UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

SCHEDULE 14A INFORMATION

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STANDEX INTERNATIONAL CORPORATION

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11 Keewaydin Drive

Salem, New Hampshire 03079

September 8, 201614, 2017

To the Stockholders of Standex International Corporation:

You are cordially invited to attend the Annual Meeting of Stockholders of Standex International Corporation (the “Company”), which will be held at the Burlington Marriott, One Burlington Mall Road, Burlington, Massachusetts 01803, on Thursday, October 27, 201626, 2017 at 11:00 a.m., local time.

We hope that you will be able to attend the meeting.  If you do attend the meeting, you may vote your shares personally.  However, if you cannot do so, it is important that your shares be represented.  All stockholders received a Notice of Internet Availability of Proxy Materials, which provides instructions on how to access the proxy electronically, so that you may vote your shares.  We urge you to read the proxy statement carefully, and to vote your shares by telephone or the Internet, or by requesting a paper copy of the proxy and signing, dating and returning your card in the postage prepaid envelope provided.

Pursuant to the procedures governing the meeting, shareholdersstockholders will be requested to verify their status as stockholders or proxy holders prior to or during meeting attendance.

This booklet includes theThe attached Notice of Annual Meeting and the Proxy Statement both of which containcontains information about the formal business of the Company to be acted on by the stockholders.  In addition,Additionally, at the Annual Meeting, a presentation regarding the operations of your Company and a question and discussion period will also take place.

Thank you in advance for voting your shares, and for your interest in the Company.

Sincerely,

David Dunbar

President/Chief Executive Officer

Chair, Board of Directors

TABLE OF CONTENTS

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

PROXY STATEMENT

PROPOSAL 1 – ELECTION OF DIRECTORS

Nominees Recommended by the Board of Directors

Nominees for Directors For Terms Expiring in 20192020   (“Class II”)

Directors To Continue In Office For Terms Expiring in 2019   (“Class III”)

Directors To Continue In Office For Terms Expiring in 2018  (“Class I”)

Directors To Continue In Office For Terms Expiring in 2017  (“Class II”)

Determination of Independence

Certain Relationships and Related Transactions

STOCK OWNERSHIP IN THE COMPANY

Stock Ownership by Directors, Nominees for Director and Executive Officers

Stock Ownership of Certain Beneficial Owners

EXECUTIVE COMPENSATION

2016 COMPENSATION DISCUSSION AND ANALYSIS

Introduction

Objectives of Executive Compensation Program

Components of Executive Compensation Program

Say-On-Pay

Administration of Executive Compensation Program

Basis for Determination of Target Executive Compensation

Details for Determination of Components of Executive Compensation ProgramRegarding 2017 Targets and results

Base Salary

Annual Incentive Bonus

Long Term Incentive ProgramPlan

Perquisites and Other Benefits

Employment Agreements

Tax and Accounting Aspects of Compensation

Clawback Provision

Stock Ownership Guidelines

Policy Concerning Transactions Involving Company Securities

Risk Considerations in Compensation Programs

COMPENSATION COMMITTEE REPORT

COMPENSATION TABLES AND NARRATIVE DISCUSSION

20162017 SUMMARY COMPENSATION TABLE

20162017 GRANTS OF PLAN-BASED AWARDS

PossibleEstimate Future Payouts Under Non-Equity Incentive Plan Awards

Estimated PossibleFuture Payouts-Equity Incentive Plan

All Other Stock Awards

Outstanding Equity Awards at Fiscal Year EndOUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

NON-QUALIFIED DEFERRED COMPENSATION

STANDEX DEFERRED COMPENSATION PLAN

STOCK VESTED DURING THE FISCAL YEAR

PENSION BENEFITSPension Benefits

PENSION BENEFITS TABLE

Certain Post-Termination Payments and Employment Agreements

OTHER INFORMATION CONCERNING THE COMPANY

BOARD OF DIRECTORS AND ITS COMMITTEES

Board’s Role in Risk Oversight

Compensation Committee

Compensation Committee Interlocks and Insider Participation

Audit Committee

Audit Committee Report

Corporate Governance/Nominating Committee Report

DirectorsDirector Compensation

PROPOSAL 2 – ADVISORY VOTE TO APPROVE THE COMPENSATION OF THE COMPANY’s NAMED EXECUTIVE OFFICERS  

PROPOSAL 3 – APPROVAL OF PERFORMANCE GOALS UNDER THE AMENDED AND RESTATED 2008 LONG TERM INCENTIVE PLAN

Material Terms of the Performance Criteria

Group of Employees Covered

Performance Criteria

Per-Person Maximum Limits

Vote Required for Approval

PROPOSAL 4 – APPROVAL OF AN AMENDMENT TO THE BYLAWS OF THE COMPANY TO ALLOW THE BOARD OF DIRECTORS TO FIX THE NUMBER OF DIRECTORS, FROM TIME TO TIME, WITHIN THE EXISTING RANGE OFSEVEN TO FIFTEEN DIRECTORS.

PROPOSAL 5 – RATIFICATION OF APPOINTMENT OF INDEPENDENTS AUDITORS

AUDITORS

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INDEPENDENT AUDITORS’ FEES

Pre-Approval Policy

REQUESTING DOCUMENTS

OTHER PROPOSALS

Section 16(a) Beneficial Ownership Reporting Compliance

STOCKHOLDER PROPOSALS

11 Keewaydin Drive

Salem, New Hampshire 03079

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders of Standex International Corporation (the “Company”) will be held at the Burlington Marriott, One Burlington Mall Road, Burlington, Massachusetts 01803, on Thursday, October 27, 2016,26, 2017, at 11:00 am, local time for the following purposes:

1.

To elect twothree directors to hold office for three-year terms ending on the date of the Annual Meeting of Stockholders in 2019;2020;

2.

To conduct an advisory vote on the total compensation paid to the named executive officers of the Company;

3.

To approve the material terms of the performance goals under the Company’s Amended and Restated 2008 Long Term Incentive Plan for the purposes of compensation deductibility under Internal Revenue Code Section 162(m);

3.

To approve an amendment of the Bylaws of the Company to allow the Board of Directors to fix the number of directors from time to time, within the existing range of between seven and fifteen;

5.

To ratify the appointment by the Audit Committee of the Board of Directors of Grant Thornton LLP as independent auditor of the Company for the fiscal year ending June 30, 2017;2018; and

4.

To transact such other business as may properly come before the meeting or any adjournments thereof.

The Company has provided each stockholder with a Notice of Internet Availability of Proxy Materials (the “Notice”), which encourages stockholders to review the Notice of Annual Meeting/Proxy Statement and 20162017 Annual Report on Form 10-K on the Internet, at www.envisionreports.com/sxi.  We believe that encouraging electronic reviewing of the proxy statement creates value for stockholders by reducing costs to the Company, eliminating wasteful surplus printed materials, and expediting the tabulation of stockholders’ votes.  The Notice also provides stockholders with information about how to obtain a paper or email copy of the proxy statement, if they prefer.  

Once the proxy materials have been reviewed, we ask stockholders to vote their shares in one of the following ways:

(a)

Call 1-800-652-VOTE (8683), and use your Stockholder Control Number to vote.  This number appears in the shaded bar on the Notice that you received;

(b)

Visit the Internet web sitewebsite at: https://www.envisionreports.com/sxi, or follow your broker’s instructions relative to Internet voting;

(c)

Request a paper or emailed proxy statement by calling 1-866-641-4276 or emailing investorvote@computershare.com and inserting the words “Proxy Materials Standex International Corporation” in the subject line.  Then, after review of the materials, vote via telephone or the Internet or mark, date, sign and mail your proxy card in the prepaid envelope provided; or

(d)

Attend the Annual Meeting and vote in person.  A ballot will be provided to you if you hold Company shares in your own name.  If you hold your shares through a bank or broker (i.e., in “street name”), you must obtain a proxy from your bank or broker to vote the shares at the Annual Meeting.

Alternatively, stockholders may request a paper or emailed proxy statement by calling 1-866-641-4276 or emailing investorvote@computershare.com and inserting the words “Proxy Materials Standex International Corporation” in the subject line.  Then, after review of the materials, vote via telephone or the Internet or mark, date, sign and mail your proxy card in the prepaid envelope provided.

Your vote is important.  Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible.

By Order of the Board of Directors,

Alan J. Glass,Secretary

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September 8, 201614, 2017

Important notice regarding the availability of proxy materials for the Annual Meeting to be held on October 27, 2016.26, 2017.  The 20162017 Notice of Annual Meeting/Proxy Statement and the 20162017 Annual Report on Form 10-K are available for review at www.standex.com under the Investors tab, in the section labeled Annual Reports and Proxy Materials.

The Notice of Internet Availability and Proxy Statement are first being made available to stockholders on or about September 8, 2016.14, 2017.

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STANDEX INTERNATIONAL CORPORATION

PROXY STATEMENT

ANNUAL MEETING OF STOCKHOLDERS

October 27, 201626, 2017

This Proxy Statement is being furnished on or about September 8, 2016,14, 2017, in connection with the solicitation of proxies by the Board of Directors of Standex International Corporation, (the "Company”), for use at the Annual Meeting of Stockholders to be held on Thursday, October 27, 2016.26, 2017.  The Board of Directors (“Board”) is recommending that you votefor the election as Directors of each of the individuals nominated for Director by the Board of Directors,for the total compensation paid to the named executive officers of the company,forthe approval of the material terms of the performance goals under the Company’s Amended and Restated 2008 Long Term Incentive Plan,for the approval of an amendment to the Company’s Bylaws to allow the Board of Directors to fix the number of directors from time to time, within the currently established limits,Company, andfor the ratification of Grant Thornton LLP as independent auditor for the Company for the fiscal year endedending June 30, 2017.2018.

The Board of Directors has fixed August 29, 201631, 2017 as the record date for the determination of stockholders entitled to vote at the Annual Meeting.  At the record date, there were outstanding and entitled to vote 12,780,76712,776,119 shares of the Common Stock of the Company.  You may vote the shares you own directly in your name as a stockholder of record, shares you hold through Company benefit plans, and shares held for you as a beneficial owner through a broker, bank or other nominee.  Each share is entitled to one vote.

