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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Definitive Proxy Statement

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Definitive Additional Materials

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Soliciting Material Pursuant to § 240.14a-12

ROPER TECHNOLOGIES, INC.

(Formerly Roper Industries, Inc.)

(Name of Registrant as Specified in its Charter)

 

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

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6901 Professional Parkway E.East LOGO   Telephone (941) 556-2601 
Suite 200   Fax (941) 556-2670 
Sarasota, FLFlorida 34240  
  
 Roper Technologies, Inc.  

April 26, 201630, 2019

Dear Fellow Shareholders,Shareholders:

As the members of your Board of Directors, we oversee Roper’s efforts to consistentlycontinually create long-term value through the efficient execution offor you by efficiently executing our strategy through sound risk management, disciplined capital deployment, performance-driven compensation programs, effective talent and succession planning, adherence to the highest ethical standards and levels of integrity, and continual review and refinement of the Board’s governance practices.

Our Strategy for Outstanding Value Creation for Shareholders

Over the past decade,fifteen years, our shareholders have enjoyedearned a compound annual return of 17.7%17.9% and a total shareholder return of 1,084%, compared to 7.3% formore than five times the total return of the S&P 500. Over the past five years, our Companydecade, Roper has delivered an even better 20.6% compound annual return to shareholders.shareholders, and delivered positive returns in 2018 despite market volatility and the negative return of the S&P 500.

ThisOur long history of superior shareholder returns is the result of Roper’s simple yet powerful strategy: Focus on

Cash Generation Through Operating Excellence: Our business is comprised of niche, asset-light businesses with leading solutions and technologies that create significant free cash flow, enabling future investments for sustainable growth. We believe thatOperating excellence, underpinned by our strategic focus on intellectual capital, product development, channel expansion and a high degree of customer intimacy, has driven sustained growth.drives cash generation, with record performance in 2018 for operating cash flow and free cash flow.

Disciplined Capital Deployment: We have a unique and disciplined capital deployment model that has guided the successful investment of billions of dollars in new businesses. We continueUnlike many companies that use cash to evolve strategicallypay large dividends and buy back shares, Roper uses most of its available cash to buy new businesses to fuel compounding growth and value creation for shareholders, as we did in 2018 with an increased emphasis on technology.our deployment of $1.3 billion to acquire exceptional software businesses.

The Board’s Role in Roper’s Success

The Board contributes significantly to our Company’sRoper’s strong performance. As directors, each of us commits to the rigor and extensive time commitment and workload required to serve on theRoper’s Board, including participation in at least 15 days of boardBoard meetings each year. We continually monitor the existing portfolio of Roper businesses and carefully examine with management the different ways our CompanyRoper can investcreate additional value for future growth.

Proxy Access and Shareholder Outreach

As part ofshareholders. Between Board meetings, we continue our continual efforts to enhance governance practices and discussions with management and each other, enabling the Company to draw from our shareholders, we recently amended our By-laws to provide for “proxy access” for our shareholders. broad experiences and expertise.

Our proxy access provision permits a shareholder, or a group of up to 20 shareholders, that has owned at least 3% of our outstanding common stock continuously for at least three years to nominatedirect involvement in and include in our proxy materials up to the greater of two directors or 20%deep understanding of the number of our directors then in office, provided thatCompany allows us to address issues such as acquisition selection, capital deployment, and succession planning while sustaining Roper’s successful culture and business model. Our focus on succession planning served the shareholders andCompany well last year, as evidenced by the nominees satisfy the requirements specified in our By-laws. In adopting our proxy access provisions, we reached out to shareholders representing over 50% of our outstanding common stock to understand their views. During this outreach, our shareholders expressed support and general flexibility for the proxy access provisions that we ultimately adopted.Company’s well-executed CEO transition.

Our Enhanced Governance Practices and Other Best Practices

OurRoper remains committed to strong corporate governance practices include:as demonstrated by the following practices:

 

Declassified Board. We declassified the Board so all Our directors are elected annually.

 

Majority Voting for Directors. OurBy-laws include a require the resignation requirement forof incumbent directors who fail to receiveobtain a majority voteof votes cast in uncontested elections.

 

Proxy Access. OurBy-laws permit a shareholder, or a group of up to 20 shareholders, that has owned at least 3% of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials up to the greater of two directors or 20% of the number of our directors then in office.


Independent Chairman of the Board.We elected Wilbur Prezzano to serve as our independent Chairman. Mr. Prezzano previously served as the Company’s Lead Independent Director.

Executive Compensation Practices AlignAlignment with Shareholder Interests.Shareholders. Because much of our shareholder value creation is derived from the Roper executive team’s capital deployment strategy, our executives must have a unique set of skills. We continue to refine our executive compensation practices (as described in more detail in our “Compensation Discussion and Analysis”) to maintain close alignment with the interests of our shareholders.shareholder interests.


Pay for Performance. In 2015, Similar to prior years, in 2018, 97% of our prior CEO’s compensation and 95% of our current CEO’s compensation was subject to performance risk and tied to long-term results and our stock price, and for our other executive officers, on average, 86% of their compensation was performance-based.

 

Clear Proxy Statement disclosureDisclosure. We have strivedstrive to present the information in our Proxy Statement in a clear andeasy-to-read manner manner.

 

Shareholder Outreach Program. Roper’s senior management team regularly engages our largest shareholders for feedback.

2016 Incentive Plan

Our agenda thisWe are extremely pleased to have delivered our shareholders with another year includesof exceptional results and record performance. However, the year closed on a proposal to approve the 2016 Incentive Plan. This new plan would replace our existing incentive plan, which expires in June 2016. Equity compensation is one way we link pay for performance, and it is an important part of our overall compensation program. We urge you to vote FOR the approval of the 2016 Incentive Plan, so that we can continue to use equity as a key component in our compensation programs.

Other Matters

In June 2015, we were saddened byvery sad note with the passing of David Devonshire, who had served as a Roper director since 2002. Mr. Devonshire brought wisdomour long-time Chairman, CEO and good friend, Brian Jellison. Though Brian’s contributions to our Company are unprecedented, the Board is committed to preserving and provided excellent advicebuilding upon the strategic foundation that he established for Roper. We welcome the opportunity to our management team overwork with the Company’s next generation of leaders who have been forged under Brian’s leadership and training for many years. We will miss our colleague and friend.

Open Communications With Our Shareholders

We value your continued support and input. Please continue to share your comments with us on any topic. Communications canmay be addressed to the directors in care of the Corporate Secretary, Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240.

Sincerely,

The Board of Directors

 

LOGOLOGOLOGO  
LOGO    LOGOLOGO
      Shellye L. ArchambeauAmy Woods Brinkley  John F. Fort III
Brian D. Jellison
LOGO

LOGO

 LOGO

LOGO       

  

LOGO

LOGO

      L. Neil HunnRobert D. Johnson  Robert E. Knowling, Jr.  Wilbur J.
Prezzano

LOGO

 

LOGO

  

LOGO

Laura G. Thatcher Richard F. Wallman  Christopher
Wright


LOGO

NOTICE OF 20162019 ANNUAL MEETING OF SHAREHOLDERS

 

Date and Time

Friday,May 27, 2016,Monday, June 10, 2019, at9:30 8:00 a.m. local time

 

Place

6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240

 

Agenda

Proposal 1: To elect nine directors.ten directors for aone-year term.

 

 

Proposal 2: To consider, on anon-binding advisory basis, a resolution approving the compensation of our named executive officers.

 

 

Proposal 3: To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016.2019.

 

 

Proposal 4: To approveconsider a shareholder proposal regarding political contributions disclosure, if properly presented at the Roper Technologies, Inc. 2016 Incentive Plan.meeting.

We will also transact any other business properly brought before the Annual Meeting.

 

Record Date

Only shareholders of record at the close of business on March 29, 2016April 15, 2019 will be entitled to vote at the Annual Meeting or any postponed or adjourned meeting, and these shareholders will be entitled to vote whether or not they have transferred any of their shares of our common stock since that date.

 

Voting Recommendations

The Company recommends that you vote:

 

 

“FOR” all of theeach director nomineesnominee

 

 

“FOR” the approval of the compensation toof our named executive officers

 

 

“FOR” the ratification of the appointment of PricewaterhouseCoopers LLP for the year ending 2019

 

 

FOR”AGAINST” the Roper Technologies, Inc. 2016 Incentive Planshareholder proposal regarding political contributions disclosure

 

Proxy Voting

Your vote is important regardless of the number of shares of our common stock you own. Whether or not you plan to attend the Annual Meeting in person, please promptly vote by Internet, telephone, via the internet, or by mail. Instructions for each of these methods and the control number that you will need are provided on the proxy card.

 

April 26, 201630, 2019    By Order of the Board of Directors
  LOGOLOGO
    

David B. LinerJohn K. Stipancich

Executive Vice President, General Counsel and Corporate Secretary

 

Important Notice Regarding the Availability of Proxy Materials for the

Shareholder Meeting To Be Held On May 27, 2016.Monday, June 10, 2019.

This Proxy Statement and the Roper Technologies, Inc. 20152018 Annual Report

to Shareholders are available at:www.ropertech.comwww.proxyvote.com


TABLE OF CONTENTS

 

 


PROXY STATEMENT SUMMARY

 

This summary highlights information about Roper Technologies, Inc. (the “Company” or, “we”, “us“us” or “our”) and the upcoming 20162019 Annual Meeting of Shareholders.Shareholders (the “2019 Annual Meeting”). It does not contain all of the information you should consider. We recommend reading the complete Proxy Statementproxy statement (the “Proxy Statement”) and our 20152018 Annual Report to Shareholders (the “2018 Annual Report”), which includes our Annual Report on Form10-K, before voting. The Proxy Statement and the enclosed proxy card are being mailed or otherwise made available to shareholders on or about April 30, 2019.

20162019 ANNUAL MEETING OF SHAREHOLDERS

 

Date and Time:              

May 27, 2016Monday, June 10, 2019

9:308:00 a.m. local time

  

Record Date:

March 29, 2016April 15, 2019

  

Place:

Roper Technologies, Inc.

6901 Professional Parkway East

Suite 200

Sarasota, Florida 34240

VOTING MATTERS AND BOARD RECOMMENDATIONS

 

Proposals 

Board

Recommendation

 

Vote

Required

1:

 Election of nineten directors for aone-year term FOR EACH NOMINEE Majority of votes cast

2:

 Advisory vote to approve the compensation paid
toof our named executive officers
 FOR Majority of votesshares present in person or represented by proxy

3:

 Ratification of the appointment of PricewaterhouseCoopers LLCLLP as our independent registered public accounting firm for 2019 FOR Majority of votesshares present in person or represented by proxy

4:

 Approval of the Roper Technologies, Inc. 2016 Incentive PlanShareholder proposal regarding political contributions disclosure FORAGAINST Majority of votesshares present in person or represented by proxy



 

 

 

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     Roper Technologies, Inc. 20162019 Proxy Statement       i


PROXY STATEMENT SUMMARY (CONTINUED)

 

20162019 DIRECTOR NOMINEES

Shareholders are electing all nine directorsten director nominees who will serve for aone-year term expiring at the 2020 Annual Meeting in 2017.of Shareholders (the “2020 Annual Meeting”).

 

NamePosition

Director

Since

IndependentAudit
Committee
Compensation
Committee

Nominating

and

Governance
Committee

Executive
Committee

Shellye L. Archambeau

Former Chief Executive Officer, MetricStream, Inc.2018X     X Committees
NamePositionDirector
Since
IndependentAuditCompensationNominating
and
Governance
Executive

Amy Woods Brinkley

 Founder, AWB Consulting, LLC 2015 X X      

John F. Fort III

 Former CEO of Tyco International Ltd. 1995 X X   X  

Brian D. JellisonL. Neil Hunn

 President and CEO of our CompanyRoper Technologies, Inc. 20012018         Chair

Robert D. Johnson

 Former CEO, DubaiChairman, Spirit Aerospace Enterprise Ltd. 2005 X   X    

Robert E. Knowling, Jr.

 Chairman, Eagles Landing Partners 2008 X   Chair   X

Wilbur J. Prezzano

 Former Vice-Chairman, Eastman Kodak Company 1997 X   X X Chair

Laura G. Thatcher

 Former Head of Executive Compensation Practice, Alston & Bird LLP 2015 X X   X  

Richard F. Wallman

 Former CFO and SVP, Honeywell International Inc. 2007 X     Chair X

Christopher Wright

 Chairman, EMAlternatives LLC and Chairman of Yimei Capital, Inc. 1991 X Chair     X

CORPORATE GOVERNANCE

We strive to maintain effective corporate governance practices and policies. Our practices and policies include the following.following:

Proxy Access: In March 2016, we amended ourBy-laws to implement proxy access for eligible stockholders.shareholders. Our proxy access provision permits a shareholder, or a group of up to 20 shareholders, that has owned at least 3% of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials up to the greater of two directors andor 20% of the number of our directors then in office, provided that the stockholdersshareholders and the nominees satisfy the requirements specifiedset forth in theBy-laws.



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    Roper Technologies, Inc. 2019 Proxy Statement


PROXY STATEMENT SUMMARY (CONTINUED)

Shareholder Outreach: We regularly engage our shareholders for feedback. In connection with our adoption of proxy access, we reached out to shareholders representing over 50% of our outstanding common stock to understand their views.



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    Roper Technologies, Inc. 2016 Proxy Statement


PROXY STATEMENT SUMMARY (CONTINUED)

Declassified Board:Our declassified Board phase-in will be completed at this 2016 Annual Meeting.One-Year

One-Year Terms for Directors: All of our directors are serving serveone-year terms.

Independent Directors: EightNine of our nineten current directors are independent, as well as all membersis each member of the Audit, Compensation, and Nominating and Governance Committees.

Lead Independent Director:Chairman of the Board: We have a Lead Independent Director.Our Chairman of the Board is independent.

Majority Voting Standards for Uncontested Director Elections: We require the resignation of an incumbent directordirectors who failsfail to obtain a majority of votes castvote in an uncontested election.elections.

Anti-Hedging and Anti-Pledging Policy:We have both anti-hedging and anti-pledging policies.

BUSINESS HIGHLIGHTS

We achieved another year of record revenue, income and cash flowresults in 2015.2018:

 

  

Our compound annualAnnual shareholder return overof 3.5%, well exceeding the past decade has been 17.7% and, overnegative return of (4.4%) of the last five years, 20.6%;S&P 500

GAAP revenue increased 13% to $5.19 billion

GAAP gross margin increased 100 basis points to 63.2%

 

 

  

Net revenue was $3.59 billion;Adjusted EBITDA increased 13% to $1.81 billion(1)

 

 

  

Net income was $679 million, a 5% increase over 2014;Operating cash flow increased 16% to $1.43 billion and free cash flow increased 17% to $1.37 billion(1)

 

 

  

Gross margin rose to 60.7% and our EBITDA margin expanded to 34.6%;(1)

Our free cash flow was $893 million in 2015, representing 25% of sales;

We deployed over $1.8$1.3 billion intoward high quality software acquisitions during 2015;

 

 

  

Our annual dividend increased by 20%12%, increasing for the 2326rdth consecutive year.year

 

 

(1) 

TheThis financial information is presented on an adjusted(non-GAAP) basis. A reconciliation offromnon-GAAP financial measures to the most comparable GAAP to non-GAAP financial measuresmeasure and other related information is available in “Appendix AA—Reconciliations.”

COMPENSATION HIGHLIGHTS

The creation of shareholder value is the foundation and driver of our executive compensation program. Aspects of our program that closely align the compensation of our executive officers with the long-term interests of our investorsshareholders include the following:

Pay for Performance: Compensation of our executive officers is almost completely tied topre-set, objective performance criteria and long-term shareholder value creation; in 2015,creation. In 2018, 97% of our prior CEO’s direct compensation and 95% of our Chief Executive Officer’scurrent CEO’s direct compensation was subject to performance risk and tied to our long-term results and our stock prices.price. For our other executive officers, on average, 86% of their direct compensation was performance-based.

Performance-Based Equity: All restricted stock awards are subject to satisfaction of performance criteria (no awards are solely time-based).

Double Trigger Vesting: “Double trigger” vesting of equity awards if a change in control occurs; no excise taxgross-ups forchange-in-control payments.

Stock Ownership Guidelines: Substantial share ownership and retention guidelines for our executive officers andnon-employee directors.

Low Overhang and Dilution: Overhang and dilution from equity incentives at Roper are very low relative to our peers.



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    Roper Technologies, Inc. 2019 Proxy Statement iii


PROXY STATEMENT SUMMARY (CONTINUED)

Clawback Policy: We have a clawback policy to recoup erroneously paid compensation.

Dividends Only on Shares Earned:Dividends on executive officers’ restricted shares awarded after 2014 will beare paid only if the shares are earned.

Annual Bonus Caps: We have caps on annual bonuses to avoid encouraging aan excessive short-term focus.focus and potentially adverse risk-taking.



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    Roper Technologies, Inc. 2016 Proxy Statement    iii


PROXY STATEMENT SUMMARY (CONTINUED)

No Repricing: Repricing of stock options is prohibited.

Limited Benefits: No defined pension benefit plan, few perquisites, and limited severance agreements.

APPROVAL OF THE ROPER TECHNOLOGIES, INC 2016 INCENTIVE PLAN

Equity compensation is an important element of our overall compensation program because it achieves many of our compensation objectives by linking pay with our performance and aligning executives’ interest with those of our shareholders. We are asking for shareholder approval of the 2016 Incentive Plan (the “2016 Plan”), which will replace our 2006 Incentive Plan (the “2006 Plan”) that expires in June 2016. The 2016 Plan authorizes us to grant equity awards for 7,924,932 million shares, plus up to 2,075,068 shares remaining available under the 2006 Plan. In addition, shares subject to awards under the 2006 Plan existing as of the effective date of the 2016 Plan that terminate or expire unexercised, or are cancelled, forfeited or lapse for any reason will be available under the 2016 Plan.

The 2016 Plan provides for the award of stock options, stock appreciation rights, restricted stock, restricted or deferred stock units, performance awards of cash or stock, dividend equivalents and other stock-based awards granted by the Compensation Committee to our employees, officers, directors and consultants for the purpose of attracting, motivating, retaining and rewarding them. The 2016 Plan includes the following features to protect our stockholders’ interests and help ensure effective corporate governance:

Conservative share counting;

No repricing of stock options;

No discounted stock options;

Double trigger required for vesting in case of change in control; and

Independent committee administration.

Over the past three years (2015, 2014 and 2013), our annual burn rates have been 1.45%, 1.36%, and 1.37%, respectively. These burn rates were calculated by the number of stock options and full-value awards granted during the applicable year (using a 1.9 multiplier for full-value awards) as a percentage of weighted average shares outstanding.

The 2016 Plan also contains performance criteria that we may use for performance-based compensation paid or granted under the 2016 Plan and that is intended to qualify under Internal Revenue Code (“IRC”) Section 162(m). Stockholder approval of the 2016 Plan will also be considered as stockholder approval of the performance criteria, which would help preserve our ability to deduct for income tax purposes compensation associated with future performance-based awards made to certain executives in accordance with IRC Section 162(m).

The 2016 Plan, including the performance metrics, is described more fully in Proposal 4, Approval of the Roper Technologies, Inc. 2016 Incentive Plan. The 2016 Plan is attached to this Proxy Statement as Appendix B.



 

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     Roper Technologies, Inc. 20162019 Proxy Statement


PROPOSAL 1: ELECTION OF DIRECTORS

Our Certificate of Incorporation provides that the Board of Directors shallof the Company (the “Board of Directors” or the “Board”) will consist of sucha number of members as mayto be fixed, from time to time, by the Board of Directors, but not less than the minimum number required under Delaware law. As a result of the passing of David Devonshire in June 2015, ourThe Board of Directors decreased the numberis currently comprised of directors from ten to nine. As of this Annual Meeting, the declassification of our Board is completed, and the terms of all nine incumbent directors will expire. Shareholders are electing nine directors who will serve for a one-year term.are elected on an annual basis.

Our Board unanimously recommended each incumbent director for electionreelection at thisthe 2019 Annual Meeting. If reelected, the director nominees will serve until the 2020 Annual Meeting and until their successors have been duly elected and qualified. Certain information about our director nominees is set forth under “Board of Directors.” This information includes the business experience, qualifications, attributes and skills that each individual brings to our Board.

IfAlthough not anticipated, if prior to the meeting a director nominee is unable to serve, which the Board of Directors does not anticipate, the proxy will be voted for a substitute nominee selected by the Board of Directors or the Board may choose to reduce its size.

 

The Board of Directors recommends a vote “FOR” the election to the Board of Directors of each of the following director nominees:

 

Name  Age  Director
Since
  Independent  Occupation

Amy Woods Brinkley

  60  2015  Yes  Founder, AWB Consulting, LLC

John F. Fort III

  74  1995  Yes  Former CEO of Tyco International Ltd.

Brian D. Jellison

  70  2001  No  President and CEO, Roper Technologies, Inc.

Robert D. Johnson

  68  2005  Yes  Former CEO, Dubai Aerospace Enterprise Ltd.

Robert E. Knowling,  Jr.

  60  2008  Yes  Chairman, Eagles Landing Partners

Wilbur J. Prezzano

  75  1997  Yes  Former Vice-Chairman, Eastman Kodak Company

Laura G. Thatcher

  60  2015  Yes  Former Head of Executive Compensation Practice, Alston & Bird LLP

Richard F. Wallman

  65  2007  Yes  Former CFO and SVP, Honeywell International Inc.

Christopher Wright

  58  1991  Yes  Chairman, EMAlternatives LLC

Name  Age  Director
Since
  Independent  Occupation

Shellye L. Archambeau

  56  2018  Yes  Former Chief Executive Officer, MetricStream, Inc.

Amy Woods Brinkley

  63  2015  Yes  Founder, AWB Consulting, LLC

John F. Fort III

  77  1995  Yes  Former CEO of Tyco International Ltd.

L. Neil Hunn

  47  2018  No  President and CEO, Roper Technologies, Inc.

Robert D. Johnson

  71  2005  Yes  Chairman, Spirit Aerospace

Robert E. Knowling, Jr.

  63  2008  Yes  Chairman, Eagles Landing Partners

Wilbur J. Prezzano

  78  1997  Yes  Former Vice-Chairman, Eastman Kodak Company

Laura G. Thatcher

  63  2015  Yes  Former Head of Executive Compensation Practice, Alston & Bird LLP

Richard F. Wallman

  68  2007  Yes  Former CFO and SVP, Honeywell International Inc.

Christopher Wright

  61  1991  Yes  Chairman, EMAlternatives LLC and Chairman, Yimei Capital

 

 

 

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     Roper Technologies, Inc. 20162019 Proxy Statement       1


BOARD OF DIRECTORS

Nominee Information

for terms expiring at the 20172020 Annual Meeting

 

LOGO     

Shellye L. Archambeau

Director since 2018                                 

Independent                                                

Age: 56

Committee:

Nominating and Governance  

Ms. Archambeau was the Chief Executive Officer of MetricStream, Inc., a global provider of governance, risk, compliance and quality management solutions to corporations across diverse industries, from 2002 to 2017. Prior to joining MetricStream, Ms. Archambeau was Chief Marketing Officer and Executive Vice President of Sales for Loudcloud, Inc., a provider of Internet infrastructure services; Chief Marketing Officer of NorthPoint Communications; and President of Blockbuster Inc.’s ecommerce division. Prior to joining Blockbuster, Ms. Archambeau held domestic and international executive positions during a15-year career at IBM.

Ms. Archambeau brings to the Board, among other skills and qualifications, leadership experience in technology, ecommerce, digital media and communications. Her technology and international experience uniquely positions her to advise the Board and senior management on developing and marketing software, emerging technology applications and solutions.

Ms. Archambeau has been a director of Nordstrom, Inc. since 2015 and Verizon, Inc. since December 2013. She previously served as a director of Arbitron, Inc. from 2005 to 2013 and a director of MetricStream, Inc. from 2002 to 2018.

LOGO      

 

Amy Woods Brinkley

Director since 2015

Independent

Age: 6063

 

Committees:

Committee:

Audit

 

Professional Experience

Ms. Brinkley is the founder, owner and manager of AWB Consulting, LLC, which provides executive advising and risk management consulting services. Ms. Brinkley retired from Bank of America Corporation in 2009 after more than 30 years with the company. Ms. Brinkley served as its Chief Risk Officer from 2002 to 2009. Prior to 2002, she served as President of the company’s Consumer Products division and was responsible for the credit card, mortgage, consumer finance, telephone, and eCommerceecommerce businesses. During her employment at Bank of America Corporation, Ms. Brinkley also held the positions of Executive Vice President and Chief Marketing Officer overseeing the company’s Olympic sponsorship and its national rebranding and name change.

Other Boards and Appointments

Ms. Brinkley is currently a director of TD Bank Group, Carter’s, Inc., TD Group US Holdings, LLC. and the Bank of America Charitable Foundation. She also serves as a trustee for the Princeton Theological Seminary and on the board of commissioners for the Carolinas Healthcare System.

Director Qualifications

Ms. Brinkley’s background offers the Board vast experience in risk management and a broad-based knowledge of banking, financial services, and brand marketing.

Ms. Brinkley is currently a director of Carter’s Inc., TD Bank Group and TD Group US Holdings, LLC. She also serves as a director of TD Bank Group’s subsidiary, TD Bank US Holding Co. and its two subsidiaries, TD Bank and TD Bank USA, N.A. In addition, she serves as a trustee for the Princeton Theological Seminary. Ms. Brinkley previously served as a director of Atrium Health from 2001 to 2018.

 

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    Roper Technologies, Inc. 2019 Proxy Statement


BOARD OF DIRECTORS(CONTINUED)

LOGO      

 

John F. Fort III

Director since 1995

Independent

Age: 7477

 

Committees:

Audit

Nominating and Governance

 

Professional Experience

Mr. Fort has been self-employed since 1993. Mr. Fort served as Chairman and Chief Executive Officer of Tyco International Ltd., a provider of diversified industrial products and services, from 1982 until his retirement from the company in January 1993, and served as Interim CEO of Tyco from June to September 2002 and as an advisor to Tyco’s Board of Directors from March 2003 to March 2004.

Director Qualifications

Mr. Fort’s leadership experience as the CEO of a diversified industrial company and hisin-depth knowledge of our Company gives our Board perspective on important issues, including business strategy and acquisitions.

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    Roper Technologies, Inc. 2016 Proxy Statement


BOARD OF DIRECTORS(CONTINUED)

 

LOGOLOGO      

 

Brian D. JellisonL. Neil Hunn

Chairman since 2003

Director since 2018

President and Chief

Executive Officer                                                                                          since 2001

Age: 70

Committees:

Executive (Chair)

47

Professional Experience

Mr. Jellison is ourPrior to being named President and CEO. He previously served as CorporateChief Executive Officer in 2018, Mr. Hunn was Executive Vice President ofIngersoll-Rand,and Chief Operating Officer since 2017 and a global diversified industrialGroup Vice President with Roper since 2011. Prior to joining Roper, Mr. Hunn held several positions in the software sector and was involved in businesses at varied stages of development. Most recently he was with MedAssets, an Atlanta-based SaaS company, from January 1998 to July 2001. During his 26-year careerwhere he served as Executive Vice President and CFO, as well as President of its revenue cycle technology businesses. He was previously with Ingersoll-Rand, Mr. Jellison served inCMGI, an incubator of Internet businesses, and Parthenon Group, a variety of senior level positions and assumed the principal responsibility for completing and integrating a variety of public and private new business acquisitions.

Director Qualificationsstrategy consulting firm.

Mr. Jellison’sHunn’s active involvement in Roper’s operations provides our Board with specific knowledge of the business and its challenges and prospects. As the Chairman of the Board, his deepHis understanding of the organization and its strategic focus has provided key leadership and guidance for our Company’s growth.

 

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BOARD OF DIRECTORS(CONTINUED)

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Robert D. Johnson

Director since 2005

Independent

Age: 6871

 

Committees:

Committee:

Compensation

 

Professional Experience

Mr. Johnson was Chief Executive Officer of Dubai Aerospace Enterprise Ltd., a global aviation corporation, from August 2006 to December 2008. Mr. Johnson served as Chairman of Honeywell Aerospace, the aviation segment of Honeywell International Inc., from January 2005 to January 2006, and as its President and Chief Executive Officer from 1999 to 2005. Mr. Johnson worked at Honeywell’s predecessor, AlliedSignal, rising to the position of President and Chief Executive Officer of AlliedSignal Aerospace. Mr. Johnson has held management positions with AAR Corporation and GE Aircraft Engines.

Other Boards and Appointments

Mr. Johnson currently serves as the Chairman of the Board of Spirit AeroSystems, Inc., and as a director of Spirit Airlines, Inc. Mr. Johnson previously served as a director of Ariba, Inc. from 2005 to 2012 and Beechcraft Corp during 2013.

Director Qualifications

Mr. Johnson brings valuable knowledge in marketing, sales and production from his diverse career experiences. His management leadership skills and his general business knowledge provide our Board with guidance in compensation and management issues.

Mr. Johnson currently serves as the Chairman of the Board of Spirit AeroSystems Holdings, Inc., and as a director of Spirit Airlines, Inc. Mr. Johnson previously served as a director of SAP Ariba, Inc. from 2005 to 2012 and Beechcraft Corp during 2013.

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BOARD OF DIRECTORS(CONTINUED)

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Robert E. Knowling, Jr.

Director since 2008

Independent

Age: 6063

 

Committees:

Compensation (Chair)

Executive

 

Professional Experience

Mr. Knowling is the Chairman of Eagles Landing Partners, a strategic management consulting company. From June 2005 to May 2009, Mr. Knowling served as Chief Executive Officer and director of Telwares, a leading provider of telecommunication spend management solutions. Mr. Knowling has served as the CEO of the NYC Leadership Academy, and in various executive capacities with SimDesk Technologies, Inc. and Covad Communications Company.

Other Boards and Appointments

Mr. Knowling previously served as a director of Heidrick & Struggles International from 2000 to 2015, The Bartech Group from 2006 to 2015, Aprimo, Inc. from 2008 to 2011, and as Lead Director of Ariba, Inc. from 2000 to 2012.

Director Qualifications

Mr. Knowling brings a unique perspective to our Board based on his involvement in telecommunications and high-growth technology companies. He also has significant operational and management skills and insight with respect to technology matters. His experience as a director of several other public companies enables him to provide guidance on corporate governance and executive compensation issues.

Mr. Knowling is currently a director of K12 Inc. andRite-Aid, Inc. Mr. Knowling previously served as a director of Convergys Corporation from 2017 to 2018, Heidrick & Struggles International from 2000 to 2015, The Bartech Group from 2006 to 2015, Aprimo, Inc. from 2008 to 2011, and as Lead Director of SAP Ariba, Inc. from 2000 to 2012.

 

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BOARD OF DIRECTORS (CONTINUED)

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Wilbur J. Prezzano

Director since 1997

Lead Independent DirectorChairman of the Board

Age: 7578

 

Committees:

Compensation

Nominating and Governance Executive  

 

Professional Experience

Mr. Prezzano retired in January 1997 from Eastman Kodak Company, a supplier of imaging material and services, as its board Vice-Chairman and as Chairman and President of its greater China region businesses. During his32-year career with Eastman Kodak Company, Mr. Prezzano served in various executive capacities and also served as a director from 1992 to 1997.

Other Boards and Appointments

Mr. Prezzano currently serves as the Board Chair of Snyder’s-Lance, Inc. and as a director of TD Ameritrade Holding Corporation. Mr. Prezzano formerly served as a director of TD Bank Financial Group from 2003 to 2016 and EnPro Industries, Inc. from 2006 to 2014.

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BOARD OF DIRECTORS(CONTINUED)

Director Qualifications

Mr. Prezzano has a strong background in management and experience in other international operations. Through his service on the boards of directors of several other companies in diverse industries, Mr. Prezzano provides our Board with a broad-based understanding important to our Company’s growth and operations.

Mr. Prezzano currently serves as a director of TD Bank, NA and as a director of TD Ameritrade Holding Corporation. Mr. Prezzano formerly served as a director of TD Bank Financial Group from 2003 to 2016, EnPro Industries, Inc. from 2006 to 2014 andSnyder’s-Lance, Inc., where he served as board Chair from 2000 to 2016.

 

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Laura G. Thatcher

Director since 2015

Independent

Age: 6063

 

Committees:

Audit

Nominating and Governance

 

Professional Experience

Ms. Thatcher retired in December 2013 fromafter 33 years of legal practice at Alston & Bird LLP, where she developed and headed the firm’s executive compensation practice for 18 years.

Other Boards and Appointments

Ms. Thatcher served on the Board of Directors of The Atlanta Legal Aid Society, Inc., a non-profit organization addressing the civil legal needs of Atlanta’s lower income, elderly and disabled residents from 2008 to 2014, and was a Past Chair of the Advisory Board of the Certified Equity Professional Institute (CEPI) of Santa Clara University.

Director Qualifications

Ms. Thatcher’s strong legal background in corporate, securities, compensation, mergers and acquisitions, and tax law, and her experience in advising a diverse array of public companies in these areas, offer the Board a broad-based as well as technical perspective in matters of corporate governance, executive compensation, and business acquisitions.

Ms. Thatcher served on the Board of Directors of Batson-Cook Company, a regional commercial construction and development company, from 1994 to 2007. She also served on the Board of Directors of The Atlanta Legal Aid Society, Inc., anon-profit organization addressing the civil legal needs of Atlanta’s lower income, elderly and disabled residents from 2008 to 2014, and was a Past Chair of the Advisory Board of the Certified Equity Professional Institute (CEPI) of Santa Clara University.

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BOARD OF DIRECTORS(CONTINUED)

 

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Richard F. Wallman

Director since 2007

Independent

Age: 6568

 

Committees:

Nominating and Governance

(Chair)

Executive

Professional Experience

Mr. Wallman served as the Chief Financial Officer and Senior Vice President of Honeywell International Inc., a diversified industrial technology and manufacturing company, and its predecessor AlliedSignal, from March 1995 to July 2003. Mr. Wallman has also served in senior financial positions with IBM and Chrysler Corporation.

