attend the Annual Meeting and will have the opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions.
Although the rules of the U.S. Securities and Exchange Commission and the corporate governance listing standards of the New York Stock Exchange require that the Audit Committee be directly responsible for selecting and retaining the independent registered public accounting firm, we are providing shareholders with the opportunity to express their views on this issue. While this vote cannot be binding, if the shareholders do not ratify the appointment of Deloitte & Touche LLP, the Audit Committee will take the vote into account in making future appointments.
The Company’s Board of Directors Recommends a Vote FOR the ratificationSECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the appointmentSecurities Exchange Act of Deloitte & Touche LLP1934, as amended, requires the Company’s independent registered public accounting firm for 2014.officers, directors and persons who own more than 10% of the Company’s Common Stock to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than 10% stockholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of the forms it received, or written representations from reporting persons, the Company believes that all filing requirements applicable to its officers, directors and greater than 10% stockholders were met during the year ended December 31, 2016.
STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
FOR 20152018 ANNUAL MEETING
A stockholder desiring to submit a proposal for inclusion in the Company’s Proxy Statement for the 20152018 Annual Meeting must deliver the proposal so that it is received by the Company no later than November 5, 2014.16, 2017. The Company requests that all such proposals be addressed to Frank J. Notaro,Denise R. Cade, Senior Vice President, - General Counsel and Corporate Secretary, IDEX Corporation, 1925 West Field Court, Suite 200, Lake Forest, Illinois 60045, and mailed by certified mail, return receipt requested.
In addition, the Company’s By-lawsBylaws require that any stockholder desiring to nominate a director for election or propose other business for consideration at the 20152018 Annual Meeting must provide written notice. Such notice must contain the information required by the By-lawsBylaws and must be received by the Corporate Secretary not less than 90 nor more than 120 days before the first anniversary of the preceding year’s annual meeting.meeting of stockholders. To be timely for the 20152018 Annual Meeting, any such notice must be received by the Corporate Secretary, at the address above, on any date beginning on December 10, 2014,27, 2017 and ending on January 9, 2015.26, 2018.
The Board of Directors does not know of any business to be brought before the Annual Meeting other than the matters described in the Notice of Annual Meeting. However, if any other matters are properly presented for action, it is the intention of each person named in the accompanying proxy to vote said proxy in accordance with his judgment on those matters.
By Order of the Board of Directors,
FRANK J. NOTARODENISE R. CADE
Senior Vice President, — General Counsel
and Corporate Secretary
March 5, 201417, 2017
Lake Forest, Illinois
A copy of the Company’s Annual Report on Form10-K for the year ended December 31, 2013,2016, including the financial statement schedules, as filed with the Securities and Exchange Commission, may be obtained by stockholders without charge by sending a written request to Heath A. Mitts, Chief Financial Officer, IDEX Corporation, 1925 West Field Court, Suite 200, Lake Forest, Illinois 60045.
IDEX CORPORATION 1925 W. FIELD CT, SUITE 200 LAKE FOREST, IL 60045 | VOTE BY INTERNET -www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. | |||||||
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. | ||||||||
VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. | ||||||||
VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. | ||||||||
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VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the web site IDEX CORPORATION and follow the instructions to obtain your records and to create an electronic 1925 W. FIELD CT, SUITE 200 voting instruction form. LAKE FOREST, IL 60045 ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: M66345-P47226
E21290-P85113 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY
| DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. IDEX CORPORATION THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 3. For Withhold For All To withhold authority to vote for any individual All All Except nominee(s), mark “For All Except” and write the name(s) of the nominee(s) on the line below. Vote on Directors 1. To elect three directors for a term of three years ! ! !
| THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2 AND 4 AND ONE YEAR ON PROPOSAL 3. IF ANY OTHER MATTERS PROPERLY COME BEFORE THE MEETING, THE PERSONS NAMED IN THIS PROXY WILL VOTE IN THEIR DISCRETION. | ||||||||||||||||||||||||||
| For All | Withhold All | For All Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the name(s) of the nominee(s) on the line below. | |||||||||||||||||||||||
1. | To elect two directors each for a term of three years | |||||||||||||||||||||||||
| Nominees: | ☐ | ☐ | ☐ | |||||||||||||||||||||||
| 01) | ANDREW K. SILVERNAIL | |||||||||||||||||||||||||
| 02) | KATRINA L. HELMKAMP | |||||||||||||||||||||||||
| Vote on Proposals | For | Against | Abstain | |||||||||||
| 2. | Advisory vote to approve named executive officer compensation. | ☐ | ☐ | ☐ | ||||||||||
| 1 Year | 2 Years | 3 Years | Abstain | |||||||||||
| 3. | Advisory vote to approve the frequency (whether annual, biennial or triennial) with which stockholders of IDEX shall be entitled to have an advisory vote to approve named executive officer compensation. | ☐ | ☐ | ☐ | ☐ | |||||||||
| For | Against | Abstain | ||||||||||||
| 4. | Ratification of the appointment of Deloitte & Touche LLP as our independent registered accounting firm for 2017. | ☐ | ☐ | ☐ | ||||||||||
| For address changes and/or comments, please check this box and write them on the back where indicated. | ☐ | |||||||||||
| Yes | No | |||||||||||
| Please indicate if you plan to attend this meeting. | ☐ | ☐ | ||||||||||
| Please sign exactly as name appears hereon. When shares are held by joint tenants, both should sign. When signed as attorney, executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign in full corporate name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person. | ||||||||||||
| Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
V.1.1
IDEX CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 8, 2014 The Annual Meeting of Stockholders of IDEX Corporation (the “Company”) will be held on Tuesday, April 8, 2014, at 9:00 a.m. Central Time, at The Westin Chicago North Shore, 601 North Milwaukee Avenue, Wheeling, Illinois 60090, for the purposes listed on the reverse side. The Board of Directors fixed the close of business on February 14, 2014, as the record date for the determination of Stockholders entitled to notice of, and to vote at, the Annual Meeting. YOUR VOTE IS IMPORTANT Regardless of whether you plan to attend the Annual Meeting of Stockholders, you can be sure these shares are represented at the meeting by promptly returning your proxy in the enclosed envelope. Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Combined Document are available at www.proxyvote.com. 26, 2017
The Annual Meeting of Stockholders of IDEX Corporation (the “Company”) will be held on Wednesday, April 26, 2017, at 9:00 a.m., Central Time, at the Westin Chicago North Shore, 601 North Milwaukee Avenue, Wheeling, Illinois 60090, for the purposes listed on the reverse side. | ||||||
The Board of Directors fixed the close of business on March 1, 2017, as the record date for the determination of Stockholders entitled to notice of, and to vote at, the Annual Meeting. You may obtain directions to the location of the Annual Meeting by visiting our website at www.idexcorp.com. | ||||||
| YOUR VOTE IS IMPORTANT | ||||||
| Regardless of whether you plan to attend the Annual Meeting of Stockholders, you can be sure these shares are represented at the meeting by promptly returning your proxy in the enclosed envelope. | ||||||
Important Notice Regarding the Availability of Proxy Materials for the 2017 Annual Meeting The Proxy Statement and 2016 Annual Report of IDEX Corporation are available at: http://phx.corporate-ir.net/phoenix.zhtml?c=83305&p=irol-reportsAnnual |
Proxy card must be signed and dated on the reverse side.
ê Please fold and detach card at perforation before mailing. M66346-P47226 IDEX CORPORATION 1925 West Field Court, Suite 200 Lake Forest, Illinois 60045-4824 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned hereby appoints ERNEST J. MROZEK, MICHAEL T. TOKARZ, AND FRANK J. NOTARO, and each of them, as Proxies, with full power of substitution, and hereby authorizes them to represent and to vote, as designated on the reverse side, all the shares of common stock of IDEX Corporation held of record by the undersigned on February 14, 2014, at the Annual Meeting of Stockholders to be held on April 8, 2014, at 9:00 a.m. Central Time, at The Westin Chicago North Shore, 601 North Milwaukee Avenue, Wheeling, Illinois 60090, or at any adjournment thereof. Address Changes/Comments: (If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse sideê
E21291-P85113
IDEX CORPORATION 1925 West Field Court, Suite 200 Lake Forest, Illinois 60045-4824 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS | ||||||||||||||||
The undersigned hereby appoints William M. Cook, Eric D. Ashleman and Denise R. Cade, and each of them, as Proxies, with full power of substitution, and hereby authorizes them to represent and to vote, as designated on the reverse side, all the shares of common stock of IDEX Corporation held of record by the undersigned on March 1, 2017, at the Annual Meeting of Stockholders to be held on April 26, 2017, at 9:00 a.m. Central Time, at the Westin Chicago North Shore, 601 North Milwaukee Avenue, Wheeling, Illinois 60090, or at any adjournment thereof. | ||||||||||||||||
Address Changes/Comments: | ||||||||||||||||
(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.) Continued and to be signed on reverse side | ||||||||||||||||
V.1.1