A quorum must be present to transact business at the Annual Meeting.  A quorum is the majority of the outstanding shares of the Company’s Common Stock entitled to vote at the Annual Meeting and represented in person or by proxy.  Proposals 1, 2, 3 and 53 will require the affirmative vote of a majority of the shares of Common Stock voting, in person or by proxy, at the Annual Meeting.  For each Proposal, 4 requiresstockholders have the affirmative voteoption of eighty percent (80%) of the issued and outstanding shares entitled to vote at the Annual Meeting.  For Proposal 1 (the election of directors), stockholders may vote in favor of all nomineesvoting for, Director,against or may withhold their votes as to all nominees or as to specific nominees.  With respect to the other Proposals, stockholdersabstaining.   Stockholders should specify their choice on the form of proxy.

Your bank or broker will send you voting instructions if you hold your shares in street name.

Abstentions and broker non-votes (i.e. when a broker or bank holding shares in “street name” is present at the meeting in person or by proxy, yet has no authority to vote on a particular proposal because the beneficial owner has not instructed the broker or bank how to vote, and the broker or bank has no discretionary voting power on its own) will be counted for quorum purposes, but will not be counted as votes in favor of Proposals 1 through 4.and 2.  Proposal 53 is considered “routine” by the New York Stock Exchange (“NYSE”), so abstentions and broker non-votes will be counted in favor of Proposal 5.3.  However, abstentions will not have any voting effect for Proposal 3.  The Company asks shareholdersencourages stockholders who hold shares in street name to instruct their bank or broker how they want to vote on Proposals 1, 2, 3 and 4.each Proposal.

You may revoke any proxy at any time prior to the Annual Meeting by delivery of written notice to the Secretary of the Company or by executing a subsequent proxy.

Each stockholder received a Notice of Internet Availability providing instructions about how to view and vote proxy materials electronically.  We believe that electronic delivery of proxy documents, rather

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than delivery of a paper copy to every stockholder, maximizes value for all stockholders and eliminates waste.  We strive to be vigilant stewards of Company resources, and we believe that electronic delivery of the proxy to the majority of stockholders helps the Company attain this goal.

All costs of solicitation of proxies will be borne by the Company.  In addition to solicitations by mail, the Company’s directors and officers, without additional remuneration, may solicit proxies in person and by telecommunications.  Brokers, custodians and fiduciaries will be requested to forward proxy soliciting materials to the owners of stock held in their names, and the Company will reimburse them for their out-of-pocket expenses in this regard.  

To assure the presence in person or by proxy of the necessary quorum for holding the meeting, the Company has engaged the firm of Morrow & Co.,Sodali LLC, 470 West Avenue, Stamford, CT 06902 to assist in soliciting proxies by mail, telephone, facsimile and personal interview, for a fee estimated at approximately $6,250 plus disbursements.  The Company pays this expense.  

PROPOSAL 1 – ELECTION OF DIRECTORS

Nominees Recommended by the Board of Directors

In Proposal 1, Election of Directors, we are asking stockholders to consider and vote on the election of the twothree nominees listed below for three-year terms.  Stockholders are asked to elect as Class II Directors, Thomas E. ChormanDavid Dunbar, Michael A. Hickey and Thomas J. Hansen,Daniel B. Hogan, each for a three-year term expiring in 2019, unless authority to2020.  Stockholders may vote for theor against each Director nominated for election, of directors is withheld by marking the proxy to that effect.or may abstain.  No proxy can be voted for a greater number of persons than the twothree nominees named below.

In the event that any nominee for election becomes unavailable, the person acting under the proxy may vote for the election of a substitute.  We have no reason to believe that any nominee will become unavailable.

The Board has affirmatively determined that Messrs. ChormanMichael A. Hickey and HansenDaniel B. Hogan are “independent,” as defined by the NYSE.  

The termsDirector Roger L. Fix will retire from Board service upon the conclusion of two longstanding directorsthe term to which he was most recently elected.  Mr. Fix’s term will expireend on the date of the 2017 Annual Meeting.  UnderThe Company extends its sincere thanks to Mr. Fix, who during his 13 year tenure at the Company’s Corporate Governance Guidelines,Company served at various times as COO, President, CEO, Director and Chair of the Board has established a retirement age for directors of 75 years.  Directors may complete the term for which they were elected prior to age 75.  Under this policy, both Messrs. William R. Fenoglio and H. Nicholas Muller, III are concluding their service as directors.  Mr. Fenoglio has severed as a director since 1997.  Mr. Muller has served since 1984.Board.  The Company is deeply grateful for their combined fifty-one years of guidanceMr. Fix’s dedication and wisdom.  The Company offers sincere thanks for their commitmentleadership, and wishes themhim well in their retirement from Board service.

Further, on the date of the Annual Meeting, Director Roger L. Fix has elected to cede his role as non-executive Chairman of the Board.  However, Mr. Fix, whose current term expires in 2017, will continue to serve as Director.  The role of Chairman of the Board, after the Annual Meeting, will be assumed by David A. Dunbar, President/CEO of the Company.  A full discussion of this transition appears in the Corporate Governance/Nominating Committee Report on page 43 herein.

Finally, please note that the Classes of directors as noted below are for ease of reference and conform to the Company’s reporting to the New York Stock Exchange.  Mr. Chorman has been reassigned into Class II due to the imbalance created in the Classes due to the two retirements noted above.  Mr. Chorman’s term had previously been scheduled to expire in 2017.retirement.

Information about each Director, including the twothree Board-recommended nominees, as of July 31, 2016,2017, follows.

The Board of Directors recommends a voteFOR each nominee.

Nominees for Directors For Terms Expiring in 2020

(“Class II”)

David Dunbar

Age 55

The Board appointed Mr. Dunbar as Chair of the Board as of October, 2016.  Mr. Dunbar has been President/CEO of the Company and a member of the Board of Directors, since January, 2014.   Mr. Dunbar joined the Company from Pentair Ltd., where he had served as President of the valves and controls global business unit since 2009.  At that time, the unit was owned by Tyco Flow Control; Tyco Flow Control and Pentair merged in 2012.  Pentair, trading on the NYSE, is a global provider of products and services relating to energy, water, thermal management and equipment protection.

In February, 2017, Mr. Dunbar joined the Board of Watts Water Technologies, Inc. where he serves on both the Audit and Nominating & Corporate Governance Committees.

Mr. Dunbar brings to the Company Board decades of executive experience with global manufacturing companies.  Mr. Dunbar’s diverse experience at various operational levels brings a broad management perspective.  Further, Mr. Dunbar is an electrical engineer by training, and therefore his technical background provides insight to the execution of Company strategy and acquisition candidates.  In addition, his directorship at Watts, a publicly traded industrial manufacturer, brings peer insight to the Company Board.  The Company believes that he continues to be a valuable contributor to the Board.

Michael A. Hickey

Age 56

The Nominating and Corporate Governance Committee has recommended, and the full Board has approved, the nomination of Michael A. Hickey for a directorship, succeeding Roger Fix.  Over the past 33 years, Mr. Hickey has enjoyed a distinguished career at Ecolab, Inc., the NYSE-traded global provider of water, hygiene and energy technologies and solutions with revenues of $13 billion in 2016.  Mr. Hickey currently serves as Executive Vice President and President of the Global Institutional business, operating in 165 countries with $3.2 billion in revenue.  During his career with Ecolab, Mr. Hickey held a number of senior executive positions, including Executive Vice President, Senior Vice President and General Manager.  Mr. Hickey also has worked in the foodservice sector, and serves on the boards of several foodservice associations and foundations.

The Company believes that Mr. Hickey, with his proven track record of leading solutions-driven global businesses with a customer-intimate focus, will be a valuable addition to the Board.  Mr. Hickey’s experience, which includes mergers and acquisitions work, marketing and sales, and operational and strategic execution, is anticipated to enhance and broaden the Board’s current strengths.  

The selection of Mr. Hickey as a director nominee was the product of a deliberative process in which the Nominating and Corporate Governance Committee retained the services of Korn Ferry, a nationally recognized executive and director search firm, to seek candidates who possessed a skill set deemed complementary to the skills of other members of the Board.  For further information regarding the Company’s process for director nomination, see page  of this Proxy Statement.

Daniel B. Hogan, J.D., Ph.D.

Age 74

Dr. Hogan has been a Director since 1983.  He brings significant management, consulting and governance experience to the Board.

Dr. Hogan currently serves as Senior Advisor to Passim, a non-profit arts organization located in Cambridge, Massachusetts.  Prior thereto, he served as Executive Director of Passim from 2008 to 2015.  Passim saw a dramatic improvement in its vibrancy and financial health under Dr. Hogan’s leadership, and his many innovations helped this arts group assure its primacy in the folk music industry.  

Dr. Hogan has over three decades of management consulting experience, including positions as Vice President of McBer & Company (a division of the Hay Group) and the Apollo Group, which he founded and where he served as President.  Apollo Group provided consulting services to major international financial and manufacturing entities.  In these roles, he specialized in leadership development, team building, executive assessment and competency modeling.  Dr. Hogan has served on many non-profit boards over the last 30 years, often chairing or heading up the governance committee.  He is currently on the Executive Board of the Harvard Square Business Association in Cambridge, MA.  

Dr. Hogan’s service to the Board over the past thirty-five years provides valuable insight and institutional knowledge, which is unique to Dr. Hogan and makes him well qualified to serve as a member of the Board.

Determination of Independence

The Board of Directors operates pursuant to Corporate Governance Guidelines, which are available under the heading “Guidelines,” under the Governance tab on the Company’s website atwww.standex.com.  Under these Guidelines, the Board requires that at least a majority of directors be “independent” as defined by the NYSE listing standards.  Pursuant to the NYSE standards, the Board annually undertakes an analysis of “independence” as the criteria apply to each Director and nominee for Director.

The NYSE rules require that, in order to be considered independent, each Director or nominee have no material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company), nor may any Director or nominee have any prohibited relationships, such as certain employment relationships with the Company, its independent auditor or another organization in business with the Company.

At its meeting on July 28, 2016,27, 2017, the Board affirmatively determined that the following Directors are independent:  Messrs. Cannon, Chorman, Edwards, Fickenscher, Hansen, and Hogan.  The Board also determined that nominee Hickey is independent.