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BOARD OF DIRECTORS(CONTINUED)

Other Boards and Appointments

Mr. Wallman currently serves as a director of Convergys Corporation, Extended Stay America, Inc., Wright Medical Group (formerly Tornier N.V.), and Charles River Laboratories International, Inc. Mr. Wallman formerly served as a director of Ariba, Inc., from 2002 to 2012 and Dana Holding Corp. from 2010 to 2013.

Director Qualifications

Mr. Wallman’s extensive leadership and financial background brings to our Board a significant understanding of the financial issues and risks that affect our Company. Mr. Wallman also serves on the boards of other diverse publicly held companies, which gives him a multi-industry perspective and exposure to developments and issues that impact the management and operations of a global business.

Mr. Wallman currently serves as a director of Boart Longyear Ltd., Extended Stay America, Inc., Wright Medical Group (formerly Tornier N.V.), and Charles River Laboratories International, Inc. Mr. Wallman formerly served as a director of SAP Ariba, Inc. from 2002 to 2012, Dana Incorporated from 2010 to 2013, Convergys Corporation from 2007 to 2017, and ESH Hospitality, Inc. from 2013 to 2017.

 

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Christopher Wright

Director since 1991

Independent

Age: 5861

 

Committees:

Audit (Chair)

Executive

Professional Experience

Mr. Wright is the Chairman of EMAlternatives LLC, a Washington, DC based private equity asset management firm focused on emerging markets and the Chairman of Yimei Capital, a Chinese investment firm. He also serves as a director of Merifin Capital Group, a private European investment firm. Untilmid-2003 he served as Head of Global Private EquityChief Executive Officer for Dresdner Kleinwort Capital and was a Group Board Member of Dresdner Kleinwort BensonWasserstein overseeing alternative assets in developed and emerging markets.assets. He has acted as Chairman of various investment funds prior to and following the latter’s integration with Allianz A.G.S.E., and as Global Head of Private Equity at Standard Bank Group from 2006 to 2007.

Other Boards and Appointments

Mr. Wright currently serves as a director of Yatra Capital Ltd (EuroNext), and sits on the advisory boards of various investment funds. Mr. Wright is a Foundation Fellow of Corpus Christi College, Oxford.

Director Qualifications

Mr. Wright offers a global perspective to our Board gained from his extensive international, private equity and banking experience. He is able to provide a valuable historical perspective on the development of our Company. He also provides our Board with knowledge of current financial issues and audit matters, risks affecting international business operations, and has broad experience with investing in the software and healthcare sectors.

Mr. Wright currently serves as a director of G.P. Investments Limited (Luxembourg), Spice Private Equity A.G.(Zurich), and sits on the advisory boards of various investment funds. He previously served as a director of Yatra Ltd. from 2010 to 2018. Mr. Wright is an Honorary Fellow of Corpus Christi College, Oxford.

 

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     Roper Technologies, Inc. 20162019 Proxy Statement


CORPORATE GOVERNANCE

 

Corporate Governance Guidelines

Our Board is committed to maintaining high standards of ethical business conduct and sound corporate governance principlespractices and practices.policies. Our Corporate Governance Guidelines reflect our Board of Directors’ commitment to monitoring the effectiveness of the Board and its Committeescommittees in exercising their responsibilities.

Business Code of Ethics and Standard of Conduct

Our Business Code of Ethics and Standards of Conduct (the “Code of Ethics”) addresses the professional, honest and candid conduct of each director, officerour directors, officers and employee;employees. The Code of Ethics also addresses conflicts of interest, disclosure process, compliance with laws, rules and regulations (including insider trading laws); and corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets, and ourassets. The Code of Ethics also encourages the reporting of any illegal or unethical behavior. Any amendments to, or waivers of, the Code of Ethics will be disclosed on our website promptly following the date of such amendment or waiver as required by law.

Director Independence

Our Corporate Governance Guidelines require that a majority of our directors qualify as “independent,” as defined by the listing standards of the NYSE.New York Stock Exchange (the “NYSE”). As required by thethese director independence standards, our Board reviewed and analyzed the independence of each director in March 2016earlier this year to determine whether any particular relationship or transaction involving any director, or any of that director’s affiliates or immediate family members, was inconsistent with a determination that the director is independent for purposes of serving on our Board of Directors and its committees. During this review, our Board examined transactions and relationships between directors or their affiliates and immediate family members and Roper and/or Roper’s management. As a result of this review on March 9, 2016, our Board affirmatively determined that all directors are independent, except for Mr. Jellison,Hunn, and that each member of the Audit, Compensation, and Nominating and Governance Committees is independent under applicable NYSE and Securities and Exchange Commission (“SEC”) rules for purposes of serving on such committees.

Nominating Process

The Nominating and Governance Committee, acting under its charter, determines the desired skills, ability,abilities, judgment, diversity (including gender and ethnicity as well as background and experience) and other criteria

deemed appropriate for service as a director and is responsible for recommending new director candidates and re-nominationrenomination of existingincumbent directors based on those criteria, which includes, but is not limited to:

 

high personal and professional ethics;

 

integrity and values;

 

knowledge of our business environment;

 

sound judgment and analytical ability;

 

skills and experience in the context of the needs of our Board;

 

breadth of business experience; and

 

whether the candidate meets the applicable independence requirements ofunder the NYSE.NYSE and SEC rules.

Our Board’s process for identifying and evaluating potential director nominees includes soliciting recommendations from our directors and engaging a third party to assist in identifying potential director nominees when a Board position becomes available. Our Board has no formal policy with respect to diversity, but considers racial and gender diversity when creating the pool of candidates from which it considers possible new boarddirector candidates.

Neither the Board of Directors nor the Nominating and Governance Committee has a specific policy regarding consideration of shareholder director nominees. Shareholder nominees submitted pursuant to the proceduresrequirements set forth in theBy-laws will be considered under the same criteria that are applied to other candidates. A shareholder of record who nominates a director candidate must provide a notice along with the additional information and materials required by ourBy-laws. See “Information Regarding the 20172020 Annual Meeting of Shareholders” for additional information regarding nominating director candidates.

Proxy Access

In March 2016, our Board adopted “proxy access” amendments to ourBy-laws, enabling a shareholder, or a group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years to nominate and include in our proxy materials director nominees constituting up to two nominees or 20% of our Board, whichever is greater, provided that the shareholder(s) and nominee(s) satisfy the requirements set forth in our By-laws.

Our Board adopted these amendments following discussions with our shareholders in the second half of

 

 

 

 

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CORPORATE GOVERNANCE(CONTINUED)

 

include in our proxy materials up to the greater of two directors or 20% of the number of our directors then in office, provided that the shareholders and the nominees satisfy the requirements set forth in theBy-laws.

Our Board adopted these amendments following discussions with our shareholders in the second half of 2015 and early 2016. These discussions covered the evolving role of proxy access and the specific requirements of ourBy-laws, including (among others) our “3/3/20/20 or 2”nominating framework referenced above, as well as those relating to the resubmission of nominees in subsequent years, which nominees will count toward the maximum number of proxy access nominees, and the impact of a proxy contest on the use of proxy access.

Our Board reached out to shareholders representing over 50% of our outstanding common stock for these discussions to understand their views. During this outreach, our shareholders (including the proponents of the 2015 shareholder proxy access proposal) expressed support and general flexibility for the proxy access provisions that our Board ultimately adopted.

Review and Approval of Related Person Transactions

The Audit Committee is responsible for reviewing and approving, as appropriate, all transactions with related persons. Although we have not adopted written procedures for reviewing related person transactions, we will review any relationship or transaction in which the Company and our directors, executive officers or their immediate family members are participants to determine whether such persons have a direct or

indirect material interest. There were no related person transactions during 2015.2018.

Shareholder Communications

Shareholders or other interested parties may send written communications to our Board of Directors or the non-management Board members of our Board in care of the CompanySecretary to the address set forth below. This process is also set forth on our website at www.ropertech.com.www.ropertech.com. All communications will be kept confidential and promptly forwarded to the appropriate director. Items unrelated to a director’s duties and responsibilities as a Board member may be excluded by the Corporate Secretary, including, without limitation,limitation; solicitations and advertisements; junk mail; product-related communications; job referral materials such as resumes; surveys; and material that is determined to be illegal or otherwise inappropriate. The director to whom such information is addressed is informed that the information has been removed, and that it will be made available to such director upon request.

Our Corporate Governance Guidelines, Code of Ethics, Director Independence Standards, andBy-laws are available on our website atwww.ropertech.com/governance-documents. Requests for copies of these documents or of the full text of theBy-law provision regarding director candidate nominations and communications to our entire Board of Directors ornon-management Board members should be addressed to:

Roper Technologies, Inc.

6901 Professional Parkway East

Suite 200

Sarasota, Florida 34240

Attention: Corporate Secretary

 

 

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BOARD COMMITTEES AND MEETINGS

 

Our Board of Directors held six scheduledseven meetings in 2015.2018. Each director participated in every one of our current directorsseven Board meetings in 2018. In addition, each director participated in allevery one of the Board meetings and applicable Committeeour committee meetings held while such director was a member, except for one director who participated in 94% of all applicable meetings.committee member. Our Board has not implemented a formal policy regarding director attendance at the Annual Meeting of Shareholders, but encourages all directors to attend in person.attend. All of our directors attended the 20152018 Annual Meeting of Shareholders either in person or telephonically.telephonically except for one director who was unable to attend the meeting due to traveling for the Company’s Board of Directors meeting.

Board Leadership Structure

Serving as a director of the Company since 1997, Mr. Jellison hasPrezzano was elected as the Board Chairman in 2018, following the death of our prior CEO and Executive Chairman. Mr. Prezzano previously served as ourthe Company’s Chairman of the Board since 2003 and as its President and Chief Executive Officer since 2001.Lead Independent Director from 2015 through 2018. Mr. Jellison’s Prezzano’sin-depth, long-term knowledge of our Company allows him to effectively identify strategic priorities, lead boardBoard discussions, and executeoversee the execution of our Company’s strategy and business plans. Our Board believes Mr. Jellison’s combined role is in the best interest of our Company and promotes decisive leadership, clear accountability, and enhanced communication internally and externally.

In light of the combined roles, the independent directors select a Lead Independent Director, whose primary responsibilities include initiating and chairing meetings of the independent directors at each Board meeting, soliciting input from independent directors on issues and areas of focus, and providing feedback to the Chief Executive Officer. Pursuant to our Corporate Governance Guidelines, the Lead Independent Director serves for a term not less than one year. The non-management directors appointed Wilbur J. Prezzano, effective January 1, 2015, to serve as the Lead Independent Director.

Effective Board Processes

As a result of our boardBoard structure and processes, our directors are actively involved in overseeing the strategy, business and affairs of our Company, including its transformation to a diversified technology company. Our Board meetings typically extend over several days, with directors monitoring the existing portfolio of businesses and analyzing and carefully examining with management the different ways Roper can invest for future growth, both internally and through acquisitions. Between scheduled Board meetings, our directors continue their discussions with management and each other, enabling our Company to draw from their experiences and expertise. Our directors are involved in our corporate strategy and must keep abreast of the issues encountered by our diverse global business operations.

The Board, including its Nominating and Governance Committee, has an effective boardBoard recruitment and evaluation process that contributes to bringing together a group of directors who complement each other and collectively provide oversight of management in ways that include challenging and discussing different perspectives.

Executive Succession Planning

Our Board recognizes the importance of effective leadership to our Company’s success and is actively engaged and involved, on an annual basis, in succession planning on both a long- and short-term basis. Our Company’s operating unit executives, who have responsibility for their respective businesses, but no “enterprise-wide” responsibilities, provide a broad and deep talent resource that is key to our executive succession planning.

Risk Oversight

Our Board has overall responsibility for the oversight of risk management at our Company, which it generally carries out through Board committees. However, several categories of risk management, such as information technology security, are managed directly by our Board. Our General Counsel informs each committee and the Board of relevant legal and compliance issues, and each committee also has access to our Company’s outside counsel or any other outside advisor when they deem it advisable. Each of these committees along with our management, which is responsible for the implementation of the process to identify, manage and monitor risks, keeps the entire Board regularly apprised of the different risks associated with our Company.

 

The Audit Committee oversees financial risk, including such factors as liquidity, credit, currency exchange and market conditions, through review and discussion with management, and monitors our Company’s risk management practices. It meets regularly with our independent auditors and theour Vice President and Chief Compliance Officer and our Director of our internal audit department who reportsInternal Audit, both of whom report directly to the Audit Committee. In addition to financial risk, the Audit Committee also reviews and discusses other risks that relate to our business activities and operations.

 

The Compensation Committee, in overseeing risk associated with compensation programs and practices, has directly retained its own independent compensation consultant and meets periodically with management to discuss current issues.

 

The Nominating and Governance Committee monitors the compliance of our corporate governance practices and policies with applicable requirements and evolving developments.

 

 

 

 

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BOARD COMMITTEES AND MEETINGS(CONTINUED)

 

Board Committees

 

Our Board has four standing committees: Audit, Compensation, Nominating and Governance, and Executive. The Audit, Compensation, and Nominating and Governance CommitteesAll four committees operate under written charters, copies of which can be viewed on Roper’s

website (www.ropertech.com/governance-documents) or obtained upon request from the Secretary.Corporate Secretary or viewed on

Roper’s website (www.ropertech.com/governance-documents). Each Committeecommittee reviews its charter annually and reports its activities to the full Board on a regular basis.

 

 

Set forth below are the current committee memberships.

 

Director                               Audit
Committee
  Compensation
Committee
  Nominating and
Governance
Committee
Executive
Committee 

 Shellye L. Archambeau

  Executive
CommitteeX

Amy Woods Brinkley

  X

     

   

John F. Fort III

  X

     X   

Brian D. Jellison

Chair

Robert D. Johnson

     X

      

Robert E. Knowling, Jr.

     Chair

     X

Wilbur J. Prezzano

     X

  X

  Chair

Laura G. Thatcher

  X

     X   

Richard F. Wallman

        Chair  X

Christopher Wright

  Chair

        X

 

Audit Committee: 109 Meetings Held in 20152018

The Audit Committee assists our Board in its oversight of the quality and integrity of our financial statements, our structure for compliance with legal and regulatory requirements, and the performance of our internal audit functions. The Board has determined that based onupon their extensive background and expertise, Messrs. Fort and Wright and Ms. Brinkley meet the criteria of an “audit committee financial expert” under SEC rules. The Board determined that Ms. Brinkley meets the criteria based upon her extensive career in banking spanning over thirty years, including her service on the disclosure committee and her participation in the financial statement diligence review process while at Bank of America, in addition to her current and prior service on the audit committees (or finance committee where audit functions are handled by such committee) of four other entities that issue publicly-traded securities. The Board has determined that all Audit Committee members meet the

heightened independence standards under NYSE and SEC rules applicable to audit committees and satisfy the NYSE standard of financial literacy, and havehaving accounting and related financial management expertise.

Pursuant to its charter, the Audit Committee has the authority and responsibility to:

 

Appoint,appoint, compensate, retain and oversee the independent registered public accounting firm engaged by us; approve all audit engagement fees and terms, as well aspre-approve allnon-audit engagements; and ensure that the independent auditors remain independent and objective;

ensure that the independent auditors remain independent and objective;

 

Reviewreview the appointment and replacement of the head of our Vice President of the internal auditingaudit department, who provides the Audit Committee with significant reports to management and management’s responses thereto;

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BOARD COMMITTEES AND MEETINGS(CONTINUED)

 

Considerconsider any reports or communications submitted by the independent auditors relating to our financial statements, policies, processes or determinations;

 

Meetmeet with management, the independent auditors and others to discuss matters relating to the scope and results of any audit, the financial statements, and changes to any auditing or accounting principles, policies, controls procedures or practices;

 

Reviewreview any major issues regarding accounting principles and financial statement presentations, including significant changes in the selection or application of accounting principles, and major issues as to the adequacy of our internal controls, analyses regarding significant financial reporting issues and judgments made in connection with the preparation of the financial statements, and the effects of regulatory and accounting initiatives;

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BOARD COMMITTEES AND MEETINGS(CONTINUED)

issues as to the adequacy of our internal controls, analyses regarding significant financial reporting issues and judgments made in connection with the preparation of the financial statements, including analyses of the effects of alternative GAAP methods, and the effects of regulatory and accounting initiatives;

 

Reviewreview significant risks and exposures and the steps taken to monitor and minimize such risks;

 

Establishestablish procedures for the receipt, investigation and resolution of complaints received by us regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters; and

 

Prepareprepare reports and disclosures required to be included in this Proxy Statement, including the “Audit Committee Report” below.

Compensation Committee:5 Meetings Held in 20152018

The Compensation Committee administers our executive incentive compensation programs and determines, either as a committee or together with the other independent members of the Board (as directed by the Board), annual salary levels and incentive compensation awards for our executive officers. The Board has determined that all Compensation Committee members meet the heightened independence standards under NYSE and SEC rules applicable to compensation committees. The Compensation Committee also, at the direction of the Board, periodically reviews and determines the form and amounts of director compensation and reviews and makes recommendations to the Board with respect to director compensation. The Compensation Committee may delegate its duties and responsibilities to a subcommittee of the Compensation Committee and has the authority to retain its own compensation consultants. Additional information regarding the

Compensation Committee’s processes and procedures for the consideration and determination of executive compensation is set forth below in this Proxy Statement under “Compensation Discussion and Analysis.”

Pursuant to its charter, the Compensation Committee has the authority and responsibility to:

 

Annuallyannually review and approve corporate goals and objectives relevant to our Chief Executive Officer’sCEO’s compensation and based on that evaluation, determine and approve our Chief Executive Officer’sCEO’s compensation, including salary, bonus, incentive and equity compensation;

Annuallyannually review performance and approve compensation, including salary, bonus, and incentive and equity compensation for our executive officers;

 

Grantgrant awards and otherwise make determinations under our equity, incentive, retirement, and deferred compensation plans, to the extent provided in such plans;

 

Determinedetermine performance goals and certify whether performance goals have been satisfied for incentive plans complying or intended to comply with Section 162(m) of the Internal Revenue Code (the “Code”);containing performance criteria;

 

Periodicallyperiodically review and make recommendations to the Board concerning our equity, incentive, retirement, and incentivedeferred compensation plans;

 

Reviewreview risks associated with compensation and assess potentialthose reasonably likely to have a material adverse effect;effect on the Company;

 

Periodicallyperiodically review and determine the form and amounts of director compensation; and

 

Reviewreview and discuss with management the Compensation Discussion and Analysis disclosure regarding named executive officer compensation included in our annual Proxy Statement.

Nominating and Governance Committee:

65 Meetings Held in 20152018

The Nominating and Governance Committee assists our Board in identifying individuals qualified to become directors, determining the size and composition of our Board and its committees, developing and implementing corporate governance guidelines, evaluating the qualifications and independence of directors on a periodic basis and evaluating the overall effectiveness of our Board and its committees.

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BOARD COMMITTEES AND MEETINGS(CONTINUED)

Pursuant to its charter, the Nominating and Governance Committee has the authority and responsibility to:

 

Evaluateevaluate a candidate’s qualification based on a variety of factors, including such candidate’s integrity, reputation, judgment, knowledge, and diversity (including gender and ethnicity as well as background and experience) as well as our Board’s needs;

 

Recommendrecommend qualified individuals for boardBoard membership, including individuals suggested by directors and/or shareholders;

 

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BOARD COMMITTEES AND MEETINGS(CONTINUED)

Periodicallyperiodically review the size and responsibilities of our Board and its committees and recommend changes to our Board;

Annuallyannually review and recommend committee slates and additional committee members to our Board as needed;

 

Developdevelop and recommend to our Board a set of corporate governance guidelines and periodically review such guidelines and propose changes to our Board;

Annually review and approve our Chief Executive Officer’s management succession plan to ensure continuity of management; and

 

Developdevelop and recommend to our Board an annual self-evaluation process for our Board and its committees, and administer and oversee the evaluation process.

Executive Committee: No Meeting Held in 20152018

The Executive Committee has the authority to exercise all powers of the Board between regularly scheduled Board meetings.

 

 

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DIRECTOR COMPENSATION

Compensation for ournon-employee directors is governed by our Director Compensation Plan, which is asub-plan of our 20062016 Incentive Plan. The Director Compensation Plan provides for an annualrecognizes the Board’s instrumental contribution to Roper’s long-term success and creation of superior shareholder value. Over the past fifteen years, our shareholders have earned a cumulative 1,084.4% return – more than five times that of the S&P 500’s 207.1% return. In the first quarter of 2019, our return of 28.5% more than doubled that of the S&P 500 return of 13.6%. Compensation paid to our Directors reflects the significant time commitment and effort associated with serving on our Board, including participation in at least 15 days of Board meetings each year, in addition to numerous Committee meetings throughout the year. In the past four years, we have added three new independent directors to the Board, each of whom has increased the level of diversity representation on our Board. However, our rapid growth, business transformation into software, and various external developments have made it increasingly challenging to find and assimilate the caliber of independent director capable of adding value to our high-growth, asset-light, diversified enterprise.

Consistent with Roper’s long-standing“pay-for-performance” philosophy, the Director Compensation Plan ties director compensation directly to the Company’s stock performance, closely aligning the financial interests of our directors with those of our shareholders. Directors receive limited cash retainers and no perquisites (such as deferred compensation benefits), and instead receive a higher percentage of their compensation in Company stock. Historically, a grant of 4,000 restricted stock units (“RSUs”), which are issued was made under the first business day afterDirector Compensation Plan to recognize the significant time commitment and workload associated with serving on our Annual MeetingBoard as well as the Board’s instrumental contribution to Roper’s long-term success and creation of Shareholders. Unlesssuperior shareholder value. In light of the non-employee director has made a timely deferral election as providedsignificant increase of 42.4% in the Plan, each RSU representsCompany’s share price in 2017, the right2018 award was reduced from 4,000 RSUs to receive one share3,000 RSUs. As a result of our common stock on the vesting date and the right to receive a dividend equivalentfurther significant appreciation in the same amount and at the same time as any dividend or other cash distribution is paid on a share of our common stock. RSUs do not have voting rights. One halfmarket value of the Company’s shares, as well as other considerations in regard to director compensation, the Company anticipates making a similar reduction to the number of RSUs granted vest six months after the grant date and the remaining RSUs vest the day before the next Annual Meeting. During 2015, each awarded to ournon-employee director received a grant of 4,000 RSUs on June 1, 2015. directors in 2019.

Under our Director Compensation Plan, eachnon-employee director also receives an annual cash retainer and fees for boardBoard and committee meetings as shown in the table below. The cash retainer and the number of RSUs granted will be prorated for any new director based on the number of full months such director serves as anon-employee director during the year.

 

Annual Cash Retainer

Cash Retainer

$42,500  

Supplemental Annual Cash RetainersRetainer

  

Chair of Audit Committee Cash Retainer

  $

5,000  42,500  

 

Chair of Compensation Committee

$5,000  

Chair of Nominating and Governance Committee

$5,000  

Board Meeting Compensation Supplemental Annual Cash Retainers(1)

  

In-Person Attendance Independent Chairman

  $

2,000  175,000  

 

Telephonic Attendance Chair of Audit Committee

  $

1,000  5,000  

 

 Chair of Compensation Committee

$

5,000  

 Chair of Nominating and Governance Committee

$

5,000  

Committee Board Meeting Compensation(1)(2)

  

In-Person Attendance

  $

1,000  2,000  

 

Telephonic Attendance

  $

500  1,000  

 

 Committee Meeting Compensation(2)

 In-Person Attendance

$

1,000  

 Telephonic Attendance

$

500  

(1)  

An extended boardBoard meeting over multiple days is treated as a single boardBoard meeting for payment purposes.

 

(2) 

Directors attending a boardBoard and a committee meeting on the same day will only receive a fee for the boardBoard meeting.

We also reimburse our directors for reasonable travel expenses incurred in connection with attendance at board,Board, committee and shareholder meetings and other Company business.

Mr. JellisonHunn is an employee of our Company and did not receive any compensation for his service as a director. His compensation is set forth in the “Executive Compensation” section below.

 

 

 

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     Roper Technologies, Inc. 20162019 Proxy Statement       13


DIRECTOR COMPENSATION(CONTINUED)

 

The table below shows the compensation of ournon-employee directors for 2015.2018.

20152018 Director Compensation

 

Name  Fees Earned or
Paid in Cash
($)
   Stock
Awards
($)
(1)(2)(3)
   All Other
Compensation
($)
   Total
($)
 

Fees Earned or
Paid in Cash
($)

 

Stock
Awards
($)
(1)(2)(3)

 

All Other
Compensation
($)

 

Total
($)

 

Amy Woods Brinkley(4)

   41,875     699,640     -     741,515  

David W. Devonshire(5)

   27,250     699,640     -     726,890  

Shellye L. Archambeau

 

 

39,875

 

 

 

 

915,190

 

 

 

 

-

 

 

 

 

955,065

 

 

Amy Woods Brinkley

 

 

57,000

 

 

 

 

846,300

 

 

 

 

-

 

 

 

 

903,300

 

 

John F. Fort III

   61,000     699,640     -     760,640   

 

57,000

 

 

 

 

846,300

 

 

 

 

-

 

 

 

 

903,300

 

 

Robert D. Johnson

   56,500     699,640     -     756,140   

 

54,500

 

 

 

 

846,300

 

 

 

 

-

 

 

 

 

900,800

 

 

Robert E. Knowling, Jr

   61,500     699,640     -     761,140   

 

59,500

 

 

 

 

846,300

 

 

 

 

-

 

 

 

 

905,800

 

 

Wilbur J. Prezzano

   58,000     699,640     -     757,640   

 

83,033

 

 

 

 

846,300

 

 

 

 

-

 

 

 

 

929,333

 

 

Laura G. Thatcher(6)

   40,375     699,640     -     740,015  

Laura G. Thatcher

 

 

57,000

 

 

 

 

846,300

 

 

 

 

-

 

 

 

 

903,300

 

 

Richard F. Wallman

   61,000     699,640     -     760,640   

 

59,500

 

 

 

 

846,300

 

 

 

 

-

 

 

 

 

905,800

 

 

Christopher Wright

   63,500     699,640     -     763,140   

 

62,000

 

 

 

 

846,300

 

 

 

 

-

 

 

 

 

908,300

 

 

(1)  

The dollar values shown represent the grant date fair values for RSUs granted to these directors during 2015,2018, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification (“ASC”) Topic 718 stock compensation.(“ASC Topic 718”).

 

(2) 

As of December 31, 2015,2018, eachnon-employee director excluding Mr. Devonshire, whose awards vested upon his death, had 2,0001,500 unvested RSUs outstanding.

 

(3) 

There were no outstanding stock option awards outstanding atas of December 31, 20152018 for ournon-employee directors.

(4)

Ms. Brinkley joined the Board in May 2015.

(5)

Mr. Devonshire passed away in June 2015.

(6)

Ms. Thatcher joined the Board in May 2015.

Our shareholdershare ownership and retention guidelines fornon-employee directors require them to own 4,000 shares of our common stock. Until the share ownership guidelinesrequirements are met,non-employee directors are required to retain 100% of any shares they receive (on a net after tax basis) under our Director Compensation Plan. All of our current directors are in compliance with the guidelines, and only newly elected director, Shellye Archambeau, is below the share ownership and retention guidelines.requirements. The ownership requirement equated to approximately 1825 times the annual cash retainer for directors, based on the closing market price of our common stock on December 31, 2015 ($189.792018 of $266.52 per share).share.

 

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     Roper Technologies, Inc. 20162019 Proxy Statement


EXECUTIVE OFFICERS

The following table sets forth certain information concerning our current executive officers.officers as of December 31, 2018. The executive officers are elected by the Board of Directors and serve at its discretion. Brian D. Jellison served as the Company’s President, Chief Executive Officer and Chairman through August 30, 2018, and as the Company’s Executive Chairman until his death on November 2, 2018.

 

Brian D. JellisonL. Neil Hunn

  

Professional Experience

President and CEOChief Executive

Officer since 20012018

Director since 2001Executive Vice President, Chief Operating Officer 2018

Group Vice President from 2011 to 2017

Age: 47

  

Prior to being named President and Chief Executive Officer in 2018, Mr. Jellison’s professional experience is discussed under “BoardHunn was Executive Vice President and Chief Operating Officer since 2017 and a Group Vice President with Roper since 2011. Prior to joining Roper, Mr. Hunn held several positions in the software sector and was involved in businesses at varied stages of Directors” above.development. Most recently he was with MedAssets, an Atlanta-based SaaS company, where he served as Executive Vice President and CFO, as well as President of its revenue cycle technology businesses. He was previously with CMGI, an incubator of Internet businesses, and Parthenon Group, a strategy consulting firm.

ChairmanRobert C. Crisci

Professional Experience

Executive Vice President and

Chief Financial Officer since 20032017

Vice President, Finance and

Investor Relations from 2013 to 2017

Age: 7043

  

Prior to being named Executive Vice President and Chief Financial Officer, Mr. Crisci joined Roper in 2013 as Vice President, Finance and Investor Relations and led the Company’s financial planning and analysis and investor relations activities. Prior to joining Roper, he served in various roles across investment banking, consulting and finance with positions at Morgan Keegan, VRA Partners, Devon Value Advisers and Deloitte & Touche.

John HumphreyK. Stipancich

  

Professional Experience

Executive Vice President since 20112018

Chief Financial OfficerGeneral Counsel since 20062016

Vice President from 2006 to 2011Corporate Secretary since 2016

Age: 50

  

Prior to joining Roper, Mr. HumphreyStipancich served as Executive Vice President and Chief Financial Officer of Honeywell Aerospace, the aviation segment of Honeywell International Inc., after serving in several financial positions with Honeywell International and its predecessor AlliedSignal. Mr. Humphrey’s earlier career included 6 years with Detroit Diesel Corporation, a manufacturer of heavy-duty engines, in a variety of engineering and manufacturing management positions.

David B. Liner

Professional Experience

Vice President since 2005

General Counsel since 2005

Secretary since 2005

Age: 60

Prior to joining Roper, Mr. Liner served four years in the corporate finance group of the law firm of Dykema Gossett, PLLC, heading up both the firm’s automotive industry and China teams, and four years as Vice President and General Counsel of MascoTech,Newell Brands Inc., a diversified industrialconsumer products company, primarily servingwhere he had also served as General Counsel and Corporate Secretary, and Executive Leader of its operations in Europe. Prior to his twelve years at Newell Brands, Mr. Stipancich served as Executive Vice President, General Counsel and Corporate Secretary for Evenflo Company and Assistant General Counsel for Borden, both KKR portfolio companies at the global transportation industry. Mr. Liner’s earliertime. He started his legal career included 17 years as a memberin the Cleveland office of the legal department of Masco Corporation, a manufacturer of products for the home improvement and new home construction markets.international law firm Squire Patton Boggs.

Paul J. Soni

  

Professional Experience

Executive Vice President since 2017

Vice President from 2006 to 2017

Controller sincefrom 2002 to 2017

Age: 5760

  

Prior to being named Executive Vice President, Mr. Soni served as Roper’s Controller and Principal Accounting Officer since 2011 and Vice President since 2006. Prior to joining Roper, Mr. Soni served four years as Corporatethe Controller of both Oxford Industries, Inc., a clothing company, and four years as Controller of the International Division of Savannah Foods & Industries, Inc., a producer, marketer, and distributor of food products, with responsibilities in the U.S. and Latin America. Mr. Soni’s earlier career included eight years with Price WaterhousePricewaterhouseCoopers LLP, a professional services firm, in the U.S. and Europe, performing audit and transaction support services. Mr. Soni has elected to retire as Executive Vice President in 2019.

 

 

 

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     Roper Technologies, Inc. 20162019 Proxy Statement       15


BENEFICIAL OWNERSHIP

Beneficial ownership is determined in accordance with the SEC rules. Under the rules, the number of shares beneficially owned by a person and the percentage of ownership held by that person includes shares of common stock that could be acquired upon exercise of an option within sixty days, although such shares are not deemed exercised and outstanding for computing the percentage of ownership ofheld by any other person. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting and investment power with respect to all shares beneficially owned, subject to community property laws where applicable.

The following table shows the beneficial ownership of Roper common stock as of March 31, 201629, 2019 by (i) each of our director nominees, (ii) each named executive officer in the “2015“2018 Summary Compensation Table,” (iii) all of our current directors and executive officers as a group, and (iv) all persons who we know are the beneficial owners of five percent or more of Roper common stock. Except as noted below, the address of each person in the table is c/o Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, FL 34240.Florida 34240.

 

Name of Beneficial Owner  Beneficial Ownership
    of Common  Stock
(1)(2)    
   Percent
of Class
 

Beneficial Ownership
    of Common Stock
(1)(2)    

 

Percent
of Class

 

T. Rowe Price Associates, Inc.
100 East Pratt Street, Baltimore, Maryland 21202

   14,666,657(3)    14.5

The Vanguard Group, Inc.
100 Vanguard Blvd., Malvern, Pennsylvania 19355

   9,050,250(4)    9.0

FMR LLC
245 Summer Street, Boston, Massachusetts 02210

   7,447,048(5)    7.4

Blackrock, Inc.
55 East 52nd Street, New York, New York 10055

   5,743,127(6)    5.7

Franklin Resources, Inc.
One Franklin Parkway, San Mateo, CA 94403

   5,086,441(7)    5.0

T. Rowe Price Associates, Inc.
100 E. Pratt Street, Baltimore, MD 21202

 

 

 

 

14,251,090

 

 

(3) 

 

 

 

13.7

 

%

 

The Vanguard Group
100 Vanguard Blvd., Malvern, PA 19355

 

 

11,529,525

 

(4) 

 

 

 

11.1

 

%

 

BlackRock, Inc.
55 East 52nd Street, New York, NY 10055

 

 

7,181,267

 

(5) 

 

 

 

6.9

 

%

 

Shellye L. Archambeau

 

 

3,250

 

 

 

 

*

 

*

 

Amy Woods Brinkley

   4,000     * 

 

15,000

 

 

 

 

*

 

*

 

John F. Fort III

   18,150(8)    * 

 

18,253

 

(6) 

 

 

 

*

 

*

 

L. Neil Hunn

 

 

386,676

 

 

 

 

*

 

*

 

Brian D. Jellison

   1,866,814     1.8 

 

1,077,365

 

(7) 

 

 

 

1.0

 

%

 

Robert D. Johnson

   8,500     * 

 

8,450

 

 

 

 

*

 

*

 

Robert E. Knowling, Jr.

