Schedule 14A


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For Dr. Graves, Mr. Oldenkamp and Ms. Powell, all performance goals were based on total Company performance. For Messrs. Bachrach and Emholz, the adjusted diluted EPS performance goal was a total Company measure, but the remaining measures were determined based upon achievement of targets by the Test or Sensors segment, as applicable. The Committee established performance goals based on segment (rather than total Company) performance for these executives to reflect their accountability for the performance of that segment. The Committee believes that the leader of the segment has a meaningful opportunity to directly impact the achievement of the performance goals through his individual performance as the leader of that segment.
The Committee established minimum, target and maximum levels of achievement for each of the performance metrics, as shown in the following table:

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate Goal  (1)


 

Weight


 

Threshold(2)


 

Target


 

Maximum


 

Result


 

Percent of

Target

Performance

Achieved




























Adjusted Diluted EPS (3)

 

35%

 

$ 2.61

 

$ 3.27

 

$ 3.92

 

$ 3.01

 

92%

Adjusted Revenue (000s) (4)

 

35%

 

$ 484,320

 

$ 605,400

 

$ 726,480

 

$ 605,644

 

100%

Adjusted WCRR (5)

 

30%

 

31.9%

 

29.0%

 

26.1%

 

24.0%

 

121%


Payout as % of Target Bonus


 


 


 


50%


 


100%


 


200%


 


 


 


 

(1)

Specific performance goals for the Test and Sensors segments and their corresponding minimum, target and maximum amounts are not disclosed due to the competitive harm of such disclosure. For fiscal 2016, the Committee followed the same pattern in setting segment-specific performance levels as for setting the corporate performance levels: for adjusted diluted EPS and adjusted revenue, minimum is equal to 80% of the expected results under the applicable segment's annual plan, target is equal to expected results and maximum is equal to 120% of expected results; and for adjusted
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WCRR, minimum is equal to a 10% decrease in the expected results under the applicable segment's annual plan, target is equal to expected results and maximum is equal to a 10% increase in expected results.(2)

Represents the hurdle performance required at which 50% payout begins.

(3)

Adjusted diluted EPS is a non-GAAP financial measure. For more information on how adjusted diluted EPS is calculated, see page 58 of our Annual Report on Form 10-K for fiscal 2016.

(4)

Adjusted revenue is a non-GAAP financial measure. For more information on how adjusted revenue is calculated, see page 18 of this proxy statement.

(5)

Adjusted WCRR is a non-GAAP financial measure. For more information on how adjusted revenue is calculated, see page 59 of our Annual Report on Form 10-K for fiscal 2016.
In addition, since the Committee believes the adjusted diluted EPS performance goal provides a strong link between the incentive program and shareholder value, if the target level of adjusted diluted EPS achievement is not met, EVC Plan participants are limited to target payout under the plan regardless of the results of other performance goals. Within this provision of the EVC Plan, if the adjusted diluted EPS target is not met, an executive may receive a payout in excess of 100% for an individual performance goal so long as the executive's payout under the EVC Plan is not in excess of 100% of target, in the aggregate.
Based on the results for fiscal year 2016, the payouts to each named executive officer, other than Messrs. Emholz and Hore, under the EVC Plan by performance goal were calculated as follows based upon their respective fiscal year 2016 base salaries:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performance Goal


 

Percent of

Target Payout

Achieved


 

Jeffrey Graves


 

Jeffrey

Oldenkamp


 

William

Bachrach (1)


 

Catherine

Powell


 



































Adjusted diluted EPS

 

 

80%

 

$

181,980

 

$

52,290

 

$

55,351

 

$

35,569

 

Adjusted revenue

 

 

100%

 

$

227,078

 

$

65,249

 

$

80,952

 

$

44,496

 

Adjusted WCRR

 

 

200%

 

$

388,500

 

$

111,632

 

$

118,167

 

$

76,125

 

Total without cap

 

 

 

 

$

797,558

 

$

229,171

 

$

254,470

 

$

156,190

 

Total with cap (2)

 

 

 

 

$

647,500

 

$

186,053

 

$

196,945

 

$

126,876

 

Total as % of Target

 

 

 

 

 

100%

 

 

100%

 

 

100%

 

 

100%

 

(1)

Achievement of the performance goals relating to adjusted revenue and adjusted WCRR for corporate performance for fiscal 2016 does not apply to Mr. Bachrach. Amounts attributable to each of these measures represent amounts attributable to actual achievement in fiscal 2016 by the Test segment of the performance goal noted.

(2)

The bonus amount for all named executive officers was capped at target, as the EVC Plan restricts over-ranging in the event that the target for any goal is not achieved and the adjusted diluted EPS goal was not achieved during fiscal 2016.
Mr. Emholz did not qualify for a payout under the EVC Plan since he was no longer an employee of the Company as of the last day of fiscal 2016. Mr. Hore does not participate in the EVC Plan, so he also did not qualify for a payout. Pursuant to the terms of the Hore Employment Agreement, the Committee decided not to provide a discretionary bonus to Mr. Hore based on the short period of time that he was employed by the Company during fiscal 2016.
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Long-Term Incentive Awards
The awards for fiscal 2016 were weighted 50% of the value in stock options and 50% of the value in PRSUs restricted over a three-year period. In determining the number of stock options to grant, the Committee reviewed the stock options based on an average of the Black Scholes values over the last 90 days prior to the end of the fiscal year. This methodology was to better represent the value of our equity over the most current period prior to the date of the award. A more stable option grant size (in terms of the number of options) also sends a signal that pay realized from stock option grants will be more sensitive to future stock price appreciation and less sensitive to past stock price volatility. This approach, however, causes the accounting value of the stock options that are shown in the Summary Compensation and Grants of Plan-Based Awards tables to differ from the value of PRSUs, which would otherwise be unexpected with an equal-weighted mix of options and PRSUs. In determining the number of PRSUs to grant, half of the aggregate value of the grant is divided by the closing price of the Company's common stock on the date of grant.
The options are all non-qualified stock options that vest in incremental installments of one-third per year commencing on the first anniversary of the date of grant and expire seven years after the date of grant.
In fiscal 2016, the Committee continued to grant PRSUs using adjusted ROIC as a performance measure. The Committee believes that measuring adjusted ROIC over a three-year period is an appropriate measure for such PRSUs given its emphasis on profitability with a longer-term view. The performance measure of adjusted ROIC is expressed as annual targets for the applicable three-year period and the annual performance is averaged over the performance period. The performance range has threshold, target and maximum performance expectations each cycle, with a 75% guaranteed threshold of target and up to a 125% maximum opportunity of target.
The following table shows for each of the named executive officers (other than Mr. Hore who did not receive an award because he was not an officer of the Company at the time) the number of shares underlying the equity awards and the aggregate value of the awards granted in December 2015 for fiscal 2016.

 

 

 

 

 

 

 

 

Named Executive Officer


 

Number of Shares

Underlying Stock

Options


 

Number of Performance

Restricted Stock Units


 

Aggregate Value of

Awards


Jeffrey Graves

 

61,455

 

10,123

 

$

1,250,000

Jeffrey Oldenkamp

 

17,207

 

2,834

 

$

350,000

William Bachrach

 

14,749

 

2,430

 

$

300,000

John Emholz

 

9,833

 

1,620

 

$

200,000

Catherine Powell

 

8,850

 

1,458

 

$

180,000
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