In assessing Dr. Hogan’s independence, the Board considered that Dr. Hogan is the son of Daniel E. Hogan, who was a co-founder of the Company and served in various capacities with the Company (including terms as President and CEO) through 1985.  Daniel E. Hogan served as a consultant to the Company from 1985 until his death in 1991.  The Board determined that this familial relationship between Director Daniel B. Hogan, who has never been employed by the Company, and Company co-founder Daniel E. Hogan did not create a relationship which in any way compromised the exercise of Dr. Hogan’s disinterested and independent judgment as a director.  Thus, the Board concluded that Dr. Hogan is independent within the meaning of the NYSE rules.

The remaining Board members, Messrs.member, Mr. Dunbar, and Fix, werewas determined by the Board not to be independent due to theirhis status as a currently employed executive of the Company, in the case of Mr. Dunbar, or a recent retiree, in the case of Mr. Fix.Company.

The Board will continue to monitor all of its members’ activities on an ongoing basis to insure the independence of a majority of the Company’s directors.

Certain Relationships and Related Transactions

We monitor transactions between the Company and its Directors, executive officers, beneficial owners of more than 5% of our common stock, and their respective immediate family members, where the amount involved exceeds or is expected to exceed $120,000 during the fiscal year.  Annual questionnaires inquiring about any potential transactions are completed and submitted to the Chief Legal Officer of the Company.  There were no transactions during the past fiscal year with any related person, promoter or control person that are required to be disclosed or reported under the applicable rules of the NYSE and the Securities and Exchange Commission (“SEC”).

In addition, ourthe Company Code of Conduct requires all officers, directors and employees to avoid engaging in any activity that might create a conflict of interest.  All individuals are required to report any proposed transaction that might reasonably be perceived as conflicting with the Company’s interest to their supervisor and/or the Chief Legal Officer.

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STOCK OWNERSHIP IN THE COMPANY

Stock Ownership by Directors, Nominees for Director and Executive Officers

The following table sets forth information regarding beneficial ownership of the Company’s Common Stock as of July 31, 20162017 of each director, each nominee for election, each executive officer named in the Summary Compensation Table and all directors and executive officers of the Company as a group:

Stock Ownership of Certain Beneficial Owners

The table below sets forth each stockholder who, based on public filings, is known to be the beneficial owner of more than 5% of the outstanding shares of Common Stock of the Company as of July 31, 2016.2017.  All information is presented as of December 31, 2015the date indicated in the footnote to the table, and is based upon stock ownership reports filed with the SEC on Schedule 13G.  Each holder listed below has sole voting power and sole dispositive power of the shares indicated on the table, unless otherwise noted in the footnote.

____________________________

(1)

“Beneficial ownershipownership” has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934 and, unless otherwise indicated, represents securities for which the beneficial owner has sole voting and investment power.

(2)

This information is based on a Schedule SC13G/13G/A filed on January 27, 2016.17, 2017.  The filing indicates sole power to vote or to direct the vote for 1,172,1301,427,087 shares; sole dispositive power for 1,202,7621,455,766 shares; and zero shares with either shared voting or shared dispositive power.

(3)

This information is based on a Schedule SC13G/13G/A, filed on February 10, 2016.2017.  The filing indicates sole voting power for 24,96922,958 shares; sole dispositive power for 989,8411,073,845 shares; 25,46924,488 shares with shared dispositive power, and 1,3002,181 shares with shared voting power.

(4)

This information is based on a Schedule 13G filed on February 17, 2016.  The filing indicates both sole voting and sole dispositive power for 668,959 and 200 shares with shared voting or dispositive power.

(5)

This information is based on a Schedule SC13G/13G/A filed on February 9, 2016.  The filing indicates sole power to vote or to direct the vote for 624,534 shares; sole dispositive power for 653,530 shares; and zero shares with either shared voting or shared dispositive power.

(6)

This information is based on a Schedule SC13G/A filed on February 12, 2016.14, 2017.  The filing indicates sole power to dispose or to direct the disposition for 643,908877,879 shares and 8 shares with sole power to vote or to direct the vote.vote for 879 shares.

(5)

This information is based on a Schedule 13G filed on February 14, 2017.  The filing indicates both sole voting and sole dispositive power for 720,759 shares.

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EXECUTIVE COMPENSATION

2016 COMPENSATION DISCUSSION AND ANALYSIS

Introduction

This Compensation Discussion and Analysis describes in detail our executive compensation program.  It covers the objectives of the program, its administrationas administered by the Compensation Committee of the Board of Directors (the “Committee”), the specific elements of compensation payable to our “named executives,” and how the amount of compensation payable to each named executive with respect to each element is determined.  This Compensation Discussion and Analysis should be read in conjunction with the actual compensation tables and accompanying narrative disclosures found on pages  26 through 4136 of this proxy statement.  Our “named executives,” as determined in accordance with SEC rules, for fiscal 2016year 2017 are:

David A. Dunbar

Chair of the Board, President and Chief Executive Officer

Thomas D. DeByle

Vice President, Chief Financial Officer and Treasurer

Deborah A. RosenAlan J. Glass

Former Vice President, Secretary, and Chief Legal Officer

Anne De Greef-SafftGreef-Safft*

President, Food Service Equipment

Paul C. Burns

Vice President, Strategy and Business Development

Ross McGovern*

Vice President, Human Resources  

On August 28, 2017, the Company reported that Ms. Rosen served as Vice President, Secretary and Chief Legal Officer untilDe Greef-Safft had confirmed that her retirement on April 15, 2016.

last day of employment with the Company will be September 29, 2017.

Objectives of Executive Compensation Program

Our compensation program is designed to

·

Attract and retain highly qualified executives.

Components of Executive Compensation Program

In general, executive compensation is set to be competitive and within the median of the Company’s peer group.  Our executive compensation program consists of several discrete components, each designed to serve a specific purpose and which together accomplish the overall objectives of the program.  Those components are summarized in the chart below.  A more detailed description of each component and its purpose is contained elsewherelater in this Compensation Discussion and Analysis.

Annual

Component

·Purpose

The Chart below shows the 2017 mix of target compensation opportunity for each Named Executive Officer.

Say-On-Pay

Stockholders are afforded the opportunity to cast an advisory vote on an annual basis with respect to the compensation of the Company’s named executive officers.  At the Annual Meeting of Stockholders held on October 27, 2016, 98.6% of the votes cast on the advisory proposal were voted in its favor.  After reviewing these results, the Committee decided to continue to apply the same general philosophy, compensation objectives and governing principles that it used in 2016 and did not materially change the structure of the executive compensation program in fiscal year 2017; however, to further strengthen the alignment of executive compensation with stockholder interest, the Committee improved the long term incentive plan by moving from a one-year to a three-year performance measurement period for its performance share units.

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Administration of Executive Compensation Program

The Committee is responsible for all aspects of our executive compensation program, as described in its Charter, which can be accessed atwww.standex.comand a copy of which shall be provided to any stockholder upon request.  

Use of Independent Compensation Consultants

To help ensure that our executive compensation program is effective in meeting its objectives, the Committee is assisted by Meridian Compensation Partners, LLC (“Meridian”), an independent compensation consulting firm.  The services provided by Meridian consist of advising on the competitiveness of our program, determining the program’s effectiveness aligning pay and performance, Committee’s establishing objectives and goals under the annual and long-term incentive plans, and keeping the Committee informed of trends and best practices in executive compensation and related governance practices.  Meridian provides the Committee similar assistance with respect to the compensation program for non-employee directors.  In addition, Meridian assists the Committee in determining appropriate stock ownership guidelines for the directors and executives of the Company.  Meridian does not provide any other services to the Company.  The Committee has determined that Meridian is independent and that no conflicts of interest exist between Meridian and the Company, including any of its directors and executive officers.

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Evaluation of Chief Executive Officer

The Committee is also charged with evaluating the performance of Mr. Dunbar as Chief Executive Officer, and setting his compensation level.  In fulfilling this role, the Committee conducts a detailed annual review of his performance which includes input provided by the Lead Independent Director after discussion with independent members of the Board.  As a key part of its analysis, the Committee asks Mr. Dunbar to summarize his key achievements against a written set of objectives previously approved by the Committee.  The Committee then meets directly with Mr. Dunbar to discuss that summary as well as the input provided by the Lead Independent Director.  The Lead Independent Director is then directed by the Committee to review the results ofthe evaluation with Mr. Dunbar before finalizing Mr. Dunbar’s compensation.

Basis for Determination of Target Executive Compensation

For fiscal year 2017, the Committee asked Meridian to evaluate competitiveness of the compensation program for our executive officers, including those of the named executives.  To accomplish this, Meridian first assisted the Committee in adopting a peer group using the following selection criteria: industrial and technology manufacturing companies that (a) have revenue 1/3 to 3x the Company revenue; (b) have multiple business units; and (c) serve global markets.  The 2017 peer group is comprised of the following 22 companies:

Albany International Corp.

ESCO Technologies, Inc.

Lydall, Inc.

Altra Industrial Motion Corp.

Graco, Inc.

Middleby Corporation

Barnes Group, Inc.

Hardinge, Inc.

NN, Inc.

Blount International, Inc.

Hillenbrand, Inc.

Nordson Corporation

Chart Industries, Inc.

JBT Corporation

RBC Bearings, Inc.

CIRCOR International, Inc.

Kadant, Inc.

TriMas Corporation

CLARCOR, Inc.¹

L. B. Foster Company

Xerium Technologies, Inc.

Enpro Industries, Inc.

¹

CLARCOR, Inc. was acquired during our fiscal year 2017 and is no longer a member of the peer group for fiscal year 2018.

By benchmarking target compensation levels against the peer group, Meridian conducted a competitive market study of the executive compensation of the Company’s executives, including the named executive officers.  As a result of its evaluation of the market study, the Committee determined that executive compensation for the named executives was competitive compared to similarly situated executives in the Company’s peer group.  In addition to its use of the market information provided by Meridian, the Committee based its compensation decisions on an executive’s experience, future potential, specific individual accomplishments, current equity holdings, and such factors as the breadth of an executive’s responsibility, including whether he or she has strategic rather than merely operational or functional responsibilities, the complexity of the function or business unit headed by an executive, whether the executive has global responsibilities, and other factors deemed relevant by the Committee.  The Committee may establish the base salary and incentive targets of an individual new in his or her position at a lower level and increase it over time by amounts greater than the increases granted to other executives, as the executive achieves expectations and gains experience in the position.