   14,038     * 

 

13,037

 

 

 

 

*

 

*

 

Wilbur J. Prezzano

   16,000     * 

 

19,000

 

 

 

 

*

 

*

 

Laura G. Thatcher

   4,000     * 

 

14,000

 

 

 

 

*

 

*

 

Richard F. Wallman

   39,965     * 

 

53,965

 

(8) 

 

 

 

*

 

*

 

Christopher Wright

   66,904     * 

 

59,862

 

 

 

 

*

 

*

 

John Humphrey

   288,728     *

David B. Liner

   154,366     *

Robert C. Crisci

 

 

68,590

 

 

 

 

*

 

*

 

John K. Stipancich

 

 

30,521

 

 

 

 

*

 

*

 

Paul J. Soni

   112,956(9)    * 

 

153,047

 

(9) 

 

 

 

*

 

*

 

All current directors and executive officers as a group (12 individuals)

   2,594,421     2.5

All current directors and executive officers as a group (14 individuals)

 

 

1,921,016

 

 

 

 

 

 

1.9

 

 

 

%

 

 

 

**

Less than 1%.

 

(1) 

Includes the following shares that maycould be acquired on or before May 30, 201628, 2019 upon exercise of stock options issued under Company plans as follows: Mr. Jellison (548,084)Hunn (167,000), Mr. Humphrey (181,916), Mr. Liner (92,000)Crisci (32,000), Mr. Soni (56,000)(90,000), and all 12 current directors and executive officers as a group (878,000)(289,000). Holders do not have voting or investment power over unexercised option shares.

 

(2) 

Includes the following shares of unvested restricted stock held by named executives officers over which they have sole voting power but no investment power: Mr. Jellison (350,000)Hunn (157,500), Mr. Humphrey (70,000)Crisci (35,500), Mr. Liner (14,000)Stipancich (25,750), and Mr. Soni (14,000)(10,000). Also includes 2,000 shares that will be acquired on May 26, 2016 upon the vesting of1,500 unvested restricted stock units for each of our the followingnon-employee directors: Messrs. Fort, Johnson, Knowling, Prezzano, Wallman, and Wright Ms.and Mses. Archambeau, Brinkley and Ms. Thatcher. The total for all current directors and executive officers and directors as a group is 464,000.(242,250).

 

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     Roper Technologies, Inc. 20162019 Proxy Statement


BENEFICIAL OWNERSHIP(CONTINUED)

 

(3) 

Based on information reported on Schedule 13G13G/A filed with the SEC on February 10, 2016,14, 2019, as of December 31, 2015,2018, T. Rowe Price Associates, Inc. may be deemed to be the beneficial ownerbeneficially owned 14,251,090 shares of such securities,Roper common stock with sole voting power over 4,205,1374,697,107 shares and sole dispositive power over all of the shares.

 

(4) 

Based on information reported on Schedule 13G filed with the SEC on February 10, 2016,12, 2019, as of December 31, 2015,2018, The Vanguard Group Inc.(“Vanguard”) beneficially owned 9,050,25011,529,525 shares of Roper common stock with sole voting power over 188,377120,119 shares, shared voting power over 9,90025,102 shares, sole dispositive power over 8,851,41011,385,998 shares, and shared dispositive power over 198,840143,527 shares. CertainVanguard Fiduciary Trust Company, a wholly-owned subsidiary of these shares are beneficially owned by subsidiaries that serve as investment managerVanguard, is the beneficial owner of collective trust accounts or as investment manager88,810 shares. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of investment offerings.Vanguard, is the beneficial owner of 84,855 shares.

 

(5) 

Based on information reported on Schedule 13G13G/A filed with the SEC on February 12, 2016,6, 2019, as of December 31, 2015, FMR LLC2018, BlackRock, Inc. (and certain of its affiliates)subsidiaries) beneficially owned 7,477,0487,181,267 shares of Roper common stock with the sole voting power over 73,5156,109,706 shares and sole dispositive power over all of the7,181,267 shares.

 

(6)

Based on information reported on Schedule 13G filed with the SEC on February 10, 2016, as of December 31, 2015, BlackRock, Inc. (and certain subsidiaries) beneficially owned 5,743,127, shares of Roper common stock with the sole voting power over 4,893,874 shares and sole dispositive power over all of the shares.

(7)

Based on information reported on Schedule 13G filed with the SEC on February 10, 2016, as of December 31, 2015, Franklin Resources, Inc. (and certain of its affiliates) beneficially owned 5,086,441 shares of Roper common stock, with certain affiliates having sole voting power and sole dispositive power over an aggregated of 926,387 shares.

(8) 

Includes 250 shares held by a trust of which Mr. Fort is a trustee.trustee and 300 shares held by Mr. Fort’s spouse.

(7)

As a result of Mr. Jellison’s death on November 2, 2018, all shares held in his name passed to his spouse to be held in a revocable trust.

(8)

Includes 500 shares held in an IRA account by Mr. Wallman’s spouse.

 

(9) 

Mr. Soni and his spouse each participate in a 401(k) plan with a unitized stock fund that consists of cash and common stock in amounts that vary from time to time. Based on a conversion factor representing the units in the fund as of March 31, 2016,29, 2019, the shares in the table include 2,7982,850 shares in Mr. Soni’s account and 946963 shares in his spouse’s account.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires Roper’s directors, officers and persons who own more than 10% of Roper common stock to file with the SEC initial reports of ownership and reports of changes in ownership. Officers, directors and greater than 10% shareholders are required by SEC regulationrules to furnish Roper with copies of all Section 16(a) forms they file.

We believe that during 20152018 all of our directors and executive officers complied with all Section 16(a) filing requirements, with the exception of one late Form 4 filed March 6, 2015 due to an administrative oversight in reporting a sale of 2,250 shares for Mr. Wright.requirements. In making this statement, we have relied upon examination of the copies of Forms 3, 4 and 5, and amendments to these forms, provided to us and the written representations of our directors and executive officers.

 

 

 

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     Roper Technologies, Inc. 20162019 Proxy Statement       17


COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) provides information about our compensation objectives and policies for our Chief Executive Officercurrent and prior CEOs and other executive officers (who are included in the 2015 Summary Compensation Table and referred to in this CD&A as “executive officers”) that will place in perspective the information set forth in the “Executive Compensation” section that follows in this Proxy Statement.“named executive officers.”

EXECUTIVE SUMMARYCREATING SHAREHOLDER VALUE

Superior Returns for Roper Investors

Roper is proud of its long track record of superior returns for its investors. Roper has significantly outperformed the S&P 500 over the past one, three, five, and 10 years.

Period    Compound Annual
Shareholder Return
    Total Shareholder Return
(TSR)
    Roper    S&P 500    Roper    S&P 500

1 Year

    22.1%    1.4%    22.1%    1.4%

3 Years

    20.0%    15.1%    72.9%    52.6%

5 Years

    20.6%    12.6%    155.5%    80.8%

10 Years

    17.7%    7.3%    408.8%    102.4%

Record 2015 Performance Despite Macro Challenges(1)

Record financial results were achieved in 2015 despite strong headwinds in foreign exchange and weakness in oil & gas end markets. Although these two challenges reduced revenue by nearly $200 million in 2015, we were still able to grow revenue, expand margins, and produce an 11% increase in free cash flow. We deployed $1.8 billion in acquisitions with a continued focus on software, SaaS and niche product applications consistent with our strategy of disciplined capital deployment to enhance our ability to generate and compound future free cash flow.

Operating income grew 4%, to above $1.0 billion

Operating margin increased 80 basis points to 29.0%

EBITDA margin continued to expand, reaching 34.6%

Free cash flow increased 11% to $893 million, representing a record 25% of revenue

Annual dividend increased by 20%, increasing for the 23rd consecutive year

Generated double-digit shareholder returns for the 12th time in the last 13 years

Greater than 20% annual compound return to shareholders over the past five years

Deployed an all-time high $1.8 billion of capital in acquisitions

Diluted Earnings Per Share (DEPS) increased

4% from $6.42 in 2014 to $6.68 in 2015.

Free Cash Flow increased 11% from $803 million

in 2014 to $893 million in 2015.

LOGO

LOGO

(1)

Financial items above are adjusted except for Free Cash Flow. Please see Appendix A for reconciliation from GAAP to adjusted results.

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    Roper Technologies, Inc. 2016 Proxy Statement


COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Compensation Summary and Consideration of Say-on-Pay Vote

At the 2015 Annual Meeting of Shareholders, 97% of the votes cast were in favor of the advisory vote to approve executive compensation, high by peer and general industry standards and up from 2014. The Compensation Committee believes the vote reflects the strong support of shareholders for recent changes to our executive compensation program as well as for our long-standing pay-for-performance philosophy and approach of integrating executive compensation with our value creation model.

The creation of shareholder value is the foundation and driver of our executive compensation program. The compensation of our executive officers is closely aligned with the long-term interests of our investors.shareholders.

Superior Returns for Roper Shareholders¹

Roper is proud of its long track record of superior returns for its shareholders. Roper has significantly outperformed the S&P 500 over the past 1, 3, 5, 10 and 15 years.

  Period    

Compound Annual

Shareholder Return

    

Total Shareholder Return

(TSR)

    Roper    S&P 500    Roper    S&P 500 

 Q1 2019

    NA    NA    28.5%    13.6%

 1-Year

    3.5%    (4.4)%    3.5%    (4.4)%

 3-Years

    12.7%    9.3%    43.1%    30.4%

 5-Years

    14.7%    8.5%    98.2%    50.3%

 10-Years

    20.6%    13.1%    552.9%    243.0%

 15-Years

    17.9%    7.8%    1,084.4%    207.1%

As outlined in the graph below, $100 invested in Roper at the end of 2001 would have yielded an investor $1,542 as of March 31, 2019, compared to only $350 for the same investment in the S&P 500.

LOGO

 

Despite record financials and $3.5 billion in market value creation in 2015, compensation was flat to down from 2014.

Salaries have remained the same for three years (2014-16).

Annual cash bonuses paid out at 52% of target for 2015, down from approximately 100% of target for the prior five years.

¹

All equity awards are performance-based with vestingperiods ending December 31 of 100% of restricted shares contingent upon meeting multi-year EBITDA and operating cash flow margin performance requirements.the referenced year, except the Q1 2019 period which ended March 31.

95% of our Chief Executive Officer’s compensation is subject to performance risk and tied to long-term financial results and stock price, with all incentive compensation tied to achievement of pre-set performance objectives over three years, and none tied solely to a single annual measurement period.

Taking into consideration input from investors, the 2014 Say on Pay vote, external developments, and internal considerations, Roper took numerous actions related to its executive compensation program over the last two years:

CEO annual cash bonus was replaced with a three-year long-term cash incentive award.

Dividends on restricted shares will not be paid until the shares are earned, and will be forfeited if not earned.

Vesting for equity awards was lengthened to 50% after years 2 and 3 (from one-third per year previously).

Achievement of three-year cumulative performance goal required for full vesting of restricted shares (versus a one-year goal for each year previously).

Performance standards for full vesting of restricted shares were increased in 2016 to EBITDA of $3.45 billion and operating cash flow of 21% of revenue.

Eliminated the Medical Reimbursement Plan for executives effective for 2015.

Our Global Industry Classification System (GICS) was reviewed with Standard & Poor’s who changed our assignment in 2014 to reflect the transformation of our business mix.

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    Roper Technologies, Inc. 2016 Proxy Statement    19


COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Checklist of Compensation Practices

Consistent with investor interests and market best practices, positive features of our executive compensation program include the following:

WHAT WE DO
Virtually all compensation for executives is tied to performance.
Performance vesting requirements apply to 100% of restricted stock awards.
CEO’s cash bonus based on three-year results to reinforce long-term planning horizon.
Cash bonuses are capped and performance-based restricted stock awards limited to 100% of target (risk mitigation features).
Robust share ownership and retention guidelines, much higher than typical practice.
“Clawback” policy to recoup erroneously paid compensation.
Risk assessment review as part of risk mitigation process.
Independent compensation consultant retained by the Compensation Committee.
Limited perquisites and other benefits.
WHAT WE DON’T DO
No re-pricing of underwater stock options or cash buy-outs.
No granting of stock options with an exercise price less than fair market value at grant.
No payment of dividends on performance-based restricted stock awards until earned.
No defined-benefit pension plan or SERPs for executives (only 401(k) Plan on the same terms as other eligible employees and voluntary deferral of cash compensation).
No “single trigger” equity vesting upon change-in-control.
Severance pay is very limited, as is the use of employment agreements.
No hedging or pledging of Company stock is permitted.
No excise tax gross-ups on change-in-control payments.

 

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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

CREATING SHAREHOLDER VALUERecord 2018 Performance for Roper

2018 was another excellent year for Roper, with double digit increases in revenue, net earnings, EBITDA and cash flow. Our strategic focus on asset-light, diversified technology businesses and our ability to generate and compound cash flow delivered another year of outperformance.

Annual shareholder return of 3.5% versus S&P 500 negative return of (4.4)%; Three-year compounded return of 12.7% versus S&P 500 return of 9.3%

GAAP revenue increased 13% to $5.19 billion with organic revenue growth of 9%

GAAP gross margin increased 100 basis points to 63.2%

Adjusted EBITDA increased 13% to $1.81 billion and adjusted EBITDA margin increased 30 basis points to 34.7%(1)

Operating cash flow increased 16% to $1.43 billion and free cash flow increased 17% to $1.37 billion

Deployed $1.3 billion toward high quality software acquisitions in 2018 while also reducing our total leverage by over $200 million

Annual dividend increased by 12%, increasing for the 26th consecutive year

(1)

This financial information is presented on an adjusted(non-GAAP) basis. A reconciliation fromnon-GAAP financial measures to the most comparable GAAP measure and other related information is available in “Appendix A—Reconciliations”.

Simple Strategy Focused onDrives Powerful Value Creation

Roper has a simple and successful business model that we believe is unique among application software and multi-industry diversified companies. We operate high-margin, high-cash generating,high cash-generating, asset-light businesses across a wide range of diverseend-markets. Our high-performing businesses generate excess free cash flow that our executive team deploys to acquire more high-performing businesses. This creates a “compounding effect” on cash flow that drives long-term value creation. Our free cash flow has increased from $257$398 million in 20052008 to $893 million$1.37 billion in 2015,2018, a compound annual growth rate of 13%, driven by thisour combination of outstanding business performance and value-creating capital deployment.

Roper Annual Free Cash Flow and Operating Cash Flow (millions)

 

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Note: Free Cash Flow = Cash from Operations less Capital Expenditures less Capitalized Software Expenditures

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Note: Free Cash Flow = Cash from Operations less Capital Expenditures
 

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     Roper Technologies, Inc. 2019 Proxy Statement  19


COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Market Capitalization Growth

Roper’s market capitalization has increased more than $30 billion since January 2010.¹

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1

Chart reflects ending period as March 31, 2019.

Key Metric: Cash Return on Investment

Cash Returnreturn on Investmentinvestment (“CRI”) is athe key operating metric Roper uses to measure the performance and value of its operating businesses and potential acquisitions, and to focus ouracquisitions. Our business leaders and corporate executive leadershipBoard of Directors focus on cash flow growth and disciplined investment.investments.

 

CRI is highly correlated to shareholder value creation and we believe our strategy of improving CRI has been a key driver toof our long termlong-term performance.

 

Our CRI discipline, as applied throughout the organization, allows usRoper to focus our investment on areas that will increase shareholder value, drive cash flow growth, and minimize physical assets.

 

Through a combination of internal improvements and disciplined capital deployment, Roper has increased CRI dramatically since 2005, andover the past 16 years, a key driver of our shareholders have enjoyed a totalstrong shareholder return of 409% during thatreturns over the period.

 

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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Acquisition-Focused Capital Deployment

We deploy the majority of our free cash flow toward acquisitions to generate long-term growth and createlong-term shareholder value. Unlike most other large corporations, we do not have a separate corporate development ormerger-and-acquisition team; our CEO and other top executives are responsible for the disciplined deployment of capital through acquisitions.

OVERVIEW OF OUR COMPENSATION PROGRAM

Consideration ofSay-on-Pay Vote

SinceSay-on-Pay started in 2011, Roper has received an average of 92% support for its executive compensation program. At the 2018 Annual Meeting of Shareholders, 95% of the votes cast were in favor of the advisory vote to approve executive compensation. This level of support is high relative to peers, and consistent with prior years’ support of 95% in 2017, 96% in 2016 and 97% in 2015. The Compensation Committee believes theSay-on-Pay vote reflects the strong support of our shareholders for our long-standingpay-for-performance philosophy and approach of integrating executive compensation with our value creation model as well as for recent changes to our executive compensation program.

Taking into consideration input from shareholders, theSay-on-Pay vote, external developments, and internal considerations, Roper has undertaken many changes over the past several years to its executive compensation program to ensure it is closely aligned with the long-term interests of our shareholders:

Prior CEO’s annual cash bonus was replaced with a multi-year long-term cash incentive award.

Dividends on executive officers’ restricted shares are not paid until the shares are earned, and are forfeited if shares are not earned.

100% of restricted shares are performance-based, with all vesting contingent upon meeting multi-year EBITDA and relative operating cash flow margin performance requirements.

Only stock options, which are inherently performance-based, vest by continued service alone.

A three-year cumulative performance goal must be met for full vesting of restricted shares (versus aone-year goal for each year previously).

Annual vesting of equity awards(one-third per year over three years) was eliminated.

CEO equity awards may vest only at the end of a three-year period.

Equity awards for other named executive officers may vest 50% after the second year and 50% after the third year.

EBITDA performance for full vesting of restricted shares was increased in 2018 by 15% to $4.6 billion.

Starting in 2017, the operating cash flow less capital expenditures and capitalized software (measured as a percentage of revenue) was changed from an internal goal to relative performance against an external benchmark with 50th percentile performance required for any portion of the restricted shares to vest and 75th percentile performance required for full vesting.

97% of our prior CEO’s compensation was and 95% of our current CEO’s compensation is subject to performance risk and tied to financial results and stock price.

In light of the transformation of our business portfolio, Standard & Poor’s changed out our Global Industry Classification System (GICS) in 2014 and we may request another change to a more appropriate GICS to reflect our significant growth in software.

Based on the results of the advisory vote at the 2017 Annual Meeting of Shareholders to approve the frequency of theSay-on-Pay vote, theSay-on-Pay vote will continue to be every year.

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

Acquisition-Focused Capital DeploymentChecklist of Compensation Practices

We deploy mostConsistent with shareholder interests and market best practices, positive features of our free cash flow in acquisitions to generate long-term growth and create long-term shareholder value. Unlike most other large corporations, we do not have a separate corporate development or merger-and-acquisition team, with our Chief Executive Officer, Chief Financial Officer, and other top executives responsible forexecutive compensation program include the disciplined deployment of capital through acquisitions.

Market Capitalization Growth (2004-2015)

In 2015, Roper’s market capitalization increased by $3.5 billion, the biggest single-year increase in our history. Over the last six years, Roper’s market capitalization has almost quadrupled, climbing by more than $14 billion.following:

 

WHAT WE DO

Virtually all compensation for named executive officers is tied to performance.

Performance vesting requirements apply to 100% of restricted stock awards (no time vesting alone).

Prior CEO’s cash bonus based on five-year results to reinforce a long-term planning horizon.

Cash bonuses are capped and performance-based restricted stock awards limited to 100% of target (risk mitigation features).

Robust share ownership and retention guidelines, much higher than typical practice.

“Clawback” policy to recoup erroneously paid compensation.

Risk assessment review as part of risk mitigation process.

Independent compensation consultant retained by the Compensation Committee.

Limited perquisites and other benefits.
WHAT WE DON’T DO

Nore-pricing of underwater stock options or cashbuy-outs.

No granting of stock options with an exercise price less than fair market value at grant.

No payment of dividends on performance-based restricted stock awards until earned.

No defined-benefit pension plan or SERPs for named executive officers (only 401(k) plan on the same terms as other eligible employees and voluntary deferral of cash compensation).

No “single trigger” equity vesting uponchange-in-control.

Severance pay is very limited, as is the use of employment agreements.

No hedging or pledging of Company stock is permitted.

No excise taxgross-ups onchange-in-control payments.

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OBJECTIVES OF OUR COMPENSATION PROGRAMObjectives of our Compensation Program

Our compensation program for executivesnamed executive officers reflects our business needs and challenges in creating shareholder value and is designed to:

 

Drive performance for the benefit of shareholders.

 

Emphasize equity compensation to align executives’ financialnamed executive officers’ interests with those of shareholders.

 

Provide compensation levels competitive with publicly traded companies and privately held enterprises enablingprivate equity firms. This enables us to recruit and retain seasoned leadership capable of effectively deploying capital, while driving and managing a diversified technology company.

Maintain flexibility to adjust to changing business needs in a fast-paced business environment.

 

Simplify compensation design to promote transparency and facilitate ease of administration and communication.

 

Solicit and consider the views of our investors.shareholders.

 

Adhere to the highest legal, governance, and ethical standards.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

ELEMENTS OF COMPENSATION

Our executive compensation program consists of several elements, each with an objective that fits into our overall program to provide an integrated and competitive total pay package.

 

Long-Term Stock Incentives

Equity compensation is the biggestlargest and most important form of pay for our named executive officers as it achieves many of our key compensation objectives:

 

Tie pay to performance by linking compensation to shareholder value creation and achievement ofpre-determined and objective performance criteria.

 

Align executives’named executive officers’ interests with those of shareholders while reinforcing a long-term planning horizon.

 

Attract executives,named executive officers, particularly those interested in building long-term value for shareholders, as equity compensation is the key element of competitive pay packages for executives.named executive officers.

 

Retain executivesnamed executive officers and reward futurecontinued service by providing forensuring the forfeiture of awards prior to satisfaction of multi-year service requirements.

We use two types of equity awards:

Stock Options

The exercise price of stock options is set at the market closing price of our stock on the date of grant which provides an incentive to grow shareholder value and requires continued service over multiple years to realize any gains.

Performance-Based Restricted Stock

In addition to continued service, the vesting of restricted shares is 100% contingent on the Company

attaining specific,pre-determined and objective performance goals, as certifiedspecified by the Compensation Committee. Dividends are withheld and paid only to the extent the shares are actually earned by performance. Performance-based restricted stock is intended to encourage the retention of named executive officers, provide a continuing incentive to increase shareholder value, and further align named executive officers’ interests with shareholder interests.

Compensation Committee. Effective for the awards made in January 2015, dividends will be withheld and paid only to the extent the shares are actually earned by performance, rather than currently as under prior awards. Performance-based restricted stock is intended to encourage the retention of executives, provide a continuing incentive to increase shareholder value, and further align executives’ interests with investors.

We use two types of cash payments:

Cash Incentives

Cash incentives support the achievement of our business strategies by tying a portion of compensation to the achievement of established financial objectives and assist in attracting executivesnamed executive officers due to their market prevalence. Cash incentives are capped to avoid an excessive short-term focus and potentially adverseexcessive risk-taking. Cash incentives for named executive officers are tied to annual performance, except for our Chief Executive Officer. Effective for 2014, the Chief Executive Officer’s annual incentive was changed to a long-term incentive covering three years to reinforce the importance of sustained performance.

Base Salary

Base salary is fixed cash compensation that reflects level and scope of responsibility, experience and skills andas well as market practices. The Compensation Committee reviews each named executive officer’s base salary annually as well as in connection with a promotion or other change in responsibility.responsibilities. Salary adjustments are usually effective as of January 1.

 

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

Other Pay Elements

As Roper has largely avoided perquisites, supplemental pensions, and other compensation not tied to performance, the other items summarized below represent only a small portion of executives’named executive officers’ total compensation.

 

Retirement Benefits

 

ExecutivesNamed executive officers may participate under the same terms as other eligible employees in a 401(k) programplan that provides matching contributions capped at 7.5% of base salary,cash compensation, subject to limitations imposed by the Code.

 

To provide financial planning flexibility, we maintain aNon-Qualified Deferred Compensation Retirement Plan, pursuant tounder which named executive officers may elect to defer cash compensation. This plan is intended to provide deferred compensation benefits that would have been earned under thetax-qualified 401(k) programplan but for certain limitations imposed by the Code.Internal Revenue Code of 1986, as amended (the “Code”). For more information on this plan, see the “Executive Compensation—2015 2018Non-Qualified Deferred Compensation” section below.

Perquisites and Other Benefits

Perquisites and othernon-cash benefits offered to named executive officers are limited to the following:

Anan automobile allowance and club membership when they have a business purpose.

Reimbursement for financial planning expenses.

A Medical Reimbursement Plan covering certain expenses was eliminated effective for 2015.

Severance and Change-in-ControlChange in Control Provisions

We have an employment agreement only with Mr. Jellison and letter agreements only with Messrs. HumphreyHunn and Liner.Stipancich. These arrangements provide

severance benefits in the event of termination of employment under certain circumstances, including a change-in-control.change in control. For a description of these agreements and payments under various termination scenarios, see the “Potential“Executive Compensation—Potential Payments upon Termination or Change in Control” section below.

Double Trigger Equity Vesting

In regard to equity awards, we use a “double trigger” approach to vesting upon a change in control, rather than providing for vesting solely upon a change in control (“single trigger”), because we believe it provides adequate protection and reduces potential costs for a possible acquirer of the Company. See the “Potential“Executive Compensation—Potential Payments upon Termination or Change in Control” section below for additional detail.

No TaxGross-Ups

AnA named executive officer may be subject to excise taxes on benefits received in relation to a change in control of the Company. We do not provide excise-tax gross-upsexcise-taxgross-ups to executives tonamed executive officers (which would place the named executive officer in the same tax position as if the excise tax did not apply.apply).

 

 

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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

Mix of Total Compensation

Compensation for our named executive officers encourages a long-term focus and closely aligns with shareholder interests.

 

For 2015, 95% of CEO2018, the total direct compensation at target that was at risk and tied to stock price and multi-year performance objectives was 97% for our prior CEO, 95% for our current CEO, and 86% on average for other executive officers.

20152018 Total Direct Compensation Mix

 

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COMPENSATION PROCESS

Compensation Committee Oversight

The Compensation Committee oversees our executive compensation programs to appropriately compensate executives, tonamed executive officers, motivate executivesnamed executive officers to achieve our business objectives, and to align our executives’named executive officers’ interests with the long-term interests of our shareholders. ItThe committee reviews each element of compensation for each named executive officer and determines any adjustments to compensation structure and levels in light of various considerations, including:

 

The scope of the named executive officer’s responsibilities, performance and experience as well as competitive compensation levels;levels.

 

Our financial results against prior periods;periods.

 

The structure of our compensation programs relative to sound risk management, as discussed with management;management.

 

The results of the advisory shareholder vote on the compensation of our named executive officers and input from investors; andshareholders.

 

Competitive pressures from private equity and capital deployment companies, as well as market practices and external developments generally.

The utilization of a compensation consultant who provides extensive external benchmarking of named executive officer compensation of industry peer group companies for comparison purposes.

The Compensation Committee has maintained a simple program that drives long-term performance and superior value creation for shareholders and believes it has enabledenabling Roper to attract, retain, and motivate a world-class managementan outstanding leadership team.

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

Consulting AssistanceCompensation Consultant

For 2015,2018, the Compensation Committee has continued the retained Frederic W.services of FW Cook & Co., Inc. (the “Consultant”) to provide the Committeecommittee with independent, objective analysis and professional opinions on executive compensation.

 

The Consultant is independent, reports directly to the Chair of the Compensation Committee and has never performed other work for the Company. The Compensation Committee determined that its engagement of the Consultant did not raise any conflicts of interest.

 

The Consultant generally attends all meetings of the Compensation Committee where evaluations of the effectiveness of overall executive compensation programs are conducted or where compensation for named executive officers is analyzed or approved.

 

The Chair of the Compensation Committee Chair meets with the Consultant in advance of Committeecommittee meetings and confers via telephone with the Consultant between meetings.

 

The Consultant assists in gathering and analyzing market data on compensation levels and provides expert knowledge of marketplace trends and best practices relating to competitive pay levels as well as developments in regulatory and technical matters.

Role of Our Named Executive Officers

While the Compensation Committee is ultimately responsible for making all compensation decisions affecting our named executive officers, our Chief Executive OfficerCEO participates in the process because of his closeday-to-day association with the other named executive officers and his knowledge of the Company’s diverse business operations.

 

Our Chief Executive Officer periodicallyCEO discusses with the Compensation Committee the performance of the Company and of each named executive officer, including himself. The Chief Executive OfficerCEO also discusses with the Committeecommittee the performance of key executives reporting to his direct reports.

 

The Chief Executive OfficerCEO makes recommendations on the components of compensation for the named executive officers, other than himself andbut does not participate in the portion of the Committeecommittee meeting regarding the review of his own performance or the determination of the actual amounts of his compensation.

The other executive officers provide support to the Committee, as needed, in regard to their respective technical areas. Our Chief Financial Officer also assists the Compensation Committee as an information resource in regard to metrics related to incentive compensation. The other named executive officers provide support to the committee, as needed, in regard to their respective technical areas.

Market Benchmarking

Market pay levels and practices, including those of a self-selected peer group, are one of many factors the Compensation Committee considers in making compensation decisions.

 

Purpose

 

We benchmark to provide an external frame of reference on range and reasonableness of compensation levels and practices. Market information is used as a data point in decision-making, and not as a primary factor.

Challenges

 

Our high-margin, high-cash generating, asset-light business model and diversifiedend-markets make it challenging to select peers using traditional criteria, such as revenue, industry codes or competitors. Roper’s operating businesses have peers that can be assigned by industry, but at the enterprise level Roper has no peers that match our diverse set of businesses and unique operating

  

Roper has no peers that match our diverse set of businesses and unique operating model. Given our valuation relative to revenue, using only revenue in measuring Roper’s size understates Roper’s overallthe relative market value of Roper and is therefore a poor indicator of Roper’s relative value.indicator.

Private Equity

 

Given the capital deployment responsibilities of our named executive officers and the private equity-like nature of our business, we consider the compensation levels and practices used by private equity companiesfirms that offer comprehensive programs, which often includeco-investment and leveraged carried-interest opportunities. We do not allow our executivesopportunities more akin to co-invest in Company investments, nor do they benefit from carried-interest tax treatment.Roper’s operating model.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

However, we do not allow our named executive officers toco-invest in Company investments, nor do they benefit from carried-interest tax treatment. Our compensation practices often compete with private

equity opportunities when recruiting and retaining talented professionals who possess expertise in both operations and capital deployment.

 

20152018 Peer Group

Changes were made to ourOur self-selected peer group for 2015 to reflectreflects our continued strong growth, and sustained value creation, our continuing expansion into medical, software and technology-driven businesses, and market valuation relative to revenues and gross investment. In lightinvestment, and intense competition with private equity for talent and investment opportunities. Roper’s decision and subsequent transformation to focus on software has changed the performance of the transformationcompany significantly. Today, approximately over 50% of Roper’s EBITDA are derived from our business portfolio, Standard & Poor’s changed our GICS assignment in 2014.software assets. All of these facts make it continually difficult to select appropriate peers. The peer companies are listed below along with various size indicators. Danaher, the largest company and the only industrial conglomerate in the group, is included as many of our investors have told us they see Danaher as our closest peer.

 

            Company  Ticker   

Enterprise
Value
(1)

($ millions)

   Market
Capitalization
(1)
($ millions)
   Revenue(2)
($ millions)
   Net
Income
(2)
($ millions)
  Global Industry Classification
Standard (GICS) Sub-Industry

Danaher

   DHR    $76,899    $63,649    $20,563    $3,357   Industrial Conglomerates

salesforce.com

   CRM    $52,763    $52,058    $6,302    ($88 Application Software

Adobe Systems

   ADBE    $44,776    $46,857    $4,796    $630   Application Software

Intuit

   INTU    $25,852    $25,476    $4,293    $418   Application Software

Citrix Systems

   CTXS    $11,881    $11,637    $3,276    $319   Application Software

Autodesk

   ADSK    $12,932    $13,729    $2,520    ($282 Application Software

American Capital

   ACAS    $6,071    $3,636    $671    ($187 Asset Management and Custody Banks

Edwards Lifesciences

   EW    $16,391    $17,037    $2,494    $495   Healthcare Equipment

Zimmer Biomet

   ZBH    $31,012    $20,906    $5,998    $50   Healthcare Equipment

Waters Corporation

   WAT    $10,310    $10,990    $2,042    $469   Life Sciences Tools and Services

PerkinElmer

   PKI    $6,830    $5,996    $2,262    $212   Life Sciences Tools and Services

TransDigm Group

   TDG    $20,053    $12,265    $2,822    $467   Aerospace and Defense

Median

    $18,222    $15,383    $3,049    $369   

Roper

   ROP    $21,230    $19,132    $3,582    $696   Industrial Conglomerates
            Company Ticker 

Market

Capitalization(1)
($ millions)

  

Enterprise
Value
(1)

($ millions)

  Revenue(2)
($ millions)
  Net
Income
(2)
($ millions)
  Global Industry Classification
Standard (GICS)Sub-Industry
TransDigm Group Incorporated TDG $17,937  $28,516  $3,956  $821  Aerospace & Defense
Adobe Inc. ADBE $110,435  $111,225  $8,981  $2,591  Application Software
salesforce.com, inc. CRM $104,782  $105,723  $12,530  $816  Application Software
Intuit Inc. INTU $51,089  $50,182  $6,094  $1,262  Application Software
Citrix Systems, Inc. CTXS $13,808  $14,641  $2,974  $576  Application Software
KKR & Co. Inc. Class A KKR $10,528  $47,897  $1,821  $1,134  Asset Management and
Custody Banks
Blackstone Group L.P. BX $19,743  $51,549  $6,042  $1,542  Asset Management and
Custody Banks
Motorola Solutions, Inc. MSI $18,812  $22,762  $7,344  $967  Communications Equipment
Zimmer Biomet Holdings, Inc. ZBH $21,156  $29,503  $7,933  ($379 Health Care Equipment
Waters Corporation WAT $14,289  $13,938  $2,420  $594  Life Sciences Tools & Services
VMware, Inc. Class A VMW $15,069  $46,889  $8,691  $1,480  Systems Software
CA, Inc.(3) CA $18,602  $18,125  $4,009  $404  Systems Software
Median  $18,812  $46,889  $6,094  $967  
Roper ROP $27,566  $32,082  $5,191  $944  Industrial Conglomerates

Source: FactSet

Source:S&P Capital IQ
(1)

As of 12/31/1518

(2)

Last four quarters available as of 12/31/1518

(3)

Acquired by Broadcom on 11/5/2018; market capitalization and enterprise valuation as of acquisition date; revenue and net income equal to last four reported quarters prior to acquisition date

Relative Performance Comparisons Caveat

Long-Term Measurement Period Needed

Comparing other companies’ performanceDue to Roper’s can generate misleading or distorted results due to our consistently strong performance, our business transformation and GICS change, and short termshort-term stock price movements.movements, comparing other companies’ performance to that of Roper can generate misleading or distorted results. As a result, we believe a long-term performance period most accurately portrays Roper’s relative performance for Roperperformance.

Over shorter periods, performance comparisons can be skewed by the easier performance baselines of peer companies that, unlike Roper, have experienced periods of historical underperformance and benefit from a “bounce back” from a lower starting point.

 

 

 

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COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

CEO Compensation

The Compensation Committee considers many factors in determining the compensation of Roper’s Chief Executive Officer, Brian Jellison,CEO, and believes histhe compensation for the position is reasonable, appropriate, and aligned with shareholders’ best interests.

 

Broad Responsibilities and Effective Leadership

Not only is Mr. Jellison, the Company’s prior Chairman Chief Executive Officer,of the Board, CEO and President, of a unique, complex, global organization, but he is alsowas the key architect of our highly successful business strategy and has beenwas instrumental in building the sustainable high-performance and entrepreneurial culture at Roper. During his tenure, Mr. Jellison also leadsled the capital deployment process under which Roper has invested billions of dollars in acquisitions during his tenure that hashave successfully created sustained superior returns for investors.shareholders. Since joining Roper in 2011, Mr. Hunn increasingly contributed to that process—playing a leading role for most acquisitions during his tenure. Mr. Hunn now leads the Company’s capital deployment efforts.

Outstanding Performance and Value Creation

Over the past 16 years, under Mr. Jellison’s leadership, Roper’s shareholders have earned a 19.0% compound annual return and a total shareholder return of 1,509%, more than five times the S&P 500’s total shareholder return of 295% over the same period. As designed and driven by Mr. Jellison, Roper has undergone a business transformation with increasing returns on cash investment and margins, providing a platform for continued growth and future value creation for shareholders. Similarly, during Mr. Hunn’s seven years with the Company, including time as our Chief Operating Officer, Roper’s shareholders have earned an 18.1% compound annual return and a total shareholder return of 220%.

Over the last five years, Roper’s value has tripled with shareholders receiving a 21% compound annual return. As guided by Mr. Jellison, Roper has undergone a business transformation with increasing returns on cash investment and margins, providing a platform for continued growth and future value creation for investors. Roper ranked 4th in the2015 Wealth Creation Index among the S&P 500 as compiled by Chief Executive magazine, up from 15th in 2014. Among other honors, Mr. Jellison was recently recognized by The Harvard Business Review as one of “The 100 Best-Performing CEOs in the World.”

Alignment with Shareholder Value Creation

By design, the Chief Executive Officer’sMr. Jellison’s compensation has beenwas closely tied to the value of Roper stock. TheWith the exception of his 2018 equity award (when the number of shares were reduced by 25%), the percentage increase in the value of Mr. Jellison’s equity awards over the last fiveeight years has exactly equaled the percentage increase in Roper’s stock price at time of grant, as the number of shares awarded has remained the same. This tight alignment between compensation and share price createscreated a strong incentive to profitably grow the enterprise. Our Compensation Committee is determined to continue our practice of tightly aligning the compensation paid to Mr. Hunn to creation of value for our shareholders.

External Comparisons

Compensation for Roper’s Chief Executive OfficerCEO is within the range for Roper’s self-selected peers and high-performing, long-tenured Chief Executive Officerschief executive officers of publicly traded corporations. Among private equity firms, compensation for Roper’s Chief Executive OfficerCEO is below levels that would be expected for commensurate levels of performance. CompensationFurther, compensation for our Chief Executive OfficerCEO has also been lowreasonable relative to the incremental value created for investorsshareholders (“sharing ratio”) as measured against Roper’s self-selected peers. OverReflective of succession planning considerations, his significant contributions to the last five yearsCompany, and intense competitive pressures from private equity firms, compensation for our current CEO in his prior role as our Chief Operating Officer, a role in which information is available, Roper’s “sharing ratio” (Chief Executive Officer totalhe served for most of 2018, was designed to be very competitive. Given timing considerations and the situation related to our prior CEO’s health issues in the latter part of 2018, the Compensation Committee decided to review our current CEO’s compensation as a percentage of incremental shareholder value created) is at the lower endpart of the range among peers.Committee’s standard executive officer compensation review process in early 2019.

Internal Pay Equity

The Compensation Committee considers the scope of responsibilities, experience, and performance of our executive officers and believes all executive officers are fairlyappropriately compensated from an internal pay equity perspective. Specific considerations in regard to the Chief Executive OfficerCEO’s compensation include the breadth of his responsibilities and his leadership role in developing and executing Roper’s business strategy. Consistent with Roper’s lean organization, we made a conscious decision to not have a Chief Operating Officer andmany traditional corporate staff positions and levels. In addition to low corporate overhead, Roper’s decentralized model results in operating business leaders who are highly compensated but are not named executive officers. In addition to rigorous executive development programs for key employees who may become executive officers, the committee monitors compensation of other key Company leaders against external and internal standards. This supports our succession planning process and ensures its continuing effectiveness, as evidenced by the recent promotion of four officers from within the Company, including the Company’s performance since Mr. Hunn’s succession of Mr. Jellison as President and CEO.

 

 

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     Roper Technologies, Inc. 20162019 Proxy Statement


COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

Equity Grants

The Compensation Committee grants awards of performance-based restricted stock and stock options to named executive officers under the Company’s 20062016 Incentive Plan at the first regularly scheduled committee meeting each year. The exercise price for stock options is the closing price of Roper common stock on the date of grant. From time to time the Compensation Committee may grant additional awards in connection with promotions or increased responsibilities but none were madeas well as to executive officers in 2015.

Equity Award Determination

Historically, the size of equity awards has been expressed as a constant number of shares, which fluctuates in value from year to year with changes in the stock price. We believe this approach strengthens the alignment with shareholders, provides additional incentive for increasing the value of our shares, exposes the executive to the risks of share ownership, and assists in attracting and retaining talented executives. Consistent with this “constant share” approach to equity award denomination, changes in total compensation for our executive officers align with our total shareholder return.

The Compensation Committee continues to review the application of the share-based approach to ensure that it does not unduly reward executive officers for past performance. For 2015, the Committee retained the approach for the 2015 equity awards which were slightly lower in value than the 2014 awards for executive officers, other than the CEO’s whose award value was only slightly higher than the prior year. The Committee will continue to closely monitor the grant size methodology to ensure it is consistent with our overall executive compensation philosophy and program.newly hired employees.

ANALYSIS OF 20152018 COMPENSATION

This section discusses the compensation actions that were taken in 20152018 for our named executive officers, as reported in the “Executive Compensation” section below.

 

Base Salary

For 2015 and 2016,In 2018, the Compensation Committee made no adjustments toincreased the salaries forof four of our named executive officers with the exception ofto reflect their additional responsibilities: Mr. Hunn to $900,000, Mr. Crisci to $600,000, Mr. Soni whose salary for 2016 was increased to reflect additional responsibility.$567,000, and Mr. Stipancich to $680,000.

Annual Cash Incentive

Incentive Opportunities

Annual cash incentive opportunities for 20152018 for participating named executive officers, expressed as percentagesa percentage of base salary atyear-end were established as follows: Mr. Hunn (200%), Mr. Crisci (125%), Mr. Soni (100%) and Mr. Stipancich (100%). Opportunities are reflective of market practice, and for Messrs. Hunn and Crisci were established at the startincreased as part of the year as follows: Mr. Humphrey (150%), Mr. Liner (100%), and Mr. Soni (80%).succession planning process. Our annual incentive bonuses are capped at the foregoing respective percentages above in the interest of risk mitigation and avoidance of a short-term focus to decision-making. The Chief Executive Officer no longer receives a one-year cash bonus award.

Funding Schedule

TheSimilar to prior years, the annual cash incentive approach was determined based on the same asgrowth in prior years. 2015 adjusted net earnings. Due to the U.S. tax reform’s significant positive impact on Roper, the 2018 measurement excluded income taxes. The 2018 adjusted net earnings before taxes were required to reach at least $644 million (2014$1.371 billion (2017 adjusted net earnings) for any bonus to be earned. At $644 million$1.371 billion of adjusted net earnings before taxes, 35% of the full bonus opportunity would be earned. If adjusted net earnings before taxes increased by 15%12% to $741 million,$1.536 billion, then 100% of the full bonus amount would be earned. If between $644 million$1.371 billion and $741 million,$1.536 billion, the percentage of the bonus opportunity earned would be determined through straight-line interpolation, as shown in the chart below. For 20152018, the adjusted net earnings before taxes for the Company were 103.9%exceeded 112% of the base amount;prior year; accordingly, the Compensation Committee approved payment of 52%100% of the bonus opportunity. No adjustments were made to adjust for currency or other unexpected external factors negatively impacting 2015 financial results. The performance bonuses to our named executive officers for 20152018 are shown in the 20152018 Summary Compensation Table below under the “Non-Equity“Non-Equity Incentive Plan Compensation.”Compensation” column.

 

 

 

 

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       Roper Technologies, Inc. 20162019 Proxy Statement       29


COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

2018 Annual Cash Incentive Schedule

 

 

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Adjusted net earnings before taxes is net earnings increased or reduced to eliminate the effects of extraordinary items, accounting and tax law changes, income-related taxes, discontinued operations, restructuring of debt obligations, asset dispositions, asset write-downs or impairment charges, acquisition-related expenses, acquisition-related intangible amortization, impact of GAAP adjustments to acquired deferred revenue, litigation expenses and settlements, reorganization and restructuring programs, andnon-recurring or special items (as discussed in Management’s Discussion and Analysis of Financial Conditions and Results of Operations in the Company’s 10-K for that year)quarterly earnings releases).

Prior CEO Long-Term Cash Incentive

2018-22 Incentive Opportunity

For 2015,2018, the annual cash incentive for the Chief Executive Officerour prior CEO was again converted to a long-term cash incentiveincentive. As for the 2014, 2015, 2016, and 2017 awards, the performance period covered five years to emphasize the importance of long-term sustained earnings.

Incentive Opportunity

The Our prior CEO’s 2018 incentive opportunity was set at 225% of base salary, the same as prior years. The2018-22 cash incentive for our prior CEO was to be determined based on the growth in adjusted net earnings, as defined above for the prior year.2018 annual cash incentive. Due to U.S. tax reform’s significant positive impact on Roper, the 2018 measurement excluded

Funding Schedule

income taxes. Adjusted net earnings before taxes for the period from 20152018 to 2017 will be2022 would have been required to reach at least $1.95$6.855 billion for any cash incentive to be earned.

At $1.95$6.855 billion of adjusted net earnings before taxes, 35% of the full bonus opportunity would be earned. If adjusted net earnings before taxes increase by 15%12% to $2.243$7.678 billion, then 100% of the full bonus amount willwould be earned. If between $1.95$6.855 billion and $2.243$7.678 billion, the percentage of the bonus opportunity earned willwas to be determined through straight-line interpolation, as shown in the chart below.

 

 

LOGOPrior CEO2018-22 Long-Term Cash Incentive Schedule

 

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See footnote to immediately preceding chart for definition of adjusted net earnings before taxes.

 

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     Roper Technologies, Inc. 20162019 Proxy Statement


COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

 

2014-18 Incentive Opportunity

For the prior CEO’s2014-18 long-term cash incentive opportunity, adjusted net earnings for the period from 2014 to 2018 of $2.389 billion were required for any cash incentive to be earned. If adjusted net earnings increased by at least 15% to $2.746 billion, then 100% of the full bonus amount would be earned. The actual adjusted net earnings for the Company exceeded $2.746 billion; accordingly, the Compensation Committee approved payment of 100% of the long-term cash incentive opportunity.

Long-Term Stock Incentives

In 2015,2018, we awarded performance-based restricted stock to our Chief Executive Officerprior CEO (Mr. Jellison) and awarded performance-based restricted stock and stock options to our current CEO (Mr. Hunn). In 2018, we awarded stock options and performance-based restricted shares to our other named executive officers.officers, other than Mr. Soni. The 2018 award to Mr. Jellison, as a number of shares, awarded in 2015was reduced by 25%, while the awards to our CEOMessrs. Hunn, Crisci and other executive officers was the same as each received in the prior year.Stipancich were increased to reflect their additional responsibilities. These awards are shown in the 20152018 Grants of Plan-Based Awards Table below.table.

Performance Vesting for 20152018 Awards

 

In 2015, vesting for allOur prior CEO’s 2018 equity award would have vested only at the end of a three-year performance period.

2018 equity awards was lengthened to other named executive officers (including the award made to Mr. Hunn prior to his appointment as CEO) vest 50% after year 2 and 50% after year 3 (from one-third annually previously)3.

Vesting of restricted shares is 100% performance-based (none vest by time alone).

 

Achievement of three-year cumulative goals for both EBITDA and operating cash flow as a percentage of revenue were added in 2015 as a requirement for full vesting of restricted shares (from one-year goals previously).

For 50% of the 20152018 restricted stock awards to vest, $3$4.6 billion in adjusted EBITDA (as defined above for adjusted net earnings with the exclusion of the following: expenses, interest, taxes, depreciation, andnon-acquisition related amortization) must be achieved over the three-year measurement period, as certified byperiod. Except for the Committee. Upprior CEO’s awards, up to 50% of the EBITDA portion can be earned at the end of year 2.

 

For the other 50% of the 2015 restricted stock awards to vest, a minimum of 20% operating cash flow as a percentage of revenue must be met; if operating cash flow is below 15% of revenue, none of the shares vest; at 15% of revenue 35% of the share vest; between 15% and 20% of revenue, vesting is pro-rated. Up to 50% of this portion of the award can be earned at the end of year 2.

Changes Effective for 2016 Awards

The EBITDA goal was increased by 15% to $3.45 billion and operating cash flow as a percentage of revenue was increased from an already high performance level of 20% up to an even higher 21%.

For the other 50% of the 2018 restricted stock awards to vest, operating cash flow less capital expenditures and capitalized software (as a percentage of net revenue) must be at the 75th percentile of the S&P 500 (excluding finance, real estate, and utilities) and no portion of the award will vest if the Company fails to reach at least the 50th percentile. Except for the prior CEO’s awards, up to 50% of the cash flow portion can be earned at the end of year 2.

 

 

ADDITIONAL INFORMATION ABOUT OUR PROGRAM

Other arrangements and considerations that are important to a shareholder’s understanding of our overall executive compensation program are described below.

Share Ownership and Retention Guidelines

We believe our executivesnamed executive officers should have a significant equity interest in the Company. To promote equity ownership and further align the interests of our executivesnamed executive officers with our shareholders, we adopted share retentionownership and ownershipretention guidelines for our named executive officers. The stock ownership requirementsguidelines vary based upon the executive’snamed executive officer’s position and are expressed as a number of shares which, as shown below, result in ownership guidelines far higher than market norms. All ournamed executive officers are in compliance with our ownership requirements and hold shares substantially above thesewell in excess of the applicable guidelines.

 

Position  Guideline
Number
of
Shares
   Market Value
at Year-End
Close*
   Salary   Guideline
Multiple
of Salary
 

CEO

   100,000    $18,979,000    $1,225,000     15.5x  

Average Other Executive Officers

   18,333    $3,479,000    $542,000     6.4x  
Position  Guideline
Number
of
Shares*
   

Guideline

Market Value
atYear-End
Close**

   Salary   Guideline
Multiple
of Salary
 

Current CEO

   100,000   $26,652,000   $900,000    29.6x 

Prior CEO

   100,000   $26,652,000   $1,225,000    21.7x 

Other Named Executive Officers

   12,000   $3,198,240   $615,667    5.2x 
*

Includes vested and unvested.

**

Based on closing market price of our common stock on December 31, 20152018 of $189.79$266.52 per share.

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      Roper Technologies, Inc. 2019 Proxy Statement 31


COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Until the stock ownership guidelinesrequirements are met, ana named executive is required toofficer must retain 100% of any applicable shares received (on a net after tax basis) under our equity compensation program.

 

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    Roper Technologies, Inc. 2016 Proxy Statement    31


COMPENSATION DISCUSSION AND ANALYSIS(CONTINUED)

Anti-Hedging and Anti-Pledging Policy

We prohibit our named executive officers and directors from engaging in transactions involving derivative instruments with respect to Company securities, and other securities that are immediately convertible or exchangeable into suchCompany securities, and from pledging shares of Company common stock.

“Clawback” Policy

In the event of a material restatement of the Company’s financial results, other than a restatement due to changes in accounting principles or applicable law or interpretations thereof, the Board will review the facts and circumstancecircumstances that led to the requirement for the restatement and will take such actions, including clawback, as it deems necessary or appropriate. The Board will consider whether any named executive officer received cash or equity compensation based on the original financial statements because it appeared he or she achieved financial performance targets whichhad been met, when in fact such targets were not achieved based on the restatement. The Board will also consider the accountability of any named executive officer whose acts or omissions were responsible in whole or in part

for the events that led to the restatement and whether such acts or omissions constituted misconduct.

Regulatory Considerations

The Code containsEffective for taxable years beginning after December 31, 2017, the Tax Cuts and Jobs Act changed certain aspects of executive compensation, including elimination of a provision that limits the tax deductibilityCompany’s ability to deduct “performance-based” compensation in excess of certain compensation paid$1 million to ournamed executive officers. This provision disallows the deductibility of certainWe will continue to consider tax implications in making compensation unless it is considered performance-based compensation under the Code. Our stock optionsdecisions and, restricted stock awards are intended to be performance-based and fully deductible. We have adopted policies and practices intended to maximize the deductibility of our annual incentive bonuses. However, we may forgo any or all of the tax deduction if we believe itwhen believed to be in the best long-term interests of our shareholders.shareholders, we may provide compensation that is not fully deductible.

In making decisions about executive compensation, we also consider the impact of other regulatory provisions, including the provisions of Section 409A of the Code regardingnon-qualified deferred compensation and the change-in-control provisions of Section 280G of the Code. In making decisions about executiveCode regarding compensation wepursuant to a change in control. We also consider how various elements of compensation will impact our financial results. For example, ASC Topic 718, the accounting standard that determines the cost to be recognized for equity awards, is considered in reviewing the relative weighting betweenwhen awarding stock options and restricted shares.stock awards.

 

 

32

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2018, Messrs. Knowling, Johnson and Prezzano served on the Compensation Committee. No member of the Compensation Committee was, during 2018, an officer or employee of the Company, was formerly an officer of the Company, or had any relationship requiring disclosure by the Company as a related party transaction under Item 404 ofRegulation S-K under the Securities Act of 1933 (the “Securities Act”). During 2018, none of the Company’s executive officers served on either the board of directors or the compensation committee of any other entity, any officers of which served on either the Board of Directors or the Compensation Committee of the Company.

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    Roper Technologies, Inc. 2016 Proxy Statement


COMPENSATION COMMITTEE REPORT

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by:

Robert E. Knowling, Jr., Chairman

Robert D. Johnson

Wilbur J. Prezzano

 

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     Roper Technologies, Inc. 20162019 Proxy Statement    33


EXECUTIVE COMPENSATION

The following table sets forth certain information with respect to compensation paid to our current and prior principal executive officer,officers, our principal financial officer, and our other executive officers for the fiscal year ended December 31, 2015.2018. In this section, we refer to the individuals in the 20152018 Summary Compensation Table as our “named executive officers.”

20152018 Summary Compensation Table

 

Name and
Principal Position
 Year  Salary(1)
($)
  Bonus
($)
  Stock
Awards
(2)
($)
  Option
Awards
(2)
($)
  

Non-Equity
Incentive

Plan
Compensation
(1)(3)
($)

  

Change in
Pension

Value &
Nonqualified
Deferred
Compensation
Earnings
(4)

($)

  All Other
Compensation
(5)
($)
  Total
Compensation
($)
 

Brian D. Jellison

  2015    1,225,000    -      21,862,500    -      -      -   127,080    23,214,580  
Chairman of the Board, President and Chief Executive Officer  2014    1,225,000    -      21,129,000    -      -      -   335,220    22,689,220  
  2013    1,200,000    -      17,283,000    -      2,551,500    -   334,296    21,368,796  
         

John Humphrey

  2015    767,000    -      4,372,500    888,729    598,260    -   179,802    6,806,291  

Executive Vice President

and Chief Financial Officer

  2014    767,000    -      4,225,800    1,086,312    1,150,500    -   183,258    7,412,870  
  2013    750,000    -      3,456,600    1,088,235    1,063,125    -   170,972    6,528,932  

David B. Liner

  2015    450,000    -      874,500    355,492    234,000    -   93,354    2,007,346  

Vice President, General

Counsel and Secretary

  2014    450,000    -      845,160    434,525    450,000    -   99,426    2,279,111  
  2013    440,000    -      691,320    435,294    415,800    -   96,642    2,079,056  
Paul J. Soni  2015    410,000    -      874,500    355,492    170,560    -   86,470    1,897,022  

Vice President and

Corporate Controller

  2014    410,000    -      845,160    434,525    328,000    -   89,031    2,106,716  
  2013    400,000    -      691,320    435,294    302,400    -   86,646    1,915,660  

Name and

Principal Position

 Year  

Salary(1)

($)

  Bonus(2)
($)
  Stock
Awards
(3)
($)
  

Option
Awards
(3)

($)

  

Non-Equity

Incentive

Plan

Compensation(1)(4)

($)

  

Change in

Pension

Value &

Nonqualified

Deferred

Compensation
Earnings
(5)

($)

  

All Other

Compensation(6)
($)

  

Total

 Compensation 

($)

 

L. Neil Hunn(7)

  2018   900,000   -     12,406,050   3,241,404   1,800,000   -     190,913   18,538,367 
President and Chief Executive Officer  2017   800,000   -     8,343,900   1,412,348   1,200,000   -     119,625   11,875,873 

Brian D. Jellison(8)

  2018   1,030,115   -     31,015,125   -     2,756,250   -     129,828   34,931,318 
Prior President and Chief Executive Officer and Prior Executive Chairman of the Board  2017   1,225,000   -     27,813,000   -     -     -     120,675   29,158,675 
  2016   1,225,000   -     24,960,000   -     -     -     131,166   26,316,166 
               
                                       

Robert C. Crisci

  2018   600,000   -     3,308,280   1,350,585   750,000   -     117,843   6,126,708 
Executive Vice President and Chief Financial Officer  2017   498,030   -     2,528,980   850,766   550,000   -     66,792   4,494,568 
                                       

John K. Stipancich

  2018   680,000   -     2,067,675   810,351   680,000   -     122,450   4,360,476 
Executive Vice President, General Counsel and Corporate Secretary  2017   650,000   -     1,373,040   512,474   650,000   -     82,243   3,267,757 
  2016   331,136   375,000   2,039,160   606,312   143,902   -     118,263   3,613,773 
                                       

Paul J. Soni

  2018   567,000   -     2,029,020   -     567,000   -     120,244   3,283,264 
Executive Vice President  2017   531,439   -     1,112,520   423,704   550,000   -     87,719   2,705,382 
  2016   475,000   -     998,400   396,229   209,000   -     79,792   2,158,421 
(1)  

Amounts shown include, as applicable, deferrals to the 401(k) Planplan and theNon-Qualified Retirement Plan.

 

(2) 

The amount in this column represents a lump sum bonus paid to Mr. Stipancich upon commencement of his employment.

(3)

The dollar values shown represent the grant date fair values for restricted stock and option awards calculated in accordance with ASC Topic 718. The assumptions used in determining the grant date fair values of these option awards are set forth in Note 11 to our consolidated financial statements for 2015,2018, which are included in our Annual Report on Form10-K for the fiscal year ended 2015,2018 filed with the SEC. The named executive officers haveThere is no assurance that these amounts will be realized. The change in value of stock awards is due solely to the increase in share price as the same number of shares were granted each year. The restricted stock awards are all subject to both time-based and performance-based vesting criteria. The performance-based criteria for awards granted in 20152018 are described in the CD&A under “Analysis of 20152018 Compensation—Long-Term Stock Incentives,” and the vesting schedule for awards granted in 20152018 is set forth in the notes to the 20152018 Outstanding Equity Awards at Fiscal Year End Tabletable below.

 

(3)(4) 

The amounts in this column reflect payments made pursuant to our annual cash incentive bonus program, which is described above in the CD&A under “Analysis of 20152018 Compensation—Annual Cash Incentive” and “Analysis of 20152018 Compensation—CEO Long-Term Cash Incentive.”

 

(4)(5) 

TheNon-Qualified Retirement Plan does not provide for “above-market” or preferential earnings as defined in applicable SEC rules.

 

(5)(6) 

Amounts reported in the “All Other Compensation” column for 20152018 include the following items. In respect of any of these items that constitute perquisites, the value shown is the Company’s incremental cost.

 

Name  Club
Memberships
($)
     

Company

Car
($)

     Additional
Medical
Benefits
($)
     

Contributions
to Defined
Contribution
Plans(a)

($)

     Financial
Planning
($)
 

Brian D. Jellison

   380       24,000       4,800       91,875       6,025  

John Humphrey

   8,320       24,000       2,800       143,812       870  

David B. Liner

   3,054       19,000       3,800       67,500       -    

Paul J. Soni

   8,320       19,000       3,800       55,350       -    

(a)

Reflects contributions to the Non-Qualified Retirement Plan and Employee’s Retirement Savings 003 Plan.

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EXECUTIVE COMPENSATION(CONTINUED)

 

Name  

Club
Memberships

($)

   

Company

Car

($)

   

Additional

Medical

Services

($)

   

Financial

Planning

($)

   

Contributions

to Defined

Contribution

Plans(a)

($)

 

L. Neil Hunn

   4,029    24,000    3,500    1,884    157,500 

Brian D. Jellison

   -      24,000    4,800    23,769    77,259 

Robert C. Crisci

   4,093    24,000    3,500    -      86,250 

John K. Stipancich

   -      19,200    3,500    -      99,750 

Paul J. Soni

   9,669    19,000    3,800    4,000    83,775 

(a)

Reflects contributions to theNon-Qualified Retirement Plan and the 401(k) plan.

(7)

Mr. Hunn was appointed President and CEO on September 1, 2018.

(8)

Mr. Jellison, our prior President and CEO, served as President and CEO until September 1, 2018 and was appointed Executive Chairman of the Board on September 1, 2018, a position in which he served the Company until his death on November  2, 2018.

20152018 Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards to the named executive officers for the fiscal year ended December 31, 2015 to the named executive officers.2018.

 

      Estimated Future
Payout Under Non-Equity
Incentive  Plan Awards(1)
   Estimated
Future
Payouts
Under
Equity
Incentive
Plan
Awards(2)
   All Other
Option
Awards: #
of Securities
Underlying
Options(3)
  Exercise /
Base Price of
Option Awards
($/Sh)
  Grant Date
Fair  Value(4)
($)
       Estimated Future
Payouts Under Non-Equity
Incentive Plan Awards(1)
   Estimated
Future
Payouts
Under
Equity
Incentive
Plan
Awards
  

All Other

Option

Awards:#

of Securities

Underlying

Options

 

Exercise /

Base Price of

Option Awards

($/Sh)

 

Grant Date

Fair Value(5)

($)

 
Name  Grant
Date
   Threshold
($)
   Target
($)
   Maximum
($)
   Target
(#)
      

Grant

Date

   

Threshold

($)

   

Target

($)

   

Maximum

($)

   

Target

(#)

 

L. Neil Hunn

   01/19/2018          45,000(2)     12,406,050 
   01/19/2018           60,000(4)   275.69   3,241,404 
   06/06/2018    630,000    1,800,000    1,800,000    

Brian D. Jellison

   1/16/2015           150,000       21,862,500     01/19/2018          112,500(3)     31,015,125 
      964,688     2,756,250     2,756,250        

John Humphrey

   1/16/2015           30,000       4,372,500  
   1/16/2015             30,000    145.75    888,729     06/06/2018    964,688    2,756,250    2,756,250    
      402,675     1,150,500     1,150,500        

David B. Liner

   1/16/2015           6,000       874,500  

Robert C. Crisci

   01/19/2018          12,000(2)     3,308,280 
   01/19/2018           25,000(4)   275.69   1,350,585 
   06/06/2018    262,500    750,000    750,000    

John K. Stipancich

   01/19/2018          7,500(2)     2,067,675 
   01/19/2018           15,000(4)   275.69   810,351 
   1/16/2015             12,000    145.75    355,492     06/06/2018    238,000    680,000    680,000    
      157,500     450,000     450,000        

Paul J. Soni

   1/16/2015           6,000       874,500     03/21/2018          7,000(2)     2,029,020 
   1/16/2015             12,000    145.75    355,492  
      114,800     328,000     328,000           06/06/2018    186,004    531,439    531,439    
(1)  

For an explanation of the material terms, refer to the CD&A section above captioned “Analysis of 20152018 Compensation—Annual Cash Incentive and “Analysis of 2018 Compensation—CEO Long-Term Cash Incentive.” Amounts paid under this programthese programs for 20152018 are set forth in the 20152018 Summary Compensation Table.

 

(2) 

The performance restricted shares vest in two equal installments in November 20162019 and 2017,November 2020 subject to the performance criteria described in the CD&A under “Analysis of 20152018 Compensation—Long-Term Stock Incentives” and “Analysis of 2015 Compensation—CEO Long-Term Cash Incentive.Incentives.” Dividends on restricted shares will be paid only if the shares are earned by performance.

 

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EXECUTIVE COMPENSATION(CONTINUED)

(3)

The performance restricted shares granted to Mr. Jellison vested in November 2018 upon his death, pursuant to the terms of the Company’s 2016 Incentive Plan and award agreements.

(4) 

The stock options vest in two equal installments onin January 16, 20172020 and 2018,2021, and expire on the tenth anniversary of the grant. The exercise price of the stock options is 100% of the fair market value of our common stock on the date of grant.

 

(4)(5) 

The dollar values reflect the grant date fair value of the awards as calculated in accordance with ASC Topic 718.

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    Roper Technologies, Inc. 2016 Proxy Statement    35


EXECUTIVE COMPENSATION(CONTINUED)

20152018 Outstanding Equity Awards at Fiscal Year End

The following table sets forth certain information with respect to outstanding equity awards at December 31, 20152018 for the named executive officers.