The Committee also seeks the views of Mr. Dunbar and the Vice President of Human Resources with respect to the effectiveness of the executive compensation program, especially with regard to its motivational effects on our executives.  Mr. Dunbar also provides input to the Committee on the performance of each of the other named executives.

DETAILS REGARDING 2017 TARGETS AND RESULTS

Base Salary

10

The base salaries of the Company’s executives were reviewed in light of the foregoing factors.  Effective October 1, of FY 2016 and FY 2017, the base salary of each named executive officer was set as follows:

____________________________

¹  

Mr. Glass joined the Company in April, 2016 and thus his partial year of service was factored into the level of adjustment.

Annual Incentive Bonus

Executives may receive annual bonuses based partly upon the financial performance of the Company (or the business unit headed by an executive with primary responsibilities at the divisional rather than the corporate level) during a particular fiscal year and partly upon their success in meeting individual strategic goals established by the Committee at the beginning of the fiscal year.  The amount of an executive’s annual incentive bonus opportunity and the criteria used to determine whether the opportunity is realized are determined through a detailed performance planning process which the Company refers to as its Balanced Performance Plan (“BPP”) process.  

BPP Process

The BPP process generally takes place over two Committee meetings of the Committee during the first quarter of the fiscal year, theyear. The first beingmeeting is the July meeting, which coincides with the meeting of the Board of Directors at which the Company’s preliminary results for the previous fiscal year are reviewed and discussed, and itsthe operating budget for the upcoming fiscal year is presented.  The Committee then conducts an additional review of the proposed BPP for the upcoming year at a second meeting, generally held in late August, or early September, after the financial results for the prior fiscal year and the operating budget for the upcoming fiscal year are finalized.  This two-step process provides the Committee with an ample opportunity to conduct a deliberative and interactive process that results in the establishment of goals that it is confident correlate to the overall objectives set for the Company by the Board of Directors for the upcoming fiscal year.  

At its August/SeptemberAugust meeting, the Committee determines the extent to which the financial and strategic goals applicable to each executive for the previous year were met, and establishes the amount of bonus to be paid.  The Committee also formally approves the financial and strategic performance goals for the upcoming fiscal year under both the annual and long-term incentive components of the executive compensation program.

Determination of Annual Incentive Bonus Targets

The BPP process begins each year by setting a percentage of the executive’s base salary as a target bonus amount.  In establishing the percentage, the Committee uses the information contained in the Survey Data to assist it in its determinations.  For fiscal 2016,year 2017, the target bonus amount as a percentage of base salary was as follows for each of the named executives:

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After establishing a target bonus amount for each executive, the Committee determines what percentage of that amount to allocate to the attainment of the financial performance measures, and what percentage to the strategic goals.  The Committee determined that for fiscal 2016,year 2017, for corporate executives, other than Mr. Burns, 70% of an executive’s target bonus should be tied to the achievement of the financial performance goals and 30% to meeting the strategic goals.  The Committee determined for divisional executives and Mr. Burns, due to their highly strategic roles, that such percentages should be 60% and 40%, respectively.  Actual bonus achievement can range between 0% andis capped at 200% of target.  Actual bonus achievement with respect to strategic goals can range between 0% and 100%133% of that portion of the target attributable to the strategic goals depending upon actual performance against the preset goals.  With respect to financial performance goals, actual bonus achievement can range between 0% and 243% of that portion of target attributable to such goals for executives other than Ms. De Greef-Safft and Mr. Burns.  Based on the 60/40 weighting of their performance to strategic goals, Ms. De Greef-Safft and Mr. Burns actual achievement for financial performance goals can range from 0% to 267% such that the maximum bonus opportunity equals 200% of target, as is the case with all executives.

The Committee then establishes the specific financial measures and individual strategic goals used to determine whether and to what extent the target bonus is achieved and the weighting to be given to each of the financial measures and strategic goals selected.  In approving these particular goals, the Committee made a specific determination that they represent financial objectives that correlate to the creation of stockholder value and are appropriate measures against which to judge executive performance.  In differentiating among the financial performance goals, the Committee determined that achieving a specified level of earnings per share and operating cash flow were the Company’s most important financial objectives, followed by sales.  The weighting reflects the Committee’s belief that, for fiscal year 2017, earnings and operating cash flow, were the most important factors in preserving and enhancing stockholder value in the near-term and sustaining and growth and stability for the long-term.  

For fiscal 2016,year 2017, three financial and three to five strategic goals were established, and a portion of the target bonus is attributable to success in meeting each goal.established.  The Committee next determined “threshold,” “target” and “superior” performance levels for the financial goals for minimum, target and maximum achievement, and set the percent achievement for those performance levels at 50%, 100% and 243% (or 267% for Ms. De Greef-Safft.  If the performance results reach and Mr. Burns).exceed the threshold level, an executive will earn a bonus on a sliding scale basis up to the maximum achievement amount.  Target financial performance levels are tied directly to the approved fiscal year budget.  In establishing the threshold and superior performance levels, the Committee sets the threshold performance level high enough so that achieving it is not guaranteed and sets the superior performance level high enough so that achieving it is difficult and represents an outstanding accomplishment that would be highly likely to significantly enhance shareholderstockholder value.  For fiscal 2016,year 2017, the financial goals for corporate executives (other than Ms. De Greef-Safft)Greef-Safft whose financial goals were discussed below) and their respective threshold, target and superior performance goals were as set forth below:

(1)

The Committee has also established guidelines regarding the reservation of the right to adjust the financial targets and/or results for bonus determination purposes during or at the end of a fiscal year, to reflect the impact of special events either not factored into the operating plan budget established at the beginning of a fiscal year (on which the bonus targets are based), or not indicative of operating performance during the year.  The Committee believes such adjustments are appropriate in order for executives to execute the Company’s long-term growth strategies to deliver strong financial results.

(2)

Operating cash flow is a non-GAAP financial measure which is determined by adding three items from the Company’s audited financial statements – 1) income from operations, 2) depreciation and amortization, and 3) change in net working capital (defined as net receivables plus inventories, less accounts payable), that occurred since the end of fiscal 2015,year 2016, and subtracting capital expenditures from the total of the foregoing three items.

The BPP process for divisional executives mirrors that for corporate executives, except that almost all of the financial and strategic goals established for them are tied directly to the objectives of the divisions which they head.  For fiscal 2016,year 2017, the three financial goals set for the Food Service Equipment segment, which applies to the bonus for Ms. De Greef-Safft, and their respective threshold, target and superior performance goals were as set forth below:

(1)

In addition, one corporate level goal, diluted earnings per share for the Company at a weighting of 5%, applies to the bonus for Ms. De Greef-Safft.

In approving these particular goals, the Committee made a specific determination that they represent financial objectives that correlate to the creation of shareholder valueFor fiscal year 2017 between three and are appropriate measures against which to judge executive performance.  In differentiating among the financial performance goals, the Committee determined that achieving a specified level of earnings per share (or EBIT in the case of Ms. De Greef-Safft) was the Company’s most important financial objective, followed by operating cash flow, then sales. The weighting reflects the Committee’s belief that for fiscal 2016 earnings and, to only a slightly lesser extent, operating cash flow, were the most important factors in enhancing shareholder value.

Thefive strategic goals established by the Committee for fiscal 2016 are differentwere established.  The specific goals differ for each of the named executives.  The strategic goals established for Mr. Dunbar were (i) to further implementapply the standard work of the Company’s Value Creation System by adopting standard work promoting implementationGrowth Disciplines and Talent Management across the entire companyCompany to improve growth capabilities; (ii) to improve the operational performance capability of the four pillars of the Value Creation System:  Standex Growth Disciplines, Operational Excellence (“OPEX”), Talent Management and BPP; (ii) to continue execution of our acquisition strategy to make accretive acquisitions that build out our strategic platforms and assure that recent acquisitions hit their targeted performance;business; (iii) to continue divestiture of non-core businesses; (iv) to implement a plan to achieve target EBIT in the Food Service Equipment segment and develop a strategy to create a more differentiated and profitable Food Service platform;Refrigeration business; and (v)(iv) to reposition the Engineering Technologies segment by adding capacity to support aviation wins, using OPEX tools to improve operational performance and restructuring to adapt to lower oil and gas and medical business revenues.legacy business.

For the fourthree named executives who head corporate staff functions, strategic goals were established by the Committee which were tied to the completion of specific projects in their functional areas that were deemed important to the Company and initiatives that would improve productivity and significantly lower the cost structures of the departments which they head, resulting in better processes and reduced corporate costs.  The strategic goals for Ms. De Greef-Safft are related to the growth and profitability of the Food Service Equipment segment.segment, implementation of a safety management system, and development of organizational plans and talent management processes.

Results for 2016  2017

Set forth in the following table are the results for the three financial performance metrics used to determine the amount of annual incentives bonuses in fiscal 2016:year 2017:

The $4.50$3.95 used for annual incentive calculation purposes is greater than the Company’s actual reported earnings per share of $4.06$3.65 for fiscal 2016year 2017 in large part due to the adjustments for non-cash charges, associated with the divestiture of its roll, plate and machinery business and non-cashgains or losses associated with the sale of unusedexcess real estate that were not included in the results used to calculate bonuses.  The operating cash flow results exceeded the target goal established by the Committee at the beginning ofand mergers and acquisitions related costs incurred during the fiscal year, while earnings per share were above threshold target goal, but fell below its target level and salesyear.  All three financial performance metrics failed to reach the threshold performance target.  Based upon these results,target mainly due to the performance of a single business unit, the Refrigeration group, that erased the improvements from most of the other businesses; therefore,

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each corporate executive other than Mr. Burns, is not entitled to a bonus based uponassociated with the financial performance of 113.81% of his or her target bonus for the financial goals which equates to 79.7% of his total target bonus.  Due to the different weighting of his performance and strategic goals, the results for Mr. Burns equates to 68.4% of his total target bonus.  targets.

Performance of the Food Service Equipment segment, on which Ms. De Greef-Safft’s annual incentive bonus is based, was as follows:

The results were below the targetthreshold level in all three categories and sales were below the threshold target goal.categories.  As a result, Ms. De Greef-Safft is not entitled to a bonus based upon the financial performance of 62.9%components of her target bonus for the financial goals which equates to 37.8% of her total target bonus.target.