 

Name Option Awards  Stock Awards 
 

# of Securities

Underlying

Unexercised

Options

Exercisable

  

# of

Securities

Underlying

Unexercised

Options

Unexercisable

  

Option

Exercise

Price ($)

  

Option

Expiration

Date

  

# of

Shares

or Units of

Stock

That Have

Not
Vested

 

Market

Value of

Shares or

Units of

Stock

That Have

Not Vested

($)

 

Equity

Incentive Plan

Awards: # of

Unearned

Shares, Units

or Other

Rights That

Have Not

Vested

  

Equity

Incentive Plan

Awards: Market or

Payout Value

of Unearned

Shares, Units or

Other Rights that

Have Not Vested

($)(1)

 

Brian D. Jellison

  108,084     52.1900    02/16/17      
  440,000     55.2200    02/18/18      
                       200,000(5)(8)   37,958,000  

John Humphrey

  1,916     52.1900    02/16/17      
  40,000     55.2200    02/18/18      
  60,000     73.5600    01/20/21      
  30,000     93.6200    01/18/22      
  20,000    10,000(2)   115.2200    01/17/23      
  10,000    20,000(3)   140.8600    01/16/24      
   30,000(4)   145.7500    01/16/25      
                       40,000(6)(8)   7,591,600  

David B. Liner

  12,000     52.1900    02/16/17      
  12,000     55.2200    02/18/18      
  12,000     41.9500    02/12/19      
  12,000     51.1100    01/22/20      
  12,000     73.5600    01/20/21      
  12,000     93.6200    01/18/22      
  8,000    4,000(2)   115.2200    01/17/23      
  4,000    8,000(3)   140.8600    01/16/24      
   12,000(4)   145.7500    01/16/25      
                       8,000(7)(8)   1,518,320  

Paul J. Soni

  12,000     51.1100    01/22/20      
  12,000     73.5600    01/20/21      
  12,000     93.6200    01/18/22      
  8,000    4,000(2)   115.2200    01/17/23      
  4,000    8,000(3)   140.8600    01/16/24      
   12,000(4)   145.7500    01/16/25      
                       8,000(7)(8)   1,518,320  
Name Option Awards  Stock Awards 
 

# of Securities

Underlying

Unexercised

Options

Exercisable

  

# of

Securities

Underlying

Unexercised

Options

Unexercisable

  

Option

Exercise

Price ($)

  

Option

Expiration

Date

  

# of

Shares

or Units of

Stock

That Have

Not
Vested

  

Market

Value of

Shares or

Units of

Stock

That Have

Not Vested

($)

  

Equity

Incentive Plan

Awards: # of

Unearned

Shares, Units

or Other

Rights That

Have Not

Vested

  

Equity

Incentive Plan

Awards: Market or 

Payout Value

of Unearned

Shares, Units or

Other Rights that

Have Not Vested

($)(1)

 

L. Neil Hunn

  32,000    68.91   09/30/2021     
  25,000    115.22   01/17/2023     
  30,000    125.68   11/19/2023     
  30,000    156.40   11/17/2024     
  30,000    186.75   11/17/2025     
   40,000(2)   185.42   01/19/2027     
   60,000(3)   275.69   01/19/2028     
                           135,000(9)(13)   35,980,200 

Brian D. Jellison(4)

  -    -    -    -    -    -    -    -  

Robert C. Crisci

  5,000    119.65   04/30/2023     
  5,000    134.23   03/11/2024     
  8,000    145.75   01/16/2025     
  4,000   4,000(5)   170.61   03/09/2026     
   12,000(2)   185.42   01/19/2027     
   10,000(6)   228.84   06/09/2027     
   25,000(3)   275.69   01/19/2028     
                           25,000(10)(13)   6,663,000 

John K. Stipancich

  9,000   9,000(7)   169.93   06/22/2026     
   12,000(6)   228.84   06/09/2027     
   15,000(3)   275.69   01/19/2028     
                           17,500(11)(13)   4,664,100 

Paul J. Soni

  12,000    51.11   01/22/2020     
  12,000    73.56   01/20/2021     
  12,000    93.62   01/18/2022     
  12,000    115.22   01/17/2023     
  12,000    140.86   01/16/2024     
  12,000    145.75   01/16/2025     
  6,000   6,000(8)   166.40   01/21/2026     
   12,000(2)   185.42   01/19/2027     
                           10,000(12)(13)   2,665,200 
(1)  

Calculated by multiplying $189.79,$266.52, the closing market price of our common stock on December 31, 2015,2018, by the number of restricted shares that have not vested.

 

(2) 

These stock options were granted on January 17, 201319, 2017 with unexercisable shares vesting in two equal installments in January 2016.2019 and 2020.

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  Roper Technologies, Inc. 2019 Proxy Statement 35


EXECUTIVE COMPENSATION(CONTINUED)

 

(3) 

These stock options were granted on January 16, 201419, 2018 with unexercisable shares vesting in two equal installments in January 20162020 and 2017.2021.

 

(4)

Mr. Jellison’s outstanding restricted stock awards vested on November 2, 2018, the date of his death, pursuant to the terms of the Company’s 2016 Incentive Plan and award agreements.

(5)

These stock options were granted on March 9, 2016 with unexercisable shares vesting in March 2019.

(6)

These stock options were granted on June 9, 2017 with unexercisable shares vesting in two equal installments in June 2019 and 2020.

(7)

These stock options were granted on June 22, 2016 with unexercisable shares vesting in June 2019.

(8) 

These stock options were granted on January 16, 201521, 2016 with unexercisable shares vesting in January 2019.

(9)

This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows:

(I)

45,000 shares remaining from 45,000 shares granted on November 17, 2015 and vesting in November 2020;

(II)

45,000 shares remaining from 45,000 shares granted on January 19, 2017 and vesting in two equal installments in January 20172019 and 2018.November 2019; and

(III)

45,000 shares remaining from 45,000 shares granted on January 19, 2018 and vesting in two equal installments in November 2019 and November 2020.

 

(5)(10)

This represents multiple restricted stock awards with the remaining shares of each grant vesting, (shares represented in footnotesIII-V subject to certification that applicable Company performance conditions have been met, as follows):

(I)

2,500 shares remaining from 2,500 shares granted on November 17, 2015 and vesting in January 2019;

(II)

1,000 shares remaining from 2,000 shares granted on March 9, 2016 vesting in March 2019;

(III)

2,500 shares remaining from 5,000 shares granted on January 19, 2017 and vesting in November 2019;

(IV)

7,000 shares remaining from 7,000 shares granted on June 9, 2017 and vesting in June 2020; and

(V)

12,000 shares remaining from 12,000 shares granted on January 19, 2018 and vesting in two equal installments in November 2019 and November 2020.

(11)

This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows:

(I)

4,000 shares remaining from 12,000 shares granted on June 22, 2016 and vesting in November 2019;

(II)

6,000 shares remaining from 6,000 shares granted on June 9, 2017 and vesting in June 2020; and

(III)

7,500 shares remaining from 7,500 shares granted on January 19, 2018 and vesting in two equal installments in November 2019 and November 2020.

(12) 

This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to certification that applicable Company performance conditions have been met, as follows:

 

 (I) 

50,0003,000 shares remaining from 150,0006,000 shares granted on January 16, 201419, 2017 and vesting in November 2016;2019; and

 

 (II) 

150,0007,000 shares remaining from 150,0007,000 shares granted January 16, 2015on March 21, 2018 and vesting in two equal installments in November 20162019 and 2017;

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EXECUTIVE COMPENSATION(CONTINUED)

(6)

This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to applicable Company performance conditions, as follows:

(I)

10,000 shares remaining from 30,000 shares granted January 16, 2014 and vesting in November 2016;

(II)

30,000 shares remaining from 30,000 shares granted January 16, 2015 and vesting in two equal installments in November 2016 and 2017.2020.

 

(7)

This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to applicable Company performance conditions, as follows:

(I)

2,000 shares remaining from 6,000 shares granted January 16, 2014 and vesting in November 2016; and

(II)

6,000 shares remaining from 6,000 shares granted January 16, 2015 and vesting in two equal installments in November 2016 and 2017.

(8)(13) 

For restricted stock awards granted in November 2015 (to Mr. Hunn), June 2016, January 20142017, June 2017, January 2018 and 2015,March 2018, the vesting only occurs if the Compensation Committee certifies our Company’s attainment of related performance goals.

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    Roper Technologies, Inc. 2019 Proxy Statement


EXECUTIVE COMPENSATION(CONTINUED)

20152018 Option Exercises and Stock Vested

 

Name  Option Awards   Stock Awards Option AwardsStock Awards
# of Shares Acquired
on Exercise
   Value Realized Upon
Exercise ($)
   # of Shares Acquired
on Vesting
   Value Realized on
Vesting ($)
 # of Shares Acquired
on Exercise
Value Realized Upon
Exercise ($)
# of Shares Acquired
on Vesting
Value Realized on 
Vesting ($)

L. Neil Hunn

 15,000 4,440,450

Brian D. Jellison

   -       -       100,000     18,696,000   290,000 64,365,625 75,000 21,914,250

John Humphrey

   -       -       20,000     3,739,200  

David B. Liner

   -       -       4,000     747,840  

Estate of Brian D. Jellison

 262,500(1)  74,565,750

Robert C. Crisci

 2,000 554,970

John K. Stipancich

 4,000 1,175,480

Paul J. Soni

   36,000     4,709,154     4,000     747,840   6,000 1,776,180
(1)

Vested upon Mr. Jellison’s death pursuant to the terms of the Company’s 2016 Incentive Plan and award agreements.

No Pension Benefits

None of our named executive officers participate in a Company-sponsored defined-benefit pension plan.

2015 2018Non-Qualified Deferred Compensation

Pursuant to our Company’sNon-Qualified Retirement Plan, named executive officers may defer base salary and payments earned under the annual cash incentive bonus plan.program. Deferral elections are made by eligible executives before the beginning of each year for amounts to be earned in the following year. The executive may invest such amounts in funds that are substantially similar to those available under the 401(k) Plan.plan.

The following table sets forth certain information with respect to theNon-Qualified Retirement Plan for our named executive officers during the fiscal year ended December 31, 2015.2018.

 

Name  Executive
Contributions
in Last FY
(1)
($)
     Registrant
Contributions
in Last FY
(2)
($)
     Aggregate
Earnings
in Last FY
(3)
($)
   Aggregate
Withdrawals/
Distributions
($)
     Aggregate
Balance
at Last FYE
($)
   Executive
Contributions
in Last FY
(1)
($)
   Registrant
Contributions
in Last FY
(2)
($)
   Aggregate
Earnings
in Last FY
(3)
($)
 Aggregate
Withdrawals/
Distributions
($)
 Aggregate
Balance
at Last FYE
($)
 

L. Neil Hunn

   243,000    136,875    (10,708  (713,322  485,482 

Brian D. Jellison

   73,500       72,000       204     337,529       145,613     61,807    56,634    237   (411,174  -   

John Humphrey

   1,553,175       123,937       (123,722   -         4,397,886  

David B. Liner

   54,000       47,625       (16,906   -         869,848  

Robert C. Crisci

   115,000    65,625    (34,205  345,533 

John K. Stipancich

   79,800    79,125    (9,840  274,872 

Paul J. Soni

   73,800       35,475       (1,104   -         574,340     167,550    63,150    (94,797  1,179,679 
(1)  

Amounts reflect participant deferrals under theNon-Qualified Retirement Plan during the fiscal year ended December 31, 2018 and all of these amounts are included in the Summary Compensation Table above in the “Salary” or “Non-Equity“Non-Equity Incentive Plan Compensation” column as applicable.

 

(2) 

The amounts are included in the Summary Compensation Table in the “All Other Compensation” column.

 

(3) 

No portion of these earnings was included in the Summary Compensation Table because theNon-Qualified Retirement Plan does not provide for “above-market” or preferential earnings as defined in applicable SEC rules.

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    Roper Technologies, Inc. 2016 Proxy Statement    37


EXECUTIVE COMPENSATION(CONTINUED)

Potential Payments upon Termination or Change in Control

The employment agreement with Mr. Jellison and offer letters with Messrs. HumphreyHunn and LinerStipancich provide for certain benefits in the event of the termination of the officer’s employment under certain conditions. The amount of the benefits varies depending on the reason for termination, as explained below. In no event will excise taxgross-ups be paid in regard to a termination of employment related to a change in control.

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  Roper Technologies, Inc. 2019 Proxy Statement 37


EXECUTIVE COMPENSATION(CONTINUED)

Employment Agreement with Mr. Jellison

Termination for Cause; Resignation Without Good Reason. If Mr. Jellison were terminated for cause or if he were to resign without good reason (as such terms are defined in his agreement), he would receivehave received the salary and vested benefits that had accrued through the date of termination, plus apro-rata portion of his annual bonus earned through the date of termination, assuming our Company achieved the level of performance for which a bonus would be paid for that year. No special severance benefits would be payable.

Termination Due to Death or Disability. If Mr. Jellison were to die or terminate employment due to disability, he (or his estate) would receive salary and vested benefits accrued through the date of termination, plus a pro-rata portion of his annual bonus earned through the date of termination, assuming our Company achieved the level of performance for which a bonus would be paid for that year. No special severance benefits would behave been payable.

Termination Without Cause; Resignation for Good Reason.If Mr. Jellison were terminated without cause or resigned for good reason, either before a change ofin control of our Company occurs or more than one year after a change ofin control, he would receivehave received a severance payment, in addition to accrued salary, earned and unpaid bonus from the prior fiscal year and vested benefits, of two times his annual base salary. He would have also receivereceived apro-rated target bonus for the year and continuation of health and welfare benefits for a period of two years. Any stock option that would have vested during theone-year period following termination would have also become immediately exercisable.

In Connection with a Change ofin Control. If Mr. Jellison were terminated without cause or resigned for good reason within one year following a change ofin control of our Company, then in addition to accrued salary, prorated bonus and vested benefits, he would behave been entitled to:

 

a severance payment equal to two times the sum of (i) his then currentthen-current base salary and (ii) the greater of the average of his last two years’ annual bonuses or his target bonus for the year of termination,termination;

 

accelerated vesting of all of his outstanding equity awards,awards; and

 

continuation of health and welfare benefits for a period of two years.

Restrictive Covenants. Mr. Jellison hashad also agreed not to compete with our Company for a period of one year after his termination of employment for any reason.

Offer Letters to Messrs. HumphreyHunn and LinerStipancich

Mr. Humphrey. Hunn.Pursuant to an offer letter dated April 24, 2006, as amended December 30, 2008,August 18, 2011, if Mr. Humphrey’sHunn’s employment iswere to be terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary.

Mr. Liner. Pursuant Stipancich.Pursuant to an offer letter dated July 21, 2005, as amended December 30, 2008,June 17, 2016, if Mr. Liner’sStipancich’s employment iswere to be terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to the sum of his then-current annual base salary, and annualplus apro-rated bonus earned with respect to the last year before the termination occurred.based upon Company performance.

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    Roper Technologies, Inc. 2016 Proxy Statement


EXECUTIVE COMPENSATION(CONTINUED)

Summary of Termination Payments and Benefits

The following tables summarize the value of the termination payments and benefits that each of our named executive officers would receive if he had terminated employment on December 31, 20152018 under the circumstances shown. Scenarios for termination due to involuntarily for cause, voluntary resignation, and retirement have not been included because, in those circumstances, no severance or other additional payments will be made to named executive officers. Scenarios for termination due to death or disability have not been included because they do not discriminate in scope, terms or operation in favor of named executive officers compared to the benefits offered to all salaried employees. Mr. Jellison is not included because his 2017 and 2018 restricted stock awards vested upon his death, representing a market value of $74,565,750 based on the closing price of the Company’s common stock on November 2, 2018.

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EXECUTIVE COMPENSATION(CONTINUED)

BL. NRIANEIL D. JHELLISONUNN

 

  Termination Scenario   Termination Scenario 
Potential Payments Upon Termination or Change-in-Control  By Employee
For Good
Reason
     

By Company

Without

Cause

     Change-in-
Control(1)
 
Potential Payments Upon Termination or Change in Control  

By Employee

For Good

Reason

    

By Company

Without

Cause

     

Change in

Control(1)

 

Cash payments

  $2,450,000     $2,450,000      $2,450,000    $-      $900,000     $900,000 

Accelerated Equity Awards(2)(3)

          

2014 Restricted Stock Grant

   -         -         9,489,500  

Accelerated Equity Awards(2)(4)

          

2017 Stock Option Grant

  -       -       3,244,000 

2018 Stock Option Grant

  -       -       -  

2015 Restricted Stock Grant

   -         -         28,468,500    -       -       11,993,400 

2017 Restricted Stock Grant

  -       -       11,993,400 

2018 Restricted Stock Grant

  -       -       11,993,400 

Continued Medical Benefits

   26,544      26,544       26,544    -       19,451      19,451 
  

 

    

 

     

 

 

Total

  $2,476,544     $2,476,544      $40,434,544    $-      $919,451     $40,143,651 

JROHNOBERT HC. CUMPHREYRISCI

 

   Termination Scenario 
Potential Payments Upon Termination or Change-in-Control  

By Employee

For Good
Reason

     

By Company

Without

Cause

     Change-in-
Control(1)
 

Cash payments

  $-        $767,000      $767,000  

Accelerated Equity Awards(2)(3)

          

2013 Stock Option Grant

   -         -         745,700  

2014 Stock Option Grant

   -         -         978,600  

2015 Stock Option Grant

   -         -         1,321,200  

2014 Restricted Stock Grants

   -         -         1,897,900  

2015 Restricted Stock Grants

   -         -         5,693,700  

Continued Medical Benefits

   -         18,528       18,528  

Total

  $-        $785,528      $11,422,628  
   Termination Scenario 
Potential Payments Upon Termination or Change in Control  

By Employee

For Good

Reason

    

By Company

Without

Cause

    

Change in

Control(1)

 

Cash payments

  $-      $-      $-   

Accelerated Equity Awards(2)(3)

          

2016 Stock Option Grant

  -      -       383,640 

2017 Stock Option Grants

  -      -       1,350,000 

2018 Stock Option Grant

  -      -       -  

2015 Restricted Stock Grant

           666,300 

2016 Restricted Stock Grant

  -      -       266,520 

2017 Restricted Stock Grants

  -      -       3,198,240 

2018 Restricted Stock Grant

  -      -       3,198,240 

Continued Medical Benefits

  -      -       -  

Total

  $-      $-      $9,062,940 

 

 

 

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   Roper Technologies, Inc. 20162019 Proxy Statement       39


EXECUTIVE COMPENSATION(CONTINUED)

 

DJAVIDOHN B. LK. SINERTIPANCICH

 

   Termination Scenario 
Potential Payments Upon Termination or Change-in-Control  

By Employee

For Good

Reason

   

By Company

Without

Cause

   

Change-in-

Control(1)

 

Cash payments

  $-      $684,000    $684,000  

Accelerated Equity Awards(2)(3)

      

2013 Stock Option Grant

   -       -       298,280  

2014 Stock Option Grant

   -       -       391,440  

2015 Stock Option Grant

   -       -       528,480  

2014 Restricted Stock Grant

   -       -       379,580  

2015 Restricted Stock Grant

   -       -       1,138,740  

Continued Medical Benefits

   -       13,272     13,272  

Total

  $-     $697,272    $3,433,792  
   Termination Scenario 
Potential Payments Upon Termination or Change in Control  

By Employee

For Good

Reason

    

By Company

Without

Cause

     

Change in

Control(1)

 

Cash payments

  $-      $680,000     $680,000 

Accelerated Equity Awards(2)(3)

          

2016 Stock Option Grant

  -       -       869,310 

2017 Stock Option Grant

  -       -       452,160 

2018 Stock Option Grant

  -       -       -  

2016 Restricted Stock Grant

  -       -       1,066,080 

2017 Restricted Stock Grant

  -       -       1,599,120 

2018 Restricted Stock Grant

  -       -       1,998,900 

Continued Medical Benefits

  -       19,451      19,451 

Total

  $-      $699,451     $6,685,021 

PAUL J. SONI

 

   Termination Scenario 
Potential Payments Upon Termination or Change-in-Control  

By Employee

For Good

Reason

   

By Company

Without

Cause

   

Change-in-

Control(1)

 

Cash payments

  $-      $-      $-    

Accelerated Equity Awards(2)(3)

      

2013 Stock Option Grant

   -       -       298,280  

2014 Stock Option Grant

   -       -       391,440  

2015 Stock Option Grant

   -       -       528,480  

2014 Restricted Stock Grant

   -       -       379,580  

2015 Restricted Stock Grant

   -       -       1,138,740  

Continued Medical Benefits

   -       -       -    

Total

  $-      $-      $2,736,520  
   Termination Scenario 
Potential Payments Upon Termination or Change in Control  

By Employee

For Good

Reason

    

By Company

Without

Cause

     

Change in

Control(1)

 

Cash payments

  $-      $-       $-   

Accelerated Equity Awards(2)(3)

          

2016 Stock Option Grant

  -       -       600,720 

2017 Stock Option Grant

  -       -       973,200 

2017 Restricted Stock Grant

  -       -       799,560 

2018 Restricted Stock Grant

  -       -       1,865,640 

Continued Medical Benefits

  -       -       -  

Total

  $-      $-       $4,239,120 
(1)  

Assumes employment is terminated involuntarily without cause, or also with respect to Mr. Jellison, he resigns for good reason.cause.

 

(2) 

Based on $189.79 closing market price as of our common stock on December 31, 2015.2018 of $266.52 per share.

 

(3)

Based on closing market price of our common stock on November 2, 2018 of $285.28 per share.

(4) 

Under the terms of our 20062016 Incentive Plan, if within two years after a change ofin control, employment is terminated by the employee for good reason or by the acquirer without cause, or if the acquirer does not assume the awards upon a change in control, (i) outstanding stock options become fully exercisable, (ii) time-based vesting restrictions on outstanding restricted stock awards lapse, and (iii) the target payout opportunities on outstanding performance-based restricted stock awards shall be deemed to have been fully earned (subject to the conditions provided in the 20062016 Incentive Plan).

CEO Pay Ratio

As required by SEC rules, we compared the weighted average of the total compensation of our prior CEO and current CEO in 2018 to that of our median employee for the same period. Through our core human capital management system with supplementation from manual inputs, we collected information for our global workforce of 15,596 employees, including our full-time, part-time and temporary workers, and excluded our employees in Germany (283), France (173), and certain other countries (50) under the de minimis exemption. We identified our median employee as of December 31, 2018 by applying a consistent compensation measure for the period from January 1, 2018 to December 31, 2018 across our global employee population—annual salary or hourly pay, bonus and commissions (excluding equity compensation because inclusion of such would have had no impact on the determination of the median employee). We annualized the compensation for our full-time and part-time employees who were newly-hired in 2018. Our median employee’s total 2018 compensation was $88,707 and the weighted average of the total 2018 compensation of our prior CEO and current CEO was $29,054,430 ($22,773 more than as reported in the Summary Compensation Table above due to the inclusion of certain employee benefits).  Accordingly, our 2018 CEO to Median Employee Pay Ratio was 328:1.

 

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PROPOSAL 2: ADVISORY VOTE ON THE COMPENSATION OF

THE COMPANY’S NAMED EXECUTIVE OFFICERS

We are seeking your advisory vote approving the compensation of our named executive officers as disclosed in this Proxy Statement. We believe that our executive compensation programs are structured in the best manner possible to support our business objectives, evidenced by the superior returns we have delivered to our shareholders. Over the past 10 years,In 2018, our total shareholder return to shareholders was 17.7% compounded annually, compared to 7.3% annually for3.5% versus S&P 500’s negative return of (4.4)%, and in the first quarter of this year, our return of 28.5% more than doubled the 13.6% return of the S&P 500. Over the past five10 years, our compound annual return to shareholders was 20.6% annually,, compared to 12.6% for the S&P 500.500’s return of 13.1%.

Our executive compensation programs are designed to provide competitive total compensation that is tied to the achievement of Company performance objectives and to attract, motivate and retain individuals who will build long-term value for our shareholders. See the “Proxy Statement Summary” and “Compensation Discussion and Analysis” above for key characteristics of our executive compensation programs.

We are seeking shareholder approval of the following resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the related material disclosed in this Proxy Statement is hereby APPROVED.

The vote on this proposal is advisory andnon-binding; however, the Compensation Committee and our Board will review the results of the vote and consider them when making future determinations regarding our executive compensation programs.

 

The Board of Directors recommends a vote “FOR” the resolution providing an advisory approval of the Company’s compensation of the Company’s named executive officers.

 

 

 

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AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors is comprised of fournon-employee directors, each of whom has been determined by the Board of Directors to be independent under the rules of the NYSE and the SEC.SEC rules. The Audit Committee’s responsibilities are set forth in its charter.

The Audit Committee oversees and reviews with the full Board of Directors any issues with respect to the Company’s financial statements, the structure of the Company’s legal and regulatory compliance, the performance and independence of the Company’s Independent Certified Public Accountantsindependent registered public accounting firm and the performance of the Company’s internal audit function. The Committeecommittee retains the Company’s Independent Certified Public Accountantsindependent registered public accounting firm to undertake appropriate reviews and audits of the Company’s financial statements, determines the compensation of the Independent Certified Public Accountants,independent registered public accounting firm, andpre-approves all of their services. The committee also periodically reviews the work performed by other public accounting firms retained by the Company to provide various financial and information technology services. The Company’s management is primarily responsible for the Company’s financial reporting process and for the preparation of the Company’s financial statements in accordance with accounting principles generally accepted in the United States.GAAP. The Audit Committee maintains oversight of the Independent Certified Public Accountantsindependent registered public accounting firm by discussing the overall scope and specific plans for their audits, the results of their examinations, their evaluations of the Company’s internal accounting controls and the overall quality of the Company’s financial reporting. The Audit Committee may delegate its duties and responsibilities to a subcommittee of the Audit Committee.

The Audit Committee maintains oversight of the Company’s internal audit function by evaluating the appointment and performance of the Company’s Vice Presidentdirector of Internal Auditinginternal audit and periodically meeting with the Vice President of Internal Auditingthis individual to receive and review reports of the work of the Company’s internal audit department. The Audit Committee meets with management on a regular basis to discuss any significant matters, internal audit recommendations, policy or procedural changes and risks or exposures, if any, that may have a material effect on the Company’s financial statements.

The Audit Committee: (i) appointed and retained PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2015;2018; (ii) reviewed and discussed with the Company’s management the Company’s audited financial statements for the fiscal year ended December 31, 2015;2018; (iii) discussed with PwC the matters required to be discussed by the statements on Auditing StandardsStandard No. 61, as amended (AICPA,1301, “Professional StandardsCommunication with Audit Committees, Vol. 1.AU Section 380), as adopted” issued by the Public Company Accounting Oversight Board in Rule 3200T;(the “PCAOB”); (iv) received the written disclosures and the letter from the Independent Certified Public AccountantsPwC required by applicable requirements of the Public Company Accounting Oversight Board regarding the Independent Certified Public Accountants’ communicationsPCAOB Ethics and Independence Rule 3526, “Communication with the audit committee concerning independence,Audit Committees Concerning Independence,” and has discussed with PwC its independence from the Independent Certified Public AccountantsCompany and its independence;management; (v) discussed matters with PwC outside the presence of management; (vi) reviewed internal audit recommendations; (vii) discussed with PwC the quality of the Company’s financial reporting; and (viii) reviewed and discussed with PwC the results of the audit of the effectiveness of internal control over financial reporting in accordance with §Section 404 of the Sarbanes-Oxley Act.Act of 2002 (the “Sarbanes-Oxley Act”).

In reliance on the reviews, reports and discussions referred to above, the Audit Committee recommended to the Company’s Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form10-K for the fiscal year ended December 31, 2015,2018, for filing with the Securities and Exchange Commission.SEC.

AUDIT COMMITTEE*COMMITTEE

Christopher Wright, Chairman

Amy Woods Brinkley

John F. Fort III

Laura G. Thatcher

*Ms. Thatcher joined our Audit Committee on March 9, 2016, subsequent to the filing of our audited financial statements in our Form 10-K and the approval of the foregoing Report by the Audit Committee.

The foregoing report and other information provided above regarding the Audit Committee should not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933, as amended, or Securitiesthe Exchange Act, of 1934, as amended, except to the extent that Roper specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.either the Securities Act or the Exchange Act.

 

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INDEPENDENT PUBLIC ACCOUNTANTS FEES

Set forth below are the professional fees billed by PwC for the fiscal years ended December 31, 20152018 and 2014.2017. It is the Audit Committee’s policy that all services performed by and all fees paid to the independent auditorregistered public accounting firm require the Audit Committee’s prior approval. As such, all audit, audit-related tax and other fees werepre-approved by the Audit Committee.

 

   Dollars in Thousands 
Fees  FY 2015   FY 2014 

Audit Fees(1)

  $4,514    $3,940  

Audit-Related Fees(2)

   1,148     845  

Tax Fees(3)

   1,205     884  

All Other Fees

   14     6  

Total Fees

  $6,881    $5,675  

   Dollars in Thousands 

Fees

 

  

FY 2018

 

   

FY 2017

 

 

Audit Fees(1)

 

  $

 

3,990

 

 

 

  $

 

4,172

 

 

 

Audit-Related Fees(2)

 

   

 

881

 

 

 

   

 

231

 

 

 

Tax Fees(3)

 

   

 

637

 

 

 

   

 

1,029

 

 

 

All Other Fees

 

   

 

4

 

 

 

   

 

26

 

 

 

Total Fees

 

  $

 

5,512

 

 

 

  $

 

5,458

 

 

 

(1)  

Aggregate fees from PwC for audit or review services in accordance with the standards of the Public Company Accounting Oversight Board (United States)PCAOB and fees for services, such as statutory audits and review of documents filed with the SEC. Audit fees also include fees paid in connection with services required for compliance with Section 404 of the Sarbanes-Oxley Act.

 

(2) 

Aggregate fees from PwC for assurance and related services which primarily include due diligence on acquisition targets.

 

(3) 

Tax fees include tax compliance, assistance with tax audits, tax advice and tax planning.

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PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 20162019

The Audit Committee has appointed PricewaterhouseCoopers LLP (“PwC”)PwC as our independent registered public accounting firm for the year ending December 31, 2016.2019. Our Board of Directors recommends that the shareholders ratify this appointment. PwC has been our Company’s independent auditorregistered public accounting firm since May 2002. One or more representatives of PwC are expected to be present at the Annual Meeting and will be given the opportunity to make a statement if they so desire and to respond to appropriate questions of shareholders in attendance. If this proposal does not pass, the selection of our independent registered public accounting firm will be reconsidered by the Audit Committee and the Board of Directors. Even if the proposal passes, the Audit Committee may decide to select another firm at any time.

 

The Board of Directors recommends a vote “FOR” the approval of the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2016.2019.

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PROPOSAL 4: APPROVAL OF THE ROPER TECHNOLOGIES, INC. 2016 INCENTIVE PLAN

Our Board of Directors adopted the Roper Technologies, Inc. 2016 Incentive Plan (the “2016 Plan”) in March 2016, subject to approval by our shareholders at this Annual Meeting. If approved by shareholders, the 2016 Plan will become effective on May 27, 2016 (the “Effective Date”) and will replace our 2006 Incentive Plan, as amended (the “Prior Plan”). The 2016 Plan will have 7,924,932 new shares reserved for issuance, plus up to 2,075,068 shares available under the Prior Plan immediately prior to the Effective Date.

Reasons for Shareholders’ Approval of the 2016 Plan

The 2016 Plan will allow us to continue to grant equity awards. Our Prior Plan expires in June 2016. The Compensation Committee believes that the Company must continue to grant equity compensation in order to attract, retain and motivate our key employees. The ability to grant equity awards keeps us competitive for talent and is fundamental to the effectiveness of our compensation program.

Equity awards align employees’ interests with shareholders’ long-term interests. Equity awards promote the success and enhance the value of our Company by aligning the personal interests of our directors, officers and employees with those of our shareholders and by retaining executives through multi-year service requirements for vesting in awards.

Equity awards reflect the Compensation Committee’s pay-for-performance philosophy. The value ultimately received by participants from our equity awards is linked to the value of our common stock.

Approval will facilitate the tax deductibility of performance-based compensation. Shareholder approval of the 2016 Plan will preserve our Company’s ability to continue to grant performance-based awards that are intended to be fully deductible without regard to the deduction limit imposed under Section 162(m) of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). Shareholder approval of the 2016 Plan includes shareholder approval of the business criteria listed below under “Performance Goals” for purposes of Code Section 162(m).

Our burn rate and dilution is low. The awards we make annually and that are outstanding and available for future grants are a lower percentage of total shares outstanding than is typical among our peer group.

Key Features of the 2016 Plan

Conservative share counting provisions. We count the full number of shares issued, rather than the net number of shares, where shares are withheld from an award to satisfy tax withholding requirements or delivered or withheld to pay the exercise price of an option. We also count the full number of shares underlying stock appreciation rights.

No repricing of options. The 2016 Plan does not permit the repricing of options or stock appreciation rights, either directly or indirectly through replacement with new awards or cash buyouts, without stockholder approval.

“Double trigger” change in control provisions. If an acquirer assumes our awards in connection with a change in control, accelerated vesting of a participant’s awards occurs only if the participant’s employment is terminated without “cause” or the participant resigns for “good reason” within two years after the change in control.

Independent committee administration. The Plan is administered by our Compensation Committee, which is comprised entirely of independent directors.

Equity Usage Information

Outstanding Awards. As of March 31, 2016, under the Prior Plan (which is the only plan under which awards remained outstanding), there were (i) 4,616,583 shares of our common stock subject to outstanding awards, of which 3,625,510 shares were subject to stock options outstanding with a weighted average exercise price per share of $114.29 and a weighted average remaining term of 6.4 years; (ii) 991,073 shares were subject to restricted stock awards and restricted stock units outstanding and unvested, and (iii) 2,075,068 shares of our

 

 

 

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common stock reserved and available for future awards under the Prior Plan. On March 31, 2016, the closing price of Roper common stock on the New York Stock Exchange was $182.77.

Burn Rate. Over the past three years (2015, 2014 and 2013), our annual burn rates have been 1.45%, 1.36%, and 1.37%, respectively. These burn rates were calculated by the number of stock options and full-value awards granted during the applicable year (using a 1.9 multiplier for full-value awards) as a percentage of weighted average shares outstanding.

Equity Overhang. We define “overhang” as the sum of outstanding equity awards under our Prior Plan plus the number of shares available for future grant, divided by the sum of the foregoing plus the number of shares outstanding. As of March 31, 2016, our overhang was 6.2%.

Dilution. The 7,924,932 million new shares requested under the 2016 Plan represent approximately 7.8% of our shares of common stock outstanding as of March 31, 2016.

Summary of the 2016 Plan

The following is a summary of the provisions of the 2016 Plan. This summary is qualified in its entirety by the full text of the 2016 Plan, attached to this Proxy Statement as Appendix B.

Purpose. The purpose of the 2016 Plan is to promote the Company’s success by linking the personal interests of its employees, officers, directors and consultants to those of its shareholders, and by providing participants with an incentive for outstanding performance.

Administration. The 2016 Plan will be administered by the Compensation Committee of the Board of Directors, which has the authority to designate participants; determine the type or types of awards to be granted to each participant and the number, terms and conditions thereof; establish, adopt or revise any rules and regulations as it may deem advisable to administer the 2016 Plan; and make all other decisions and determinations that may be required under the 2016 Plan.

Shares Available for Awards. The 2016 Plan will have 7,924,932 new shares available for issuance, plus up to 2,075,068 shares remaining available under the Prior Plan immediately prior to the Effective Date. In addition, up to 4,616,583 shares subject to awards previously granted under the Prior Plan that are outstanding as of the Effective Date and thereafter terminate or expire unexercised, or are cancelled, forfeited or lapse for any reason will become available under the 2016 Plan.

Share Counting. Shares underlying options and stock appreciation rights count as one share, while shares underlying all other awards count as three shares, against the number of shares available for issuance under the 2016 Plan. Shares withheld from an award to satisfy tax withholding requirements, shares delivered or withheld to pay the exercise price of an option, and the full number of shares underlying stock appreciation rights, rather than the net number of shares actually issued, are counted against the shares available under the 2016 Plan. The 2016 Plan provides that shares subject to awards that terminate or expire unexercised, or are cancelled, forfeited or lapse for any reason, and shares underlying awards that are ultimately settled in cash, will again be available for future grants of awards under the 2016 Plan.

Eligibility. The 2016 Plan permits the grant of equity awards to employees, officers, directors and consultants of the Company and its affiliates as selected by the Compensation Committee. As of March 31, 2016, the Company had approximately 11,000 employees and 8 non-employee directors. The number of eligible participants may change over time based upon future growth of the Company and its affiliates.

Awards to Non-Employee Directors. Awards granted to the Company’s non-employee directors will be made only in accordance with the terms, conditions and parameters of the Company’s director compensation plan as in effect from time to time. In no event will the awards that may be granted to any non-employee director (other than a non-executive chairman) during any calendar year exceed 6,000 shares.

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Types of Equity Awards. The 2016 Plan authorizes the following types of awards:

stock options that give the holder the right to purchase shares of our common stock at a price not less than the fair market value at grant;

stock appreciation rights, which give the holder the right to receive the difference (payable in cash or stock, as specified in the award certificate) between the fair market value per share of our common stock on the date of exercise over the base price of the award (which cannot be less than the fair market value of a share of our common stock as of the grant date);

restricted stock, which gives the holder the rights of a holder of common stock, subject to restrictions on transferability and forfeiture on terms set by the Compensation Committee;

restricted or deferred stock units, which represent the right to receive shares of common stock (or an equivalent value in cash or other property, as specified in the award certificate) at a designated time in the future;

performance awards, which are awards payable in cash or stock upon the attainment of specified performance goals;

dividend equivalents, which entitle the participant to payments (or an equivalent value payable in stock or other property) equal to any dividends paid on the shares of stock underlying a full-value award, except that dividends or dividend equivalents will not be paid on performance-based awards unless and until the performance conditions have been met; and

other cash and stock-based awards in the discretion of the Compensation Committee.

Minimum Vesting Restrictions. Options and SARs granted under the 2016 Plan generally may not vest less than one year following the grant date, except with respect to up to 5% of the total number of shares authorized under the 2016 Plan or as a result of a participant’s death or disability or upon, or in connection with, a participant’s termination of service following, a change in control.

Limitations on Individual Awards. The maximum number of shares of common stock that may be covered by options and stock appreciation rights granted under the 2016 Plan to any one person during any one calendar year is 450,000. The maximum number of shares of common stock that may be granted under the 2016 Plan in the form of performance-based full-value awards (such as restricted stock, restricted stock units, deferred stock units, performance shares or other stock-based awards other than options or stock appreciation rights) under the 2016 Plan to any one person during any one calendar year is 450,000. The aggregate dollar value of any cash-based award that may be paid to any one participant during any one calendar year under the 2016 Plan is $10,000,000. For purposes of applying the foregoing limits in the case of multi-year performance periods, the amount of cash or property or number of shares deemed granted or paid with respect to any year is the total amount payable or shares earned for the performance period divided by the number of years in the performance period.

Performance Goals. If a full-value award or a cash award is designated as a qualified performance-based award for purposes of Code Section 162(m), the Compensation Committee must establish objectively determinable performance goals for the award based on one or more business criteria approved by shareholders. The business criteria may be expressed in terms of company-wide objectives or in terms of objectives that relate to the performance of an affiliate or a division, region, department or function within the Company or an affiliate or measured relative to an external group or index. Additionally, the Committee may provide for the inclusion or exclusion of specified circumstances or events in the evaluation of performance. The following criteria are identified in the 2016 Plan:

Revenue

Sales

Profit (net profit, gross profit, operating profit, economic profit, profit margins or other corporate profit measures)

Earnings (EBIT, EBITDA, earnings per share, or other corporate earnings measures)

Net income (before or after taxes, operating income or other income measures)

Cash (cash flow, free cash flow, cash generation or other cash measures)

Cash return on investment

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Stock price or performance

Total stockholder return (stock price appreciation plus reinvested dividends divided by beginning share price)

Economic value added

Market share

Improvements in capital structure

Expenses (expense management, expense ratio, expense efficiency ratios or other expense measures)

Business expansion or consolidation (acquisitions and divestitures)

Internal rate of return or increase in net present value

Working capital targets relating to inventory and/or accounts receivable

Productivity measures

Cost reduction measures

Capital structure optimization

Strategic plan development and implementation

Return measures (including, but not limited to, return on assets, capital, equity, investments, gross investments, revenue or sales, and includes cash flow returns on assets, capital, equity, or sales)

Limitations on Transfer. A participant may not assign or transfer an award other than by will or the laws of descent and distribution. The Compensation Committee may permit other transfers (other than transfers for value) where it concludes that such transferability does not result in accelerated taxation, does not cause any option intended to be an incentive stock option to fail to qualify as such, and is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, any state or federal tax or securities laws or regulations applicable to transferable awards. The 2016 Plan prohibits transfers of awards for value.

Acceleration Upon Certain Events. Unless otherwise provided in an award certificate or any special plan document or separate agreement governing an award:

If a participant’s service terminates by reason of death or disability, (i) all of that participant’s outstanding options and stock appreciation rights will become fully exercisable, (ii) all time-based vesting restrictions on such participant’s outstanding awards shall lapse, and (iii) the target payout opportunities attainable under all of that participant’s outstanding performance-based awards shall be deemed to have been fully earned as of the date of termination based upon an assumed achievement of all relevant performance goals at the “target” level.

In connection with a change in control, with respect to any awards assumed by the surviving entity or otherwise equitably converted or substituted: if within two years after the effective date of the change in control, a participant’s employment is terminated without cause (or if the participant resigns for “good reason” as provided in any employment, severance or similar agreement), then (a) all of that participant’s outstanding service-based awards will become fully vested, and (b) all of that participant’s outstanding performance-based awards will be earned on a pro-rata basis based on actual performance through the end of the performance period.

In connection with a change in control, if awards are not assumed by the surviving entity or otherwise equitably converted or substituted in connection with the change in control: (a) all outstanding service-based awards will become fully vested and exercisable, as applicable, and (b) all outstanding performance-based awards will become fully vested, with the level of such vested amount to be determined based on an assumed achievement of performance goals at “target” levels, and there will be a prorate payout to the participants based on the length of time within the performance period that has elapsed prior to the date of the change of control.

Adjustments. In the event of a transaction between the Company and our shareholders that causes the per-share value of our common stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large nonrecurring cash dividend), the share authorization limits under the 2016 Plan will be adjusted proportionately, and the Compensation Committee shall make such adjustments to the 2016 Plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction.

Termination and Amendment. Our Board of Directors or the Compensation Committee may, at any time and from time to time, terminate or amend the 2016 Plan, but if an amendment would constitute a material

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amendment requiring shareholder approval under applicable listing requirements, laws, policies or regulations, then such amendment will be subject to shareholder approval.

Prohibition on Repricing. Outstanding stock options and stock appreciation rights cannot be repriced, directly or indirectly, without the prior consent of our shareholders. The exchange of an “underwater” option (i.e., an option having an exercise price in excess of the current market value of the underlying stock) for another award would be considered an indirect repricing and would, therefore, require the prior consent of our shareholders.

Certain U.S. Federal Income Tax Effects

The U.S. federal income tax discussion set forth below is intended for general information only and does not purport to be a complete analysis of all of the potential tax effects of the 2016 Plan. It is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change. State, local and non-U.S. income tax consequences are not discussed, and may vary from locality to locality.

Nonstatutory Stock Options. There will be no federal income tax consequences to the optionee or to the Company upon the grant of a nonstatutory stock option under the 2016 Plan. When the optionee exercises a nonstatutory option, however, the optionee will recognize ordinary income in an amount equal to the excess of the fair market value of the stock received upon exercise of the option over the exercise price, and the Company will be allowed a corresponding federal income tax deduction. Any gain that the optionee realizes when the optionee later sells or disposes of the shares received upon exercise of an option will be short-term or long-term capital gain, depending on how long the shares were held.

Incentive Stock Options. There will be no federal income tax consequences to the optionee or to the Company upon the grant or exercise of an incentive stock option. If the optionee holds the shares received upon exercise of the option for the required holding period of at least two years after the date the option was granted and one year after exercise, the difference between the exercise price and the amount realized upon sale or disposition of the shares received upon exercise of the option will be taxed as long-term capital gain or loss, and the Company will not be entitled to a federal income tax deduction. If the optionee disposes of the shares received upon exercise of the option in a sale, exchange, or other disqualifying disposition before the required holding period ends, the optionee will recognize taxable ordinary income in an amount equal to the excess of the fair market value of the option shares at the time of exercise over the exercise price, and the Company will be allowed a federal income tax deduction equal to such amount. While the exercise of an incentive stock option does not result in current taxable income, the excess of the fair market value of the shares received upon exercise of the option at the time of exercise over the exercise price will be an item of adjustment for purposes of determining the optionee’s alternative minimum taxable income.

Stock Appreciation Rights. A participant receiving a stock appreciation right under the 2016 Plan will not recognize income, and the Company will not be allowed a tax deduction, at the time the award is granted. When the participant exercises the stock appreciation right, the amount of cash and the fair market value of any shares of stock received will be taxed as ordinary income to the participant and the Company will be allowed a corresponding federal income tax deduction at that time.

Restricted Stock. Unless a participant makes an election to accelerate recognition of the income to the date of grant as described below, a participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is nontransferable or is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of the stock as of that date (less any amount the participant paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m). If the participant files an election under Code Section 83(b) within 30 days after the date of grant of the restricted stock, the participant will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less any amount paid for the stock), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m). Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Code Section 83(b) election.

Restricted or Deferred Stock Units. A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a stock unit award is granted. Upon receipt of shares of stock (or the

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    Roper Technologies, Inc. 2016 Proxy Statement    49


equivalent value in cash or other property) in settlement of a stock unit award, a participant will recognize ordinary income equal to the fair market value of the stock or other property as of that date (less any amount the participant paid for the stock or property), and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m).

Performance Awards. A participant will not recognize income, and the Company will not be allowed a tax deduction, at the time a performance award is granted (for example, when the performance goals are established). Upon receipt of cash, stock or other property in settlement of a performance award, the participant will recognize ordinary income equal to the cash, stock or other property received, and the Company will be allowed a corresponding federal income tax deduction at that time, subject to any applicable limitations under Code Section 162(m).

Tax Withholding. The Company has the right to deduct or withhold, or require a participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including employment taxes) required by law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising as a result of the 2016 Plan.

New Plan Benefits

Awards to be made under the 2016 Plan are not determinable because generally they are granted at the sole discretion of the Compensation Committee. Awards granted in 2015 to the named executive officers are set forth above in the section captioned “Executive Compensation.” Awards that will be granted to our non-employee directors are described in the section captioned “Director Compensation.”

Vote Required

The approval of the 2016 Plan requires the affirmative vote of a majority of the votes entitled to be cast on this proposal. Approval of the 2016 Plan will also be considered approval of the performance criteria included in the 2016 Plan for purposes of performance-based compensation under Code Section 162(m). See the discussions above captioned “Performance Award Under Code Section 162(m)” and “Performance Goals.”

The Board of Directors recommends a vote “FOR” the approval of the Roper Technologies 2016 Incentive Plan.

Equity Compensation Plan Information

The following table provides information as of December 31, 20152018 regarding our compensation plans under which our equity securities are authorized for issuance.issuance (shares in millions).

 

Plan Category  (a)
Number of Securities to
be Issued Upon
Exercise of Outstanding
Options, Warrants and
Rights
   (b)
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights
   (c)
Number of Securities
Remaining Available for
Future Issuance  Under
Equity Compensation
Plans (Excluding Securities
Reflected in Column(a))
   

(a)
Number of Securities to
be Issued Upon
Exercise of Outstanding
Options, Warrants and
Rights

 

   

(b)
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants and Rights

 

   

(c)
Number of Securities
Remaining Available for
Future Issuance Under
Equity  Compensation
Plans (Excluding Securities
Reflected in Column(a))

 

 

Equity Compensation Plans Approved by Shareholders(1)

            

Stock options

   3,117,616   $104.54     -       

 

3.205

 

 

 

  $

 

180.69

 

 

 

  

Restricted stock awards(2)

   709,275    -         

 

0.739

 

 

 

   

 

-  

 

 

 

  

Subtotal

   3,826,891      3,175,605    

 

3.944

 

 

 

     

 

6.019

 

 

 

Equity Compensation Plans Not Approved by Shareholders

   -       -       -       

 

-  

 

 

 

   

 

-  

 

 

 

   

 

-  

 

 

 

Total

   3,826,891   $-       3,175,605    

 

3.944

 

 

 

  $

 

-  

 

 

 

   

 

6.019

 

 

 

 

(1)  

Consists of the Company’s Amended and Restated 2006 Plan and 2016 Incentive Plan.

 

(2) 

The weighted-average exercise price is not applicable to restricted stock awards.

 

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     Roper Technologies, Inc. 20162019 Proxy Statement


PROPOSAL 4: SHAREHOLDER PROPOSAL REGARDING POLITICAL CONTRIBUTIONS DISCLOSURE

The Company is not responsible for the content of this shareholder proposal or supporting statement.

The following shareholder proposal (the “Shareholder Proposal”) will be voted on at the Annual Meeting only if properly presented by or on behalf of the shareholder proponent. Sonen Capital, 456 Montgomery Avenue, San Francisco, California 94104, a holder of 448 shares of Common Stock, 0.0004 percent of the Company’s outstanding shares, submitted the Proposal. The Board of Directors recommends a vote AGAINST the Shareholder Proposal and asks shareholders to read through the Roper’s response which follows the Shareholders Proposal.

“Resolved, that the shareholders of Roper Technologies Inc. (“Roper” or “Company”) hereby request that the Company provide a report, updated semiannually, disclosing the Company’s:

1.    Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.

2.    Monetary andnon-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:

a.    The identity of the recipient as well as the amount paid to each; and

b.    The title(s) of the person(s) in the Company responsible for decision-making.

The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.

Supporting Statement

As long-term shareholders of Roper, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.

Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

Relying on publicly available data does not provide a complete picture of the Company’s electoral spending. For example, the Company’s payments to trade associations that may be used for election- related activities are undisclosed and unknown. This proposal asks the Company to disclose all of its electoral spending, including payments to trade associations and othertax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies, including Salesforce.com Inc., Inuit Inc., and Northrop Grumman Corporation, which present this information on their websites.

The Company’s Board and shareholders need comprehensive disclosure to fully evaluate the use of corporate assets in elections. We urge your support for this critical governance reform.

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    Roper Technologies, Inc. 2019 Proxy Statement 45


Board of Directors Statement in Opposition to Shareholder Proposal

The Board has carefully considered the Shareholder Proposal and while the Board generally supports the Shareholder Proposal’s stated objectives of transparency and accountability, adoption of the Shareholder Proposal is unnecessary and would not be in the best interests of the Company or our shareholders.

The Company has historically made an extremely limited number of political contributions.

The Company does not have, and does not contribute to federal political campaigns through, a political action committee and has not made contributions to state political campaigns. The Company has historically made an extremely limited number of political contributions, where such contributions are permitted by law, and has made those contributions almost exclusively through participation in trade associations in an indirect manner. While our participation in various trade associations serves an important corporate purpose, it represents only a small fraction of our total annual expenses (less than 0.02% in each of fiscal years 2018, 2017 and 2016). Additional disclosure is not necessary to provide shareholders visibility into our limited political contributions, and incurring the time and expense to generate the report twice each year as requested by the Shareholder Proposal would not be a productive use of corporate resources.

The Company is committed to adhering to the highest ethical standards.

Political contributions of all types are subject to governmental regulation and public disclosure requirements, and the Company is fully committed to complying with all applicable laws, including as those laws relate to contributions made indirectly through participation in trade associations. Roper’s Business Code of Ethics and Standards of Conduct (which is available for review atwww.ropertech.com/code-of-ethics.com) prohibits most political activities, and requires the express approval of Company’s Chief Executive Officer before any Company property may be donated to a political cause.

The Company’s participation in trade associations serves multiple objectives.

Participation as a trade association member comes with the understanding that we may not always agree with all of the positions of the associations or other members. However, such participation provides us with visibility to business and technical issues as well as emerging standards within our industries. Trade associations are subject to public disclosure obligations with respect to their lobbying and political contributions and expenditures. We do not participate in trade associations to advance political purposes, and our participation in a particular trade association does not represent our agreement with all of the association’s positions or views. Although we must pay regular membership dues, we do not normally make additionalnon-dues contributions to support a trade association’s targeted political contributions. Accordingly, disclosure of our trade association dues would not provide our shareholders with a greater understanding of our business strategies, initiatives or values. Because our payments to trade associations do not necessarily reflect our views on every action a trade association may take, and because we support trade associations for reasons unrelated to any of their political activities, semi-annual reporting on our trade association dues would not provide meaningful information to investors.

Given the limited nature of the Company’s political contributions and expenditures, we are certain that the Shareholder Proposal is unnecessary and costly. Moreover, requiring disclosure of all corporate political contributions, including those made indirectly through trade associations, as requested in the Shareholder Proposal, could place the Company at a competitive disadvantage by revealing its strategies and priorities. Parties with interests adverse to the Company likewise participate in the political process. Accordingly, any expanded disclosure by the Company, above what is required by law and equally applicable to all similar parties engaged in public debate, could disproportionately benefit those parties, while harming the interests of the Company and our shareholders. If adopted, the Board believes that producing the report requested by the Shareholder Proposal would be burdensome and an unnecessary use of the Company’s resources without a commensurate benefit to the Company or our shareholders.

The Board of Directors opposes this proposal and recommends a voteAGAINST Proposal 4.

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    Roper Technologies, Inc. 2019 Proxy Statement


ANNUAL MEETING AND VOTING INFORMATION

Our companyCompany is soliciting the enclosed proxy for use at the 20162019 Annual Meeting of Shareholders. This Proxy Statement and the enclosed proxy card are being mailed or otherwise made available to shareholders on or about April 26, 2016.30, 2019.

We are concurrently mailing or making available to shareholders a copy of our 20152018 Annual Report, which includes our Annual Report onForm 10-K for the fiscal year ended December 31, 2015.2018. Our Annual Report on Form10-K and its exhibits are available on the internetInternet at www.sec.gov. TheOur 2018 Annual Report and Annual Report on Form10-K are not part of these proxy soliciting materials.

This Proxy Statement contains important information for you to consider when deciding how to vote. Please read this information carefully.

 

Q:

When is the Annual Meeting?

 

A:

Date & Time:

Friday, May 27, 2016Monday, June 10, 2019 at 9:308:00 a.m.

(and at any postponement or adjournments thereof)

Place:

Our corporate office located at:

6901 Professional Parkway East

Suite 200

Sarasota, Florida 34240

 

Q:

What is the purpose of this meeting?

 

A:

This is the Annual Meeting of our shareholders. At this meeting, we will be voting on the following matters:

 

 1.

The election of nineten directors;

 

 2.

Approval of, on anon-binding advisory basis, the compensation of our named executive officers;

 

 3.

Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2016;2019; and

 

 4.Approval of the Roper Technologies, Inc. 2016 Incentive Plan.

Shareholder proposal regarding political contributions disclosure.

We will also transact any other business properly brought before the meeting.

Our Board of Directors strongly encourages you to exercise your right to vote on these matters. Your vote is important. Voting early through the internet, by Internet, telephone or by amailing proxy or voting instruction card helps ensure that we receive a quorum of shares necessary to hold the meeting.

Q:

What happens if additional matters are presented at the Annual Meeting?

 

A.

We are not aware of any matters to be acted upon at the Annual Meeting other than the proposals described in this Proxy Statement. The Board of Directors has named Brian D. JellisonChristine E. Hermann and David B. LinerJohn K. Stipancich as proxy holders for this Annual Meeting. If you submit a properly executed proxy, the proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting or at any adjournment or postponement of the meeting. If for any reason a director nominee is not available as a candidate, the proxy holders may vote your shares for another candidate who may be nominated by the Board, or the Board may reduce its size.

All shares of our common stock represented by properly executed and unrevoked proxies will be voted by the person named as proxy holder in accordance with the instruction given. If no instructions are indicated on a proxy, properly executed proxies will be voted as follows:

FOR each director nominee;

FOR the advisory approval of the compensation of our named executive compensation;officers;

FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm;firm for 2019; and

FORAGAINSTapproval of the Roper Technologies, Inc. 2016 Incentive Plan.shareholder proposal regarding political contributions disclosure.

 

 

 

 

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ANNUAL MEETING AND VOTING INFORMATION(CONTINUED)

 

Q:

Who may vote at the Annual Meeting?

 

A:

Only shareholders of record at the close of business on the record date will be entitled to vote at the Annual Meeting or any postponed or adjourned meeting, and these shareholders will be entitled to vote whether or not they have transferred any of their shares of Roper common stock since that date.

 

Q:

What is the record date?

 

A.A:

Our Board has established the close of business on March 29, 2016April 15, 2019 as the record date to determine the shareholders of record entitled to receive a notice of, and to vote at, our Annual Meeting or any postponement or adjournment or postponement of the meeting.thereof. On the record date, there were 101,186,133103,842,390 shares of our common stock, $1$0.01 par value, outstanding and entitled to vote. Each share of our common stock is entitled to one vote that may be voted on each matter to be acted upon at this Annual Meeting.

 

Q:

What is a shareholder of record?

 

A.A:

A shareholder of record or a registered shareholder is a shareholder whose ownership of Roper Technologies, Inc. common stock is reflected directly on the books and records of our transfer agent, American Stock Transfer &Computershare Trust Company.Company, N.A. If you are a shareholder of record, we are providing these materials directly to you.

If you hold your shares of common stock through a bank, broker, or other intermediary, you are considered the “beneficial owner” of those shares held in “street name,” and you are not a shareholder of record. The shareholder of record of the shares is your bank, broker, or other intermediary. If your shares are held in street name, these proxy materials have been forwarded to you by your bank, broker, or other intermediary. As the beneficial owner, you have the right to instruct that institution on how to vote the shares you beneficially own.

 

Q:

How can I submit my vote?

 

A:

There are four ways to vote: by internet,Internet, by telephone, by mail or in person. Submitting your proxy by internet,Internet, telephone or mail will not affect your right to attend the Annual Meeting and

change your vote. Unless you are voting in

person, your vote must be received by 11:59 p.m. Eastern Time on May 26, 2016.June 9, 2019.

 

By Internet. Have your proxy card available and log on to www.proxyvote.com.

 

By Telephone. Have your proxy card available and call800-690-6903 toll free (US only) from a touchtone telephonetelephone.

 

By Mail. Mark, date, sign, and promptly mail the enclosed proxy card in the postage-paid envelope provided for mailing in the United States.

 

In Person. You may vote by ballot in person at the Annual Meeting. Bring your proxy card if you received one by mail, otherwise we will provide shareholders of record a ballot at the Annual Meeting.

If your shares are held by a bank, broker, or other intermediary, that institution will provide voting instructions with the proxy materials. Please follow the voting instructions that you receive from that institution. Additionally, if you plan to vote in person at the Annual Meeting and your shares are held by a bank, broker, or other intermediary, you must obtain proof of stock ownership as of the record date and have a valid legal proxy from the institution that holds your shares.

 

Q:

What is a brokernon-vote?

 

A:

If your shares are held in street name through a bank, broker, or other intermediary, you must provide voting instructions to that institution. Under the rules of the NYSE, if you do not provide voting instructions, the institution may vote in its discretion on routine proposals, but not onnon-routine proposals, or leave the shares unvoted, which is called a “brokernon-vote.”

The following proposals are not considered routine proposals, so banks, brokers, and other intermediaries do not have discretionary authority to vote on these matters if they have not received voting instructions from you: (i) the election of directors,directors; (ii) the advisory vote on the approval of the compensation toof our named executive officers,officers; and (iii) the approval of the Roper Technologies, Inc. 2016 Incentive Plan.shareholder proposal regarding political contributions disclosure. The ratification of the appointment of the independent registered public accounting firm is considered a routine proposal, so if you do not provide voting instructions, the institution holding your shares

 

 

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ANNUAL MEETING AND VOTING INFORMATION(CONTINUED)

 

so if you do not provide voting instructions, the institution holding your shares may either leave the shares unvoted or vote the shares in its discretion. If your shares are held through a bank, broker, or other intermediary, please follow the voting instructions that you receive from that institution. The institution will not be able to vote your shares on any of the proposals except the appointment of PricewaterhouseCoopers LLPPwC unless you have provided voting instructions.

 

Q:

How are brokernon-votes and abstentions treated?

 

A:

Brokernon-votes are not treated as votes cast for anypurposes of the matters on the agenda,election of directors, so they will have no effect on the election of directors. Brokernon-votes are not treated as entitled to vote for all other matters proposed for a vote at the meeting, so they will have anyno effect on those proposals.matters. Abstentions are not treated as votes cast for purposes of the election of directors, so they will have no effect on the election of directors. Abstentions are treated as present and entitled to vote so they will have the effect of a vote cast against the approval offor all other matters proposed for a vote at the compensation of our named executive officers, against the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered accounting firm, and against the approval of the 2016 Incentive Plan.meeting.

 

Q:

What constitutes a quorum?

 

A:

To conduct business at our Annual Meeting, we must have a quorum of shareholders present. A quorum is present when a majority of the outstanding shares of stock entitled to vote as of the record date are represented in person or by proxy. Brokernon-votes and abstentions will be counted toward the establishment of the quorum. If there is an insufficient number of shares represented for a quorum or to approve any proposal at the Annual Meeting, the Annual Meeting may be adjournedpostponed or postponedadjourned to permit the further solicitation of proxies.

Q:

How many votes are needed for each proposal?

 

A:

OurBy-laws provide that each director will be elected by a majority of the votes cast with respect to such director (except in the case of contested elections, in which case directors are elected by a plurality). A “majority of the votes cast” means that the number of votes cast “for” a director exceeds the number of votes cast “against” that director. Brokernon-votes and

abstentions will have no impact as they are not counted as votes cast for the election of directors. If an incumbent director fails to receive a majority of the votes cast, the director will tender his or her resignation to the Board. The Nominating and Governance Committee or another committee will consider the director’s resignation and recommend to the Board whether to accept or reject the resignation. The Board will publicly disclose its decision regarding the resignation within 90 days after the election results are certified.

The vote on the approval of compensation toof our named executive officers is an advisory vote andnon-binding on the Company. If the majority of the shares present in person or represented by proxy and entitled to vote are cast in favor of the proposal, then it will be deemed to be the approval of the shareholders. Abstentions will have the effect of a vote against the proposal. Brokernon-votes will be excluded from the calculation and will have no effect on the outcome of the voting.

TheFor all other matters proposed for a vote at the meeting, the affirmative vote of a majority of the shares present in person or represented by proxy and entitled to vote is required to approve the ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered accounting firm of the Company.matter. Abstentions will have the effect of a vote against these proposals. Brokernon-votes will be excluded from the calculation and will have no effect on the outcome of the voting.

With respect to approval of the 2016 Plan, the vote choices are for, against or abstain. The approval of the 2016 Plan, and the qualified business criteria for performance-based awards included in the 2016 Plan, requires the affirmative vote of a majority of the votes entitled to be cast on the proposal present in person or represented by proxy at the Annual Meeting. Abstentions will have the effect of votes against the proposal. Broker non-votes will not count as votes cast and otherwise will not affect the outcome of the voting on the proposal.

Q:Is my proxy revocable?

A.

You may revoke your proxy before it is exercised by voting in person at the Annual Meeting, by timely delivering a subsequent proxy or by notifying us in writing of such revocation to the

 

 

 

 

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ANNUAL MEETING AND VOTING INFORMATION(CONTINUED)

 

Q:attention of the Secretary, Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240. If you are not the shareholder of record, you will need documentation from your record holder stating your ownership to vote personally at the Annual Meeting. See “What is a shareholder of record?” above.

Is my proxy revocable?

You may revoke your proxy before it is exercised by voting in person at the Annual Meeting, by timely delivering a subsequent proxy or by notifying us in writing of such revocation to the attention of the Corporate Secretary, Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240.

If you are not the shareholder of record, you will need documentation from your record holder stating your ownership to vote personally at the Annual Meeting. See “What is a shareholder of record?” above.

 

Q:

What is “householding” and how does it affect me?

 

A.

The proxy rules of the SEC permit companies and intermediaries, such as brokers and banks, to satisfy Proxy Statement delivery requirements for two or more shareholders sharing an address by delivering one set of proxy materials to those shareholders. This procedure, known as “householding,” reduces the amount of duplicate information that shareholders receive and lowers our printing and mailing costs.

Certain intermediaries use householding for our proxy materials and our 20152018 Annual Report. Therefore, only one set of materials may have been delivered to your address if multiple shareholders share the same address. If you share an address with another shareholder and wish to receive a separate set of materials in the future, or if you would like to receive only one set of materials, you should contact your bank, broker, or other intermediary or us at the address and telephone number below. We will promptly send a separate copy of thethis Proxy Statement for the Annual Meeting or the 20152018 Annual Report if you call us at941-556-2601 or direct your request in writing to the attention of the Corporate Secretary, Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240.

Q:

How can I find the voting results of the Annual Meeting?

 

A.

The Board of Directors has designated an inspector of election who will tabulate the votes

submitted by proxy and by ballot. Preliminary voting results will be announced at the Annual Meeting. Final voting results will be published in a Current Report on Form8-K to be filed with the SEC within four business days after the Annual Meeting. If the official voting results are not available at that time, we will provide preliminary voting results in the Current Report on Form8-K and will provide the final results in an amendment to the Current Report on Form8-K as soon as they become available.

 

Q:

Who is paying for the expenses involved in preparing and mailing this Proxy Statement?

 

A:We are

Roper is paying the expenses involved in preparing, assembling and mailing these proxy materialmaterials and all costs of soliciting proxies. Our directors, executive officers and other employees may solicit proxies, without additional compensation, personally or by telephone, email or other means of communication. We have also engaged Georgeson Inc. as the proxy solicitor for this Annual Meeting for a fee of approximately $10,000$9,500 plus reasonable expenses. We will reimburse banks, brokers, and other intermediaries, such as custodians, nominees and fiduciaries, that hold our common stock in their names or in the names of their nominees for their reasonable expenses in forwarding proxy materials to beneficial owners.

 

Q:

What is your website for additional information?

 

A:

We maintain a website at www.ropertech.com. The information on our website is not part of this Proxy Statement, and it is not incorporated into any other filings we make with the SEC.

 

 

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     Roper Technologies, Inc. 20162019 Proxy Statement


INFORMATION REGARDING THE 20172020 ANNUAL MEETING OF SHAREHOLDERS

If you wish to submit a matter to be considered at the 20172020 Annual Meeting of Shareholders, you must comply with the procedures set forth below. Any proposal or nomination to be made to the Company should be sent to:

Roper Technologies, Inc.

6901 Professional Parkway East

Suite 200

Sarasota, Florida 34240

Attention: Secretary

 

Proxy Statement Proposals.If you intend to submit a proposal to be included in the Proxy Statement for the 20172020 Annual Meeting of Shareholders, we must receive your proposal no later than December 27, 2016.January 1, 2020. All proposals must comply with the SEC regulations under Rule14a-8 for including shareholder proposals in a company’s proxy material.

 

Director Candidate Nomination. OurBy-laws set forth the procedures you must follow if you wish to nominate a director candidate in connection with the 20172020 Annual Meeting of Shareholders.

Proxy Access to Include Nominees in our 20172020 Proxy Statement.If you are a shareholder, or a group of up to 20 shareholders, owning 3% or more of our outstanding common stock continuously for at least three years and wish to nominate a director candidate and require us to include such nominee in our Proxy Statement and form of proxy, youryou must submit your request so it is received by the Company between December 2, 2019 and January 27, 2017 and February 26, 2017,1, 2020, in accordance with ourBy-laws. The number of candidates that may be so nominated is limited to the greater of two or the largest whole number that does not exceed 20% of our Board, provided that the shareholder(s) and nominee(s) satisfy the requirements set forth in ourBy-laws. All proxy access nominations must be accompanied by information about the nominating shareholders as well as the nominees and meet the requirements specified in ourBy-laws, including the information specified under “Nominees Not for Inclusion in our 20172020 Proxy Statement” below.

Nominees Not for Inclusion in our 20172020 Proxy Statement.If you wish to nominate a director candidate in connection with the 20172020 Annual Meeting of Shareholders and are not requiring that the nominee be included in our Proxy Statement, you must submit the nomination so it is received by the Company between January 27, 2017February 11, 2020 and February 26, 2017,March 12, 2020, in accordance with ourBy-laws.The notice to nominate a person for election as a Company director notice must include a written statement setting forth (i) the name of the person to be nominated; (ii) the number and class of all shares of each class of Company stock owned of record and beneficially by such person, as reported by such person to you; (iii) such other information regarding each nominee proposed by you as would have been required to be included in a Proxy Statement filed pursuant to the proxy rules of the SEC if the nominee had been nominated by the Board of Directors; (iv) such person’s signed consent to serve as a director of our Company if elected; (v) your name and address; (vi) the number and class of all shares of each class of Company stock owned of record and beneficially by such shareholder (and any beneficial owner on whose behalf the nomination is made); and (vii) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, you (and any beneficial owner on whose behalf the proposal is made) with respect to Roper’s securities.