With respect to each executive’s strategic goals for the year, the Committee met with Mr. Dunbar to evaluate the performance of each executive in meeting those goals.  In determining the extent to which each strategic goal was met, the Committee examined the difficulty of reaching the goal, the work performed to achieve it, and any factors that arose during the year that made achievement of the goal more or less difficult.  Following its evaluation, the Committee determined that Mr. Dunbar had achieved 83%133% of his strategic goals, by continuingwhich equates to develop40% of his total target bonus, as a result of the Value Creation System byfollowing: (a) completing market tests and increasing laneway growth; (b) setting in place OPEX transition plans for the Company’s top 15 sites, and improving site assessment scores and (c) developing plans for allcontinued deployment of the Company’s leaders.  In addition, he continuedGrowth Disciplines resulted in a 69% increase in the executionsales value of the Company’s acquisition strategy, assured recent acquisitions hit their targetsgrowth laneways and divested a non-core business; set50% increase in  place an OpExthe number of market tests, while improvements to the Talent Development system resulted in a 33% increase in the number of open management positions filled internally as well as improved retention of high potential employees;  (b) with regard to operational performance, employee safety improved as measured by a companywide reduction in reportable injuries per 200,000 hours worked; (c) significant steps were taken to improve the operational performance of the Refrigeration business including improved management talent and Strategic Plan that delivered margin improvementsa review of the business’s operational and repositionedmarket strategies; and (d) the Company successfully completed consolidation of two Ohio facilities within the Engineering Technologies segment, addingincluding a complete overhaul of the manufacturing footprint in order to create optimal flow through the factory and enhanced capacity.  The segment also successfully ramped up production capability at its new facility in Wisconsin facility and improvingin order to support the OPEX tools for improved performance.growing aviation business.  The Committee determined that the other named executives achieved between 87%111% and 98%133% of his or her individual strategic goals, which equates to between 26%33% and 39%40% of his or her total target bonus.  In determining the achievement of each named executive officer’s strategic goals, the Committee recognized the key roles of the named executive officers in the Company’s: (i) very successful acquisition initiatives during the year, including Horizon Scientific in the Food Service Equipment segment and the largest acquisition in the Company’s history-Standex Electronics Japan Corporation; (ii) improvement in Company-wide safety measures; and (iii) overall improvement in the business segments other than a single business unit, the Refrigeration group.

Combining the scores of the financial and strategic goals, each named executive (other than Ms. Rosen, who did not receive a bonus due to her retirement prior to the end of the fiscal year) is entitled toearned the following bonus:

Deferral of Annual Incentive Bonus

The Company provides an incentive for its executives to defer up to 50% of their annual bonuses into the receipt of discounted restricted stock units pursuant to the Management Stock Purchase Program (“MSPP”), a component of the 2008 Long Term Incentive Plan.  Those restricted stock units vest three years after they are purchased,awarded, and shares equal to the number of restricted stock units are delivered to the executives.  Restricted stock units purchasedawarded under the MSPP are valued at the time of purchaseaward at a 25% discount from the lower of the closing price of the Company’s common stock on the last day of the fiscal year or the date on which the underlying bonus would otherwise be paid (which is generally on or shortly prior to was certified by the 75^th day after the last day of the fiscal year)Committee.  While the annual bonus is designed primarily to motivate an executive to meet annual performance goals established under the BPP process, the restricted stock unit deferral option adds an additional long-term motivational component to the bonus.  Each executive must make his or her deferral election at the beginning of the fiscal year.  For fiscal 2016,year 2017, the named executives elected to defer the following percentages of their annual incentive bonuses into the receipt of restricted stock units under the MSPP:

Mr. Dunbar

40%

Mr. DeByle

50%

Ms. Rosen

  0%

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Executive	Percentage Deferred for MSPP
David Dunbar	50%
Thomas D. DeByle	50%
Anne De Greef-Safft	50%
Alan J. Glass	50%
Paul C. Burns	20%

As described in more detail under “Components of Executive Compensation Program-Changes for Fiscal 2017” on page 12 of this proxy statement, the Committee adopted a three-year performance management period for its performance share units beginning in fiscal 2017, which shares are paid out at the end of the three-year period.

For fiscal 2016, 67%year 2017, 60% of the total long-term incentive award for Mr. Dunbar was made in performance share units, and 60%50% of the award made to the other named executives was made in performance share units.  This again reflects the Committee’s determination that the portion of an executive’s compensation which is directly tied to the meeting of performance goals should be higher for those executives in the strongest position to impact actual performanceperformance.

Performance Share Units Targets

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For the fiscal 2016year 2017 three-year performance period, the performance goals, weighting and their threshold, target and superior performance levels wereexplanation are as set out below.follows.

____________________________

(1)

EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP financial measure determined by adding three items from the Company’s audited financial statements – 1) income from continuing operations before income taxes, 2) interest expense, and 3) depreciation and amortization; and

(2)

Average Return on Operating Assets (determined by averaging return on operating assets at the beginning and end of the fiscal year).

Goal	Weighting	Definition
Three Year Cumulative EBITDA	60%	EBITDA (earnings before interest, taxes, depreciation and amortization) is a non-GAAP financial measure determined by adding three items from the Company’s audited financial statements – 1) income from continuing operations before income taxes, 2) interest expense, and 3) depreciation and amortization.
Three-year Average Return on Invested Capital	40%	Average Return on Invested Capital (Average ROIC) is determined by the three-year average of the annual return on invested capital.

The Committee selected EBITDA because of its direct correlation to profitability and cash flow, which are critical to the Company’s ability to complete acquisitions, invest in its core businesses, continue to return cash to shareholdersstockholders in the form of dividends and improve overall liquidity.  The Committee selected average return on operating assetsAverage ROIC as a second performance measure, because it provides a means of determining whether the Company has invested the earnings of the business so as to best optimize the Company's return on assets.invested capital.  The Committee also gave EBITDA twice the weightingestablished threshold, targets and superior levels of average return on operating assets, due to the importance of liquidity to the Company’s longer-term success.

Performance Share Unit Results for 2016

The Company’s EBITDA and Average ReturnROIC for the three-year period that may be adjusted for acquisitions, divestitures, unplanned restructurings, purchase accounting, gains or losses on Operating Assets (ROA) forreal estate, gains on life insurance and any other exceptional one-time gains or losses.  The measurement period ends with fiscal 2016 for purposes of determining performance share unit payouts was as follows:

EBITDA was betweenyear 2019 and any earned shares will be delivered upon certification by the threshold and the target performance level while ROA was slightly below the target level performance.  Actual reported results for both EBITDA and ROA were lower, but consistent with its authority to adjust results for incentive compensation purpose by excluding the gains and losses associated with anticipated events that do not reflect the operating performanceCommittee of the Company, the Committee has excluded the impact of the sale of the Company’s Cheyenne facility and the divestiture of its roll, plate and machinery business in Sandston, Virginia from the calculations of EBITDA and ROA for the purpose of determining the number of shares of stock granted pursuant to the award offinancial performance share units.

Based on these results shares equal to 79.03% of the “target” performance share units awarded to each executive will be delivered.  Delivery will be made in three equal annual installments, with the first made on the date on which the Committee “certified” the results under the plan (August 25, 2016), and the remaining two installments made as of the next two fiscal year ends, provided that the executive remains employed by the Company on those two dates.  

Perquisites and Other Benefits

We provide a limited number of perquisites to certain named executives, including Mr. Dunbar,Dunbar.  These perquisites are designed to be competitive and assist in the attraction and retention of highly qualified executives and also to facilitate the performance of the executive's responsibilities.  The perquisites consist of a car allowance, and reimbursement of the cost of automobile operating expenses, including the cost of gasoline, auto insurance and repairs.  Mr. Dunbar is reimbursed for tax return preparation and counseling.  We own no aircraft, nor do our executives fly on private aircraft for business purposes.  We do not provide any country club or other club memberships to our executives.  No gross ups are provided for any attributed income relating to perquisites received by the executives.  

Executives participate in the same employee benefit plans and arrangements as do nearly all salaried employees.  Such plans and arrangements include a defined benefit pension plan (which has been frozen since December 31, 2007 and in which Ms. Rosen is the only named executive who has a benefit), a 401(k) plan with a Company match of up to 4% of an employee’s base salary up to the IRS compensation limit and additional Company contributions equal to a percentage of an employee’s base salary, with the exact percentage based in part on the employee’s age (these additional contributions are designed to make employees at least partially whole for the inability to accrue additional benefits under the frozen defined benefit pension plan)plan up to the IRS compensation limit).  In addition, we provide medical, dental, life insurance and long-term disability arrangements that are similar to those provided by similarly-situated companies, and which provide for cost sharing between employees and the Company.

We have a supplemental defined benefit pension plan to provide unfunded, non-qualified pension benefits to executives whose compensation exceeds the maximum permitted by the IRS to be taken into account under a tax-qualified deferred benefit pension plan ($265,000 in 2016).  That plan was also frozen effective December 31, 2007, and Ms. Rosen is the only named executive with a benefit under it.  Because of their compensation levels, most employees did not qualify for benefits under this plan.  The total pension to be received from both the tax-qualified and non-qualified defined benefit plans is determined under a formula that is the same for all plan participants, including Ms. Rosen.

As part of the freezing of accruals under the defined benefit pension plan, we established, as of January 1, 2008, a non-qualified deferred compensation plan designed to meet two goals.  First, it allows participants whose compensation exceeds the IRS limits permitted to be taken into account under a tax-qualified 401(k) plan ($265,000 in 2016) to make tax-deferred contributions and receive Company matching contributions as if the non-discrimination limitations which apply to tax-qualified 401(k) plans did not exist.  The percentage of an employee’s compensation which is matched under the non-qualified deferred compensation plan is the same as the percentage of compensation which is matched under the tax-qualified 401(k) plan.  In addition, employees eligible to participate in the non-qualified deferred compensation plan because their base salary and annual incentive compensation exceeds the IRS limit described previously ($265,000 in 2016) may defer additional amounts of their base salaries and annual incentive bonuses under the plan.  In no event, however, can the total amount deferred in any one year exceed 50% of base salary and 100% of the annual bonus paid under the plan.  The purpose of these changes is to allow individuals to partially make up from the Company’s defined contribution plan the loss of future accruals under the frozen defined benefit plans.