 

Matters for Annual Meeting Agenda.If you wish to have other business (not the nomination of a director candidate) brought before the 20172020 Annual Meeting of Shareholders, you must submit the proposal between January 27, 2017February 11, 2020 and February 26, 2017,March 12, 2020, in accordance with ourBy-laws. If you intend to present the matter directly at the 20172020 Annual Meeting of Shareholders, the notice must include (a) the text of the proposal; (b) a brief statement of the reasons why you favor the proposal; (c) your name and address; (d) the number and class of all shares of each class of Company stock owned of record and beneficially by you (and any beneficial owner on whose behalf the proposal is made); (e) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on

 

 

 

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transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, you (and any beneficial owner on whose behalf the proposal is made) with respect to the Roper’s securities; and (f) if applicable, any material interest of you and such beneficial owner in the matter proposed (other than as a shareholder).

With respect to matters not included in the Proxy Statement but properly presented at the 2020 Annual Meeting of Shareholders, management generally will be able to vote proxies in its discretion if it receives notice of the proposal during the period specified above and advises shareholders in the Proxy Statement for the 20172020 Annual Meeting of Shareholders about the nature of the matter and how management intends to vote on the matter, unless the proponent of the shareholder proposal (a) provides us with a timely written statement that the proponent intends to deliver a Proxy Statement to at least the percentage of our voting shares required to carry the proposal,proposal; (b) includes the same statement in the proponent’s own proxy materials,materials; and (c) provides us with a statement from a solicitor confirming that the necessary steps have been taken to deliver the Proxy Statement to at least the percentage of our voting shares required to carry the proposal.

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OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors knows of no other business which will be or is intended to be presented at the Annual Meeting. If any other business properly comes before the Annual Meeting or any adjourned Annual Meeting, the proxy holders named in the enclosed proxy will have discretionary authority to vote the shares represented by the proxy in their discretion.

By the Order of the Board of Directors

 

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Brian D. JellisonLOGO

Chairman, L. Neil Hunn

President and Chief Executive Officer

Dated: April 26, 201630, 2019

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APPENDIX A—RECONCILIATIONS

Table 1: EBITDA and EBITDA Margin Reconciliation

(in millions, except percentages)

   2017  2018 

GAAP Revenue

 

  $

 

4,607

 

 

 

 $

 

5,191

 

 

 

Purchase accounting adjustment to acquired deferred revenue

 

   

 

57

 

 

 

  

 

8

 

 

 

Adjusted Revenue (A)

 

  $

 

4,665

 

 

 

 $

 

5,199

 

 

 

GAAP Net Earnings

 

   

 

972

 

 

 

  

 

944

 

 

 

Taxes

 

   

 

63

 

 

 

  

 

254

 

 

 

Interest Expense

 

   

 

181

 

 

 

  

 

182

 

 

 

Depreciation

 

   

 

50

 

 

 

  

 

50

 

 

 

Amortization

 

   

 

295

 

 

 

  

 

318

 

 

 

Purchase accounting adjustment to acquired deferred revenue

 

   

 

57

 

 

 

  

 

8

 

 

 

Debt extinguishment charge

 

   

 

-  

 

 

 

  

 

16

 

 

 

One-time expense for accelerated vesting

 

   

 

-  

 

 

 

  

 

35

 

 

 

Purchase accounting adjustment for commission expense

 

   

 

(5

 

 

  

 

-  

 

 

 

Gain on sale of divested energy product line

 

   

 

(9

 

 

  

 

-  

 

 

 

Impairment charge on minority investment

 

   

 

2

 

 

 

  

 

-  

 

 

 

Adjusted EBITDA (B)

 

  $

 

1,605

 

 

 

 $

 

1,806

 

 

 

Adjusted EBITDA Margin (B) / (A)

 

   

 

34.4

 

 

  

 

 

34.7

 

 

 

 

Table 2: Cash Flow Reconciliation

(in millions)

   2008  2013  2017  2018 

Operating Cash Flow

  $434  $803  $1,234  $1,430 

Capital Expenditures

   (30  (43  (49  (49

Capitalized Software Expenditures

 

   

 

(6

 

 

  

 

(1

 

 

  

 

(11

 

 

  

 

(10

 

 

Free Cash Flow

 

  $

 

398

 

 

 

 $

 

759

 

 

 

 $

 

1,175

 

 

 

 $

 

1,371

 

 

 

Note: Numbers may not foot due to rounding.

 

 

 

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APPENDIX A—RECONCILIATIONS

Table 1: Full Year Adjusted Revenue and Adjusted Operating Margin Reconciliation

(in millions, except percentages)

   2015  2014  2013  2012 

Full Year GAAP Revenue

  $3,582   $3,549   $3,238   $2,993  

Add: Purchase Accounting Adjustment to Acquired Deferred Revenue

   11  �� 2    7    9  

Add: Purchase Accounting Adjustment to Acquired Revenue

   -      -      26    -    

Rounding

   -      1    1    -    

Adjusted Revenue (A)

  $3,593   $3,552   $3,272   $3,002  

GAAP Operating Profit

  $1,028   $999   $842   $758  

Add: Purchase Accounting Adjustment to Acquired Deferred Revenue

   11    2    7    9  

Add: Purchase Accounting Adjustment to Acquired Revenue

   -      -      26    -    

Add: Acquisition-Related Inventory Step-up Charge

   5    1    -      -    

Add: Transaction Expenses

   -      -      -      6  

Add: Credit Facility Write-off

   -      -      -      1  

Add: Vendor-Supplied Component Quality Issue

   -      -      9    -    

Rounding

   (1  1    1    (1

Adjusted Operating Profit (B)

   1,043    1,003    885    773  

GAAP Operating Margin

   28.7  28.2  26.0  25.3

Adjusted Operating Margin (B) / (A)

   29.0  28.2  27.0  25.7

Table 2: Full Year GAAP DEPS to Adjusted DEPS Reconciliation

   2015  2014  2013   2012 

GAAP Diluted Earnings Per Share (DEPS)

   $6.85    $6.40    $5.37     $4.86  

Minus: Gain on Sale of Divested Business

   ($0.33    

Add: Impairment Charge on Minority Investment

   $0.06      

Add: Purchase Accounting Adjustment to Acquired Deferred Revenue

   $0.07    $0.02    $0.05     $0.06  

Add: Purchase Accounting Adjustment to Acquired Revenue

     $0.17    

Add: Acquisition-Related Inventory Step-up Charge

   $0.03    $0.01     

Add: Transaction Expenses

       $0.01  

Add: Credit Facility Write-off

       $0.04  

Add: Vendor-Supplied Component Quality Issue

     $0.06    

Rounding

       ($0.01       ($0.01

Adjusted DEPS

   $6.68    $6.42    $5.65     $4.96  

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Table 3: 2015 EBITDA and EBITDA Margin Reconciliation

(in millions, except percentages)

   2015 

GAAP Revenue

  $3,582.4  

Add: Purchase Accounting Adjustment to Acquired Deferred Revenue

   10.6  

Rounding

   -    

Adjusted Revenue (A)

  $3,593.0  

GAAP Net Earnings

  $696.1  

Add: Taxes

   306.3  

Add: Amortization

   166.1  

Add: Interest Expense

   84.2  

Add: Depreciation

   38.2  

Add: Purchase Accounting Adjustment to Acquired Deferred Revenue

   10.6  

Add: Acquisition-Related Inventory Step-up Charge

   4.6  

Add: Impairment Charge on Minority Investment

   9.5  

Less: Gain on Disposal of a Business

   (70.9

EBITDA (B)

   1,244.7  

EBITDA Margin (B) / (A)

   34.6

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APPENDIX B—ROPER TECHNOLOGIES, INC. 2016 INCENTIVE PLAN

ROPER TECHNOLOGIES, INC.

2016 INCENTIVE PLAN

ARTICLE 1

PURPOSE

1.1.GENERAL. The purpose of the Roper Technologies, Inc. 2016 Incentive Plan (as may be amended from time to time, the “Plan”) is to promote the success, and enhance the value, of Roper Technologies, Inc. (together with any successor, the “Company”), by linking the personal interests of employees, officers, directors and consultants of the Company or any Affiliate (as defined below) to those of Company shareholders and by providing such persons with an incentive for outstanding performance. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of employees, officers, directors and consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent. Accordingly, the Plan permits the grant of incentive awards from time to time to selected employees, officers, directors and consultants of the Company and its Affiliates.

ARTICLE 2

DEFINITIONS

2.1.DEFINITIONS. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:

(a) “Affiliate” means (i) any Subsidiary or Parent, or (ii) an entity that directly or through one or more intermediaries controls, is controlled by or is under common control with, the Company, as determined by the Committee.

(b) “Award” means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Deferred Stock Unit, Performance Award, Dividend Equivalent, Other Stock-Based Award, or any other right or interest relating to Stock or cash, granted to a Participant under the Plan.

(c) “Award Certificate” means a written document, in such form as the Committee prescribes from time to time, setting forth the terms and conditions of an Award. Award Certificates may be in the form of individual award agreements or certificates or a program document describing the terms and provisions of an Awards or series of Awards under the Plan.

(d) “Board” means the Board of Directors of the Company.

(e) “Cause” as a reason for a Participant’s termination of employment shall have the meaning assigned such term in the employment, severance or similar agreement, if any, between such Participant and the Company or an Affiliate, provided, however that if there is no such employment, severance or similar agreement in which such term is defined, and unless otherwise defined in the applicable Award Certificate, “Cause” shall mean any of the following acts by the Participant, as determined by the Board: gross neglect of duty, prolonged absence from duty without the consent of the Company, intentionally engaging in any activity that is in conflict with or adverse to the business or other interests of the Company, or willful misconduct, misfeasance or malfeasance of duty which is reasonably determined to be detrimental to the Company. With respect to a Participant’s termination of directorship, “Cause” means an act or failure to act that constitutes cause for removal of a director under applicable Delaware law. The determination of the Committee as to the existence of “Cause” shall be conclusive on the Participant and the Company.

(f) “Change in Control” means and includes the occurrence of any one of the following events:

(1) The acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of 25% or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (i) any acquisition by a Person who is on the

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Effective Date the beneficial owner of 25% or more of the Outstanding Company Voting Securities, (ii) any acquisition directly from the Company, (iii) any acquisition by the Company, (iv) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (v) any acquisition by any corporation pursuant to a transaction which complies with clauses (i), (ii) and (iii) of subsection (3) of this definition; or

(2) Individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

(3) Consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), in each case, unless, following such Business Combination, (i) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Company Voting Securities, and (ii) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 25% or more of the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination.

(g) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and includes a reference to any applicable regulations thereunder and any successor or similar provision.

(h) “Committee” means the committee of the Board described in Article 4.

(i) “Continuous Status as a Participant” means the absence of any interruption or termination of service as an employee, officer, consultant or director of the Company or any Affiliate, as applicable; provided, however, that for purposes of an Incentive Stock Option “Continuous Status as a Participant” means the absence of any interruption or termination of service as an employee of the Company or any Parent or Subsidiary, as applicable, pursuant to applicable tax regulations. Continuous Status as a Participant shall not be considered interrupted in any of the following cases: (i) a Participant transfers employment between the Company and an Affiliate or between Affiliates, (ii) in the discretion of the Committee as specified at or prior to such occurrence, in the case of a spin-off, sale or disposition of the Participant’s employer from the Company or any Affiliate, (iii) unless otherwise determined by the Committee at the time of any such change, a Participant’s change in status among employee, director or consultant of the Company or an Affiliate, (iv) a Participant’s short-term disability, or (v) a Participant’s leave of absence authorized in writing by the Company prior to its commencement; provided, however, that for purposes of Incentive Stock Options, if any such leave exceeds 90 days, and the Participant’s reemployment upon expiration of such leave is not guaranteed by statute or contract, then on the 91st day of such leave any Incentive Stock Option held by the Participant shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Whether military, government or other service or other leave of absence shall constitute a termination of Continuous Status as a Participant shall be determined in each case by the Committee at its discretion, and any determination by the Committee shall be final and conclusive; provided, however, that for purposes of any Award that is subject to Code Section 409A, the determination of a leave of absence must comply with the requirements of a “bona fide leave of absence” as provided in Treas. Reg. Section 1.409A-1(h).

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(j) “Covered Employee” means a covered employee as defined in Code Section 162(m)(3).

(k) “Deferred Stock Unit” means a right granted to a Participant under Article 10 to receive Shares (or the equivalent value in cash or other property if the Committee so provides) at a future time as determined by the Committee, or as determined by the Participant within guidelines established by the Committee in the case of voluntary deferral elections.

(l) “Disability” of a Participant means that the Participant (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant’s employer. If the determination of Disability relates to an Incentive Stock Option, Disability means that condition described in Section 22(e)(3) of the Code. In the event of a dispute, the determination of whether a Participant is Disabled will be made by the Committee and may be supported by the advice of a physician competent in the area to which such Disability relates.

(m) “Dividend Equivalent” means a right granted to a Participant under Article 12.

(n) “Effective Date” has the meaning assigned such term in Section 3.1.

(o) “Eligible Participant” means an employee, officer, consultant or director of the Company or any Affiliate.

(p) “Exchange” means the New York Stock Exchange or any national securities exchange on which the Stock may from time to time be listed or traded.

(q) “Fair Market Value” means, on any date, (i) if the Stock is listed on a securities exchange, the closing sales price on the principal such exchange on such date or, in the absence of reported sales on such date, the closing price on the immediately preceding date on which sales were reported, (ii) if the Stock is not listed on a securities exchange, the mean between the bid and offered prices of the Stock as quoted by the applicable interdealer quotation system for such date, or (iii) fair market value as determined by such other method as the Committee determines in good faith to be reasonable.

(r) “Full-Value Award” means any Award other than an Option or SAR, and which is settled by the issuance of Stock (or at the discretion of the Committee, settled in cash valued by reference to Stock value).

(s) “Good Reason” has the meaning assigned such term in an employment, severance or similar agreement, if any, between a Participant and the Company or an Affiliate; provided, however, that if there is no such employment, severance or similar agreement in which such term is defined, “Good Reason” shall have the meaning, if any, given such term in the applicable Award Certificate. If not defined in any such document, the term “Good Reason” as used herein shall not apply to a particular Award.

(t) “Grant Date” of an Award means the first date on which all necessary corporate action has been taken to approve the grant of the Award as provided in the Plan, or such later date as is determined and specified as part of that authorization process. Notice of the grant shall be provided to the grantee within a reasonable time after the Grant Date.

(u) “Incentive Stock Option” means an Option that is intended to be an incentive stock option and meets the requirements of Section 422 of the Code or any successor provision thereto.

(v) “Independent Directors” means those members of the Board of Directors who qualify at any given time as an “independent” director under the applicable rules of each Exchange on which the Shares are listed.

(w) “Non-Employee Director” means a director of the Company who is not a common law employee of the Company or an Affiliate.

(x) “Nonstatutory Stock Option” means an Option that is not an Incentive Stock Option.

(y) “Option” means a right granted to a Participant under Article 7 of the Plan to purchase Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option.

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(z) “Other Stock-Based Award” means a right, granted to a Participant under Article 13, that relates to or is valued by reference to Stock or other Awards relating to Stock.

(aa) “Parent” means a corporation, limited liability company, partnership or other entity which owns or beneficially owns a majority of the outstanding voting stock or voting power of the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Parent shall have the meaning set forth in Section 424(e) of the Code.

(bb) “Participant” means an Eligible Participant who has been granted an Award under the Plan; provided that in the case of the death of a Participant, the term “Participant” refers to a beneficiary designated pursuant to Section 14.4 or the legal guardian or other legal representative acting in a fiduciary capacity on behalf of the Participant under applicable state law and court supervision.

(cc) “Performance Award” means an Award granted pursuant to Article 9.

(dd) “Person” means any individual, entity or group, within the meaning of Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3) or 14(d)(2) of the 1934 Act.

(ee) “Prior Plan” means the Roper Technologies, Inc. Amended and Restated 2006 Incentive Plan.

(ff) “Qualified Performance-Based Award” means an Award that is either (i) intended to qualify for the Section 162(m) Exemption and is made subject to performance goals based on Qualified Business Criteria as set forth in Section 11.2, or (ii) an Option or SAR having an exercise price equal to or greater than the Fair Market Value of the underlying Stock as of the Grant Date.

(gg) “Qualified Business Criteria” means one or more of the Business Criteria listed in Section 11.2 upon which performance goals for certain Qualified Performance-Based Awards may be established by the Committee.

(hh) “Restricted Stock” means Stock granted to a Participant under Article 10 that is subject to certain restrictions and to risk of forfeiture.

(ii) “Restricted Stock Unit” means the right granted to a Participant under Article 10 to receive shares of Stock (or the equivalent value in cash or other property if the Committee so provides) in the future, which right is subject to certain restrictions and to risk of forfeiture.

(jj) “Retirement” means a Participant’s voluntary termination of employment with the Company or an Affiliate after attaining any normal or early retirement age specified in any pension, profit sharing or other retirement program sponsored by the Company, or, in the event of the inapplicability thereof with respect to the Participant in question and except as otherwise determined by the Committee, after attaining age 65 with at least five years of service with the Company or its Affiliates.

(kk) “Section 162(m) Exemption” means the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code or any successor provision thereto.

(ll) “Shares” means shares of the Company’s Stock. If there has been an adjustment or substitution with respect to the Shares (whether or not pursuant to Article 15), the term “Shares” shall also include any shares of stock or other securities that are substituted for Shares or into which Shares are adjusted.

(mm) “Stock” means the $0.01 par value Common Stock of the Company and such other securities of the Company as may be substituted for Stock pursuant to Article 15.

(nn) “Stock Appreciation Right” or “SAR” means a right granted to a Participant under Article 8 to receive a payment (in cash or Stock) equal to the difference between the Fair Market Value of a Share as of the date of exercise of the SAR over the base price of the SAR, all as determined pursuant to Article 8.

(oo) “Subsidiary” means any corporation, limited liability company, partnership or other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company. Notwithstanding the above, with respect to an Incentive Stock Option, Subsidiary shall have the meaning set forth in Section 424(f) of the Code.

(pp) “1933 Act” means the Securities Act of 1933, as amended from time to time.

(qq) “1934 Act” means the Securities Exchange Act of 1934, as amended from time to time.

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ARTICLE 3

EFFECTIVE TERM OF PLAN

3.1.EFFECTIVE DATE. The Plan first became effective on May 27, 2016, the date that it was approved by the shareholders of the Company (the “Effective Date”).

3.2.TERMINATION OF PLAN. The Plan shall terminate on the tenth anniversary of the Effective Date unless earlier terminated as provided herein. The termination of the Plan shall not affect the validity of any Award outstanding on the date of termination.

ARTICLE 4

ADMINISTRATION

4.1.COMMITTEE. The Plan shall be administered by a Committee appointed by the Board (which Committee shall consist of two or more Independent Directors) or, at the discretion of the Board from time to time, the Plan may be administered by the Board. The members of the Committee shall be appointed by, and may be changed at any time and from time to time in the discretion of, the Board. Unless and until changed by the Board, the Compensation Committee of the Board is designated as the Committee to administer the Plan. The Board may reserve to itself any or all of the authority and responsibility of the Committee under the Plan or may act as administrator of the Plan for any and all purposes. To the extent the Board has reserved any authority and responsibility or during any time that the Board is acting as administrator of the Plan, it shall have all the powers and protections of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.1) shall include the Board. To the extent any action of the Board under the Plan conflicts with actions taken by the Committee, the actions of the Board shall control. Notwithstanding the foregoing, grants of Awards to Non-Employee Directors under the Plan shall be made only in accordance with the terms, conditions and parameters of a plan, program or policy for the compensation of Non-Employee Directors as in effect from time to time that is approved and administered by a committee of the Board consisting solely of Independent Directors and is in accordance with Section 5.4(b) hereof.

4.2.ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of administering the Plan, the Committee may from time to time adopt rules, regulations, guidelines and procedures for carrying out the provisions and purposes of the Plan and make such other determinations, not inconsistent with the Plan, as the Committee may deem appropriate. The Committee’s interpretation of the Plan, any Awards granted under the Plan, any Award Certificate and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties and shall be given the maximum deference permitted by applicable law. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s or an Affiliate’s independent certified public accountants, Company counsel or any executive compensation consultant or other professional retained by the Company or the Committee to assist in the administration of the Plan. No member of the Committee will be liable for any good faith determination, act or omission in connection with the Plan or any Award.

4.3.AUTHORITY OF COMMITTEE. Except as provided herein, the Committee has the exclusive power, authority and discretion to:

(a) Grant Awards;

(b) Designate Participants;

(c) Determine the type or types of Awards to be granted to each Participant;

(d) Determine the number of Awards to be granted and the number of Shares or dollar amount to which an Award will relate;

(e) Determine the terms and conditions of any Award granted under the Plan;

(f) Prescribe the form of each Award Certificate, which need not be identical for each Participant;

(g) Decide all other matters that must be determined in connection with an Award;

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(h) Establish, adopt or revise any rules, regulations, guidelines or procedures as it may deem necessary or advisable to administer the Plan;

(i) Make all other decisions and determinations that may be required under the Plan or as the Committee deems necessary or advisable to administer the Plan;

(j) Amend the Plan or any Award Certificate as provided herein;

(k) Correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the manner and to the extent it deems necessary to carry out the intent of the Plan; and

(l) Adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of non-U.S. jurisdictions in which the Company or any Affiliate may operate, in order to assure the viability of the benefits of Awards granted to participants located in such other jurisdictions and to meet the objectives of the Plan.

Notwithstanding the foregoing:

(1) The Board or the Committee may, by resolution, expressly delegate to a special committee, consisting of one or more directors who may but need not be officers of the Company, the authority, within specified parameters, to (i) designate officers, employees and/or consultants of the Company or any of its Affiliates to be recipients of Awards under the Plan, and (ii) to determine the number of such Awards to be received by any such Participants; provided, however, that such delegation of duties and responsibilities to an officer of the Company may not be made with respect to the grant of Awards to eligible participants (a) who are subject to Section 16(a) of the 1934 Act at the Grant Date, or (b) who as of the Grant Date are reasonably anticipated to be become Covered Employees during the term of the Award. The acts of such delegates shall be treated hereunder as acts of the Board and such delegates shall report regularly to the Board and the Compensation Committee regarding the delegated duties and responsibilities and any Awards so granted.

(2) The Board may from time to time reserve to the Independent Directors (or any subset thereof), as a group, any or all of the authority and responsibility of the Committee under the Plan. To the extent and during such time as the Board has so reserved any authority and responsibility, the Independent Directors shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4.3) shall include the Independent Directors. To the extent any action of the Independent Directors under the Plan made within such authority conflicts with actions taken by the Committee, the actions of the Independent Directors shall control.

ARTICLE 5

SHARES SUBJECT TO THE PLAN

5.1.NUMBER OF SHARES. Subject to adjustment as provided in Sections 5.2 and 15.1, the aggregate number of Shares reserved and available for issuance pursuant to Awards granted under the Plan from the Effective Date shall be (i) 7,924,932, (ii) plus the number of Shares (not to exceed 2,075,068) remaining available for issuance under the Prior Plan but not subject to outstanding awards as of the Effective Date, plus (iii) the number of additional Shares underlying awards outstanding under the Prior Plan as of the Effective Date (not to exceed 4,616,583) that thereafter terminate or expire unexercised, or are cancelled, forfeited or lapse for any reason after the Effective Date. The maximum number of Shares that may be issued upon exercise of Incentive Stock Options granted under the Plan shall be the sum of the foregoing. From and after the Effective Date, no further awards shall be granted under the Prior Plan.

5.2.SHARE COUNTING.

(a) Awards of Options and Stock Appreciation Rights shall count against the number of Shares remaining available for issuance pursuant to Awards granted under the Plan as 1.0 Share for each Share covered by such Awards, and Full-Value Awards shall count against the number of Shares remaining available for issuance pursuant to Awards granted under the Plan as 3.0 Shares for each Share covered by such Awards.

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(b) The full number of Shares subject to an Option shall count against the number of Shares remaining available for issuance pursuant to Awards granted under the Plan, even if the exercise price of the Option is satisfied through net-settlement or by delivering Shares to the Company (by either actual delivery or attestation).

(c) Upon exercise of Stock Appreciation Rights that are settled in Shares, the full number of Stock Appreciation Rights (rather than any lesser number based on the net number of Shares actually delivered upon exercise) shall count against the number of Shares remaining available for issuance pursuant to Awards granted under the Plan.

(d) Shares withheld from an Award to satisfy tax withholding requirements shall count against the number of Shares remaining available for issuance pursuant to Awards granted under the Plan, and Shares delivered by a Participant to satisfy tax withholding requirements shall not be added to the Plan share reserve.

(e) To the extent that an Award is canceled, terminates, expires, is forfeited or lapses for any reason, any unissued or forfeited Shares subject to the Award (based on the number set forth in clause (a)) will again be available for issuance pursuant to Awards granted under the Plan.

(f) Shares subject to Awards settled in cash will again be available for issuance pursuant to Awards granted under the Plan.

(g) Substitute Awards granted pursuant to Section 14.10 of the Plan shall not count against the Shares otherwise available for issuance under the Plan under Section 5.1.

(h) Subject to applicable Exchange requirements, shares available under a shareholder-approved plan of a company acquired by the Company (as appropriately adjusted to Shares to reflect the transaction) may be issued under the Plan pursuant to Awards granted to individuals who were not employees of the Company or its Affiliates immediately before such transaction and will not count against the maximum share limitation specified in Section 5.1.

5.3.STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.

5.4.LIMITATION ON INDIVIDUAL AWARDS.

(a)Employee Awards. Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided in Section 15.1): (i) the maximum number of Shares with respect to one or more Options and/or SARs that may be granted during any calendar year under the Plan to any one Participant is 450,000; (ii) the maximum number of Shares with respect to Full-Value Awards that are Performance Awards granted in any calendar year to any one Participant is 450,000; and (iii) the aggregate dollar value of any cash-based Performance Award that may be paid to any one Participant during any one calendar year under the Plan is $10,000,000 For purposes of applying the foregoing limits in the case of multi-year performance periods, the amount of cash or property or number of Shares deemed granted or paid with respect to any year is the total amount payable or Shares earned for the performance period divided by the number of years in the performance period.

(b)Non-Employee Director Awards. Notwithstanding any provision in the Plan to the contrary (but subject to adjustment as provided in Section 15.1), the maximum aggregate number of Shares associated with any Award granted under the Plan in any calendar year to any one Non-Employee Director (other than a non-executive chairman) is 6,000 Shares.

5.5.MINIMUM VESTING REQUIREMENTS FOR OPTIONS AND SARS. Except in the case of substitute Awards granted pursuant to Section 14.10 and subject to the following sentence, any Options or Stock Appreciation Rights granted under the Plan to an Eligible Participant shall not vest less than one year following the Grant Date. Notwithstanding the foregoing, (i) the Committee may permit and authorize acceleration of vesting of Options and SARs in the event of the Participant’s death or disability or upon, or in connection with Participant’s termination of service following a Change in Control, and (ii) the Committee may grant Options and SARs without respect to the above-described minimum vesting requirements, or may permit and authorize acceleration of vesting of Options and SARs otherwise subject to the above-described minimum vesting requirements, with respect to Options and SARs covering 5% or fewer of the total number of Shares authorized under the Plan.

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ARTICLE 6

ELIGIBILITY

6.1.GENERAL. Awards may be granted only to Eligible Participants; except that Incentive Stock Options may be granted to only to Eligible Participants who are employees of the Company or a Parent or Subsidiary as defined in Section 424(e) and (f) of the Code. Eligible Participants who are service providers to an Affiliate may be granted Options or SARs under this Plan only if the Affiliate qualifies as an “eligible issuer of service recipient stock” within the meaning of §1.409A-1(b)(5)(iii)(E) of the final regulations under Code Section 409A.

ARTICLE 7

STOCK OPTIONS

7.1.GENERAL. The Committee is authorized to grant Options to Participants on the following terms and conditions:

(a)Exercise Price. The exercise price per Share under an Option shall be determined by the Committee, provided that the exercise price for any Option (other than an Option issued as a substitute Award pursuant to Section 14.10) shall not be less than the Fair Market Value as of the Grant Date.

(b)Time and Conditions of Exercise. The Committee shall determine the time or times at which an Option may be exercised in whole or in part. The Committee shall also determine the performance or other conditions, if any, that must be satisfied before all or part of an Option may be exercised or vested.

(c)Exercise Term. In no event may any Option be exercisable for more than ten years from the Grant Date.

(d)Method of Payment. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, and the methods by which Shares shall be delivered or deemed to be delivered to Participants. As determined by the Committee at or after the Grant Date, payment of the exercise price of an Option may be made, in whole or in part, in the form of (i) cash or cash equivalents, (ii) delivery (by either actual delivery or attestation) of previously-acquired Shares based on the Fair Market Value of the Shares on the date the Option is exercised, (iii) withholding of Shares from the Option based on the Fair Market Value of the Shares on the date the Option is exercised, (iv) broker-assisted market sales, or (v) any other “cashless exercise” arrangement.

(e)Prohibition on Repricing. Except as otherwise required pursuant to Section 15.1, without the prior approval of the shareholders of the Company: (i) the exercise price of an Option may not be reduced, directly or indirectly, (ii) an Option may not be cancelled in exchange for an Option, SAR or other Award with an exercise, base or purchase price that is less than the exercise price of the original Option or for a Full-Value Award, and (iii) the Company may not repurchase an Option for value (in cash or otherwise) from a Participant if the then-current Fair Market Value of the Shares underlying the Option is lower than the exercise price per share of the Option.

7.2.INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options granted under the Plan must comply with the requirements of Section 422 of the Code. If all of the requirements of Section 422 of the Code are not met, the Option shall automatically become a Nonstatutory Stock Option.

ARTICLE 8

STOCK APPRECIATION RIGHTS

8.1.GRANT OF STOCK APPRECIATION RIGHTS. The Committee is authorized to grant Stock Appreciation Rights to Participants on the following terms and conditions:

(a)Base Price. The base price per Share under a Stock Appreciation Right shall be determined by the Committee, provided that the base price for any Stock Appreciation Right (other than a Stock Appreciation Right issued as a substitute Award pursuant to Section 14.10) shall not be less than the Fair Market Value as of the Grant Date.

(b)Time and Conditions of Exercise.The Committee shall determine the time or times at which a Stock Appreciation Right may be exercised in whole or in part.

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(c)Exercise Term. In no event may any Stock Appreciation Right be exercisable for more than ten years from the Grant Date.

(d)Other Terms. All Stock Appreciation Rights shall be evidenced by an Award Certificate. Subject to the limitations of this Article 8, the terms, methods of exercise, methods of settlement, form of consideration payable in settlement, and any other terms and conditions of any Stock Appreciation Right shall be determined by the Committee at the time of the grant of the Award and shall be reflected in the Award Certificate.

(e)Prohibition on Repricing. Except as otherwise required pursuant to Section 15.1, without the prior approval of the shareholder of the Company: (i) the base price of a Stock Appreciation Right may not be reduced, directly or indirectly (ii) a Stock Appreciation Right may not be cancelled in exchange for an Option, SAR or other Award with an exercise, base or purchase price that is less than the base price of the original Stock Appreciation Right or for a Full-Value Award, and (iii) the Company may not repurchase a Stock Appreciation Right for value (in cash or otherwise) from a Participant if the then-current Fair Market Value of the Shares underlying the Stock Appreciation Right is lower than the base price per share of the Stock Appreciation Right.

ARTICLE 9

PERFORMANCE AWARDS

9.1.GRANT OF PERFORMANCE AWARDS. The Committee is authorized to grant any Award under this Plan, including cash-based Awards, with performance-based vesting criteria, on such terms and conditions as may be selected by the Committee. Any such Awards with performance-based vesting criteria are referred to herein as Performance Awards. The Committee shall have the complete discretion to determine the number of Performance Awards granted to each Participant, subject to Section 5.4, and to designate the provisions of such Performance Awards as provided in Section 4.3. All Performance Awards shall be evidenced by an Award Certificate or a written program established by the Committee, pursuant to which Performance Awards are awarded under the Plan under uniform terms, conditions and restrictions set forth in such written program.

9.2.PERFORMANCE GOALS. The Committee may establish performance goals for Performance Awards which may be based on any criteria selected by the Committee. Such performance goals may be described in terms of Company-wide objectives or in terms of objectives that relate to the performance of the Participant, an Affiliate or a division, region, department or function within the Company or an Affiliate. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company or the manner in which the Company or an Affiliate conducts its business, or other events or circumstances render performance goals to be unsuitable, the Committee may modify such performance goals in whole or in part, as the Committee deems appropriate. If a Participant is promoted, demoted or transferred to a different business unit or function during a performance period, the Committee may determine that the performance goals or performance period are no longer appropriate and may (i) adjust, change or eliminate the performance goals or the applicable performance period as it deems appropriate to make such goals and period comparable to the initial goals and period, or (ii) make a cash payment to the participant in an amount determined by the Committee. The foregoing two sentences shall not apply with respect to a Performance Award that is intended to be a Qualified Performance-Based Award if the recipient of such award (a) was a Covered Employee on the date of the modification, adjustment, change or elimination of the performance goals or performance period, or (b) in the reasonable judgment of the Committee, may be a Covered Employee on the date the Performance Award is expected to be paid.

ARTICLE 10

RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS

10.1.GRANT OF RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS. The Committee is authorized to make Awards of Restricted Stock, Restricted Stock Units or Deferred Stock Units to Participants in such amounts and subject to such terms and conditions as may be selected by the Committee. An Award of Restricted Stock, Restricted Stock Units or Deferred Stock Units shall be evidenced by an Award Certificate setting forth the terms, conditions, and restrictions applicable to the Award.

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10.2.ISSUANCE AND RESTRICTIONS. Restricted Stock, Restricted Stock Units or Deferred Stock Units shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, upon the satisfaction of performance goals or otherwise, as the Committee determines at the time of the grant of the Award or thereafter. Except as otherwise provided herein or in an Award Certificate or any special Plan document governing an Award, the Participant shall have all of the rights of a shareholder with respect to the Restricted Stock, and the Participant shall have none of the rights of a shareholder with respect to Restricted Stock Units or Deferred Stock Units until such time as Shares of Stock are paid in settlement of the Restricted Stock Units or Deferred Stock Units. Unless otherwise provided in the applicable Award Certificate, Awards of Restricted Stock will be entitled to full dividend rights and any dividends paid thereon will be paid or distributed to the holder no later than the end of the calendar year in which the dividends are paid to shareholders or, if later, the 15th day of the 3rd month following the date the dividends are paid to shareholders. In no event shall dividends with respect to an award of Restricted Stock or Restricted Stock Units that is subject to performance-based conditions be paid or distributed unless and until the performance-based conditions are met.

10.3.FORFEITURE. Subject to the terms of the Award Certificate and except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of Continuous Status as a Participant during the applicable restriction period or upon failure to satisfy a performance goal during the applicable restriction period, Restricted Stock or Restricted Stock Units that are at that time subject to restrictions shall be forfeited.

10.4.DELIVERY OF RESTRICTED STOCK. Shares of Restricted Stock shall be delivered to the Participant either by book-entry registration or by delivering to the Participant, or a custodian or escrow agent (including, without limitation, the Company or one or more of its employees) designated by the Committee, a stock certificate or certificates registered in the name of the Participant. If physical certificates representing shares of Restricted Stock are registered in the name of the Participant, such certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock.

ARTICLE 11

QUALIFIED PERFORMANCE-BASED AWARDS

11.1.OPTIONS AND STOCK APPRECIATION RIGHTS. The provisions of the Plan are intended to enable Options and Stock Appreciation Rights granted hereunder to any Covered Employee to qualify for the Section 162(m) Exemption.

11.2.OTHER AWARDS. When granting any other Award, the Committee may designate such Award as a Qualified Performance-Based Award, based upon a determination that the recipient is or may be a Covered Employee with respect to such Award, and the Committee wishes such Award to qualify for the Section 162(m) Exemption. If an Award is so designated (and subject to the Award limits set forth in Section 5.4(a) of the Plan), the Committee shall establish performance goals for such Award within the time period prescribed by Section 162(m) of the Code based on one or more of the following Qualified Business Criteria, which may be expressed in terms of Company-wide objectives or in terms of objectives that relate to the performance of an Affiliate or a division, region, department or function within the Company or an Affiliate:

—Revenue

—Sales

—Profit (net profit, gross profit, operating profit, economic profit, profit margins or other corporate profit measures)

—Earnings (EBIT, EBITDA, earnings per share, or other corporate earnings measures)

—Net income (before or after taxes, operating income or other income measures)

—Cash (cash flow, free cash flow, cash generation or other cash measures)

—Cash return on investment

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—Stock price or performance

—Total shareholder return (stock price appreciation plus reinvested dividends divided by beginning share price)

—Economic value added

—Market share

—Improvements in capital structure

—Expenses (expense management, expense ratio, expense efficiency ratios or other expense measures)

—Business expansion or consolidation (acquisitions and divestitures)

—Internal rate of return or increase in net present value

—Working capital targets relating to inventory and/or accounts receivable

—Productivity measures

—Cost reduction measures

—Capital structure optimization

—Strategic plan development and implementation

—Return measures (including, but not limited to, return on assets, capital, equity, investments, gross investments, revenue or sales, and includes cash flow returns on assets, capital, equity, or sales)

Performance goals with respect to the foregoing Qualified Business Criteria may be specified in absolute terms, on an adjusted basis, in percentages, or in terms of growth from period to period or growth rates over time, as well as measured relative to the performance of a group of comparator companies, or a published or special index, or a stock market index, that the Committee deems appropriate. Any member of a comparator group or an index that ceases to exist during a measurement period shall be disregarded for the entire measurement period. Performance Goals need not be based upon an increase or positive result under a business criterion and could include, for example, the maintenance of the status quo or the limitation of economic losses (measured, in each case, by reference to a specific business criterion). Performance measures may but need not be determinable in conformance with generally accepted accounting principles.

11.3.PERFORMANCE GOALS. Each Qualified Performance-Based Award (other than a market-priced Option or SAR) shall be earned, vested and payable (as applicable) only upon the achievement of performance goals established by the Committee based upon one or more of the Qualified Business Criteria, together with the satisfaction of any other conditions, such as continued employment, as the Committee may determine to be appropriate; provided, however, that the Committee may provide, either in connection with the grant thereof or by amendment thereafter, that achievement of such performance goals will be waived, in whole or in part, upon (i) the termination of employment of a Participant by reason of death or Disability, or (ii) the occurrence of a Change in Control. Performance periods established by the Committee for any such Qualified Performance-Based Award may be as short as three months and may be any longer period. In addition, the Committee may reserve the right, in connection with the grant of a Qualified Performance-Based Award, to exercise negative discretion to determine that the portion of such Award actually earned, vested and/or payable (as applicable) shall be less than the portion that would be earned, vested and/or payable based solely upon application of the applicable performance goals.

11.4.INCLUSIONS AND EXCLUSIONS FROM PERFORMANCE CRITERIA. The Committee may provide in any Qualified Performance-Based Award at the time the performance goals are established, that any evaluation of performance shall exclude or otherwise objectively adjust for any specified circumstance or event that occurs during a performance period, including by way of example but without limitation the following: (a) asset write-downs or impairment charges; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or provisions affecting reported results; (d) accruals for reorganization

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and restructuring programs; (e) events that are of an unusual nature or of a type that indicates infrequency of occurrence as described in then-current accounting principles and identified or discussed in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (f) acquisitions or divestitures; and (g) foreign exchange gains and losses. To the extent such inclusions or exclusions affect Awards to Covered Employees, they shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.

11.5.CERTIFICATION OF PERFORMANCE GOALS. Any payment of a Qualified Performance-Based Award granted with performance goals pursuant to Section 11.3 above shall be conditioned on the written certification of the Committee (which may be approved minutes of a meeting or otherwise) in each case that the performance goals and any other material conditions were satisfied. Except as specifically provided in Section 11.3, no Qualified Performance-Based Award held by a Covered Employee or by an employee who in the reasonable judgment of the Committee may be a Covered Employee on the date of payment, may be amended, nor may the Committee exercise any discretionary authority it may otherwise have under the Plan with respect to a Qualified Performance-Based Award under the Plan, in any manner to waive the achievement of the applicable performance goal based on Qualified Business Criteria or to increase the amount payable pursuant thereto or the value thereof, or otherwise in a manner that would cause the Qualified Performance-Based Award to cease to qualify for the Section 162(m) Exemption.

ARTICLE 12

DIVIDEND EQUIVALENTS

12.1.GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant Dividend Equivalents with respect to Full-Value Awards granted hereunder, subject to such terms and conditions as may be selected by the Committee. Dividend Equivalents shall entitle the Participant to receive payments equal to ordinary cash dividends or distributions with respect to all or a portion of the number of Shares subject to a Full-Value Award, as determined by the Committee. The Committee may provide that Dividend Equivalents (i) will be deemed to have been reinvested in additional Shares or otherwise reinvested, which shall be subject to the same vesting provisions as provided for the host Award; (ii) will be credited by the Company to an account for the Participant and accumulated without interest until the date upon which the host Award becomes vested, and any Dividend Equivalents accrued with respect to forfeited Awards will be reconveyed to the Company without further consideration or any act or action by the Participant; or (iii) except in the case of Performance Awards, will be paid or distributed to the Participant as accrued (in which case, such Dividend Equivalents must be paid or distributed no later than the 15th day of the 3rd month following the later of (A) the calendar year in which the corresponding dividends were paid to shareholders, or (B) the first calendar year in which the Participant’s right to such Dividends Equivalents is no longer subject to a substantial risk of forfeiture). In no event shall Dividend Equivalents with respect to a Performance Award be paid or distributed until the performance-based conditions of the Performance Award are met.

ARTICLE 13

OTHER STOCK-BASED AWARDS

13.1.GRANT OF OTHER STOCK-BASED AWARDS. The Committee is authorized, subject to limitations under applicable law, to grant to Participants such other Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to Shares, as deemed by the Committee to be consistent with the purposes of the Plans, including without limitation convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares, and Awards valued by reference to book value of Shares or the value of securities of or the performance of specified Parents or Subsidiaries. The Committee shall determine the terms and conditions of such Awards which shall be subject to the terms of the Plan.

ARTICLE 14

PROVISIONS APPLICABLE TO AWARDS

14.1.AWARD CERTIFICATES. Each Award shall be evidenced by an Award Certificate. Each Award Certificate shall include such provisions, not inconsistent with the Plan, as may be specified by the Committee. The Committee may provide for the use of electronic, internet or other non-paper Award Certificates, and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by a Participant.

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14.2.FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any applicable law or Award Certificate, payments or transfers to be made by the Company or an Affiliate on the grant or exercise of an Award may be made in such form as the Committee determines at or after the Grant Date, including without limitation, cash, Stock, other Awards, or other property, or any combination, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case determined in accordance with rules adopted by, and at the discretion of, the Committee.

14.3.LIMITS ON TRANSFER. No right or interest of a Participant in any unexercised or restricted Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or an Affiliate, or shall be subject to any lien, obligation, or liability of such Participant to any other party other than the Company or an Affiliate. No unexercised or restricted Award shall be assignable or transferable by a Participant other than by will or the laws of descent and distribution; provided, however, that the Committee may (but need not) permit other transfers (other than transfers for value) where the Committee concludes that such transferability (i) does not result in accelerated taxation, (ii) does not cause any Option intended to be an Incentive Stock Option to fail to be described in Code Section 422(b), and (iii) is otherwise appropriate and desirable, taking into account any factors deemed relevant, including without limitation, state or federal tax or securities laws applicable to transferable Awards.

14.4.BENEFICIARIES. Notwithstanding Section 14.3, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death by filing a beneficiary designation form, in such form as determined by the Committee, with the Company. A beneficiary, legal guardian, legal representative, or other person claiming any rights under the Plan is subject to all terms and conditions of the Plan and any Award Certificate applicable to the Participant, except to the extent the Plan and Award Certificate otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If no beneficiary has been designated or survives the Participant, payment shall be made in accordance with applicable law. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Company.

14.5.STOCK TRADING RESTRICTIONS. All Stock issuable under the Plan is subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with federal or state securities laws, rules and regulations and the rules of any national securities exchange or automated quotation system on which the Stock is listed, quoted, or traded. The Committee may place legends on any Stock certificate or issue instructions to the transfer agent to reference restrictions applicable to the Stock.

14.6.ACCELERATION UPON DEATH OR DISABILITY. Except as otherwise provided in the Award Certificate or any special Plan document governing an Award, upon the termination of a person’s Continuous Status as a Participant by reason of death or Disability, (i) all of such Participant’s outstanding Options, SARs, and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) all time-based vesting restrictions on the Participant’s outstanding Awards shall lapse, and (iii) the target payout opportunities attainable under all of such Participant’s outstanding performance-based Awards shall be deemed to have been fully earned as of the date of termination based upon an assumed achievement of all relevant performance goals at the “target” level and there shall be a pro rata payout to the Participant or his or her estate within 30 days following the date of termination (unless a later date is required by Section 17.4 hereof) based upon the length of time within the performance period that has elapsed prior to the date of termination. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Certificate. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options shall be deemed to be Nonstatutory Stock Options.

14.7.EFFECT OF A CHANGE IN CONTROL. The provisions of this Section 14.7 shall apply in the case of a Change in Control, unless otherwise provided in the Award Certificate or any special Plan document or separate agreement with a Participant governing an Award.

(a)Awards not Assumed or Substituted by Surviving Entity. Upon the occurrence of a Change in Control, and except with respect to any Awards assumed by the surviving entity or otherwise equitably converted or substituted in connection with the Change in Control in a manner approved by the Committee or the Board: (i) outstanding Options, SARs, and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) time-based vesting restrictions on outstanding Awards shall lapse, and (iii) the target

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payout opportunities attainable under all outstanding performance-based Awards shall be deemed to have been fully earned as of the date of the Change in Control based upon an assumed achievement of all relevant performance goals at the “target” level and, subject to Section 17.4, there shall be a pro rata payout to Participants within 30 days following the date of the Change in Control (unless a later date is required by Section 17.4 hereof) based upon the length of time within the performance period that has elapsed prior to the date of the Change in Control. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Certificate. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options shall be deemed to be Nonstatutory Stock Options.

(b)Awards Assumed or Substituted by Surviving Entity. With respect to Awards assumed by the surviving entity or otherwise equitably converted or substituted in connection with a Change in Control: if within two years after the effective date of the Change in Control, a Participant’s employment is terminated without Cause or (subject to the following sentence) the Participant resigns for Good Reason, then (i) all of that Participant’s outstanding Options, SARs and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) all time-based vesting restrictions on the his or her outstanding Awards shall lapse, and (iii) the payout opportunities attainable under all of such Participant’s outstanding performance-based Awards shall be earned based on actual performance through the end of the performance period, and there shall be a pro rata payout to the Participant or his or her estate within 30 days after the amount earned has been determined (unless a later date is required by Section 17.4 hereof) based upon the length of time within the performance period that has elapsed prior to the date of termination. With regard to each Award, a Participant shall not be considered to have resigned for Good Reason unless either (i) the Award Certificate includes such provision or (ii) the Participant is party to an employment, severance or similar agreement with the Company or an Affiliate that includes provisions in which the Participant is permitted to resign for Good Reason. Any Awards shall thereafter continue or lapse in accordance with the other provisions of the Plan and the Award Certificate. To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options shall be deemed to be Nonstatutory Stock Options.

14.8.ACCELERATION UNDER CERTAIN CIRCUMSTANCES. Subject to Section 11.3 as to Qualified Performance-Based Awards and to Section 5.5, the Committee may in its sole discretion at any time determine that, upon the termination of service of a Participant, or the occurrence of a Change in Control, all or a portion of such Participant’s Options, SARs and other Awards in the nature of rights that may be exercised shall become fully or partially exercisable, that all or a part of the restrictions on all or a portion of the Participant’s outstanding Awards shall lapse, and/or that any performance-based criteria with respect to any Awards held by that Participant shall be deemed to be wholly or partially satisfied, in each case, as of such date as the Committee may, in its sole discretion, declare. The Committee may discriminate among Participants and among Awards granted to a Participant in exercising its discretion pursuant to this Section 14.8.

14.9.EFFECT OF ACCELERATION. If an Award is accelerated under Section 14.6, 14.7 or 14.8, the Committee may, in its sole discretion, provide (i) that the Award will expire after a designated period of time after such acceleration to the extent not then exercised, (ii) that the Award will be settled in cash rather than Stock, (iii) that the Award will be assumed by another party to a transaction giving rise to the acceleration or otherwise be equitably converted or substituted in connection with such transaction, (iv) that the Award may be settled by payment in cash or cash equivalents equal to the excess of the Fair Market Value of the underlying Stock, as of a specified date associated with the transaction, over the exercise price of the Award, or (v) any combination of the foregoing. The Committee’s determination need not be uniform and may be different for different Participants whether or not such Participants are similarly situated. To the extent that such acceleration causes Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d), the excess Options shall be deemed to be Nonstatutory Stock Options.

14.10.SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in substitution for stock and stock-based awards held by employees of another entity who become employees of the Company or an Affiliate as a result of a merger or consolidation of the former employing entity with the Company or an Affiliate or the acquisition by the Company or an Affiliate of property or stock of the former employing corporation. The Committee may direct that the substitute Awards be granted on such terms and conditions as the Committee considers appropriate in the circumstances.

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14.11.FORFEITURE EVENTS. Awards under the Plan shall be subject to any compensation recoupment policy that the Company may adopt from time to time that is applicable by its terms to the Participant. In addition, the Committee may specify in an Award Certificate that the Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions of an Award. Such events may include, but shall not be limited to, (i) termination of employment for Cause, (ii) violation of material Company or Affiliate policies, (iii) breach of noncompetition, confidentiality or other restrictive covenants that may apply to the Participant, (iv) other conduct by the Participant that is detrimental to the business or reputation of the Company or any Affiliate, or (v) a later determination that the vesting of, or amount realized from, a Performance Award was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria, whether or not the Participant caused or contributed to such material inaccuracy.

ARTICLE 15

CHANGES IN CAPITAL STRUCTURE

15.1.MANDATORY ADJUSTMENTS. In the event of a nonreciprocal transaction between the Company and its shareholders that causes the per-share value of the Stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large nonrecurring cash dividend), the Committee shall make such adjustments to the Plan and Awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction. Action by the Committee may include: (i) adjustment of the number and kind of shares that may be delivered under the Plan; (ii) adjustment of the number and kind of shares subject to outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards or the measure to be used to determine the amount of the benefit payable on an Award; and (iv) any other adjustments that the Committee determines to be equitable. Without limiting the foregoing, in the event of a subdivision of the outstanding Stock (stock-split), a declaration of a dividend payable in Shares, or a combination or consolidation of the outstanding Stock into a lesser number of Shares, the authorization limits under Sections 5.1 and 5.4 shall automatically be adjusted proportionately, and the Shares then subject to each Award shall automatically, without the necessity for any additional action by the Committee, be adjusted proportionately without any change in the aggregate purchase price therefor.

15.2DISCRETIONARY ADJUSTMENTS. Upon the occurrence or in anticipation of any corporate event or transaction involving the Company (including, without limitation, any merger, reorganization, recapitalization, combination or exchange of shares, or any transaction described in Section 15.1), the Committee may, in its sole discretion, provide (i) that Awards will be settled in cash rather than Stock, (ii) that Awards will become immediately vested and non-forfeitable and, if applicable, exercisable (in whole or in part) and will expire after a designated period of time to the extent not then exercised (provided that Participants shall be provided with advance written notice of any such exercise period), (iii) that Awards will be assumed by another party to a transaction or otherwise be equitably converted or substituted in connection with such transaction, (iv) that outstanding Awards may be settled by payment in cash or cash equivalents equal to the excess of the Fair Market Value of the underlying Stock, as of a specified date associated with the transaction (or the per-shares transaction price), over the exercise or base price of the Award, (v) that performance targets and performance periods for Performance Awards will be modified, consistent with Code Section 162(m) where applicable, or (vi) any combination of the foregoing. The Committee’s determination need not be uniform and may be different for different Participants whether or not such Participants are similarly situated.

15.3GENERAL. Any discretionary adjustments made pursuant to this Article 15 shall be subject to the provisions of Section 16.2. To the extent that any adjustments made pursuant to this Article 15 cause Incentive Stock Options to cease to qualify as Incentive Stock Options, such Options shall be deemed to be Nonstatutory Stock Options.

ARTICLE 16

AMENDMENT, MODIFICATION AND TERMINATION

16.1.AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee may, at any time and from time to time, amend, modify or terminate the Plan without shareholder approval; provided, however, that any amendment or modification to the Plan shall be subject to shareholder approval if such amendment or modification would (i) increase the number of Shares available under the Plan, (ii) otherwise constitute a material

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change requiring shareholder approval under applicable laws, policies or regulations or the applicable listing or other requirements of an Exchange, or (iii) be an amendment to permit a direct or indirect repricing prohibited pursuant to Section 7.1 or 8.1; and provided, further, that the Board or Committee may condition any other amendment or modification on the approval of shareholders of the Company for any reason, including by reason of such approval being necessary or deemed advisable (x) to comply with the listing or other requirements of an Exchange, or (y) to satisfy any other tax, securities or other applicable laws, policies or regulations.

16.2.AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the Committee may amend, modify or terminate any outstanding Award without approval of the Participant; provided, however:

(a) Subject to the terms of the applicable Award Certificate, such amendment, modification or termination shall not, without the Participant’s consent, reduce or diminish the value of such Award determined as if the Award had been exercised, vested, cashed in or otherwise settled on the date of such amendment or termination (with the per-share value of an Option or SAR for this purpose being calculated as the excess, if any, of the Fair Market Value as of the date of such amendment or termination over the exercise or base price of such Award);

(b) The original term of an Option or SAR may not be extended without the prior approval of the shareholders of the Company;

(c) All Options and SARs shall be subject to the prohibitions on repricing set forth in Sections 7.1 and 8.1; and

(d) No termination, amendment, or modification of the Plan shall adversely affect any Award previously granted under the Plan, without the written consent of the Participant affected thereby. An outstanding Award shall not be deemed to be “adversely affected” by a Plan amendment if such amendment would not reduce or diminish the value of such Award determined as if the Award had been exercised, vested, cashed in or otherwise settled on the date of such amendment (with the per-share value of an Option or SAR for this purpose being calculated as the excess, if any, of the Fair Market Value as of the date of such amendment over the exercise or base price of such Award).

16.3.COMPLIANCE AMENDMENTS. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, the Board may amend the Plan or an Award Certificate, to take effect retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan or Award Certificate to any present or future law relating to plans of this or similar nature (including, but not limited to, Section 409A of the Code), and to the administrative regulations and rulings promulgated thereunder. By accepting an Award under this Plan, a Participant agrees to any amendment made pursuant to this Section 16.3 to any Award granted under the Plan without further consideration or action.

ARTICLE 17

GENERAL PROVISIONS

17.1.NO RIGHTS TO AWARDS; NON-UNIFORM DETERMINATIONS. No Participant or any Eligible Participant shall have any claim to be granted any Award under the Plan. Neither the Company, its Affiliates nor the Committee is obligated to treat Participants or Eligible Participants uniformly, and determinations made under the Plan may be made by the Committee selectively among Eligible Participants who receive, or are eligible to receive, Awards (whether or not such Eligible Participants are similarly situated).

17.2. NO SHAREHOLDER RIGHTS. No Award gives a Participant any of the rights of a shareholder of the Company unless and until Shares are in fact issued to such person in connection with such Award.

17.3.WITHHOLDING. The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company or an applicable Affiliate, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any exercise, lapse of restriction or other taxable event arising as a result of the Plan or an Award. The obligations of the Company under the Plan will be conditioned on such payment or arrangements and the Company or such Affiliate will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. Unless otherwise determined by the Committee, at the time the Award is granted or thereafter, any such withholding requirement may be satisfied, in whole or in part, by

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withholding from the Award Shares having a Fair Market Value on the date of withholding equal to the minimum amount required to be withheld for tax purposes (or such greater amount up to the maximum individual statutory rate in the applicable jurisdiction as may be permitted under then-current accounting principles to qualify the Award for equity classification), all in accordance with such procedures as the Committee establishes.

17.4.SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE.

(a)General. It is intended that the payments and benefits provided under the Plan and any Award shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Code. The Plan and all Award Certificates shall be construed in a manner that effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan or any Award is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers (other than in his or her capacity as a Participant) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any Award.

(b)Definitional Restrictions. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, to the extent that any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable, or a different form of payment (e.g., lump sum or installment) of such Non-Exempt Deferred Compensation would be effected, under the Plan or any Award Certificate by reason the occurrence of a Change in Control or the Participant’s Disability or separation from service, such (“Non-Exempt Deferred Compensation”) will not be payable or distributable, and/or such different form of payment will not be effected, to the Participant by reason of such circumstance unless the circumstances giving rise to such Change in Control, Disability or separation from service meet any description or definition of “change in control event,” “disability” or “separation from service,” as the case may be, in Section 409A of the Code and applicable regulations (without giving effect to any elective provisions that may be available under such definition). This provision does not affect the dollar amount or prohibit the vesting of any Award upon a Change in Control, Disability or separation from service, however defined. If this provision prevents the payment or distribution of any amount or benefit, or the application of a different form of payment of any amount or benefit, such payment or distribution shall be made at the time and in the form that would have applied absent the non-409A-conforming event.

(c)Allocation among Possible Exemptions. If any one or more Awards granted under the Plan to a Participant could qualify for any separation pay exemption described in Treas. Reg. Section 1.409A-1(b)(9), but such Awards in the aggregate exceed the dollar limit permitted for the separation pay exemptions, the Company (acting through the Committee or the Head of Human Resources) shall determine which Awards or portions thereof will be subject to such exemptions.

(d)Six-Month Delay in Certain Circumstances. Notwithstanding anything in the Plan or in any Award Certificate to the contrary, if any amount or benefit that would constitute Non-Exempt Deferred Compensation would otherwise be payable or distributable under this Plan or any Award Certificate by reason of a Participant’s separation from service during a period in which the Participant is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes): (i) the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Participant’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Participant’s separation from service (or, if the Participant dies during such period, within 30 days after the Participant’s death) (in either case, the “Required Delay Period”) and (ii) , the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

For purposes of this Plan, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder,provided, however, that, as permitted in such final regulations, the Company’s Specified Employees and its application of the six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted by the Board or any committee of the Board, which shall be applied consistently with respect to all nonqualified deferred compensation arrangements of the Company, including this Plan.

(e)Installment Payments. If, pursuant to an Award, a Participant is entitled to a series of installment payments, such Participant’s right to the series of installment payments shall be treated as a right to a series

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of separate payments and not to a single payment. For purposes of the preceding sentence, the term “series of installment payments” has the meaning provided in Treas. Reg. Section 1.409A-2(b)(2)(iii) (or any successor thereto).

(f)Timing of Release of Claims. Whenever an Award conditions a payment or benefit on the Participant’s execution and non-revocation of a release of claims, such release must be executed and all revocation periods shall have expired within 60 days after the date of termination of the Participant’s employment; failing which such payment or benefit shall be forfeited. If such payment or benefit is exempt from Section 409A of the Code, the Company may elect to make or commence payment at any time during such 60-day period. If such payment or benefit constitutes Non-Exempt Deferred Compensation, then, subject to subsection (d) above, (i) if such 60-day period begins and ends in a single calendar year, the Company may make or commence payment at any time during such period at its discretion, and (ii) if such 60-day period begins in one calendar year and ends in the next calendar year, the payment shall be made or commence during the second such calendar year (or any later date specified for such payment under the applicable Award), even if such signing and non-revocation of the release occur during the first such calendar year included within such 60-day period. In other words, a Participant is not permitted to influence the calendar year of payment based on the timing of signing the release.

(g)Permitted Acceleration. The Company shall have the sole authority to make any accelerated distribution permissible under Treas. Reg. section 1.409A-3(j)(4) to Participants of deferred amounts, provided that such distribution(s) meets the requirements of Treas. Reg. section 1.409A-3(j)(4).

17.5.NO RIGHT TO CONTINUED SERVICE. Neither an Award nor any benefits arising under this Plan shall constitute an employment contract with the Company or any Affiliate and, accordingly, subject to Article 16, this Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company or an of its Affiliates. Nothing in the Plan, any Award Certificate or any other document or statement made with respect to the Plan, shall interfere with or limit in any way the right of the Company or any Affiliate to terminate any Participant’s employment or status as an officer, director or consultant at any time, nor confer upon any Participant any right to continue as an employee, officer, director or consultant of the Company or any Affiliate, whether for the duration of a Participant’s Award or otherwise.

17.6.UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Certificate shall give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate. This Plan is not intended to be subject to ERISA.

17.7.RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or benefit plan of the Company or any Affiliate unless provided otherwise in such other plan.

17.8.EXPENSES. The expenses of administering the Plan shall be borne by the Company and its Affiliates.

17.9.TITLES AND HEADINGS. The titles and headings of the Sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

17.10.GENDER AND NUMBER. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine; the plural shall include the singular and the singular shall include the plural.

17.11.FRACTIONAL SHARES. No fractional Shares shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether such fractional Shares shall be eliminated by rounding up or down.

17.12.GOVERNMENT AND OTHER REGULATIONS.

(a) Notwithstanding any other provision of the Plan, no Participant who acquires Shares pursuant to the Plan may, during any period of time that such Participant is an affiliate of the Company (within the meaning of the rules and regulations of the Securities and Exchange Commission under the 1933 Act), sell such Shares,

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unless such offer and sale is made (i) pursuant to an effective registration statement under the 1933 Act, which is current and includes the Shares to be sold, or (ii) pursuant to an appropriate exemption from the registration requirement of the 1933 Act, such as that set forth in Rule 144 promulgated under the 1933 Act.

(b) Notwithstanding any other provision of the Plan, if at any time the Committee shall determine that the registration, listing or qualification of the Shares covered by an Award upon any Exchange or under any foreign, federal, state or local law or practice, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition of, or in connection with, the granting of such Award or the purchase or receipt of Shares thereunder, no Shares may be purchased, delivered or received pursuant to such Award unless and until such registration, listing, qualification, consent or approval shall have been effected or obtained free of any condition not acceptable to the Committee. Any Participant receiving or purchasing Shares pursuant to an Award shall make such representations and agreements and furnish such information as the Committee may request to assure compliance with the foregoing or any other applicable legal requirements. The Company shall not be required to issue or deliver any certificate or certificates for Shares under the Plan prior to the Committee’s determination that all related requirements have been fulfilled. The Company shall in no event be obligated to register any securities pursuant to the 1933 Act or applicable state or foreign law or to take any other action in order to cause the issuance and delivery of such certificates to comply with any such law, regulation or requirement.

17.13.GOVERNING LAW. To the extent not governed by federal law, the Plan and all Award Certificates shall be construed in accordance with and governed by the laws of the State of Delaware.

17.14.NO LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award shall not in any way affect the right or power of the Company to make adjustments, reclassification or changes in its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets. The Plan shall not restrict the authority of the Company, for proper corporate purposes, to draft or assume awards, other than under the Plan, to or with respect to any person. If the Committee so directs, the Company may issue or transfer Shares to an Affiliate, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Affiliate will transfer such Shares to a Participant in accordance with the terms of an Award granted to such Participant and specified by the Committee pursuant to the provisions of the Plan.

17.15.SEVERABILITY. In the event that any provision of this Plan is found to be invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability will not be construed as rendering any other provisions contained herein as invalid or unenforceable, and all such other provisions will be given full force and effect to the same extent as though the invalid or unenforceable provision was not contained herein.

17.16.INDEMNIFICATION. Each person who is or shall have been a member of the Committee, or of the Board, or an officer of the Company to whom authority was delegated in accordance with Article 4 shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such action, suit, or proceeding against him or her, provided he or she shall give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a result of his or her own willful misconduct or except as expressly provided by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s charter or bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

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ROPER TECHNOLOGIES, INC.

6901 PROFESSIONAL PKWY EAST

SARASOTA, FL 34240

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 ROPER TECHNOLOGIES, INC. For All Withhold All For All Except
  The Board of Directors recommends you vote FOR the following:   
  

1.

 

Election of Directors

   ¨ ¨ ¨
   Nominees:     
01)   Shellye L. Archambeau    06)   Robert E. Knowling, Jr.
   01)02)   Amy Woods Brinkley      06)07)   Wilbur J. Prezzano
   02)03)   John F. Fort, III      07)08)   Laura G. Thatcher
   03)   Brian D. Jellison04)   L. Neil Hunn      08)09)   Richard F. Wallman
   04)05)   Robert D. Johnson      09)10)   Christopher Wright
The Board of Directors recommends you vote FOR the following proposals:ForAgainstAbstain
2.To consider, on a non-binding advisory basis, a resolution approving the compensation of our named executive officers.
3.To ratify of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the year ending December 31, 2019.
The Board of Directors recommends you vote AGAINST the following proposal:   05)   Robert E. Knowling, Jr.
  4.To consider a shareholder proposal regarding political contributions disclosure, if properly presented at the meeting.
NOTE:The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned shareholder(s).If no direction is made, this proxy will be voted FOR the reelection of all nominees listed, FOR Proposal 2, FOR Proposal 3, and AGAINST Proposal 4.   
To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below.    
        
     
     
     
    
    
    
    

 

The Board of Directors recommends you vote FOR the following proposals:ForAgainstAbstain
2.To consider, on a non-binding, advisory basis, a resolution approving the compensation of our named executive officers.¨¨¨
3.To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered accounting firm of the Company.¨¨¨
4.To approve the Roper Technologies, Inc. 2016 Incentive Plan.¨¨¨
5.To transact any other business properly brought before the meeting.

NOTE:The shares represented by this proxy, when properly executed, will be voted in the manner directed herein by the undersigned Shareholder(s).If no direction is made, this proxy will be voted FOR all nominees listed and FOR Proposals 2, 3 and 4.If any other matters properly come before the meeting, the person(s) named in this proxy will vote in their discretion.

For address changes and/or comments, please check this box and write them on the back where indicated. ¨
Please indicate if you plan to attend this meeting. ¨ ¨ 
 Yes No 

 

Please sign your name exactly as it appears hereon. When signing as attorney, executor, administrator, trustee or guardian, please add your title as such. When signing as joint tenants, all parties in the joint tenancy must sign. If a signer is a corporation, please sign in full corporate name by a duly authorized officer. 

 

        
 Signature [PLEASE SIGN WITHIN BOX] Date 
       
Signature (Joint Owners) Date 
 


 

Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting to be

Held on May 27, 2016:June 10, 2019:

The Notice and Proxy Statement and Annual Report to Shareholders are available at www.proxyvote.com.

 

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E07751-P73229E71424-P21824

 

 

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

ANNUAL MEETING OF SHAREHOLDERS

MAY 27, 2016JUNE 10, 2019

The undersigned hereby authorize(s) BRIAN D. JELLISONCHRISTINE E. HERMANN and DAVID B. LINER,JOHN K. STIPANCICH, or either of them as proxies, and each with full power of substitution and revocation, to represent and vote the shares of common stock the undersigned would be entitled to vote if personally present at the Annual Meeting of Shareholders to be held on May 27, 2016,June 10, 2019 at 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240 at 9:308:00 a.m. (local time) and at any adjournments or postponements thereof.

THE SHARES REPRESENTED BY THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED ASIN THE MANNER DIRECTED BY THE SHAREHOLDER. IF NO SUCH DIRECTIONS AREDIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR THE ELECTIONREELECTION OF THE NOMINEES LISTED ON THE REVERSE SIDE, AND FOR PROPOSALSPROPOSAL 2, FOR PROPOSAL 3, AND AGAINST PROPOSAL 4.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED REPLY ENVELOPE.

 

Address Changes/Comments:

  
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