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Employment Agreements

We have entered into employment agreements with each of the named executives.  Under those agreements, the executives shall be employed for a period of approximately three years (January 20, 2014 through December 31, 2016) in the case of Mr. Dunbar, and one year in the case of the other named executives.  The length of the agreements is based upon the Committee’s assessment of appropriate terms to attract and retain qualified executive talent, and of what is appropriate to maintain competitiveness.  TheMr. Dunbar’s agreement for Mr. Dunbarhas an initial three-year period that renews automatically for additional three-year periods, except thatand either party may giveterminate the agreement with 30 days’ notice of its desire to terminate the agreement.notice.  The agreements for the other named executives have one-year terms, and will renew automatically for successive one-year periods, except thatand either party may giveterminate the agreement with 30 days’ notice of its desire to terminate the agreement.notice.  In the event of involuntary termination for a reason other than death or material breach of the agreement, Mr. Dunbar will receive base salary continuation for two years, and the other named executives will receive base salary continuation for one year.  Mr. Burns’ agreement provided for the granting of 6,021 restricted stock units, which award vests in four installments as follows: 2007 on July 27, 2016, 2,007 on July 27, 2017,2016; 2,007 on July 27, 2017; 1,338 on July 27, 20182018; and 669 on July 27, 2019, provided that he is employed on the vesting date; and a signing bonusaward of $100,000, which was paid to Mr. Burns upon his hiring.  Mr. McGovern’s agreement provided for the granting of restricted stock in an amount valued at $100,000, which was granted on September 1, 2015 and is based upon the Company’s closing stock price on such date, which award vests in three equal installments on September 1, 2016, September 1, 2017 and September 1, 2018, provided that he is employed on the vesting date; and a signing bonus of $50,000, which was paid to Mr. McGovern upon his hiring.  The signing awardsaward for Messrs.Mr. Burns and McGovern werewas granted as compensation to such executives as compensation for incentiveincentives forfeited in connection with theirhis departure from his previous employers.employer.  

Each agreement contains a non-compete provision which precludes the executive from competing against the Company after the agreement is terminated, regardless of the reason for the termination, for two years, in the case of Mr. Dunbar, and one year, in the case of the other named executives, after the agreement is terminated, regardless of the reason for the termination.executives.  The agreements also contain a “non-poaching” provision, which restricts the ability of an executive who takes a position outside the Company to hire employees of the Company.  Such provisions are considered by the Committee to be a benefit to the Company, because they ensure that those who know the most about the Company, its businesses, its employees, and the markets that the Company serves cannot use that knowledge to adversely impact the Company after their employment ends.

In the event of a change in control of the Company, the agreements further provide for the payment of severance and other benefits in the eventif the executive's employment is terminated, or the executive resigns for certain specified good reasons, includingsuch as a significant diminishingdiminishment of his or her job duties or reporting relationship, or a diminution in base salary or incentive compensation opportunity, in either case following a change in control.opportunity.  Upon such a termination or resignation, severance for Messrs. Dunbar and DeByle will be based upon three additional years of salary and bonus, while the amount for Messrs. Glass, Burns and McGovern and Ms. De Greef-Safft will be based upon one additional year.  The amount of bonus used to calculate the lump sum payment is the higher of the executive’s “target” bonus for the year in which the change in control occurs or the most recent annual bonus paid to him or her.  The amounts reflect the determination of the Committee at the time the agreements were entered into of what was appropriate to ensure that executives involved in negotiating

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and completing any change in control transaction will act in the best interest of shareholders,stockholders, without regard to the personal dislocation that they would likely face as a result of the transaction.  These amounts are paid only upon termination or resignation for certain specified good reasons following a change in control and not upon the change in control itself.  Such a “double trigger” provision, requiring both a change in control and a subsequent termination or resignation for the executive to be entitled to the amounts paid under the agreement, has been determined to be appropriate by the Committee.  The Committee sees no reason for the change in control event itself to trigger any right to additional compensation or benefits, if the executive’s employment status is not significantly impacted by the change in control.  There is no gross-upgross up provided with respect to any amounts paid under the agreements.

Tax and Accounting Aspects of Compensation

The tax deductibility by a corporation of compensation in excess of $1 million paid to the named executives other than the CFO is limited by Section 162(m) of the Internal Revenue Code.  "Performance-based"“Performance-based” compensation, as defined in the Code, may be excluded from the $1 million limit if, among other requirements, the compensation is payable only upon attainment of pre-established, objective performance goals set out in writing within 90 days after the beginning of the plan year to which the goals apply, and if the compensation is paid under a plan approved by Stockholders.  The Company's 2008 Long Term Incentive Plan was approved by stockholders at the Company’s 2008 Annual Meeting of Stockholders and an amendment to this plan was approved by stockholders at the Company’s 2011 Annual Meeting of Stockholders.  Shareholders are being asked to approveStockholders most recently approved the material terms of the performance goals under the 2008 Long Term Incentive Plan at this year’sthe Company’s 2016 Annual Meeting of Stockholders, as described under “Proposal 3 – Approval of Performance Goals under the 2008 Long Term Incentive Plan, As Amended” on page 51 of this proxy statement.Stockholders.

The Company does not have a specific policy regarding executive compensation and Section 162(m), and the Committee may choose to provide compensation that is not deductible under Section 162(m) on occasion if it determines such action to be in the best business interest of the Company.  Notwithstanding the absence of a specific policy, the Committee’s intent in fiscal 2016year 2017 was to structure the executive compensation program so that the vast majority of all compensation would be deductible, except to the extent that the combined total of base compensation, the value of perquisites and the grant date value of restricted stock issued under the 2008 Long-Term Incentive Plan exceeds $1 million.deductible.

Clawback Provision

The 2008 Long Term Incentive Plan contains a provision which authorizes the Board of Directors to recover excess annual and long-term incentive compensation paid under the Plan to the Chief Executive Officer, Chief Financial Officer, or any other executive, in the event that the Company’s financial results for any reporting period require restatement downward due to misconduct, as determined by the Board of Directors, on the part of any such executives.

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Stock Ownership Guidelines

The Committee has adopted stock ownership guidelines for its directors and executives, including the named executives, out of a belief that those individuals should have at least a minimum level of stock ownership to align their interests with those of the Company’s stockholders.  With the assistance of Meridian, the Committee reviewed the Company’s stock ownership guidelines in October, 2015 and adopted new guidelines.  Under the new guidelines, Mr. Dunbar is required to own stock the value of which is equal to at least five times his base salary, and the other named executives are required to own stock the value of which is equal to at least two times their base salaries.  In addition, to further the Company’s commitment to ensure that the interests of executives are aligned with those of shareholders,stockholders, the revised guidelines provide that Vice Presidents, Group Presidents and Division Presidents are required to hold share units with a value equal to one times annual base salary.  Until such time as a named executive officer has attained the applicable share ownership guideline, he or she is expected to retain at least 50% of the share units awarded to him or her, net of amounts required to pay taxes and exercise prices.  Stock owned outright and unvested restricted stock are considered owned by the executive.  The share ownership guidelines level will beis recalculated whenever an executive receives an increase in pay.  To determine whether the guidelines are met, shares owned will have a deemed value determined annually as the average stock price of the Company’s common stock in the fourth quarter of the prior fiscal year.  The Committee monitors compliance with the stock ownership requirements on an ongoing basis and the named executives are presently in compliance with the guidelines.

Policy Concerning Transactions Involving Company Securities

The Company has a policy applicable to all officers, directors and employees, that prohibits certain transactions involving the Company’s securities, including engaging in short-term speculative transactions involving the Company’s securities includingsuch as hedging transactions and buying or selling put or call options, holding the Company’s securities in a margin account, or engaging in short sales of the Company’sCompany securities.  In addition, the policy prohibits the pledging of Company securities without first providing at least two weeks’ advance notice, of the proposed pledge, with an explanation of the purpose of the pledge and obtaining advance approval for the proposed pledge transaction.approval.  No named executive officers or directors have entered into agreements pledging any shares of Company common stock for any purpose since the updating of the policy.purpose.

Risk Considerations in Compensation Programs

In August 2016,2017, the Committee conducted its annual review of the Company’s compensation policies and practices to assess whether they contain incentives that cancould lead to excessive or inappropriate risk taking by executives.  Following that review, the Committee has concluded that the Company’s compensation programs, when considered both separately and taken as whole, are not reasonably likely to have a material adverse effect on the Company.  The principal factors that led to this conclusion are as follows:

·

The annual incentive compensation achievable by an executive is capped at 200% of the executive’s target bonus, thus reducing any incentive to generate an inordinately high level of performance in any one year at the expense of future performance.

·

Executives may defer up to fifty (50%) percent of their annual incentive compensation into restricted stock units, which vest and become payable in stock three years after the date the annual incentive compensation is paid.

·

Long-term incentive compensation is paid entirely in shares of stock.  RestrictedExcept for 2017 grants, restricted stock granted under the planPlan requires that an executive remain employed for three years before the stock vests.  Shares paid pursuant to the award of performance share units are based on a three-year performance management period and paid in three annual installments, and are paidout at the end of the three-year period,

2018

only if the executive continues to be employed by the Company at the time an installment of shares is to be delivered.  Furthermore, as described in more detail under “Components of Executive Compensation Program-Changes for Fiscal 2017” on page 12 of this proxy statement, the Committee adopted a three-year performance management period for its performance share units beginning in fiscal 2017, which shares are paid out at the end of the three-year period and requires the employee to remain employed at such time of payment.  As a result of the foregoing, any future deterioration in the Company’s stock price would adversely impact the executive which keeps the executive’s interests aligned with those of the shareholders.stockholders.

·

The long-term incentive plan is based solely on total corporate, rather than business unit performance, which motivates business unit heads to focus on total corporate performance, and not just the performance of their own business units.  In addition, the performance measures used to determine the amount of any long-term incentive payment differ from those used to determine the amount of any annual incentive bonus, thus reducing the ability of an executive to engage in conduct designed to inflate his or her incentive compensation payout.

·

The Board of Directors is empowered to “claw back” the portion of any annual or long-term incentive compensation paid to any executive, which is attributable to financial results that must be restated or to other fraud or misconduct on the part of the executive.

·

The absence of any guaranteed bonuses or large equity grants that are not specifically tied to corporate performance.

·

Executives are subject to stock ownership requirements, which require that they maintain ownership of a specified amount of Company stock during the course of their employment.

COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management.  Based on that review and discussion, the Compensation Committee has recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

COMPENSATION COMMITTEE

Charles H. Cannon, Jr., ChairmanChair

Thomas E. Chorman

Jeffrey S. Edwards

H. Nicholas Muller, III

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20

COMPENSATION TABLES AND NARRATIVE DISCUSSION

20162017 SUMMARY COMPENSATION TABLE

The following table sets forth compensation information for the Company's chief executive officer, chief financial officer, former vice president/chief legal officer and three other individuals who served as the most highly compensated executive officers of the Company (the "named“named executive officers"officers”) during the fiscal years ending June 30, 2016,2017, June 30, 20152016 and June 30, 2014.

2015.

Footnotes to Summary Compensation Table

(1)

Mr. Dunbar became employed by the Company as President/CEO on January 20, 2014.

(2)

Since the payment of each executive's annual non-equity incentive bonus is dependent on meeting or exceeding certain targets and performance criteria, all annual non-equity cash incentive payments are reported under the column headed "Non-Equity“Non-Equity Incentive Plan Compensation."”

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(3)(2)

This column represents the aggregate grant date fair value of three separate awards: (a) restricted stock units (“RSUs”) purchasedissued with respect to the portion of the executive’s annual incentive bonus which the executive elects to use to purchasedefer into the receipt of discounted RSUs under the terms of the Management Stock Purchase Program (“MSPP”); (b) shares of time-based restricted stock, and (c) performance share units (“PSUs”).  In addition, a time based restricted stock award granted to each of Mr. Burns and Mr. McGovern as of the date on which he commenced employment with the Company is included in this column.  The award has a fair value of $450,009 for Mr. Burns and $99,976 for Mr. McGovern.$450,009.  

With respect to (a) above, the MSPP permits executives to elect prior to the beginning of the fiscal year in which the annual incentive bonus is earned (or prior to the commencement of his employment, in the case of Messrs. Burns and McGovern), executives elect to usedefer up to 50% of their annual incentive bonuses to purchaseinto the receipt of discounted RSUs.  For FY 2016, Mr.2017, Messrs. Dunbar, elected to use 40% of his bonus to purchase RSUs, Mr. DeByle, and Glass and Ms. De Greef-Safft elected to usedefer 50%; Mr. McGovern elected 30%; of their bonus into such RSUs, and Mr. Burns elected to defer 20% and Ms. Rosen elected 0%.  Under the MSPP, RSUs will be purchased atare based on a 25% discount from the lower of the closing price of the Company’s stock on the last day of the fiscal year in which the bonus was earned or the date on which the cash portion ofCompensation Committee certified the results for the annual incentive bonus is paid, which is generally on or shortly prior to the 75^th day after the end of the fiscal year.bonus.  The amounts in this column which are attributable to purchasesdistributions under the MSPP are computed in accordance with FASB ASC Topic 718, and assume a probable outcome at the “target” performance level with respect to the satisfaction of financial performance measures, and at the maximum fulfillment of the executive’s strategic objectives.  If the “superior” financial performance target had been reached, and if each executive had fulfilled all of his or her strategic objectives, the amounts set forth in the table attributable to MSPP purchases would have been as follows:

FY 2017, Mr. Dunbar - $1,106,908; Mr. DeByle - $368,610; Ms. De Greef-Safft - $310,596; Mr. Glass - $234,118; and Mr. Burns - $96,462.

FY 2016, Mr. Dunbar - $ 765,674; Mr. DeByle - $ 296,776; Ms. Rosen - $0; Ms. De Greef-Safft - $ 298,412; and Mr. Burns - $ 92,686; and Mr. McGovern - $ 80,874.92,686.

FY 2015, Mr. Dunbar - $780,670; Mr. DeByle - $291,082; Ms. Rosen - $96,308; and Ms. De Greef-Safft - $127,590.  

FY 2014, Mr. Dunbar - $396,084; Mr. DeByle - $290,686; and Ms. Rosen - $0

Ms. De Greef-Safft was not employed by the Company in FY 2014.  Messrs. Burns and McGovern were not employed by the Company in FY 2015 and FY 2014.

With respect to the awards of time-based restricted stock noted in (b) above, the column includes the grant date fair value of such awards for FY 2017, FY 2016 and FY 2015, and FY 2014, respectively.  Grant date fair value is calculated by multiplying the number of shares of stock awarded times the closing price of the Company’s stock on the date awarded, in accordance with FASB ASC Topic 718.  The dollar amounts in this column specifically attributable to grants of time-based restricted stock are set forth in the Grants of Plan-Based Awards table on page  29 of this proxy statement.

With respect to the awards of PSUs noted in (c) above, the column includes the grant date fair value of such awards for FY 2017, FY 2016 and FY 2015, and FY 2014, respectively.  Grant date fair value is calculated by multiplying the number of PSUs awarded times the closing price of the Company stock on the date of the award, in accordance with FASB ASC Topic 718.  In determining the grant date fair value of the PSUs, a probable outcome at the “target” performance level is assumed.  PSU payouts can range from zero to a maximum of 200% of target performance.  For FY 2016, payouts equal to 79.03% of target performance were earned.  For FY 2015, payouts equal to 115.24% of target performance were earned.  For FY 2014, payouts equal to 132.97% of target performance were earned.  The maximum PSU payouts for each of the past three fiscal years, determined as of the date on which the PSUs were granted, assuming achievement of the “superior” performance target, are as follows:  

FY 2017, Mr. Dunbar - $1,871,479; Mr. DeByle - $599,310; Ms. De Greef-Safft - $397,838; Mr. Glass - $329,875; and Mr. Burns - $200,850.

FY 2016, Mr. Dunbar - $2,028,894; Mr. DeByle - $576,285; Ms. Rosen - $314,531; Ms. De Greef-Safft - $463,500; and
Mr. Burns - $198,000; and Mr. McGovern - $115,200.$198,000.

FY 2015 Mr. Dunbar - $ 1,969,800; Mr. DeByle - $ 559,500; Ms. Rosen - $ 305,370; and Ms. De Greef-Safft - $0;

FY 2014 Mr. Dunbar - $1,641,500; Mr. DeByle - $436,680; and Ms. Rosen - $232,632.

Ms. De Greef-Safft was not employed by the Company in FY 2014.  Messrs Burns and McGovern were not employed by the Company in FY 2015 and FY 2014.  The superior performance target was not achieved in any of the past three years.  The dollar amounts in this column specifically attributable to grants of PSUs are set forth in the Grants of Plan-Based Awards table on page  29 of this proxy statement.

Assumptions used in the calculation of the above amounts are disclosed in the Stock Based Compensation and Purchase Plans Note to the Company’s audited financial statements for fiscal year end June 30, 2016,2017, included in the

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Company's Annual Report on Form 10-K, filed with the SEC on August 25, 2016,28, 2017, except that the fair value of RSUs purchasedissued under the MSPP for FY 20162017 is based upon the following assumptions: risk-free interest rates 0.71%(1.55%); expected volatility of underlying stock 44.5%(44.3%); expected quarterly dividends per share $0.14;($0.16); and annual rate of quarterly dividends 0.68%(0.71%).

(4)

The amount shown in this column represents the portion of each executive’s annual incentive bonus which was paid in cash.  The amount of the executive’s target annual incentive bonus which is used to purchasedeferred into the receipt of discounted RSUs under the MSPP is disclosed in the Stock Awards column.  

(5)(4)

The amount shown isincludes the aggregate change in the actuarial present value of each named executive’s accumulated benefit under the Company’s defined benefit plans (including supplemental plans) from July 1, 20152016 to June 30, 2016 (see Pension Benefits on page 36 of this proxy statement for a complete discussion of the Company’s defined benefit plans).2017.  Messrs. Dunbar, DeByle, Burns,Glass, and McGovernBurns, and Ms. De Greef-Safft, do not participate in the pension plan, as they began employment with the Company subsequent to the December 31, 2007 freezing of the pension plan.

(6)(5)

Included in this column are (i) accrued dividends that were paid during the fiscal year on previously awarded restricted stock (including RSUs acquired through the MSPP) that vested during the fiscal year.  Such dividends accrued during the three-year vesting period and were not factored into the grant date fair value reported in the Stock Awards column of the table.  The dividend totals for each named executive are as follows:  Mr. Dunbar, $7,856;$8,930; Mr. DeByle, $9,419; Ms. Rosen, $8,163;$7,105; Ms. De Greef-Safft, $851;$1,845; Mr. Glass, $0; and Mr. Burns, $0 and Mr. McGovern, $0.$1,088.  Further shown are (ii) the contribution made by the Company to each named executive’s 401(k) and non-qualified defined contribution plan accounts, which was $62,317$74,373 for Mr. Dunbar; $26,989$30,774 for Mr. DeByle; $43,357 for Ms. Rosen; $21,168$27,159 for Ms. De Greef-Safft; $13,308;$16,057 for Mr. BurnsGlass; and $9,300$11,870 for Mr. McGovern.Burns.  Also shown is (iii) the dollar value of life insurance premiums paid by the Company during the year for the benefit of each named executive, which was $8,118$10,578 for Mr. Dunbar; $9,401$8,523 for Mr. DeByle; $10,364 for Ms. Rosen; $3,213$5,716 for Ms. De Greef-Safft; $935$2,553 for Mr. BurnsGlass; and $633$1,289 for Mr. McGovern.Burns.  Also included are (iv) perquisites provided to each named executive.  The only perquisites that exceeded $10,000 were automobile allowances of $13,641$10,474 for Mr. Dunbar; $14,253and $14,386 for Mr. DeByle; $13,731 for Ms. Rosen; and $10,082 for Ms. De Greef-Safft and for Mr. Burns relocation reimbursement costs of $56,770, including $21,315 for tax gross-up.DeByle.  No other perquisites exceeding $10,000 were provided to any named executive.  None of the perquisites provided to any named executive exceed the greater of $25,000 or 10% of the aggregate value of all perquisites received by a named executive.

(7)

Based upon the terms pursuant to which he became employed by the Company, Mr. Dunbar received a gross cash payment of $500,000 at the time of commencement of his employment.  In addition, he is entitled to a minimum bonus at the performance target level set for him by the Compensation Committee, pro-rated for the portion of the year during which he was employed.  The amount of $136,354, which represents 50% of his target bonus, is included in the Bonus column because Mr. Dunbar elected to use 50% of this amount to purchase RSUs pursuant to the terms of the MSPP.  That portion is reported in the Stock Awards column.  In addition, any bonus payments over and above the target amount are reported in the Stock Awards and Non-Equity Incentive Plan Compensation columns, as appropriate.

(8)

Ms. Rosen retired from the Company on April 15, 2016.

(9)(6)

Ms. De Greef-Safft became employed by the Company on January 26, 2015.

(10)(7)

Based upon terms pursuant to which she became employed by the Company, Ms. De Greef-Safft is entitled to a minimum bonus at the performance target level set forth in her employment agreement, prorated for the portion of the year during which she was employed.  The amount of $44,952, which represents 50% of her target bonus, is included in the Bonus Column because Ms. De Greef-Safft elected to usedefer 50% of this amount to purchaseinto the receipt of RSUs pursuant to the terms of the MSPP.  That portion is reported in the Stock Awards column.

(11)(8)

Mr. Glass became employed by the Company on April 4, 2016.

(9)

Mr. Burns became employed by the Company on July 27, 2015.

(12)(10)

Based upon the terms pursuant to which he became employed by the Company, Mr. Burns received a gross cash payment of $100,000 at the time of commencement of his employment.  

(13)

Mr. McGovern became employed by the Company on August 17, 2015.

(14)

Based upon the terms pursuant to which he became employed by the Company, Mr. McGovern received a gross cash payment of $50,000 at the time of commencement of his employment.  In addition, he is entitled to a minimum bonus at the performance target set forth in his agreement prorated for the portion of the year during which he was employed.  The amount of $61,600, which represents 70% of his target bonus is included in the Bonus Column because Mr. McGovern elected to use 30% of this amount to purchase RSUs pursuant to the terms of the MSPP.  That portion is reported in the Stock Awards column.  In addition, any bonus payments over and above the target amount are reported in the Stock Awards and Non-Equity Incentive Plan Compensation columns, as appropriate.

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20162017 GRANTS OF PLAN-BASED AWARDS

The following table shows information concerning grants of plan-based awards made during fiscal 2016year 2017 to the named executives, all of which are made pursuant to the Company’s shareholder-approved 2008 Long Term Incentive Plan.  A more detailed description of the awards is set forth in the narrative disclosure which follows the table and the footnotes to the table.

Footnotes to 20162017 Grants of Plan-Based Awards Table

(1)

The date of the Compensation Committee action was the same as the date of grant for all plan-based awards, except that for (i) the September 9, 2015 grants, which were approved at the September 1, 2015August 25, 2016 Compensation Committee meeting and (ii) Mr. Burns’ July 27, 2015 grant.  Pursuant to his employment agreement, Mr. Burns was granted a time-based restricted stock award as of the date on which he commenced employment with the Company.meeting.

(2)

The amounts set forth below with respect to this award represent the percentage of the executive’s annual incentive bonus which he or she has elected to receive in cash.  With respect to Mr. McGovern’s, the cash portion of his annual incentive bonus for fiscal 2016 was established in accordance with the terms pursuant to which he became employed by the Company, and was therefore reported in the Bonus column of the Summary Compensation Table on page 26 of this proxy statement, rather than as Non-Equity Incentive Plan Compensation.  As a result, only the excess of any cash bonus over $61,600 would be treated as a non-equity incentive plan award.

(3)

The dollar amounts set forth below represent the percentage of the annual incentive bonus, if any, which he or she has elected to receive in RSUs under the MSPP, except that for Mr. McGovern, the Threshold and Target amounts reflect the minimum amount that she would receive in accordance with the terms under which she became employed by the Company.MSPP.  The share amounts represent the shares of common stock which could be earned pursuant to PSUs awarded to the executive.

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(4)

The amounts set forth in this column represent the grant date fair value determined in accordance with FASB ASC Topic 718.  In determining the fair value of possible future payouts under the equity incentive plan awards, it was assumed that the “target” performance was achieved.

PossibleEstimate Future Payouts Under Non-Equity Incentive Plan Awards

The amounts set forth under this heading are the amounts of annual incentive bonus that would be paid out in cash to each of the named executives for fiscal 2016year 2017 if the minimum,threshold, target and superior financial performance targets established in the Balanced Performance Plan (BPP) applicable to each named executive were met, and the executive fulfilled all of his or her strategic objectives.  A more detailed description of those targets is contained under the section of the Compensation Discussion and Analysis headed “Annual Incentive Bonus”“” on page 15  of this proxy statement.  The target bonus payout (including both the portion paid in cash and the portion paid in RSUs under the MSPP--seeMSPP—see the discussion below under “Estimated PossibleFuture Payouts – Equity Incentive Plan”) for Mr. Dunbar represents 90%100% of base salary, while the target bonus payout for Messrs.Mr. DeByle andis 65%; for Mr. Burns and Ms. De Greef-Safft is 55% of base salary.  For Ms. Rosen, the target bonus is 50% of base salary; and for Mr. McGovern, the target bonusGlass is 40%50% of base salary.  No bonus attributable to the financial performance goals will be paid unless a threshold performance target established by the Compensation Committee for a particular goal is met.  If that occurs, 50% of the target bonus amount attributable to that goal (which is the percentage of the target bonus equal to the weighting given to that goal--seegoal—see the discussion under “Annual Incentive Bonus”“” on page 15  of this proxy statement) will be paid.  A bonus could be paid based upon success in meeting one or more of the strategic objectives, notwithstanding that none of the threshold financial performance targets are achieved.  

Estimated PossibleFuture Payouts-Equity Incentive Plan

The amounts set forth under this heading show three separate non-equity incentive awards.  First, the dollar amount of an executive’s annual incentive bonus that will be used to purchasedeferred into the receipt of restricted stock units (“RSUs”) under the Management Stock Purchase Program (“MSPP”) component of the annual incentive bonus plan, depending upon the extent to which the financial performance criteria established by the Committee are met, is disclosed.  The three amounts set forth are based on the assumption that (i) minimum“threshold” performance criteria are notis met, (ii) “target” performance is reached, and (iii) the “superior” performance target is achieved.  The RSUs purchased withare valued at the applicable dollar amounts will be bought atbased on a 25% discount from the lower of the closing price of the Company’s stock on the last day of the fiscal year for which the bonus is earned or the date on which the shares are purchased, which is generally on or shortly prior toCompensation Committee certifies the 75^th day afterresults for the last day of such fiscal year.annual incentive bonus.  Delivery to the executives of shares converted from the RSUs on a one for one basis will occur three years after the date of purchase,issue, unless the executive dies, becomes disabled or retires prior to the end of the three-year period, in which case the RSUs will immediately vest and be paid in shares of stock.  Dividends on the RSUs, which are payable at the same rate as for all issued and outstanding stock of the Company, will accrue and be paid to the executives upon vesting.

Second, the amount set forth under this heading shows the number of shares of Company stock that will be delivered to the named executives if the Company's performance goals established under the performance share unit (PSU) component of the 2008 Long Term Incentive Plan reach specified threshold, target and superior performance levels at the end of the performance period which began on July 1, 20152017 and ends on June 30, 2016.2020.  The levels are disclosed in the subsection of the Compensation Discussion and Analysis headed “Performance Share Units”Units Targets” under the section headed “2008 Long Term Incentive Program”“” on page 19  of this proxy statement.  No shares will be delivered unless the threshold performance level is reached.  Similarly, in no event will a greater number of shares than the number shown for attaining the superior performance level be delivered, even if actual performance exceeds that level.  Shares earned under the awards will be paid in three equal annual installments, withone lump sum at the first installment paid asend of the date whenPerformance Period after the Compensation Committee certifies the extent to which the performance goals were met for the performance period, and the remaining two installments paid as of the next two anniversary dates of the end of the performance period.  Executives who are not employed by the Company at the time when shares are earned (orend of the anniversary date thereafter, where applicable)three-year performance period shall forfeit their right to those shares.

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The number of shares to be delivered pursuant to the PSU awards if target performance is met, plus the number of shares of time-based restricted stock awarded to the named executives (see the “All Other Stock Awards” subsection below) on the same date (awards of both were made on the same day after they arewere approved by the Compensation Committee), have a grant date fair value, based upon the closing stock price on the date the awards were made of 200% of base salary for Mr. Dunbar, 125%150% for Mr. DeByle, 75%100% for Ms. Rosen, 100% forMr. Glass and Ms. De Greef-Safft, 55%and 65% for Mr. Burns and 40% for Mr. McGovern.Burns.

All Other Stock Awards

The amounts set forth under this heading disclose shares of time-based restricted stock awarded to the named executives under the long-term incentive program.  These shares will vest in three years fromequal annual installments on each of the first, second and third anniversary of the date of the award.  During the three-year period, executives shall have voting rights and shall accrue dividends on the shares, which shall be paid in cash at the end of the three-year period.  Executives will forfeit the right to receive the shares if their employment terminates prior to the end of the three-yearvesting period, unless termination is the result of death, disability or retirement, in which case all restricted stock awarded to the executive will immediately vest as of the date of such occurrence.  The grant date fair value of these shares is the closing price of the Company’s stock on the date when they are granted times the number of shares granted.

In addition, an award of time-based restricted stock was made to each of Mr. Burns and Mr. McGovern as of July 27, 2015 and September 1, 2015, respectively, pursuant to their respective commencement of employment with the Company.  Mr. Burns’ award, which was valued at $450,009, will be paid as follows:  2007 shares on July 27, 2016; 2,007 shares on July 27, 2017; 1,338 shares on July 27, 2018 and 669 shares on July 27, 2019, provided that Mr. Burns remains employed as of such date.  Mr. McGovern’s award, which was valued at $99,976, will be paid in on September 1, 2018, provided that Mr. McGovern remains employed as of such date.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR END

The following table sets forth certain information with respect to outstanding equity awards at June 30, 20162017 to the named executive officers other than Ms. Rosen.  Ms. Rosen retired on April 15, 2016 and all unvested shares to which she was entitled accelerated vesting became vested as of that date.  As of June 30, 2016 she held no unvested shares.officers.  The Company has not awarded stock options since fiscal year 2003, and there are no outstanding option awards to report.

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(1)

The following table sets forth the vesting dates for the unvested shares awarded to each named executive: