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Table of Contents
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Filed by the Registrant ý
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Filed by a Party other than the Registrant o
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
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CARLISLE COMPANIES INCORPORATED
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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Table of Contents
CARLISLE COMPANIES INCORPORATED
16430 North Scottsdale Road, Suite 400
Scottsdale, Arizona 85254
(480) 781-5000
NOTICE OF 2020 ANNUAL MEETING OF STOCKHOLDERS
The 2020 Annual Meeting of Stockholders (the "Annual Meeting") of Carlisle Companies Incorporated (the "Company") will be held at 8:00 a.m., Mountain Time,
on Wednesday, May 6, 2020 at the Company's offices located at 16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254, for the following purposes:
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1.
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To
elect the three directors nominated by the Board of Directors;
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2.
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To
ratify the appointment of Deloitte & Touche LLP to serve as the Company's independent registered public accounting firm for 2020;
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3.
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To
approve, on an advisory basis, the Company's named executive officer compensation in 2019; and
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4.
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To
transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
DUE TO THE CURRENT CORONAVIRUS (COVID-19) PANDEMIC, THE COMPANY MAY DECIDE UPON NOTICE TO CHANGE THE DATE, TIME OR LOCATION OF THE ANNUAL
MEETING.
The Board of Directors recommends that you vote "FOR" Items 1, 2 and 3. The proxy holders will use their discretion to vote on other matters that may
properly arise at the Annual Meeting or any adjournment or postponement thereof.
Only
stockholders of record as of the close of business on March 11, 2020 will be entitled to vote at the Annual Meeting whether or not they have transferred their shares since
that date.
YOUR VOTE IS IMPORTANT
If
you own your shares directly as a registered stockholder or through the Carlisle, LLC Employee Incentive Savings Plan, please vote in one of the following
ways:
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Via the Internetby logging on to www.proxyvote.com and following the instructions,
using the Control Number shown on the Notice of Internet Availability of Proxy Materials (or proxy card if you received or request one), for voting.
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By telephone (only if you received or request a proxy card)by calling the phone number on the proxy card.
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By mail (only if you received or request a proxy card)by completing, signing, dating and promptly returning the proxy card in the
postage-paid envelope provided.
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In personby submitting a ballot in person at the Annual Meeting.
If
you own your shares indirectly through a bank, broker or similar organization, please follow the instructions you receive from the stockholder of record to vote your shares.
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By Order of the Board of Directors,
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/s/ SCOTT C. SELBACH
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Scott C. Selbach
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Vice President, Secretary and General Counsel
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Scottsdale,
Arizona
March 24, 2020
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Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders To Be Held on May 6, 2020:
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The Notice of 2020 Annual Meeting of Stockholders, Proxy Statement and
2019 Annual Report to Stockholders are available at www.proxyvote.com.
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Table of Contents
Table of Contents
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Table of Contents
PROXY STATEMENT
GENERAL INFORMATION
This Proxy Statement is being furnished in connection with the solicitation by the Board of Directors (the "Board of Directors" or the "Board")
of Carlisle Companies Incorporated (the "Company") of proxies to be voted at the 2020 Annual Meeting of Stockholders (the "Annual Meeting"). The Annual Meeting will be held at 8:00 a.m.,
Mountain Time, on Wednesday, May 6, 2020 at the Company's offices located at 16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254.
DUE TO THE CURRENT CORONAVIRUS (COVID-19) PANDEMIC, THE COMPANY MAY DECIDE UPON NOTICE TO CHANGE THE DATE, TIME OR LOCATION OF THE ANNUAL
MEETING.
In
accordance with the Securities and Exchange Commission rules and regulations (the "SEC rules"), instead of mailing a printed copy of the proxy materials to each stockholder of record,
the Company is furnishing proxy materials to its stockholders via the Internet. You will not receive a printed copy of the proxy materials unless you request a copy. Instead, the Notice of Internet
Availability of Proxy Materials instructs you how to access and review the proxy materials over the Internet. If you would like to receive a printed copy of the proxy materials, you should follow the
instructions for requesting a copy included in the notice.
The
Notice of Internet Availability of Proxy Materials, or a printed copy of the proxy materials (including the Proxy Statement and form of proxy), as applicable, was sent to
stockholders beginning March 24, 2020.
The
proxy is solicited by the Board of Directors of the Company. The cost of proxy solicitation will be borne by the Company. In addition to the solicitation of proxies by mail and the
Internet, officers and regular employees of the Company may devote part of their time to solicitation by correspondence sent via e-mail, facsimile and telephone or personal calls. Arrangements may
also be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation materials to beneficial owners and for the reimbursement of their out-of-pocket and
clerical expenses incurred in connection therewith. Proxies may be revoked at any time prior to the taking of the vote at the Annual Meeting. See "Voting by Proxy and Confirmation of Beneficial
Ownership" beginning on page 50.
The
mailing address of the Company's principal executive offices is Carlisle Companies Incorporated, 16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254. Upon written request mailed to the attention of the
Secretary of the Company, at the Company's principal executive offices, the Company will provide without charge a copy of
its Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission (the "SEC").
The record date for the Annual Meeting is March 11, 2020. Only holders of record of the Company's common stock ("Shares" or "Common
Shares") as of the close of business on that date will be entitled to vote at the Annual Meeting. As of the record date, 55,690,398 Shares were outstanding. The presence, in person or by proxy, of the
holders of a majority of the votes entitled to be cast is necessary to constitute a quorum for the transaction of business at the Annual Meeting.
The Company's Restated Certificate of Incorporation provides that each person who received Shares pursuant to the Agreement of Merger, dated
March 7, 1986, which was approved by the
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stockholders
of Carlisle Corporation and became effective on May 30, 1986, is entitled to five votes per Share. Persons acquiring Shares after May 30, 1986 (the effective date of the
merger) are entitled to one vote per Share until the Shares have been beneficially owned (as defined in the Restated Certificate of Incorporation) for a continuous period of four years. Following
continuous ownership for a period of four years, the Shares are entitled to five votes per Share. The actual voting power of each holder of Shares will be based on stockholder records at the time of
the Annual Meeting. See "Voting by Proxy and Confirmation of Beneficial Ownership" beginning on page 50. In addition, holders of Shares issued from the treasury, other than in connection with the
exercise of stock options, before the close of business on March 11, 2020 (the record date for determining stockholders entitled to vote at the Annual Meeting) are entitled to five votes per
Share unless the Board of Directors determined otherwise at the time of authorizing such issuance.
If your Shares are registered directly in your name with the Company's transfer agent, Computershare Investor Services, LLC, you are
considered the registered holder of those Shares. As the registered stockholder, you can ensure your Shares are voted at the Annual Meeting by submitting your instructions: (i) via the Internet
by logging on to www.proxyvote.com and following the instructions, using the Control Number shown on the Notice of Internet Availability of Proxy
Materials (or proxy card if you received or request one), for voting; (ii) by telephone (only if you received or request a proxy card) by calling the phone number on the proxy card;
(iii) by mail (only if you received or request a proxy card) by completing, signing, dating and promptly returning the proxy card in the postage-paid envelope provided; or (iv) by
attending the Annual Meeting and voting your Shares in person at the meeting. Internet and telephone voting for registered stockholders will be available 24 hours a day, up until
11:59 p.m., Mountain Time, on May 5, 2020. You may obtain directions to the Annual Meeting in order to vote in person by calling the Company's principal executive offices at
(480) 781-5000 or by visiting the Company's website at: www.carlisle.com/investors/events-and-presentations.
Most
of the Company's stockholders hold their Shares through a bank, broker or other nominee, rather than directly in their name. In that case, you are considered the beneficial owner of
Shares held in street name. As the beneficial owner, you are entitled to direct the voting of your Shares by your intermediary. Brokers, banks and other nominees typically offer telephonic or
electronic means by which the beneficial owners of Shares held by them can submit voting instructions, in addition to the traditional mailed voting instruction forms. If you own your Shares indirectly
through a bank, broker or other nominee, please follow the instructions you receive from the stockholder of record to vote your Shares. As the beneficial owner, if you wish to vote at the Annual
Meeting, you will need to bring to the meeting a legal proxy from your bank, broker or other nominee authorizing you to vote those Shares.
If
you participate in the Carlisle, LLC Employee Incentive Savings Plan (the "401(k) Plan") and own Shares through your 401(k) Plan account, Wells Fargo Bank, N.A. ("Wells
Fargo"), the trustee of the 401(k) Plan, will vote your 401(k) Plan Shares in accordance with the instructions you provide by voting via the Internet, by telephone or on the voting instruction form.
If Wells Fargo does not receive voting instructions from you by 11:59 p.m., Mountain Time, on May 5, 2020, Wells Fargo will vote your 401(k) Plan Shares as directed by the Carlisle
Pension and Insurance Committee, the 401(k) Plan administrator, in its discretion.
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Table of Contents
The following sets forth the voting requirement to approve each of the proposals:
Proposal 1, Election of Directors. Directors shall be elected by the affirmative vote of a majority of the votes cast (meaning that the
number of
votes cast "for" a nominee must exceed the number of votes cast "against" such nominee). If any incumbent director who is a nominee for reelection receives a greater number of votes "against" his or
her election than votes "for" such election in an uncontested election of directors, the Company's Amended and Restated Bylaws provide that the director must promptly tender his or her offer of
resignation to the Board for consideration. See "Proposal 1: Election of Directors" for a more detailed description of the Company's director resignation policy.
Proposal 2, Ratification of the Appointment of Independent Registered Public Accounting Firm. Ratification of the appointment of
Deloitte &
Touche LLP to serve as the Company's independent registered public accounting firm for 2020 requires the affirmative vote of a majority of the total votes of all Shares present in person or
represented by proxy and entitled to vote on the proposal at the Annual Meeting (meaning that of the total votes of all Shares represented at the Annual Meeting and entitled to vote, a majority of
them must be voted "for" the proposal for it to be approved).
Proposal 3, Advisory Vote to Approve Named Executive Officer Compensation. Advisory approval of the Company's named executive officer
compensation in
2019 requires the affirmative vote of a majority of the total votes of all Shares present in person or represented by proxy and entitled to vote on the proposal at the Annual Meeting (meaning that of
the total votes of all Shares represented at the Annual Meeting and entitled to vote, a majority of them must be voted "for" the proposal for it to be approved).
Other Items. Approval of any other matters requires the affirmative vote of a majority of the total votes of all Shares present in
person or
represented by proxy and entitled to vote on the item at the Annual Meeting (meaning that of the total votes of all Shares represented at the Annual Meeting and entitled to vote, a majority of them
must be voted "for" the item for it to be approved).
Abstentions and broker non-votes are counted as present or represented for purposes of determining the presence or absence of a quorum for the
Annual Meeting. A broker non-vote occurs when a nominee holding Shares in street name for a beneficial owner votes on one proposal but does not vote on another proposal because, with respect to such
other proposal, the nominee does not have discretionary voting power and has not received voting instructions from the beneficial owner.
Under
the New York Stock Exchange rules (the "NYSE rules"), Proposal 2, the ratification of the appointment of Deloitte & Touche LLP to serve as the Company's independent
registered public accounting firm for 2020, is considered a "routine" matter, which means that brokerage firms may vote in their discretion on this proposal on behalf of clients who have not furnished
voting instructions. However, Proposals 1 and 3, the election of directors and the advisory vote to approve the Company's named executive officer compensation in 2019, respectively, are "non-routine"
matters under the NYSE rules, which means that brokerage firms that have not received voting instructions from their clients on these matters may not vote on these proposals.
With
respect to Proposal 1, the election of directors, you may vote "for" or "against" each of the nominees for the Board, or you may "abstain" from voting for one or more nominees.
Abstentions and broker non-votes are not considered votes cast for the foregoing purpose and will therefore have no effect on the election of director nominees.
With
respect to Proposals 2 and 3, the ratification of the appointment of Deloitte & Touche LLP to serve as the Company's independent registered public accounting firm for
2020 and the advisory vote
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to
approve the Company's named executive officer compensation in 2019, respectively, you may vote "for" or "against" these proposals, or you may "abstain" from voting on these proposals. An abstention
will be counted as a vote present or represented and entitled to vote on these proposals and will therefore have the same effect as a vote "against" these proposals, and a broker non-vote will not be
considered entitled to vote on these proposals and will therefore have no effect on their outcome. As discussed above, because Proposal 2, the ratification of the appointment of Deloitte &
Touche LLP to serve as the Company's independent registered public accounting firm for 2020, is considered a "routine" matter, we do not expect any broker non-votes with respect to this
proposal.
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Table of Contents
SECURITY OWNERSHIP
A. Certain Beneficial Owners
The table below provides information about the beneficial ownership of Common Shares as of December 31, 2019 by each person known by the Company to
beneficially own more than 5% of the outstanding Common Shares as of such date. As defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), "beneficial
ownership" means essentially that a person has or shares voting or investment power over shares. It does not necessarily mean that the person enjoys any economic benefit from those shares. The
ownership percentages in the table below are based on 55,866,103 Common Shares outstanding as of December 31, 2019.
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Name and Address of Beneficial Owner
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Number of Shares
and Nature of
Beneficial Ownership
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Ownership
Percentage
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The Vanguard Group, Inc.
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100 Vanguard Boulevard
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Malvern, Pennsylvania 19355
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5,830,128(1)
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10.4%
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BlackRock, Inc.
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55 East 52nd Street
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New York, New York 10055
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5,293,136(2)
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9.5%
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Janus Henderson Group plc
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201 Bishopsgate EC2M 3AE
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United Kingdom
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3,291,924(3)
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5.9%
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(1)
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This
information is based upon a Schedule 13G/A filed with the SEC on February 12, 2020 by The Vanguard Group, Inc. ("Vanguard"). The
Schedule 13G/A reports that Vanguard has sole voting power over 31,825 Shares, shared voting power over 8,173 Shares, sole investment power over 5,797,208 Shares and shared investment power
over 32,920 Shares.
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(2)
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This
information is based upon a Schedule 13G/A filed with the SEC on February 5, 2020 by BlackRock, Inc. ("BlackRock"). The
Schedule 13G/A reports that BlackRock has sole voting power over 5,054,355 Shares, shared voting power over no Shares and sole investment power over all of such Shares.
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(3)
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This
information is based upon a Schedule 13G/A filed with the SEC on February 13, 2020 by Janus Henderson Group plc ("Janus Henderson"). The
Schedule 13G/A reports that Janus Henderson has shared voting and investment power over all of such Shares. The Schedule 13G/A further reports that Janus Henderson has an indirect 97%
ownership stake in Intech Investment Management LLC ("Intech") and a 100% ownership stake in Janus Capital Management LLC ("Janus Capital"), Perkins Investment Management LLC
("Perkins"), Geneva Capital Management LLC, Henderson Global Investors Limited and Janus Henderson Investors Australia Institutional Funds Management Limited (collectively, the "Asset
Managers"), and that, due to this ownership structure, holdings for the Asset Managers are aggregated for purposes of the Schedule 13G/A. The Schedule 13G/A further reports that, as a
result of its role as investment adviser or sub-adviser to various funds, individual and/or institutional clients (collectively, the "Managed Portfolios"), Intech may be deemed to be the beneficial
owner of 9,321 Shares held by the Managed Portfolios, Janus Capital may be deemed to be the beneficial owner of 3,082,204 Shares held by the Managed Portfolios and Perkins may be deemed to be the
beneficial owner of 200,399 Shares held by the Managed Portfolios, but that none of Intech, Janus Capital or Perkins has the right to receive any dividends from, or the proceeds from the sale of, the
Shares held in the Managed Portfolios and each disclaims any ownership associated with such rights.
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Table of Contents
B. Management
The table below shows the number and the percentage of Common Shares beneficially owned as of February 28, 2020 by each director, director nominee and
named executive officer and by all directors and executive officers as a group. As of February 28, 2020, a total of 55,815,727 Common Shares were outstanding.
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Name
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Shares
Owned
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Shares
Subject to
Options
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Share
Equivalent
Units(1)
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Total
Beneficial
Ownership
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Ownership
Percentage
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Robin J. Adams
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5,959
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0
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18,459
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24,418
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*
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Robert G. Bohn
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7,972
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0
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22,604
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30,576
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*
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Jonathan R. Collins
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0
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0
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5,490
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5,490
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*
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James D. Frias
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663
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0
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8,040
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8,703
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*
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Maia A. Hansen
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0
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0
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310
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310
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*
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D. Christian Koch
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151,901(2)(3)(4)
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160,055
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388
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312,344
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*
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Gregg A. Ostrander
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4,469
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0
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32,598
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37,067
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*
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Corrine D. Ricard
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600
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0
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6,601
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7,201
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*
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David A. Roberts
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202,453
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0
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7,830
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210,283
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*
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Lawrence A. Sala
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18,248
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0
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|
32,281
|
|
|
|
50,529
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jesse G. Singh
|
|
|
|
0
|
|
|
|
0
|
|
|
|
5,239
|
|
|
|
5,239
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John E. Berlin
|
|
|
|
29,191(2)(3)(4)
|
|
|
|
14,786
|
|
|
|
1,000
|
|
|
|
44,977
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert M. Roche
|
|
|
|
13,348(3)(4)
|
|
|
|
25,405
|
|
|
|
9,178
|
|
|
|
47,931
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Selbach
|
|
|
|
38,744(2)(3)(4)
|
|
|
|
12,155
|
|
|
|
21,392
|
|
|
|
72,291
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicholas J. Shears
|
|
|
|
8,912(3)(4)
|
|
|
|
10,870
|
|
|
|
5,801
|
|
|
|
25,583
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors and executive officers as a group (22 persons)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,027,256
|
|
|
|
1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
*
-
Less
than 1%.
-
(1)
-
Share
equivalent units do not represent issued and outstanding Shares and have no voting power. The Share equivalent units for the directors represent Share unit
awards and cash fees the directors elected to defer and invest in Share equivalent units, which will be paid in Shares following termination of the director's service. The Share equivalent units for
the executive officers represent Shares earned under the Carlisle Companies Incorporated Incentive Compensation Program (the "Incentive Compensation Program") the officers elected to defer under the
Carlisle Companies Incorporated Nonqualified Deferred Compensation Plan (the "Nonqualified Deferred Compensation Plan") and which will be paid in Shares following termination of the officer's
employment.
-
(2)
-
Includes
Shares allocated as of December 31, 2019 to the accounts of the following directors and executive officers participating in the 401(k) Plan:
Mr. Koch, 1,232 Shares; Mr. Berlin, 8,202 Shares; and Mr. Selbach, 1,312 Shares. Each participant in the 401(k) Plan has the right to direct the voting of Shares allocated to his
or her account. Shares are held by the trustee of the 401(k) Plan in a commingled trust fund with beneficial interest allocated to each participant's account.
-
(3)
-
Includes
restricted Shares as follows: Mr. Koch, 57,008 Shares; Mr. Berlin, 8,310 Shares; Mr. Roche, 8,205 Shares; Mr. Selbach, 5,140
Shares; and Mr. Shears, 6,398 Shares. Restricted Shares have one vote per Share until such Shares have been held for a continuous period of four years.
6
Table of Contents
-
(4)
-
Excludes
performance Shares awarded to the executive officers as a group, including the named executive officers as follows: Mr. Koch, 40,095 Shares;
Mr. Berlin, 8,310 Shares; Mr. Roche, 8,205 Shares; Mr. Selbach, 5,140 Shares; and Mr. Shears, 3,815 Shares. The performance Shares, to the extent earned, will be
paid to the executive officers in Shares following the expiration of the applicable performance period.
7
Table of Contents
PROPOSAL 1:
ELECTION OF DIRECTORS
The number of directors is currently fixed at 11. The Company's Restated Certificate of Incorporation provides for a classified Board of
Directors under which the Board is divided into three classes of directors, with each class as nearly equal in number as possible. Three directors are to be elected at the Annual Meeting. If elected,
each nominee will serve for a three-year term expiring at the 2023 Annual Meeting of Stockholders or until his successor is duly elected and qualified. All of the nominees are currently serving as
directors and have agreed to be named in this Proxy Statement and to serve if elected.
Although
the Company knows of no reason why any of the nominees would not be able to serve, if any nominee is unavailable for election, the proxy holders intend to vote your Shares for
any substitute nominee proposed by the Board.
Under
the Company's Statement of Corporate Governance Guidelines and Principles, a director is required to submit his or her resignation at the annual meeting of stockholders following
the earlier of the date when he or she reaches age 72 or has completed 18 consecutive years of service on the Board. Mr. Roberts has attained age 72 and is expected to submit his resignation
from the Board at the Annual Meeting.
The
Company's Amended and Restated Bylaws provide for a majority vote standard in uncontested director elections, which means each director nominee must receive a majority of the votes
cast with respect to that nominee at the Annual Meeting. For this purpose, a "majority of the votes cast" means that the number of votes cast "for" a nominee must exceed the number of votes cast
"against" such nominee. In an uncontested election, if any incumbent director who is nominated for reelection does not receive a majority of the votes cast, the director must promptly tender his or
her offer of resignation to the Board for consideration. In such event, the Board may decrease the number of directors on the Board, fill any vacancy, refuse to accept such offer of resignation or
take other appropriate action. The Company's Amended and Restated Bylaws provide that directors will be elected by a plurality of the votes cast in contested elections. The resignation policy set
forth in the Company's Amended and Restated Bylaws does not apply to contested elections.
For
voting purposes, proxies requiring confirmation of the date of beneficial ownership received by the Board of Directors with such confirmation not completed so as to show which Shares
beneficially owned by the stockholder are entitled to five votes will be voted with one vote for each Share. See "Voting by Proxy and Confirmation of Beneficial Ownership" beginning on page 50.
The Board of Directors recommends that you vote "FOR" the election of each of the three nominees listed below. Unless otherwise specified,
proxies will be voted "FOR" the election of each of the three nominees listed below.
8
Table of Contents
A. Business Experience of Directors
Director Nominees
The table below sets forth certain information relating to each director nominee, as furnished to the Company by the nominee. Except as
otherwise indicated, each nominee has had the same principal occupation or employment during the past five years.
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Positions with the Company, Principal Occupation and
Other Directorships
|
|
Period of Service as a Director
and Expiration of Term
|
Robert G. Bohn
|
|
66
|
|
Chairman (from January 2000 to February 2011) and President and Chief Executive Officer (from November 1997 to December 2010) of Oshkosh Truck Corporation, a global manufacturer of specialty vehicles and
bodies for access equipment, defense, fire and emergency and commercial uses. Director of The Manitowoc Company, Inc. (since May 2014) and Parker-Hannifin Corporation (since August 2010). Former director of Graco Inc. (from June 1999 to
January 2008).
|
|
April 2008 to date. Term expires 2020.
|
Gregg A. Ostrander
|
|
67
|
|
Executive Chairman (from January 2008 to June 2010), Chairman, President and Chief Executive Officer (from April 2001 to January 2008) and President and Chief Executive Officer (from January 1994 to
April 2001) of Michael Foods, Inc., a major food service and retail food company that produces products for food service distributors, chain restaurants and retail grocery and club stores. Former director of Arctic Cat Inc. (from April 1994
to August 2012), Hearthside Food Solutions LLC (from October 2014 to May 2018) and Michael Foods, Inc. (from April 2001 to June 2014).
|
|
August 2008 to date. Term expires 2020.
|
Jesse G. Singh
|
|
54
|
|
Chief Executive Officer (since June 2016) of The AZEK Company, a leading manufacturer of building products. Previously, Mr. Singh served in a number of capacities with 3M Corporation, a global
diversified technology company, including Senior Vice President of Supply Chain Transformation (from March 2016 to May 2016), President of 3M Health Information Systems Division (from September 2015 to February 2016), Senior Vice President of
Marketing and Sales (from January 2014 to August 2015), Vice President and General ManagerStationary and Office Supplies Division (from March 2012 to December 2013) and President of 3M Sumitomo (from November 2007 to February 2012). Prior to 3M,
Mr. Singh spent several years in general management, marketing and account management positions for General Electric Company and Arthur Andersen.
|
|
December 2017 to date. Term expires 2020.
|
9
Table of Contents
Continuing Directors
The table below sets forth certain information relating to each continuing director, as furnished to the Company by the director. Except as
otherwise indicated, each director has had the same principal occupation or employment during the past five years.
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Positions with the Company, Principal Occupation and Other Directorships
|
|
Period of Service as a Director and Expiration of Term
|
Robin J. Adams
|
|
66
|
|
Vice Chairman (from March 2012 to April 2013), Chief Financial Officer (from April 2004 to March 2012) and Chief Administrative Officer (from April 2004 to April 2013) of BorgWarner Inc., a leading
global supplier of highly engineered systems and components, primarily for vehicle powertrain applications. Prior to BorgWarner, Mr. Adams served as Executive Vice PresidentFinance and Chief Financial Officer (from July 1999 to April 2004)
of American Axle & Manufacturing Holdings, Inc., a manufacturer of automotive driveline and drivetrain components and systems. Director of Delphi Technologies PLC (since December 2017). Former director of Accuride Corporation (from
May 2013 to November 2016) and BorgWarner Inc. (from April 2005 to April 2013).
|
|
October 2009 to date. Term expires 2022.
|
Jonathan R. Collins
|
|
43
|
|
Vice President, eCommerce Global Components (since March 2020) of Arrow Electronics Inc., a global provider of electronic components and comprehensive computing solutions. Prior to Arrow,
Mr. Collins served as General Manager and Head of eCommerce (from May 2019 to March 2020) of The Goodyear Tire & Rubber Company, one of the world's leading manufacturers of tires. Prior to Goodyear, Mr. Collins was Vice President
and Head of eCommerce (from September 2016 to April 2019) of Mylan N.V., a leading global pharmaceutical company offering products in approximately 165 countries. Prior to Mylan, Mr. Collins served as Senior Director of
eCommerceInternational and M&A (from April 2013 to September 2016) of W.W. Grainger, Inc., a leading distributor of maintenance, repair and operating supplies and other related products and services, Director of Digital Strategy and
User Experience (from February 2012 to November 2012) of Anixter International Inc., a global supplier of communications and security products and electrical and electronic wire and cable.
|
|
September 2016 to date. Term expires 2022.
|
James D. Frias
|
|
63
|
|
Chief Financial Officer, Treasurer and Executive Vice President (since January 2010) and Corporate Controller (from June 2001 through December 2009) of Nucor Corporation, a manufacturer of steel and
steel products for North America and international markets.
|
|
February 2015 to date. Term expires 2021.
|
10
Table of Contents
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Positions with the Company, Principal Occupation and Other Directorships
|
|
Period of Service as a Director and Expiration of Term
|
Maia A. Hansen
|
|
51
|
|
Senior Vice President, Operations & Supply Chain (since March 2020) of Athersys, Inc., a clinical-stage biotechnology company. Prior to Athersys, Ms. Hansen was a Senior Partner (from July
2013 to March 2020) and Partner (from July 2006 to June 2013) of McKinsey & Company, a global management consulting firm serving leading businesses, governments and non-governmental and not-for-profit organizations.
|
|
February 2020 to date. Term expires 2021.
|
D. Christian Koch
|
|
55
|
|
President and Chief Executive Officer (since January 2016) and Chief Operating Officer (from May 2014 to January 2016) of the Company. Previously, Mr. Koch served as Group President of Carlisle
Diversified Products (from June 2012 to May 2014), President of Carlisle Brake & Friction, Inc., a wholly owned subsidiary of the Company ("CBF") (from January 2009 to June 2012), and President of Carlisle Asia Pacific (from February
2008 to January 2009). Director of The Toro Company (since April 2016). Former director of Arctic Cat Inc. (from August 2009 to April 2016).
|
|
January 2016 to date. Term expires 2022.
|
Corrine D. Ricard
|
|
56
|
|
Senior Vice President, The Mosaic Company and President, Mosaic Fertilizantes (since November 2019), Senior Vice PresidentCommercial (from February 2017 to October 2019), Senior Vice
PresidentHuman Resources (from April 2012 to January 2017), Vice PresidentInternational Sales and Distribution (from March 2011 to April 2012), Vice PresidentBusiness Development (from March 2007 to March 2011) and Vice
PresidentSupply Chain (from October 2004 to March 2007) of The Mosaic Company, a leading global producer and marketer of concentrated phosphate and potash. Prior to Mosaic, Ms. Ricard worked for Cargill, Inc. in various roles,
including supply chain, product management and international sales.
|
|
February 2016 to date. Term expires 2021.
|
Lawrence A. Sala
|
|
57
|
|
President and Chief Executive Officer (from September 1997 to December 2018) and Chairman (from November 2001 to February 2014) of Anaren, Inc., a leading manufacturer of microelectronics and
microwave components and assemblies for the wireless and space and defense electronic markets. Former director of Anaren, Inc. (from May 1995 to February 2014).
|
|
September 2002 to date. Term expires 2021.
|
B. Specific Experience and Skills of Directors
The Board of Directors has identified nine specific areas of experience or attributes that qualify a person to serve as a member of the Board in light of the
Company's businesses and corporate structure. The table below shows the experience or attributes held by each director nominee and continuing member of the Board of Directors. The narrative discussion
that follows the table describes
11
Table of Contents
the
specific experience, qualifications, attributes and skills of each director nominee and continuing member of the Board of Directors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notable Multi-
Industry
Experience
|
|
Significant
Experience
in Company
Specific
Industries*
|
|
Experience
as Chair/
CEO of
Multi-
National
Business
|
|
Experience
as CFO of
Multi-
National
Business
|
|
Meets
Definition
of "Audit
Committee
Financial
Expert"
|
|
Experience
with
International
Business
Issues
|
|
Mergers &
Acquisitions
Expertise
|
|
Manufacturing
Experience
|
|
Corporate
Governance
Experience
|
|
Mr. Adams
|
|
|
|
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
Mr. Bohn
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
Mr. Collins
|
|
ü
|
|
ü
|
|
|
|
|
|
|
|
ü
|
|
ü
|
|
|
|
ü
|
|
Mr. Frias
|
|
ü
|
|
ü
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
Ms. Hansen
|
|
|
|
ü
|
|
|
|
|
|
|
|
ü
|
|
ü
|
|
|
|
|
|
Mr. Koch
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
Mr. Ostrander
|
|
ü
|
|
|
|
ü
|
|
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
Ms. Ricard
|
|
ü
|
|
|
|
|
|
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
Mr. Sala
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
Mr. Singh
|
|
ü
|
|
ü
|
|
ü
|
|
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
ü
|
|
-
*
-
Commercial
construction, liquid finishing, brake, medical, aerospace and/or defense.
Mr. Adams
has 28 years of experience with multi-national manufacturing companies with multiple business segment operating structures. As the principal financial officer of
publicly traded companies for 19 years prior to his retirement in April 2013, Mr. Adams gained significant experience with large merger and acquisition transactions. In addition,
Mr. Adams has more than 14 years of experience as a director of a number of other public companies and, as a result, is thoroughly familiar with the duties and responsibilities of the
audit and compensation committees of public company boards of directors.
Mr. Bohn
served as Chairman, President and Chief Executive Officer of Oshkosh Truck Corporation, a global manufacturer engaged in several businesses that are similar to the
businesses conducted by the Company. In these positions, Mr. Bohn gained significant experience with merger and acquisition transactions, the evaluation of manufacturing opportunities in
several countries, and board governance and performance.
Mr. Collins
currently serves as Vice President, eCommerce Global Components of Arrow Electronics Inc., a global provider of electronic components and comprehensive
computing solutions. Previously, Mr. Collins was General Manager and Head of eCommerce of The Goodyear Tire & Rubber Company, one of the world's leading manufacturers of tires.
Mr. Collins also served as Vice President and Head of eCommerce of Mylan N.V., a leading global pharmaceutical company offering products in approximately 165 countries.
Mr. Collins has more than 14 years of experience in digital marketing and eCommerce with a range of international industrial companies. This experience provides significant value to the
Board as the Company grows its global eCommerce channels.
Mr. Frias
has served as the principal financial officer for 10 years and has a total of more than 28 years of experience in treasury, finance and accounting
positions with Nucor Corporation, one of the largest and most diversified steel and steel products companies in the world. In these positions, Mr. Frias has gained substantial experience with
mergers and acquisitions, joint venture transactions, the development of new facilities and the commercialization of new technology.
12
Table of Contents
Ms. Hansen
currently serves as Senior Vice President, Operations & Supply Chain of Athersys, Inc., a clinical-stage biotechnology company. Ms. Hansen also served for
more than six years as Senior Partner of McKinsey & Company, a global management consulting firm serving leading businesses, governments and non-governmental and not-for-profit organizations.
Ms. Hansen has gained significant experience working with industrial companies on product development, digital manufacturing, sourcing strategy and execution to improve profitability and adapt
to tariffs.
Mr. Koch
brings to the Board experience in a number of critical areas, including operations, senior leadership, global sales, and mergers and acquisitions. With over
12 years of experience with the Company, Mr. Koch is thoroughly familiar with all of the Company's businesses and can provide insight on those businesses to the Board.
Mr. Ostrander
previously served as Chairman, President and Chief Executive Officer of Michael Foods, Inc., a major food service and retail food company that produces
products for food service distributors, chain restaurants and retail grocery and club stores. Mr. Ostrander has significant experience negotiating corporate merger and acquisition transactions
and has served on the boards of directors of multiple public companies and their audit, compensation and governance committees.
Ms. Ricard
is Senior Vice President of The Mosaic Company and President of Mosaic Fertilizantes, a leading global producer and marketer of concentrated phosphate and potash.
Previously, Ms. Ricard led the commercial and supply chain organizations at The Mosaic Company. Ms. Ricard also previously served as the Senior Vice PresidentHuman Resources
for Mosaic, and, prior to that role, she held various leadership positions since Mosaic's formation, including Vice PresidentInternational Sales and Distribution, Vice
PresidentBusiness Development and Vice PresidentSupply Chain. In these positions, she gained substantial experience with executive management, mergers and acquisitions, joint
venture transactions, international commerce and supply chain management. Prior to Mosaic's formation, Ms. Ricard worked for Cargill, Inc. in various roles, including supply chain,
product management and international sales.
Mr. Sala
previously served as President, Chief Executive Officer and Chairman of Anaren, Inc., a leading manufacturer of microelectronics and microwave components and
assemblies for the wireless and space and defense electronic markets. Anaren has operations in the United States and China and generates approximately 50% of its sales outside the United States.
Anaren completed numerous acquisitions during Mr. Sala's tenure. Mr. Sala brings to the Board substantial experience in operating a global business, developing business strategies and
completing acquisitions.
Mr. Singh
is Chief Executive Officer of The AZEK Company, a leading manufacturer of building products. Previously, he served in a variety of leadership roles, including
international positions, at 3M Corporation, a global diversified technology company, including Senior Vice President of Supply Chain Transformation, President of 3M Health Information Systems
Division, Senior Vice President of Marketing and Sales, Vice President and General ManagerStationary and Office Supplies Division, and President of 3M Sumitomo. Prior to 3M,
Mr. Singh spent several years in general management, marketing and account management positions for General Electric Company and Arthur Andersen. In these positions, Mr. Singh gained
significant experience in the building products industry, international operations and managing within a diversified manufacturing environment.
13
Table of Contents
CORPORATE GOVERNANCE
A. The Board of Directors
The Company is governed by the Board of Directors and its various committees. The Board and its committees have general oversight responsibility for the affairs
of the Company. In exercising its fiduciary duties, the Board represents and acts on behalf of the Company's stockholders. The Board has adopted written corporate governance guidelines and principles,
known as the Statement of
Corporate Governance Guidelines and Principles. The Board also has adopted a Code of Business Conduct and Ethics, which applies to the Company's employees, officers (including the principal executive
officer, principal financial officer and principal accounting officer), directors and consultants. The Code of Business Conduct and Ethics includes guidelines relating to the ethical handling of
conflicts of interest, compliance with laws and other related topics.
B. Documents Available
All of the Company's corporate governance materials, including the charters for the Audit Committee, the Compensation Committee and the Corporate Governance and
Nominating Committee, as well as the Statement of Corporate Governance Guidelines and Principles and the Code of Business Conduct and Ethics, are available on the Company's website at www.carlisle.com.
These materials are also available in print without charge to any stockholder upon request by contacting the Company in writing at
Carlisle Companies Incorporated, 16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254, Attention: Secretary, or by telephone at (480) 781-5000. Any modifications to these
corporate governance materials will be reflected, and the Company intends to post any amendments to, or waivers from, the Code of Business Conduct and Ethics (to the extent required to be disclosed
pursuant to Form 8-K) on the Company's website at www.carlisle.com. By referring to the Company's website, www.carlisle.com, or any portion thereof,
the Company does not incorporate its website or its contents into this Proxy Statement.
C. Director Independence
The Board believes that a majority of its members are independent under the applicable NYSE rules and SEC rules. The NYSE rules provide that a director does not
qualify as "independent" unless the board of directors affirmatively determines that the director has 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). The NYSE rules recommend that a board of directors consider all of the relevant facts and circumstances in determining the materiality of
a director's relationship with a company. In addition to the NYSE rules and the SEC rules, the Board of Directors has adopted director independence standards to assist the Board in determining whether
a director has a material relationship with the Company. Under those standards, which are included in the Company's Statement of Corporate Governance Guidelines and Principles, a director will not be
independent if, within the preceding three years: (i) the director was employed by the Company or received $100,000 per year in direct compensation from the Company, other than director and
committee fees and pension or other forms of deferred compensation for prior service; (ii) the director was employed by or affiliated with the Company's independent registered public accounting
firm; (iii) the director was part of an interlocking directorate in which an executive officer of the Company served on the compensation committee of
another company that employed the director; (iv) the director was an executive officer or employee of another company that made payments to, or received payments from, the Company for property
or services in an amount which, in any single year, exceeded the greater of $1 million or 2% of such other company's consolidated gross revenues; or (v) the director had an immediate
family member in any of the categories in (i)(iv).
14
Table of Contents
In
December 2019, the Board of Directors, with the assistance of the Corporate Governance and Nominating Committee, conducted an evaluation of director independence based on the
Company's director independence standards, the NYSE rules and the SEC rules. The Board considered all relationships and transactions between each director (and his or her immediate family members and
affiliates) and each of the Company, its management and its independent registered public accounting firm, as well as the transactions described below under "Related Person Transactions."
As a result of this evaluation, the Board determined those relationships that do exist or did exist within the last three years (except for Mr. Koch's current employment with the Company and
Mr. Robert's prior employment with the Company) all fall well below the thresholds in the Company's director independence standards. Consequently, the Board of Directors determined that each of
Messrs. Adams, Bohn, Collins, Frias, Ostrander, Sala and Singh and Ms. Ricard is an independent director under the Company's director independence standards, the NYSE rules and the SEC
rules. The Board also conducted an evaluation of director independence on Ms. Hansen in connection with her election to the Board on February 4, 2020 and determined that
Ms. Hansen is an independent director under the applicable standards and rules. The Board also determined that each member of the Audit, Compensation and Corporate Governance and Nominating
Committees (see membership information below under "Board Committees") is independent, including that each member of the Audit Committee is "independent" as that term is defined under
Rule 10A-3(b)(1)(ii) of the Exchange Act.
D. Board Leadership Structure
Currently, the Company has separated the roles of Chairman of the Board and Chief Executive Officer. David A. Roberts, a retired executive officer of the Company,
serves as the Chairman of the Board and D. Christian Koch serves as the Company's President and Chief Executive Officer. The Company previously combined the roles of Chairman of the Board and Chief
Executive Officer and, in the future, the Board may determine that it is in the best interests of the Company and its stockholders for the same person to hold the positions of Chairman of the Board
and Chief Executive Officer. Mr. Koch, as the Company's President and Chief Executive Officer, is responsible for providing the day-to-day leadership of the Company, executing the Company's
strategy, shaping the Company's corporate vision and developing the operational management of the Company's businesses while Mr. Roberts, as the
Chairman of the Board, facilitates the Board's independent oversight of management and oversees the Company's strategic direction, the Board's engagement with stockholders, the Board's consideration
of key governance matters and communication between senior management and the Board about issues such as management development and succession planning, executive compensation and Company performance.
The
Board of Directors acknowledges that independent Board leadership is important, and, accordingly, the Company's Statement of Corporate Governance Guidelines and Principles provides
that when the Company's Chief Executive Officer serves as Chairman of the Board or, as is currently the case, the Chairman is otherwise not considered independent, the independent directors shall
elect a Lead Independent Director. The director then serving as Chair of the Corporate Governance and Nominating Committee also serves as the Lead Independent Director. The Lead Independent Director's
duties closely parallel the role of an independent Chairman of the Board of Directors, to ensure an appropriate level of independent oversight for Board decisions. Mr. Bohn, as the Lead
Independent Director, has the following responsibilities: (i) chairs all meetings of the Board of Directors at which the Chairman is not present and all executive sessions of the Board of
Directors; (ii) liaises between the Chief Executive Officer and the independent directors; (iii) consults with the Chairman concerning (a) information to be sent to the Board of
Directors, (b) meeting agendas and (c) meeting schedules to ensure appropriate time is provided for all agenda items; (iv) calls meetings of independent directors as required; and
(v) is available when appropriate for consultation, including stockholder communications. In addition, the Lead Independent Director presides over an executive session of the independent
directors at every regularly scheduled meeting of the Board of Directors.
15
Table of Contents
The
Board of Directors believes that the existence of a Lead Independent Director, the scope of the Lead Independent Director's responsibilities and the regularly scheduled executive sessions of the
independent directors all support strong corporate governance principles and allow the Board to effectively fulfill its fiduciary responsibilities to stockholders.
In
addition, as previously noted, all of the Company's directors (other than Mr. Roberts, a retired executive officer of the Company, and Mr. Koch, the Company's President
and Chief Executive Officer) and each member of the Audit, Compensation and Corporate Governance and Nominating Committees meet the independence requirements of the New York Stock Exchange (the
"NYSE"). Therefore, independent directors directly oversee such critical matters as the integrity of the Company's financial statements, the compensation of executive management, the selection and
evaluation of directors and the development and implementation of the Company's corporate governance policies and structures. In addition, the Compensation Committee conducts an annual performance
review of Mr. Koch, and, based upon this review, makes recommendations for his compensation (including base salary and annual incentive and equity compensation) for approval by the independent
members of the Board.
E. Board Committees
The Board has three standing committees: (i) the Audit Committee; (ii) the Compensation Committee; and (iii) the Corporate Governance and
Nominating Committee. Committee members and committee chairs are appointed by the Board of Directors. The members and chairs of these committees are identified in the following table:
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Name
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Audit
Committee
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Compensation
Committee
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Corporate
Governance and
Nominating
Committee
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Robin J. Adams
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X
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Chairman
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Robert G. Bohn
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X
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Chairman
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Jonathan R. Collins
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X
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X
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James D. Frias
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Chairman
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X
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Maia A. Hansen
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D. Christian Koch
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Gregg A. Ostrander
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X
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X
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Corrine D. Ricard
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X
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X
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David A. Roberts
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Lawrence A. Sala
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X
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X
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Jesse G. Singh
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X
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X
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The
Board of Directors has also adopted a committee chair rotation guideline. Under the guideline, effective as of the date of each annual meeting of stockholders, a committee chair will
relinquish his or her chairmanship. The guideline will result in each committee chair typically serving for three years. The Board of Directors believes that periodically bringing new leadership to
each of the committees will enhance the effectiveness of the committees. At the meeting of the Board of Directors held on May 7, 2019, the Board modified the committee chair rotation guideline
for 2019 to accommodate the retention of Mr. Bohn as Lead Independent Director until the Annual Meeting and the retention of Mr. Frias as Chairman of the Audit Committee for a three-year
term.
16
Table of Contents
Each
committee of the Board of Directors functions pursuant to a written charter adopted by the Board. Set forth below is a summary of the principal functions of each committee.
Audit Committee. The Audit Committee has the sole authority to appoint and terminate the engagement of the Company's independent
registered public
accounting firm. The functions of the Audit Committee also include reviewing the arrangements for and the results of the independent registered public
accounting firm's examination of the Company's books and records, the Company's internal accounting control procedures, the activities and recommendations of the Company's internal auditors, and the
Company's accounting policies, control systems and compliance activities, and monitoring the funding and investment performance of the Company's defined benefit pension plan. During 2019, the Audit
Committee held eight meetings.
Compensation Committee. The Compensation Committee administers the Company's annual and long-term, stock-based incentive programs and
decides upon
annual salary adjustments for various employees of the Company, including the Company's executive officers. During 2019, the Compensation Committee held three meetings.
Corporate Governance and Nominating Committee. The Corporate Governance and Nominating Committee develops and maintains the Company's
corporate
governance guidelines and principles, leads the search for individuals qualified to become members of the Board and recommends such individuals for nomination by the Board to be presented for
stockholder approval at the Company's annual meetings, reviews the Board's compensation and committee structure and recommends to the Board, for its approval, directors to serve as members of each
committee, discusses succession planning and recommends a new chief executive officer if a vacancy occurs. During 2019, the Corporate Governance and Nominating Committee held two meetings.
The
Board may also establish other committees from time to time as it deems necessary.
F. Director Meeting Attendance
The Board of Directors held six meetings during 2019. Each incumbent director attended 75% or more of the aggregate number of meetings of the Board and committees
of the Board on which the director served during 2019. While directors are not required to attend the Company's annual meeting of stockholders, nine of the Company's 10 directors in office at the time
attended the 2019 Annual Meeting of Stockholders.
At
the conclusion of each of the regularly scheduled Board meetings, the independent directors meet in executive session without management. Mr. Bohn, as the Lead Independent
Director, presides over these executive sessions.
G. Director Nomination Process
As more fully described in its Charter, the Corporate Governance and Nominating Committee assists the Board by identifying and evaluating individuals qualified to
be directors and by recommending to the Board such individuals for nomination as members. Pursuant to the Company's Statement of Corporate Governance Guidelines and Principles, director nominees
should possess the highest personal and professional integrity, ethics and values, and be committed to representing the long-term interests of the Company's stockholders. Nominees should also have
outstanding business, financial, professional, academic or managerial backgrounds and experience. Each nominee must be willing to devote sufficient time to fulfill his or her duties and should be
committed to serve on the Board for an extended period of time. Prior to accepting an invitation to serve on another public company board, directors must advise the Corporate Governance and Nominating
Committee, which will determine whether such service would create a conflict of interest and/or prevent the director from fulfilling his or her responsibilities to the Company.
17
Table of Contents
Under
the Company's Statement of Corporate Governance Guidelines and Principles, in identifying, recruiting and recommending nominees to the Board, the Corporate Governance and
Nominating Committee is committed to including for consideration qualified candidates with diverse backgrounds, including diversity of gender and race, and the Corporate Governance and Nominating
Committee has consistently included diversity as a desired qualification when conducting searches for director nominees. The composition of the Board reflects its emphasis on diversity.
The
Corporate Governance and Nominating Committee may, at its discretion, hire third parties to assist in the identification and evaluation of director nominees. All director nominees,
including those nominated by stockholders, are evaluated in accordance with the process described above.
H. Director Nominations by Stockholders
Stockholders may nominate directors for election at the Company's 2021 Annual Meeting of Stockholders by submitting the nominee's name in accordance with
provisions of the Company's Restated Certificate of Incorporation, which require advance notice to the Company and certain other information. Written notice must be received by the Company's Secretary
at Carlisle Companies Incorporated, 16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254 not less than 90 days prior to the first anniversary of the date of the Annual
Meeting. As a result, any director nominations submitted by a stockholder pursuant to the provisions of the Company's Restated Certificate of Incorporation must be received no later than
February 5, 2021.
The
notice must contain certain information about the nominee and the stockholder submitting the nomination, as set forth in the Company's Restated Certificate of Incorporation,
including: (i) the name, address and qualifications of the stockholder submitting the nomination; (ii) the name, age, business address and, if known, residence address of each nominee
proposed in such notice; (iii) the principal occupation or employment of each such nominee; (iv) the number of shares of capital stock of the Company of which each such nominee is the
"Beneficial Owner" (as defined in the Company's Restated Certificate of Incorporation); and (v) such other information as would be required by the securities laws of the United States and the
rules and regulations promulgated thereunder in respect of an individual nominated as a director of the Company and for whom proxies are solicited by the Board of Directors of the Company. The
presiding officer at the 2021 Annual Meeting of Stockholders may refuse to accept any such nomination that is not in proper form or submitted in compliance with the procedure set forth in the
Company's Restated Certificate of Incorporation. A stockholder who is interested in nominating a director should request a copy of the Company's Restated Certificate of Incorporation by writing to the
Company's Secretary at Carlisle Companies Incorporated, 16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254.
I. Related Person Transactions
The Board has adopted a written policy concerning the review, approval and monitoring of transactions involving the Company and "related persons"
(i.e., directors, director nominees and executive officers of the Company or their immediate family members, or stockholders owning more than 5% of the outstanding Common Shares). The policy
covers any such transaction exceeding $120,000 in which the related person has a direct or indirect material interest. Related person transactions must be approved by the Corporate Governance and
Nominating Committee which will approve the transaction only if it determines that the transaction is in the best interest of the Company. In the course of its review and, if appropriate, approval of
a related person transaction, the Corporate Governance and Nominating Committee considers all of the relevant facts and circumstances, including the material terms of the transaction, the risks,
benefits and costs of the transaction, the availability of other comparable services or products and, if applicable, the impact on a director's independence.
18
Table of Contents
In
2019, in accordance with the requirements of the Company's related person transaction policy, the Corporate Governance and Nominating Committee reviewed the fleet management services
that Emkay Incorporated ("Emkay") provides to Carlisle Construction Materials, LLC, a wholly owned subsidiary of the Company ("CCM"). The Company paid Emkay a management fee of $66,224 and
reimbursed Emkay $3,754,509 for pass-through costs, such as fuel, taxes, vehicle depreciation and other related costs. Emkay has provided fleet management services as a preferred vendor to CCM since
1997. A brother-in-law of Mr. Roberts (the Company's Chairman of the Board) is a senior officer and more than 10% owner of Emkay. The Corporate Governance and Nominating Committee considered
all of the relevant facts and circumstances related to the services provided by Emkay and approved the continuation of Emkay's services to CCM.
J. The Board's Role in Risk Oversight
Risk management is a significant component of management's annual strategic and operating planning processes. The Company has adopted an enterprise risk
management program to identify and mitigate enterprise risk. Under the program, each operating business is required to identify risks to its business and prepare a detailed plan to mitigate those
risks. The division presidents present the plans to executive management as part of their strategic and operating plans. Over the course of each year, the division presidents provide similar
presentations to the Board of Directors at the meetings covering the Company's business plans. Each year, the Board also reviews and discusses reports on the Company's ongoing litigation,
cybersecurity risks and insurance coverages.
The
Compensation Committee, in consultation with the committee's compensation consultant, periodically reviews the relationship between the Company's compensation practices and risk. The
Compensation Committee has concluded that the Company's compensation practices are not reasonably likely to have a material adverse effect on the Company and do not encourage inappropriate risk
taking. The Compensation Committee's conclusion was based on the following:
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-
Annual cash bonuses at maximum performance levels are capped by the Compensation Committee at 240% of base salary for the President and Chief
Executive Officer and 150% of base salary for the other named executive officers.
-
-
Annual cash bonuses are based on multiple balanced performance metrics.
-
-
The threshold, target and maximum performance levels for each of the annual cash bonus performance metrics are based on prior year performance
adjusted to reflect the current year Company business plan, which has been reviewed and approved by the Board of Directors, and general market expectations. The Company's Chief Financial Officer
actively participates in the Compensation Committee meetings during which the performance levels are set and the performance results are verified.
-
-
The annual cash bonus payout curve from threshold to maximum is a straight line (linear) progression.
-
-
The target grant value of the Company's long-term, stock-based awards is fixed at 445% of base salary for the President and Chief Executive
Officer and 150% of base salary for the other named executive officers.
-
-
The stock-based awards include an equally weighted mix of stock options, restricted Shares and performance Shares. Stock options and restricted
Shares are subject to three-year vesting periods and performance Shares are earned over a three-year performance period.
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-
The Compensation Committee has adopted a stock ownership policy that requires significant stock ownership by the Company's executives.
19
Table of Contents
-
-
The Compensation Committee has adopted a clawback policy, effective January 1, 2019, under which the committee may elect to seek
recovery of excess incentive-based compensation paid to an executive officer for up to three years prior to a material accounting restatement.
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-
The Company has adopted guiding principles that govern plan design. The executive compensation program is documented, communicated and
monitored on a consistent basis.
The
Compensation Committee has and will continue to conduct assessments of the relationship between the Company's compensation practices and risk periodically and in connection with the adoption of
any new material compensation programs or any material changes to existing compensation programs.
The
Board believes that its leadership structure supports the Company's governance approach to risk oversight as the President and Chief Executive Officer is involved directly in risk
management as a member of the Company's management team, while the Chairman of the Board and the committee chairpersons, in their respective areas, maintain oversight roles as non-management
directors.
K. Communications with the Board of Directors
Stockholders and other interested parties can communicate directly with any of the Company's directors by sending a written communication addressed to such
director at Carlisle Companies Incorporated, 16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254, Attention: Secretary. Stockholders and other interested parties wishing to
communicate with Mr. Bohn, as the Lead Independent Director, or with the independent directors as a group may do so by sending a written
communication addressed to Mr. Bohn at the above address. Any communication addressed to any director that is received at the Company's principal executive offices will be delivered or
forwarded to the individual director as soon as practicable. All such communications are promptly reviewed before being forwarded to the addressee. The Company generally will not forward to directors
a communication that the Company determines to be primarily commercial in nature, relates to an improper or irrelevant topic or requests general information about the Company.
20
Table of Contents
DIRECTOR COMPENSATION
In 2019, the Company paid an annual fee of $85,000 to each non-employee director, except for Mr. Roberts who received an annual fee of
$230,000 for his service as Chairman of the Board. The annual fees are determined by the Board of Directors. Each non-employee director may elect to receive one-half of the annual fee in Shares.
Directors do not receive meeting attendance fees.
The
Company also pays an annual fee for service on the Board's committees. In 2019, each member of the Audit Committee received an annual fee of $15,000 and each member of the
Compensation and Corporate Governance and Nominating Committees received an annual fee of $8,500. In 2019, the Chairman of the Audit Committee received an additional annual fee of $20,000 and the
Chairman of the Compensation Committee received an additional annual fee of $15,000. The Chairman of the Corporate Governance and Nominating Committee, who also served as the Lead Independent
Director, received an additional annual fee of $35,000 in 2019.
In
addition to the annual fee and committee fees, each non-employee director is eligible to participate in the Incentive Compensation Program. The Incentive Compensation Program provides
for the grant of stock options, stock appreciation rights, restricted Shares or units or other stock-based awards to non-employee directors. The Board administers the Incentive Compensation Program
with respect to awards to non-employee directors and has the discretionary authority to make all award decisions under the Incentive Compensation Program. At the meeting of the Board of Directors held
on February 5, 2019, the Board of Directors granted each eligible director (other than Mr. Roberts) an award of 1,219 Share equivalent units having a grant date fair value of
approximately $135,000 based on the closing market price of a Common Share on that date. Under the current policy of the Board, each new director receives an award of Share equivalent units having a
grant date fair value of approximately $50,000. All Share equivalent units awarded to eligible directors are fully vested and will be paid in Shares after the director ceases to serve as a member of
the Board, or, if earlier, upon a change of control of the Company. Mr. Roberts received an award of 2,076 Share equivalent units having a grant date fair value of approximately $230,000 based
on the closing market price of a Common Share on February 5, 2019.
The
Company also maintains the Carlisle Companies Incorporated Deferred Compensation Plan for Non-Employee Directors (the "Deferred Compensation Plan"). Under the Deferred Compensation
Plan, each non-employee director of the Company is entitled to defer up to 100% of the cash fees otherwise payable to him or her. Each participant in the Deferred Compensation Plan may direct the
"deemed investment" of his or her deferral account among the different investment options offered by the Company from time to time. The investment options currently include a fixed rate fund and Share
equivalent units. All amounts credited to a participant's account under the Deferred Compensation Plan are 100% vested and generally will be paid or commence to be paid after the participant
terminates service as a director. At the participant's election, payments can be made in a lump sum or in quarterly installments over a 10-year period. Payments under the Deferred Compensation Plan
are made in cash from the Company's general assets.
The
Board of Directors has adopted a stock ownership policy that requires significant stock ownership by the Company's non-employee directors. The stock ownership policy requires each
non-employee director to own Shares having a market value equal to six times the annual fee amount within five years of him or her becoming a director. Shares for purposes of this policy include
Shares, Share equivalent units and any restricted Shares. Once the required market value ownership level is achieved, no further purchases are required in the event the value of the Shares held by a
director falls below the ownership level due solely to a decrease in the market value of the Shares. As of December 31, 2019, each of the directors who had been a member of the Board for at
least five years as of that date met the policy's ownership requirement. The stock ownership policy prohibits a director
21
Table of Contents
from
using Shares as collateral for any purpose or engaging in short sales (profiting if the market price of the securities decreases) or hedging transactions involving Shares.
The
table below sets forth the compensation paid to each non-employee director who served on the Board in 2019. Directors who are also employees of the Company (currently
Mr. Koch) do not receive compensation (other than their compensation as employees of the Company) for their service on the Board of Directors.
Director Compensation Table
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Name
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Fees Earned or
Paid in Cash
($)
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Stock
Awards
($)(1)
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Change in
Pension Value and
Nonqualified Deferred
Compensation Earnings
($)(2)
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Total
($)
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Robin J. Adams
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$
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123,500
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$
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135,000
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$
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0
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$
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258,500
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Robert G. Bohn
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$
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137,000
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$
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135,000
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$
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0
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$
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272,000
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|
|
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Jonathan R. Collins
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$
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108,500
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$
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135,000
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$
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0
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$
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243,500
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James D. Frias
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$
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128,500
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$
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135,000
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$
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0
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$
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263,500
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Gregg A. Ostrander
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$
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102,000
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$
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135,000
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$
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50
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$
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237,050
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Corrine D. Ricard(3)
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|
$
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108,500
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$
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135,000
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|
$
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0
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$
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243,500
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|
|
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David A. Roberts
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$
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230,000
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$
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230,000
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$
|
0
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$
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460,000
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|
|
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Lawrence A. Sala
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|
$
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108,500
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$
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135,000
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|
$
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66
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$
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243,566
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|
|
|
Jesse G. Singh
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|
$
|
108,500
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|
$
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135,000
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|
$
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761
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$
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244,261
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|
-
(1)
-
The
values of the stock awards shown in the table are equal to the grant date fair values of Share equivalent units awarded to the directors computed in accordance
with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 718, CompensationStock Compensation (excluding any effect of estimated forfeitures). On
February 5, 2019, (i) each non-employee director serving at that time (other than Mr. Roberts) received a grant of 1,219 Share equivalent units valued at approximately $135,000;
and (ii) Mr. Roberts received a grant of 2,076 Share equivalent units valued at approximately $230,000. Note 7 to the Company's consolidated financial statements included in its
Annual Report on Form 10-K for the year ended December 31, 2019 contains more information about the Company's accounting for stock-based compensation arrangements, including the
assumptions used to determine the grant date fair values of the awards.
-
(2)
-
Represents
the portion of interest credited on fees deferred under the Deferred Compensation Plan that is considered "above market" under the SEC rules.
-
(3)
-
Ms. Ricard
elected to receive one-half of her annual fee in Shares.
22
Table of Contents
COMPENSATION DISCUSSION AND ANALYSIS
This section contains an in-depth discussion and analysis of the Company's executive compensation policies and practices and the compensation
earned by the Company's most senior executives (referred to as the "named executives" or the "named executive officers" in this section) under those policies and practices. The Compensation Committee
of the Board of Directors administers the Company's compensation policies and practices for all executive officers of the Company, including the named executives.
As
you review this section, you will see that the Compensation Committee has adopted executive compensation policies and practices that: (i) link pay and
performancewith the Company's executives having the opportunity to earn substantial compensation over and above their base salaries based on the Company's performance or the market value
of the Shares; (ii) align the interests of the Company's executives and stockholders; (iii) are transparent and easy to communicate to
the Company's executives and stockholders; and (iv) provide a valuable retention tool for key executive talent.
A. Executive Summary
In 2017, management developed Vision 2025, a strategic vision for the Company built on the foundation and core capabilities established over the Company's long
history and based on creating sustainable value for stockholders through repeatable execution of solid plans. A critical factor to achieving the Vision 2025 strategic goals is the contributions of
motivated employees. Accordingly, the Company's annual incentive compensation program will continue to be directly linked to key financial goals and will award annual incentive compensation to the
named executives based on the Company's progress toward achieving the Vision 2025 strategic goals for the Company.
The
executive compensation program provides a further link between executive pay and stockholder interests by including performance Shares and stock options in the long-term stock-based
awards made under the program. The performance Shares are earned based on the total return to the Company's stockholders (Share appreciation plus dividends) relative to the total stockholder return of
the companies comprising the S&P MidCap 400 Index® over three-year performance periods. The value of the earned performance Shares and the stock options is directly linked to the market
value of the Shares. The Company's stockholders endorsed the executive compensation program at the 2019 Annual Meeting of Stockholders where approximately 92% of the votes cast were in favor of a
resolution approving the compensation earned by the named executive officers under the program in 2018.
In
2019, the Company continued its journey to its 2025 strategic vision by continuing implementation of the Carlisle Operating System, investing in new acquisitions and strengthening its
management talent. The continuing strong operational performance of the Company in 2019 produced positive financial results and enabled the Company to return capital to stockholders through increased
dividends and Share repurchases.
The
table below summarizes the Company's annual incentive performance measures for 2019 and 2018 selected by the Compensation Committee for determining the annual incentive compensation
for the named executive officers.
23
Table of Contents
Annual Incentive Performance Measures(1)
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2019
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2018
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|
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|
Year-over-Year
Change
Favorable/(Unfavorable)
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Sales
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$
|
4.766 billion
|
|
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|
$
|
4.446 billion
|
|
|
|
|
7.2%
|
|
|
|
|
|
|
|
|
|
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|
|
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Operating Income Margin
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14.3%
|
|
|
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12.0%
|
|
|
|
|
230 bps
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|
Average Working Capital as a % of Sales(2)
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20.2%
|
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|
19.5%
|
|
|
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|
(70) bps
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Earnings
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|
$
|
496.0 million
|
|
|
|
$
|
379.0 million
|
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|
30.9%
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-
(1)
-
The
results shown in the table reflect certain adjustments as described on page 28.
-
(2)
-
Average
working capital (defined as the average of the quarter-end balances of receivables, plus inventory, less accounts payable) as a percentage of annual sales
(defined as net sales from continuing operations).
The
Compensation Committee established the performance measures on which the 2019 annual incentive awards were based, as described on pages 27 through 29. The performance measures are
intended to align with the Company's Vision 2025 strategic goals. As described in this section, the Compensation Committee took the following compensation actions in 2019 with respect to the named
executives:
-
-
Increased the base salaries of the named executive officers in line with market conditions, as described on page 27;
-
-
Paid 2019 annual incentive awards ranging from 145% to 187% of the target award levels based upon Company-wide or Company business unit
performance, as described on pages 27 through 29;
-
-
Based on the Company's total stockholder return (Share appreciation plus dividends) for the three-year performance period ended
December 31, 2019 of 54.54% relative to the total stockholder return of the companies comprising the S&P MidCap 400 Index® for the same period of 32.35%, paid performance Shares for
the three-year performance period that ended in 2019 at 181.87% of the target award level based on the Company's total stockholder return during the period ranking in the
70th percentile of the S&P MidCap 400 Index®; and
-
-
Issued long-term incentive awards, as described on pages 29 through 31.
The
Company's stockholders will have the opportunity at the Annual Meeting to provide feedback to the Board of Directors on the Company's executive compensation program by voting to
approve or not approve, on an advisory basis, the compensation earned by the named executive officers under the program in 2019 (the "say-on-pay proposal"). The Compensation Committee encourages all
of the Company's stockholders to carefully review this section, including the executive officer compensation disclosure tables below, prior to casting their votes on the say-on-pay proposal included
as Proposal 3 in this Proxy Statement.
B. Roles of Compensation Committee, Compensation Consultant and Executive Officers in Determining Executive Compensation
The Compensation Committee renewed its engagement of Willis Towers Watson as the executive compensation consultant to the committee for 2019. Willis Towers Watson
provides no services to the Company or its management other than services related to the Company's executive and non-employee director compensation programs. The Compensation Committee has determined
that Willis Towers Watson is independent from the Company and its executive officers and that the services provided by Willis Towers Watson do not raise any conflict of interest.
24
Table of Contents
In
2019, Willis Towers Watson presented an executive compensation report to the Compensation Committee and conducted a competitive market analysis of the Company's executive compensation
program to confirm that the program is delivering pay to the Company's executive officers within the program guidelines. The executive compensation report included market highlights and trends and
compared the Company's executive compensation practices with those of similarly situated companies.
The
Compensation Committee also receives input from Company management in connection with the administration of the Company's executive compensation program. Mr. Koch, the
Company's President and Chief Executive Officer, recommended base salary increases for the named executive officers (other than for himself), and the Compensation Committee approved the
recommendations. In addition, Mr. Koch provided input to the Compensation Committee about the refinements made to the performance measures used for determining the 2019 annual incentive awards
(other than for himself), the threshold, target and maximum performance levels for the performance measures and the weighting of each performance measure.
Mr. Roche,
the Company's Vice President and Chief Financial Officer, provided information and analysis to the Compensation Committee about the financial performance of the Company
for 2019 and each of the Company's operating businesses for which a named executive officer was responsible. The Compensation Committee used the information and analysis provided by Mr. Roche
in determining the annual incentive awards earned by the named executives for 2019.
C. Philosophy and Material Elements of Executive Compensation Program; 2019 Compensation Actions
The material elements of the total direct compensation provided to executives under the Company's executive compensation program are: (i) base salary;
(ii) a target annual cash bonus opportunity expressed as a percentage of each executive's base salary; and (iii) a long-term, stock-based award, the expected value of which is also
expressed as a percentage of base salary. While each element of compensation paid to executive officers is significant, the annual cash bonus and the long-term, stock-based award have the potential to
be the largest amounts of the total compensation paid to executive officers.
25
Table of Contents
The
following table shows the guiding principles for the Company's executive compensation program and how the program complies with these principles:
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Principle
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How the Program Complies
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|
Provide competitive total direct compensation opportunity.
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|
Executive total direct
compensation opportunity is managed between the first and third quartiles of companies similar in size to the Company.
The total direct compensation opportunity within the range varies by executive.
Performance-based pay opportunity (short- and long-term incentives)
plays a predominant role in competitive total pay positioning.
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Reward performance that is consistent with key strategic and stockholder goals.
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Annual incentive plan
incorporates earnings and other financial measures aligned with stockholder interests.
Performance Share awards incorporate total stockholder return as a performance measure.
Inappropriate risk taking is not encouraged.
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Balance performance measures and, where appropriate, emphasize overall corporate, operating business and division performance.
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Annual incentive plan
incorporates corporate and operating business and division level performance measures.
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Serve as a retention tool for key executive talent, provide a balance of liquidity and reward executives for superior performance.
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|
Executive compensation
program provides a mix of base salary, annual incentives tied to performance and stock-based awards with vesting restrictions.
Performance Share awards incorporate total stockholder return as a performance measure.
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Be transparent, simple to administer and easy to communicate.
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|
Formula-based structure
includes pre-set performance measures, weightings and timing.
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|
|
Compensation Benchmarking
The Compensation Committee periodically benchmarks executive compensation to ensure the compensation provided to the Company's executive
officers is reasonable and competitive with the market. The executive compensation report presented to the Compensation Committee by Willis Towers Watson in 2019 (the "Compensation Report")
benchmarked the total pay arrangements of the Company's executive officers through a competitive market analysis and concluded that total direct compensation to the executive officers is managed
between the first and third quartiles of benchmarked companies. The Compensation Report concluded that the Company's executive pay program is sound and effective by delivering value to the executive
officers within the program's guidelines that are generally competitive at desired market levels, are aligned with stockholder interests, and are consistent with the guiding principles disclosed
above. Any variation above or below the
guidelines may be a function of variations in performance, tenure, experience or scope of executive responsibility. For
26
Table of Contents
purposes
of its analysis, Willis Towers Watson used data from two published survey sources: the 2018 Willis Towers Watson General Industry Executive Compensation Database and the 2018 Mercer General
Industry Executive Compensation Survey and updated the survey data to September 2019 using an annual update factor of 3.0%. Willis Towers Watson also: (i) evaluated the responsibilities,
reporting relationships, revenue responsibility and level of each position; (ii) matched each position to the appropriate benchmark survey position; and (iii) used size and level
appropriate data or size adjusted the survey data by regressing, where possible, based on the Company's revenues.
Base Salaries
Base salaries provide a baseline level of compensation to executive officers for carrying out the day-to-day duties and responsibilities of
their positions.
The
Compensation Committee reviews and adjusts base salary levels each year. During the review and adjustment process, the Compensation Committee
considers:
-
-
the duties and responsibilities of each executive officer position;
-
-
the executive officer pay relative to the base salaries of senior officers and other employees of the Company; and
-
-
whether the base salary levels are competitive, based on a comparison of the current base salary with the market base salary.
The
Compensation Committee reviews the named executive officer base salaries in December each year. Any base salary increases approved in December become effective for the succeeding
year. In December 2019, the Company approved the following base salaries for the named executives effective for 2020:
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Name
|
|
|
|
2019 Annual
Base Salary
|
|
|
|
2020 Annual
Base Salary
|
|
|
|
% Increase
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Mr. Koch
|
|
|
|
$
|
1,175,000
|
|
|
|
$
|
1,225,000
|
|
|
|
|
4.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Mr. Roche
|
|
|
|
$
|
628,000
|
|
|
|
$
|
647,000
|
|
|
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Mr. Berlin
|
|
|
|
$
|
683,000
|
|
|
|
$
|
703,000
|
|
|
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
$
|
586,333
|
|
|
|
$
|
651,000
|
|
|
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
$
|
525,000
|
|
|
|
$
|
541,000
|
|
|
|
|
3.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Compensation Committee approved increases based generally on trends in the market indicating average salary increases in the range of 3%. Mr. Shears received a larger than
average increase to reflect his promotion to President of CCM.
2019 Annual Incentive Awards
The Company's executive officers earned annual incentive compensation under the Incentive Compensation Program for 2019 based on the overall
performance of the Company or a Company business unit compared to pre-established performance measures.
The
Compensation Committee first established a target annual incentive award expressed as a percentage of each named executive's base salary. The 2019 target awards were 120% of base
salary for Mr. Koch and 75% of base salary for the other named executives.
The
Compensation Committee then selected the performance measures on which the 2019 annual incentive awards would be based. The measures adopted for the 2019 annual incentive awards to
Messrs. Koch, Roche and Selbach were the Company's consolidated: (i) sales; (ii) operating income
27
Table of Contents
margin;
(iii) average working capital as a percentage of sales; and (iv) earnings. The measures adopted for the 2019 annual incentive awards to the other named executive officers were:
(i) sales; (ii) operating income margin; (iii) average working capital as a percentage of sales, each as reported by their respective business units; and (iv) the Company's
consolidated earnings. The Compensation Committee believes that each of these respective performance measures tracks whether the Company and its core businesses are operating efficiently and with a
view toward long-term, sustainable growth in the United States and globally. The Compensation Committee believes that superior performance under these measures will ultimately benefit the Company's
stockholders through increased profits, dividends and Share value.
Finally,
the Compensation Committee established threshold, target and maximum levels of performance for each of the measures and determined that 50% of the target annual incentive award
would be paid for threshold level performance, 100% of the target annual incentive award would be paid for target level performance and 200% of the target annual incentive award would be paid for
performance at or above the maximum level. Under the program adopted by the Compensation Committee, the Company's performance under each of the measures was independently determined from the other
measures, so that an annual incentive award was determined for the actual level of performance under each measure. The annual incentive awards under each measure were then combined to determine the
aggregate annual incentive award.
The
Compensation Committee approved threshold, target and maximum performance levels for 2019 based on the Company's 2018 adjusted performance. The tables below show the threshold,
target and maximum performance levels for each of the performance measures established by the Compensation Committee for 2019 as well as the Company's adjusted performance in 2019 and 2018. The
results shown below for both 2019 and 2018 reflect the Company's publicly reported results, excluding results of operations of acquisitions made and disposals not classified as discontinued operations
and the associated acquisition and disposal costs incurred during the respective year. The 2019 results have also been adjusted to exclude approximately $19.7 million (pre-tax) in restructuring
charges and facility rationalization costs at CCM, Carlisle Interconnect Technologies, Inc. ("CIT"), Carlisle Fluid Technologies, Inc. ("CFT") and CBF and approximately
$0.9 million (pre-tax) in casualty losses at CCM and CFT. The 2019 results also exclude the impact of the Company's adoption of the new lease accounting standard in FASB ASC Topic 842, Leases.
The 2018 results have also been adjusted to exclude approximately $32.7 million (pre-tax) in restructuring charges and facility rationalization costs at CFT, CBF and CIT. The 2018 results also
exclude sales of approximately $21.9 million and operating income of approximately $7.2 million to adjust for the Company's adoption of the revenue recognition standard in FASB ASC Topic
606, Revenue from Contracts with Customers. The Compensation Committee approved the adjustments because they are generally nonrecurring or were not anticipated when the respective performance measures
were approved at the beginning of the year.
Consolidated Company Performance Measures
Used for 2019 Annual Incentive Awards to Mr. Koch, Mr. Roche and Mr. Selbach
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Performance Levels Established by the
Compensation Committee
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|
Adjusted Performance
|
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Performance Measure
|
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Weight
|
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Threshold
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|
Target
|
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|
Maximum
|
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|
|
2019
|
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|
2018
|
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Sales
|
|
|
|
|
25%
|
|
|
|
$
|
4.650 billion
|
|
|
|
$
|
4.790 billion
|
|
|
|
$
|
4.976 billion
|
|
|
|
|
|
|
|
$
|
4.766 billion
|
|
|
|
$
|
4.446 billion
|
|
|
|
|
|
|
|
|
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|
|
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|
|
Operating Income Margin
|
|
|
|
|
20%
|
|
|
|
|
11.3%
|
|
|
|
|
11.8%
|
|
|
|
|
12.3%
|
|
|
|
|
|
|
|
|
14.3%
|
|
|
|
|
12.0%
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
Average Working Capital as a % of Sales
|
|
|
|
|
15%
|
|
|
|
|
20.4%
|
|
|
|
|
19.9%
|
|
|
|
|
19.4%
|
|
|
|
|
|
|
|
|
20.2%
|
|
|
|
|
19.5%
|
|
|
|
|
|
|
|
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|
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|
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|
|
|
|
|
|
Earnings
|
|
|
|
|
40%
|
|
|
|
$
|
368.0 million
|
|
|
|
$
|
407.0 million
|
|
|
|
$
|
426.0 million
|
|
|
|
|
|
|
|
$
|
496.0 million
|
|
|
|
$
|
379.0 million
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
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|
28
Table of Contents
CIT Performance Measures
Used for 2019 Annual Incentive Award to Mr. Berlin
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|
Performance Levels Established by the
Compensation Committee
|
|
|
|
|
|
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|
|
Adjusted Performance
|
|
|
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|
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Performance Measure
|
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|
|
|
Weight
|
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Threshold
|
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Target
|
|
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|
|
Maximum
|
|
|
|
|
|
|
|
|
2019
|
|
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|
|
2018
|
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|
|
|
|
|
|
Business Unit Sales
|
|
|
|
|
25%
|
|
|
|
$
|
935.0 million
|
|
|
|
$
|
963.0 million
|
|
|
|
$
|
1.000 billion
|
|
|
|
|
|
|
|
$
|
954.0 million
|
|
|
|
$
|
909.0 million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Unit Operating Income Margin
|
|
|
|
|
50%
|
|
|
|
|
14.8%
|
|
|
|
|
15.3%
|
|
|
|
|
15.8%
|
|
|
|
|
|
|
|
|
15.7%
|
|
|
|
|
13.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Unit Average Working Capital as a % of Sales
|
|
|
|
|
15%
|
|
|
|
|
27.1%
|
|
|
|
|
26.6%
|
|
|
|
|
26.1%
|
|
|
|
|
|
|
|
|
26.8%
|
|
|
|
|
25.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Earnings
|
|
|
|
|
10%
|
|
|
|
$
|
368.0 million
|
|
|
|
$
|
407.0 million
|
|
|
|
$
|
426.0 million
|
|
|
|
|
|
|
|
$
|
496.0 million
|
|
|
|
$
|
379.0 million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CCM Performance Measures
Used for 2019 Annual Incentive Award to Mr. Shears
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Levels Established by the
Compensation Committee
|
|
|
|
|
|
|
|
|
Adjusted Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Performance Measure
|
|
|
|
|
Weight
|
|
|
|
|
Threshold
|
|
|
|
|
Target
|
|
|
|
|
Maximum
|
|
|
|
|
|
|
|
|
2019
|
|
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Unit Sales
|
|
|
|
|
35%
|
|
|
|
$
|
3.050 billion
|
|
|
|
$
|
3.141 billion
|
|
|
|
$
|
3.264 billion
|
|
|
|
|
|
|
|
$
|
3.231 billion
|
|
|
|
$
|
2.871 billion
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Unit Operating Income Margin
|
|
|
|
|
40%
|
|
|
|
|
14.8%
|
|
|
|
|
15.3%
|
|
|
|
|
15.8%
|
|
|
|
|
|
|
|
|
17.9%
|
|
|
|
|
15.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Unit Average Working Capital as a % of Sales
|
|
|
|
|
15%
|
|
|
|
|
16.7%
|
|
|
|
|
16.2%
|
|
|
|
|
15.7%
|
|
|
|
|
|
|
|
|
15.9%
|
|
|
|
|
15.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Earnings
|
|
|
|
|
10%
|
|
|
|
$
|
368.0 million
|
|
|
|
$
|
407.0 million
|
|
|
|
$
|
426.0 million
|
|
|
|
|
|
|
|
$
|
496.0 million
|
|
|
|
$
|
379.0 million
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based
on the performance measures established by the Compensation Committee for 2019 and the Company's adjusted performance, the named executives earned 2019 annual incentive awards as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
2019 Annual Incentive Award
($)(1)
|
|
|
|
|
2019 Annual Incentive Award
(% of base salary)
|
|
|
|
|
2019 Annual Incentive Award
(% of target incentive award)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
$
|
2,163,700
|
|
|
|
|
184
|
%
|
|
|
|
153
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Roche
|
|
|
|
$
|
722,800
|
|
|
|
|
115
|
%
|
|
|
|
153
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berlin
|
|
|
|
$
|
741,500
|
|
|
|
|
109
|
%
|
|
|
|
145
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
$
|
821,500
|
|
|
|
|
140
|
%
|
|
|
|
187
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
$
|
604,200
|
|
|
|
|
115
|
%
|
|
|
|
153
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
These
amounts are also reported in the "Non-Equity Incentive Plan Compensation" column of the Summary Compensation Table on page 34.
2019 Long-Term, Stock-Based Awards
Annual Awards
The
Compensation Committee makes annual stock-based awards each year at its regularly scheduled February meeting. All stock-based awards are made under the Incentive
Compensation Program which imposes certain restrictions, as described below, on the terms of the awards.
In
February 2019, the Compensation Committee awarded stock options, performance Shares and restricted Shares to the named executives in the amounts shown in the Grants of Plan-Based
Awards Table on page 36. The number of Shares included in the 2019 awards was determined using a formula-based approach. First, the Compensation Committee established a target award
opportunity, expressed
29
Table of Contents
as
a percentage of base salary, for the named executives based on each executive's position and the long-term incentive award market range for that position: 445% of base salary for the Chief
Executive Officer and 150% of base salary for the other named executives.
The
Compensation Committee then determined the appropriate blend of the types of equity awards to be included in each named executive's stock-based award. In 2010, the Compensation
Committee changed the blend of equity awards from stock options and time-vested restricted Shares (each weighted 50%) to stock options, performance Shares and time-vested restricted Shares (each
weighted 331/3%) and elected to use the same blend of stock-based awards in 2019 for all the named executives to support the Company's pay-for-performance programs and the alignment of
executive and stockholder interests.
All
employees awarded stock options, performance Shares and restricted Shares are subject to a non-competition agreement that prohibits the employee from competing with the Company for
one year following his or her termination of employment.
The
stock options awarded in February 2019 will vest in equal annual installments over three years. The restricted Shares awarded in February 2019 will become vested on the
January 1 immediately preceding the third anniversary of the award date.
The
performance Shares awarded in February 2019 will be earned based on the total return to the Company's stockholders (Share appreciation measured using the average of the closing
market prices for a Share for the first 10 and last 10 trading days of the performance period plus dividends) relative to the total stockholder return of the companies comprising the S&P MidCap 400
Index® over the three-year performance period ending December 31, 2021 in accordance with the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relative Total Stockholder Return
|
|
|
|
Percentage of Performance Shares Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Below 25th percentile
|
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25th percentile
|
|
|
|
50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50th percentile
|
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75th percentile or above
|
|
|
|
200%
|
|
|
|
|
|
|
|
|
|
|
|
If
the Company's total stockholder return falls between the 25th and 50th percentiles or between the 50th and
75th percentiles, the number of performance Shares earned will be determined by linear interpolation. Dividends will accrue during the three-year performance period and will be
paid on performance Shares that are earned.
The
Compensation Committee included stock options in the awards to encourage the named executives to increase stockholder value over the 10-year term of the options. The Compensation
Committee included restricted Shares in the awards not only to encourage the named executives to increase stockholder value but also, where applicable, to remain employed with the Company. The
Compensation Committee added performance Shares to further link executive compensation to the performance of the Company and to align the interests of the executives with the Company's stockholders.
The
Incentive Compensation Program contains certain restrictions on the terms of all stock-based awards. For example, all stock options must be granted with an option exercise price that
is equal to or greater than the fair market value of the Shares on the date of award. The Incentive Compensation Program also expressly prohibits resetting the option exercise price of stock options.
These restrictions ensure that any options awarded under the Incentive Compensation Program will have value to the executives only if the market price of the Shares increases after the date of the
award. As a result of changes made to Section 162(m) of the Internal Revenue Code (the "Code") applicable to 2019 compensation, the Compensation Committee approved an amendment to the Incentive
Compensation
30
Table of Contents
Program,
effective January 1, 2019, to eliminate the limits on the size of the annual awards that may be granted to any executive. The Compensation Committee also approved an amendment to the
Incentive Compensation Program, effective January 1, 2019, to allow the Company's Chief Executive Officer to approve off-cycle grants of stock-based awards to employees other than
Section 16 officers for limited purposes and subject to volume limits approved by the Compensation Committee.
The
Compensation Committee has never altered the timing of stock-based awards to take advantage of non-public information. The Compensation Committee is aware that the February meeting
during which it makes annual stock-based awards precedes the date the Company releases its fourth quarter and annual financial results. The Compensation Committee is also aware that the release could
affect the market value of the Company's stock and the underlying value of the stock-based awards made to executives at the February meeting. The Compensation Committee believes that executives will
not necessarily gain over the long run from the short-term benefit of a positive release because the Company's stock price fluctuates over time and because all of the awards have multi-year vesting
schedules and stock options have historically been held for several years prior to exercise. In addition, any gain from a positive benefit in some years will be offset by earnings releases in other
years that negatively affect the market value of the Shares.
Stock Ownership Policy
The Compensation Committee believes that ownership of Common Shares by executive officers aligns their interests with those of the Company's
stockholders, enhances retention of executives by providing them an opportunity to accumulate a meaningful ownership interest in the Company and focuses executives on building stockholder value over
the long term. Therefore, the Compensation Committee maintains a stock ownership policy for the Company's executive officers, including the named executive officers.
The
policy, which is applicable to all of the Company's Section 16 officers, has the following ownership requirements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
|
Ownership Requirement
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Executive Officer
|
|
|
|
10 times previous year base salary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Named Executive Officers
|
|
|
|
5 times previous year base salary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Remaining Section 16 Officers
|
|
|
|
3 times previous year base salary
|
|
|
|
|
|
|
|
|
|
|
|
The
policy also has a retention requirement under which an executive officer must retain at least one-half of the after-tax value realized from the vesting of restricted Shares, the
exercise of stock options or the receipt of earned performance Shares until the executive officer has satisfied the policy's ownership requirement. Each executive officer subject to the policy has
five years from first becoming subject to the policy to attain the ownership requirement and once the ownership requirement is met, no further accumulation is required in the event the value of the
Shares falls below the ownership requirement due solely to a decrease in the market value of the Shares.
Ownership
for purposes of the policy includes Shares owned directly or under an employee benefit plan and all restricted Shares. Ownership does not include any performance Share awards
or any Shares subject to stock options. As of February 28, 2020, the Chief Executive Officer and each of the individuals who had been a Section 16 officer for at least five years as of
that date met the policy's ownership requirement.
The
stock ownership policy prohibits any executive officer from using Shares as collateral for any purpose or engaging in short sales (profiting if the market price of the securities
decreases) or hedging transactions involving Shares.
31
Table of Contents
D. Retirement and Other Benefits
Retirement and Group Insurance Benefits
The Company provides retirement, health and welfare and other benefits to its executive officers. The Company sponsors the 401(k) Plan, a
tax-qualified, defined contribution retirement plan, for the benefit of substantially all of its U.S.-based employees, including the named executives. The 401(k) Plan encourages saving for retirement
by enabling participants to save on a pre-tax basis and by providing Company matching contributions.
The
Company also sponsors the Retirement Plan for Employees of Carlisle, LLC (the "Retirement Plan"), a tax-qualified, defined benefit retirement plan that provides retirement
income to eligible employees following their retirement from the Company. The Pension Benefits Table on page 40 shows the lump sum present value as of December 31, 2019 of the
accumulated benefit earned by the named executives under the Retirement Plan.
Section 401(a)(17)
of the Code limits the amount of annual compensation that tax-qualified plans like the 401(k) Plan and the Retirement Plan may take into account for purposes of
determining contributions and benefits. The limit for 2019 was $280,000 and it is subject to adjustment annually for cost of living increases. For 2020, the limit will be $285,000. The Company
maintains the Carlisle, LLC Supplemental Pension Plan (the "Supplemental Pension Plan") to provide benefits to certain Retirement Plan participants whose benefits are limited by
Section 401(a)(17) of the Code and to certain senior management employees who were employed on or after January 1, 2005 and are not eligible to participate in the Retirement Plan. The
Pension Benefits Table on page 40 also shows the lump sum present value as of December 31, 2019 of the accumulated benefit earned by the named executives under the Supplemental Pension
Plan.
As
part of the Nonqualified Deferred Compensation Plan, the Company sponsors a supplemental 401(k) Plan to provide covered officers, including the named executives, the opportunity to
defer base salary and annual incentive compensation that could not be deferred under the 401(k) Plan due to the Code limitations that apply to the 401(k) Plan. The Company provides a matching
contribution equal to 100% of the first 4% of base salary and annual incentive compensation deferred under the supplemental 401(k) Plan. Each participant in the supplemental 401(k) Plan may direct the
deferrals of base salary or annual incentive compensation and the matching contributions among the different investment options offered by the Company from time to time. The investment options
currently include a fixed rate fund and various stock index funds. All amounts credited to a participant's account under the supplemental 401(k) Plan are 100% vested and will be paid in a lump sum or
installments in
accordance with the participant's election after the participant terminates employment with the Company. A participant may also elect to receive one or more in-service distributions.
The
named executives also participate in group health, life and other welfare benefit plans on the same terms and conditions that apply to other employees. Except for supplemental
long-term disability insurance, the named executives do not receive better insurance programs, vacation schedules or holidays, and perquisites are limited.
Post-Termination Employment Benefits
The Company has not entered into an employment agreement with any executive officer that provides severance or other benefits following their
resignation, termination, retirement, death or disability, except for agreements with certain executive officers (including all of the named executives) that provide severance benefits in the event of
a termination of their employment following a change of control of the Company (the "change of control agreements"). The change of control agreements provide that the executives will not, in the event
of the commencement of steps to effect a change of control (defined generally as an acquisition of 20% or more of the outstanding voting Shares or a
32
Table of Contents
change
in a majority of the Board of Directors), voluntarily leave the employ of the Company until the potential acquirer of the Company or control of the Company has terminated its efforts to effect
a change of control or until a change of control has occurred. The Company believes that the change of control agreements protect the interests of the Company's stockholders by providing financial
incentives to executives to represent the best interests of the Company and its stockholders during the periods immediately preceding and following a change of control.
In
connection with the change of control agreements with Messrs. Koch, Berlin and Selbach, in the event of any termination of their employment (including due to their resignation)
within three years after a change of control (other than due to their death or disability or after their attaining age 65), the change of control agreements provide that they will be entitled to
receive three years' compensation, including bonus, retirement benefits equal to the benefits they would have received had they completed three additional years of employment, continuation of all
life, accident, health, savings and other fringe benefits for three years and relocation assistance. The three-year benefit period is reduced if they terminate within three years of the date that they
would attain age 65. In addition, the agreements provide that they will become fully vested in all outstanding stock option and restricted Share awards.
If any payments to Messrs. Koch, Berlin or Selbach are considered excess "parachute payments" under Section 280G of the Code and the amount of the excess is more than 15% of the total
parachute payment, the Company is required to provide a tax gross up for the excise taxes he would be required to pay with respect to the payments.
In
September 2012, the Compensation Committee determined that any future change of control agreements would provide severance benefits only in the event an executive is terminated
without cause or resigns with good reason within three years after a change of control and the severance benefits would not be reduced based on the executive's age. In addition, the Company would not
provide any tax gross up for excise taxes assessed against any excess parachute payments. The change of control agreements with Messrs. Roche and Shears contain these revised terms.
The
Potential Payments Upon Termination or Change of Control Table on page 42 shows the estimated amounts that would have been payable to the named executives had their employment
with the Company terminated as a result of a change of control or otherwise on December 31, 2019.
Internal Revenue Code Section 162(m)
Section 162(m) of the Code limits the amount of compensation paid to the named executives in any one year that may be deducted by the
Company for federal income tax purposes. The deduction limitation is currently $1 million.
The
Tax Cuts and Jobs Act of 2017 expanded the number of individuals covered by Section 162(m) of the Code and eliminated the exception for performance-based compensation
effective for the Company's 2018 tax year. Therefore, compensation in excess of $1 million paid to named executives in 2018 and later years will not be deductible unless it qualifies for
transition relief applicable to certain arrangements in place as of November 2, 2017.
The
Compensation Committee has not adopted a formal policy that requires all compensation paid to the named executives to be fully deductible.
E. Conclusion
The Compensation Committee has reviewed all components of the Chief Executive Officer's and the other named executives' compensation, including salary, annual and
long-term incentive compensation, accumulated realized and unrealized stock option and restricted Share gains and the dollar value of all perquisites and other personal benefits as well as the
Company's obligations under its pension plans. Based on this review, the Compensation Committee finds the Chief Executive Officer's and the other named executives' total compensation, in the
aggregate, to be reasonable and appropriately linked to the Company's performance. The Compensation Committee therefore recommends that stockholders vote "FOR" the say-on-pay proposal included as
Proposal 3 in this Proxy Statement.
33
F. Executive Officer Compensation Disclosure Tables
Summary Compensation TableThis table shows the base salary, annual incentive award and all other compensation paid to the named executives. The table
also shows the grant date fair values of the stock option, restricted Share and performance Share awards made to the named executives and the increase in the present value of the retirement benefit
for each named executive.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal
Position(s)
|
|
|
|
|
Year
|
|
|
|
|
Salary
($)
|
|
|
|
|
Bonus
($)
|
|
|
|
|
Stock
Awards
($)(1)
|
|
|
|
|
Option
Awards
($)(1)
|
|
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
|
|
|
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)(2)
|
|
|
|
|
All Other Compensation ($)(3)
|
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
D. Christian Koch,
President and Chief Executive Officer
|
|
|
|
|
2019
|
|
|
|
$
|
1,175,000
|
|
|
|
$
|
0
|
|
|
|
$
|
4,090,697
|
|
|
|
$
|
1,746,387
|
|
|
|
$
|
2,163,700
|
|
|
|
$
|
193,395
|
|
|
|
$
|
209,762
|
|
|
|
$9,578,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
$
|
1,140,000
|
|
|
|
$
|
0
|
|
|
|
$
|
3,259,476
|
|
|
|
$
|
1,432,191
|
|
|
|
$
|
1,414,600
|
|
|
|
$
|
67,848
|
|
|
|
$
|
183,320
|
|
|
|
$7,497,435
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
$
|
1,100,000
|
|
|
|
$
|
0
|
|
|
|
$
|
2,550,458
|
|
|
|
$
|
1,084,151
|
|
|
|
$
|
857,300
|
|
|
|
$
|
122,351
|
|
|
|
$
|
218,969
|
|
|
|
$5,933,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert M. Roche,
Vice President and Chief Financial Officer
|
|
|
|
|
2019
|
|
|
|
$
|
628,000
|
|
|
|
$
|
0
|
|
|
|
$
|
737,262
|
|
|
|
$
|
314,680
|
|
|
|
$
|
722,800
|
|
|
|
$
|
51,237
|
|
|
|
$
|
72,553
|
|
|
|
$2,526,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
$
|
587,000
|
|
|
|
$
|
0
|
|
|
|
$
|
671,544
|
|
|
|
$
|
294,947
|
|
|
|
$
|
496,600
|
|
|
|
$
|
29,077
|
|
|
|
$
|
48,964
|
|
|
|
$2,128,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
$
|
500,909
|
|
|
|
$
|
0
|
|
|
|
$
|
1,661,307
|
|
|
|
$
|
285,055
|
|
|
|
$
|
291,500
|
|
|
|
$
|
586
|
|
|
|
$
|
301,754
|
|
|
|
$3,041,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John E. Berlin,
President, CIT
|
|
|
|
|
2019
|
|
|
|
$
|
683,000
|
|
|
|
$
|
0
|
|
|
|
$
|
800,976
|
|
|
|
$
|
342,177
|
|
|
|
$
|
741,500
|
|
|
|
$
|
209,031
|
|
|
|
$
|
43,524
|
|
|
|
$2,820,208
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018
|
|
|
|
$
|
663,000
|
|
|
|
$
|
0
|
|
|
|
$
|
758,596
|
|
|
|
$
|
333,222
|
|
|
|
$
|
584,500
|
|
|
|
$
|
66,010
|
|
|
|
$
|
12,659
|
|
|
|
$2,417,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017
|
|
|
|
$
|
650,000
|
|
|
|
$
|
0
|
|
|
|
$
|
753,147
|
|
|
|
$
|
320,270
|
|
|
|
$
|
159,900
|
|
|
|
$
|
156,614
|
|
|
|
$
|
16,557
|
|
|
|
$2,056,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicholas J. Shears(4),
President, CCM
|
|
|
|
|
2019
|
|
|
|
$
|
586,333
|
|
|
|
$
|
0
|
|
|
|
$
|
632,467
|
|
|
|
$
|
115,253
|
|
|
|
$
|
821,500
|
|
|
|
$
|
578,510
|
|
|
|
$
|
52,235
|
|
|
|
$2,786,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott C. Selbach,
Vice President, Secretary & General Counsel
|
|
|
|
|
2019
|
|
|
|
$
|
525,000
|
|
|
|
$
|
0
|
|
|
|
$
|
616,335
|
|
|
|
$
|
263,059
|
|
|
|
$
|
604,200
|
|
|
|
$
|
53,038
|
|
|
|
$
|
70,639
|
|
|
|
$2,132,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The amounts in these columns do not reflect the actual value the named executives will realize from the stock option,
restricted Share and performance Share awards made to the executives. The amounts presented in the table are the grant date fair values of the equity-based awards computed in accordance with FASB ASC
Topic 718, CompensationStock Compensation (excluding any effect of estimated forfeitures). The Company will recognize the grant date fair values of the awards as compensation expense over
the vesting period of the awards.
-
-
The "Stock Awards" column includes the grant date fair values of performance Shares awarded to the named
executive officers. The performance Shares are earned based on the total return to the Company's stockholders (Share appreciation plus dividends) relative to the total stockholder return of the
companies comprising the S&P MidCap 400 Index® over the three-year performance period ending December 31, 2019 (for the performance Shares awarded in 2017), December 31, 2020
(for the performance Shares awarded in 2018) and December 31, 2021 (for the performance Shares awarded in 2019). The terms of the performance Share awards are described on pages 29 through 30.
The "Stock Awards" column for 2019 includes the following grant date fair values of the performance Share awards: Mr. Koch, $2,347,970; Mr. Roche, $423,172; Mr. Berlin, $459,742;
Mr. Shears, $155,238; and Mr. Selbach, $353,763. The grant date fair value of $149.27 for the performance Shares was determined using the $110.79 closing market price of a Common Share
on the grant date and a Monte Carlo simulation and assumptions regarding the future performance of the Common Shares and the stock of the S&P MidCap 400 Index® companies, including
expected
34
volatility,
risk-free interest rates, correlation coefficients and dividend reinvestment. The grant date fair values of the performance Share awards assuming the maximum number of performance Shares
would be earned at the end of the three-year performance period based on the closing market price of a Common Share on the grant date would have been as follows: Mr. Koch, $3,485,453;
Mr. Roche, $628,179; Mr. Berlin, $682,466; Mr. Shears, $230,443; and Mr. Selbach, $525,145.
-
-
Note 7 to the Company's consolidated financial statements included in its Annual Report on
Form 10-K for the year ended December 31, 2019 contains more information about the Company's accounting for stock-based compensation arrangements, including the assumptions used to
determine the grant date fair values of the stock and option awards.
-
(2)
-
Represents the sum of: (i) the aggregate increase in the actuarial present value of the accumulated benefit under the
Retirement Plan and the Supplemental Pension Plan; and (ii) the portion of interest credited on compensation deferred under the Company's supplemental 401(k) Plan that is considered "above
market" under the SEC rules as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
Change in Present Value of
Retirement Plan and Supplemental
Pension Plan Benefits
|
|
|
|
|
"Above Market" Supplemental
401(k) Plan Earnings
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
$
|
193,230
|
|
|
|
$
|
165
|
|
|
|
$
|
193,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Roche
|
|
|
|
$
|
41,916
|
|
|
|
$
|
9,321
|
|
|
|
$
|
51,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berlin
|
|
|
|
$
|
209,031
|
|
|
|
$
|
0
|
|
|
|
$
|
209,031
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
$
|
561,224
|
|
|
|
$
|
17,286
|
|
|
|
$
|
578,510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
$
|
50,822
|
|
|
|
$
|
2,216
|
|
|
|
$
|
53,038
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(3)
-
The amounts presented in this column for 2019 consist of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
|
Mr. Roche
|
|
|
|
|
Mr. Berlin
|
|
|
|
|
Mr. Shears
|
|
|
|
|
Mr. Selbach
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matching Contributions to the 401(k) & HSA Plans
|
|
|
|
$
|
11,200
|
|
|
|
$
|
13,750
|
|
|
|
$
|
11,200
|
|
|
|
$
|
13,785
|
|
|
|
$
|
13,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matching Contributions to the Supplemental 401(k) Plan
|
|
|
|
$
|
103,584
|
|
|
|
$
|
44,984
|
|
|
|
$
|
0
|
|
|
|
$
|
30,899
|
|
|
|
$
|
37,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physical Examination
|
|
|
|
$
|
0
|
|
|
|
$
|
6,290
|
|
|
|
$
|
15,354
|
|
|
|
$
|
1,635
|
|
|
|
$
|
4,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reimbursement of Tax Return Preparation and Financial Advisory Services Fees
|
|
|
|
$
|
38,267
|
|
|
|
$
|
1,495
|
|
|
|
$
|
10,759
|
|
|
|
$
|
3,832
|
|
|
|
$
|
4,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charitable Contribution Made by the Company in the Name of the Executive under the Carlisle Matching Gifts for Education Program
|
|
|
|
$
|
35,000
|
|
|
|
$
|
2,500
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
10,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Long-Term Disability Insurance
|
|
|
|
$
|
21,711
|
|
|
|
$
|
3,534
|
|
|
|
$
|
6,211
|
|
|
|
$
|
2,084
|
|
|
|
$
|
1,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
209,762
|
|
|
|
$
|
72,553
|
|
|
|
$
|
43,524
|
|
|
|
$
|
52,235
|
|
|
|
$
|
70,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
-
All amounts presented above equal the actual cost to the Company of the particular benefit or perquisite
provided.
-
(4)
-
Mr. Shears was promoted to President of CCM on May 1, 2019.
35
Table of Contents
Grants of Plan-Based Awards TableThis table presents the threshold, target and maximum annual incentive awards the named executives could have earned
for 2019 and the restricted Shares, performance Shares and stock options awarded to the named executives during 2019. The annual incentive awards earned by the named executives for 2019 are reported
in the "Non-Equity Incentive Plan Compensation" column of the Summary Compensation Table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts under
Non-Equity Incentive Plan Awards
|
|
|
|
|
Estimated Future Payouts under
Equity Incentive Plan Awards(1)(2)
|
|
|
|
|
All Other Stock
Awards: Number
of Shares of Stock
|
|
|
|
|
All Other
Option
Awards: Number
of Securities
Underlying
|
|
|
|
|
Exercise or
Base Price
of Option
|
|
|
|
|
Grant Date
Fair Value of
Stock and
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
Grant
Date
|
|
|
|
|
Threshold
($)
|
|
|
|
|
Target
($)
|
|
|
|
|
Maximum
($)
|
|
|
|
|
Threshold
(#)
|
|
|
|
|
Target
(#)
|
|
|
|
|
Maximum
(#)
|
|
|
|
|
or Units
(#)(2)(3)
|
|
|
|
|
Options
(#)(2)(4)
|
|
|
|
|
Awards
($/Sh)
|
|
|
|
|
Awards
($)(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
|
|
|
|
|
$
|
705,000
|
|
|
|
$
|
1,410,000
|
|
|
|
$
|
2,820,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,742,727
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,865
|
|
|
|
|
15,730
|
|
|
|
|
31,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,347,970
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82,885
|
|
|
|
$
|
110.79
|
|
|
|
$
|
1,746,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Roche
|
|
|
|
|
|
|
|
|
$
|
235,500
|
|
|
|
$
|
471,000
|
|
|
|
$
|
942,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,835
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
314,090
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,418
|
|
|
|
|
2,835
|
|
|
|
|
5,670
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
423,172
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,935
|
|
|
|
$
|
110.79
|
|
|
|
$
|
314,680
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berlin
|
|
|
|
|
|
|
|
|
$
|
256,125
|
|
|
|
$
|
512,250
|
|
|
|
$
|
1,024,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
341,233
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,540
|
|
|
|
|
3,080
|
|
|
|
|
6,160
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
459,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,240
|
|
|
|
$
|
110.79
|
|
|
|
$
|
342,177
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
|
|
|
|
|
$
|
205,500
|
|
|
|
$
|
411,000
|
|
|
|
$
|
822,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
115,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
05/01/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
362,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
520
|
|
|
|
|
1,040
|
|
|
|
|
2,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
155,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,470
|
|
|
|
$
|
110.79
|
|
|
|
$
|
115,253
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
|
|
|
|
|
$
|
196,875
|
|
|
|
$
|
393,750
|
|
|
|
$
|
787,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
262,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,185
|
|
|
|
|
2,370
|
|
|
|
|
4,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
353,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
02/05/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,485
|
|
|
|
$
|
110.79
|
|
|
|
$
|
263,059
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
performance Shares will be earned based on the total return to the Company's stockholders (Share appreciation plus dividends) relative to the total stockholder
return of the companies comprising the S&P MidCap 400 Index® over the three-year performance period ending December 31, 2021 in accordance with the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relative Total Stockholder Return
|
|
|
|
Percentage of Performance Shares Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Below 25th percentile
|
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25th percentile
|
|
|
|
50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50th percentile
|
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75th percentile or above
|
|
|
|
200%
|
|
|
|
|
|
|
|
|
|
|
|
If
the Company's total stockholder return falls between the 25th and 50th percentiles or between the 50th and
75th percentiles, the number of performance Shares earned will be determined by linear interpolation. Dividends will accrue during the three-year performance period and will be
paid on performance Shares that are earned. In the event the named executive's employment is terminated without cause or the named executive resigns with good reason within three years after a change
of control of the Company, outstanding performance Shares will be earned at the maximum level. The performance Shares held by a named executive will remain outstanding and will be earned based on the
Company's relative total stockholder return performance in the event of a termination of employment of the named executive by the Company without cause.
-
(2)
-
All
of the awards include a non-competition agreement prohibiting the named executive from competing with the Company for one year following his termination of
employment by the Company.
36
Table of Contents
-
(3)
-
Shares
subject to the February 5, 2019 stock awards become vested on January 1, 2022. The Shares will also become vested on the date the named
executive officer terminates employment due to death or disability, upon the named executive officer's reaching age 65 (and, in the case of Mr. Shears, upon his retirement before age 65), in
the event a named executive officer's employment is terminated by the Company without cause prior to the originally scheduled vesting date or in accordance with the named executive officer's change of
control agreement. The named executives receive all dividends paid with respect to the restricted Shares during the vesting period.
-
(4)
-
The
option awards become vested and exercisable in three equal annual installments beginning upon the first anniversary of the date of grant, or, if earlier, on the
date the named executive officer terminates employment due to death or disability, upon the named executive officer's retirement at or after age 65, or in accordance with the named executive officer's
change of control agreement, under which, in all such cases, the options remain exercisable until the expiration of the 10-year term of the options. If the Company terminates the employment of the
named executive without cause (and, in the case of Mr. Shears, upon his retirement before age 65), the options will continue to become exercisable in accordance with the vesting schedule set
forth in the award agreement and remain exercisable until the expiration of the 10-year term of the options.
-
(5)
-
See
Footnote 1 to the Summary Compensation Table for a description of how the grant date fair values of the Share and stock option awards were determined.
37
Table of Contents
Outstanding Equity Awards at Fiscal Year-End TableThis table presents information about unvested restricted Share, stock option and performance Share
awards held by the named executives on December 31, 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
|
|
|
Option
Exercise
Price
($)
|
|
|
|
|
Option
Expiration
Date
|
|
|
|
|
Number of
Shares or Units
of Stock That
Have Not
Vested
(#)(1)
|
|
|
|
|
Market Value
of Shares or
Units of
Stock That
Have Not
Vested
($)(2)
|
|
|
|
|
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or
Other Rights
That Have Not
Vested
(#)(3)
|
|
|
|
|
Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned Shares,
Units or
Other Rights
That Have Not
Vested
($)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
|
0
|
|
|
|
|
82,885
|
(5)
|
|
|
$
|
110.79
|
|
|
|
|
02/04/2029
|
|
|
|
|
45,748
|
|
|
|
$
|
7,403,856
|
|
|
|
|
15,730
|
|
|
|
$
|
2,545,743
|
|
|
|
|
|
|
|
|
|
20,143
|
|
|
|
|
40,287
|
(6)
|
|
|
$
|
108.72
|
|
|
|
|
02/05/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,105
|
|
|
|
$
|
2,120,913
|
|
|
|
|
|
|
|
|
|
29,417
|
|
|
|
|
14,708
|
(7)
|
|
|
$
|
107.73
|
|
|
|
|
02/07/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,015
|
|
|
|
|
0
|
|
|
|
$
|
83.31
|
|
|
|
|
02/02/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Roche
|
|
|
|
|
0
|
|
|
|
|
14,935
|
(5)
|
|
|
$
|
110.79
|
|
|
|
|
02/04/2029
|
|
|
|
|
5,535
|
|
|
|
$
|
895,784
|
|
|
|
|
2,835
|
|
|
|
$
|
458,816
|
|
|
|
|
|
|
|
|
|
4,148
|
|
|
|
|
8,297
|
(6)
|
|
|
$
|
108.72
|
|
|
|
|
02/05/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,700
|
|
|
|
$
|
436,968
|
|
|
|
|
|
|
|
|
|
8,087
|
|
|
|
|
4,043
|
(8)
|
|
|
$
|
105.03
|
|
|
|
|
02/14/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berlin
|
|
|
|
|
0
|
|
|
|
|
16,240
|
(5)
|
|
|
$
|
110.79
|
|
|
|
|
02/04/2029
|
|
|
|
|
6,130
|
|
|
|
$
|
992,079
|
|
|
|
|
3,080
|
|
|
|
$
|
498,467
|
|
|
|
|
|
|
|
|
|
4,687
|
|
|
|
|
9,373
|
(6)
|
|
|
$
|
108.72
|
|
|
|
|
02/05/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,050
|
|
|
|
$
|
493,612
|
|
|
|
|
|
|
|
|
|
8,690
|
|
|
|
|
4,345
|
(7)
|
|
|
$
|
107.73
|
|
|
|
|
02/07/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
|
0
|
|
|
|
|
5,470
|
(5)
|
|
|
$
|
110.79
|
|
|
|
|
02/04/2029
|
|
|
|
|
4,383
|
|
|
|
$
|
709,345
|
|
|
|
|
1,040
|
|
|
|
$
|
168,314
|
|
|
|
|
|
|
|
|
|
1,168
|
|
|
|
|
2,337
|
(6)
|
|
|
$
|
108.72
|
|
|
|
|
02/05/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
760
|
|
|
|
$
|
122,998
|
|
|
|
|
|
|
|
|
|
2,143
|
|
|
|
|
1,072
|
(7)
|
|
|
$
|
107.73
|
|
|
|
|
02/07/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,495
|
|
|
|
|
0
|
|
|
|
$
|
83.31
|
|
|
|
|
02/02/2026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
|
0
|
|
|
|
|
12,485
|
(5)
|
|
|
$
|
110.79
|
|
|
|
|
02/04/2029
|
|
|
|
|
3,465
|
|
|
|
$
|
560,776
|
|
|
|
|
2,370
|
|
|
|
$
|
383,561
|
|
|
|
|
|
|
|
|
|
1,682
|
|
|
|
|
3,363
|
(6)
|
|
|
$
|
108.72
|
|
|
|
|
02/05/2028
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,095
|
|
|
|
$
|
177,215
|
|
|
|
|
|
|
|
|
|
3,087
|
|
|
|
|
1,543
|
(7)
|
|
|
$
|
107.73
|
|
|
|
|
02/07/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
restricted Shares will become vested as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares Becoming Vested On:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
January 1,
2021
|
|
|
|
|
January 1,
2022
|
|
|
|
|
May 2,
2022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
|
30,018
|
|
|
|
|
15,730
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Roche
|
|
|
|
|
2,700
|
|
|
|
|
2,835
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berlin
|
|
|
|
|
3,050
|
|
|
|
|
3,080
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
|
760
|
|
|
|
|
1,040
|
|
|
|
|
2,583
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
|
1,095
|
|
|
|
|
2,370
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(2)
-
Based
on the closing market price of a Common Share on December 31, 2019 of $161.84 per Share.
-
(3)
-
The
number of unearned performance Shares in this column equals the target number of performance Shares that may be earned by the named executives (for the
three-year performance periods that will end on December 31, 2021 and December 31, 2020). The performance Shares will be earned based on the total return to the Company's stockholders
(Share appreciation plus dividends) relative to the total
38
Table of Contents
stockholder
return of the companies comprising the S&P MidCap 400 Index® over the three-year performance periods in accordance with the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Relative Total Stockholder Return
|
|
|
|
Percentage of Performance Shares Earned
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Below 25th percentile
|
|
|
|
0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25th percentile
|
|
|
|
50%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50th percentile
|
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75th percentile or above
|
|
|
|
200%
|
|
|
|
|
|
|
|
|
|
|
|
-
-
If
the Company's total stockholder return falls between the 25th and 50th percentiles or between the
50th and 75th percentiles, the number of performance Shares earned will be determined by linear interpolation. Dividends will accrue during the three-year
performance period and will be paid on performance Shares that are earned.
-
-
The
Company's 2019 total stockholder return of 58.86% (calculated for this purpose as Share appreciation measured using the average of the closing market
prices for a Share for the first 10 and last 10 trading days of the performance period plus dividends) resulted in a ranking for the year at the 91st percentile. Based on that
percentile, approximately 200% of the performance Shares awarded in 2019 would have been earned if the performance period had ended on December 31, 2019. The Company's 2018 through 2019 total
stockholder return of 41.23% resulted in a ranking for the year at the 82nd percentile. Based on that percentile, approximately 200% of the performance Shares awarded in 2018
would have been earned if the performance period had ended on December 31, 2019.
-
(4)
-
The
amounts in this column equal the number of unearned performance Shares shown in the column to the left multiplied by, in each case, the closing market price of a
Common Share on December 31, 2019 of $161.84 per Share. The amounts shown are not necessarily indicative of the amounts that may actually be realized by the named executive officers. The actual
amounts realized will be based on the Company's total stockholder return over the three-year performance periods and the market value of the Shares when the performance Shares are earned.
-
(5)
-
The
unexercisable stock options will become exercisable at the rate of 331/3% per year on February 5, 2020, February 5, 2021 and
February 5, 2022.
-
(6)
-
The
unexercisable stock options will become exercisable at the rate of 50% per year on February 6, 2020 and February 6, 2021.
-
(7)
-
The
unexercisable stock options will become exercisable on February 8, 2020.
-
(8)
-
The
unexercisable stock options will become exercisable on February 15, 2020.
39
Table of Contents
Option Exercises and Stock Vested TableThis table presents information about stock options exercised by the named executives and the number and value
of stock awards that became vested in the named executives during 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
|
Number of
Shares Acquired
on Exercise
(#)
|
|
|
|
|
Value Realized
on Exercise
($)(1)
|
|
|
|
|
Number of
Shares Acquired
on Vesting
(#)
|
|
|
|
|
Value Realized
on Vesting
($)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
|
93,418
|
|
|
|
$
|
6,433,561
|
|
|
|
|
28,779
|
|
|
|
$
|
4,657,593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Roche(3)
|
|
|
|
|
0
|
|
|
|
$
|
0
|
|
|
|
|
12,414
|
|
|
|
$
|
1,816,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berlin
|
|
|
|
|
15,150
|
|
|
|
$
|
620,052
|
|
|
|
|
8,499
|
|
|
|
$
|
1,375,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
|
10,305
|
|
|
|
$
|
712,027
|
|
|
|
|
4,100
|
|
|
|
$
|
614,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
|
20,850
|
|
|
|
$
|
872,651
|
|
|
|
|
3,017
|
|
|
|
$
|
488,271
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Value
realized equals the fair market value of the Shares on the date of exercise less the exercise price.
-
(2)
-
Value
realized equals the fair market value of: (i) the restricted Shares on the date the vesting restrictions lapsed and the Shares became vested; and
(ii) the performance Shares earned for the three-year performance period ended December 31, 2019.
-
(3)
-
Mr. Roche
elected to defer receipt of 5,607 Shares. The deferred Shares will be distributed to Mr. Roche in accordance with the terms of the
Nonqualified Deferred Compensation Plan. Mr. Roche will receive dividend equivalent payments from the Company during the period the Shares are deferred.
Pension Benefits TableThis table provides the actuarial present value of each named executive's accumulated benefit under the Retirement Plan and the
Supplemental Pension Plan.
The
Retirement Plan provides benefits under a cash balance benefit accrual formula. Under the formula, participants accumulate a cash balance benefit based upon compensation credits made
annually to the participants' cash balance accounts. The amount of the compensation credits ranges from 3.0% to 7.5% of total base salary and annual bonus (including amounts deferred under the 401(k)
Plan and Section 125 of the Code), depending on each participant's years of service. The cash balance account is further credited with interest annually. The interest credit is based on the
One-Year Treasury Constant Maturities as published in the Federal Reserve Statistical Release over the one-year period ending on the December 31st immediately preceding the
applicable plan year. The interest rate for the plan year ending December 31, 2019 was 4.0%. The Retirement Plan was closed to new participants effective December 31, 2004. No employees
hired on or after January 1, 2005 are eligible to participate in the Retirement Plan.
The
benefits under the Supplemental Pension Plan are equal to the difference between the benefits that would have been payable under the Retirement Plan without regard to the limitation
imposed by the Code on the amount of compensation that may be taken into account under the Retirement Plan or the limitation on participation in the Retirement Plan that became effective on
January 1, 2005 and the actual benefits payable under the Retirement Plan as so limited.
Benefits
under the Retirement Plan are payable as a monthly annuity or in a lump sum payment. Vested benefits under the Supplemental Pension Plan are payable only in the form of a
monthly annuity. The benefits under the Retirement Plan become vested after the executive completes five years of vesting service, or, if earlier, the date the executive terminates employment due to
death or disability. The benefits under the Supplemental Pension Plan become vested after the executive
40
Table of Contents
completes
10 years of vesting service, or, if earlier, the date the executive terminates employment due to death or disability.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
Plan Name
|
|
|
|
|
Number of
Years of Credited
Service
(#)(1)
|
|
|
|
|
Present Value
of Accumulated
Benefit
($)(2)
|
|
|
|
|
Payments During
Last Fiscal
Year
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
Retirement Plan
|
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
Supplemental Pension Plan
|
|
|
|
|
10.92
|
|
|
|
$
|
689,656
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Roche
|
|
|
|
Retirement Plan
|
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
Supplemental Pension Plan
|
|
|
|
|
1.83
|
|
|
|
$
|
65,397
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berlin
|
|
|
|
Retirement Plan
|
|
|
|
|
29.00
|
|
|
|
$
|
493,958
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
Supplemental Pension Plan
|
|
|
|
|
29.00
|
|
|
|
$
|
810,916
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
Retirement Plan
|
|
|
|
|
34.75
|
|
|
|
$
|
551,734
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
Supplemental Pension Plan
|
|
|
|
|
34.75
|
|
|
|
$
|
498,435
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
Retirement Plan
|
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
Supplemental Pension Plan
|
|
|
|
|
13.75
|
|
|
|
$
|
368,718
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
amounts presented in this column represent the number of actual years the named executive has been a participant in each plan. None of the named executives have
been given credit under the plans for years of service in addition to their actual years of service presented in the table. Messrs. Koch, Roche and Selbach commenced employment after
December 31, 2004 and are not eligible to participate in the Retirement Plan.
-
(2)
-
Note 15
to the Company's consolidated financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019
includes the valuation assumptions and other information relating to the Retirement Plan and the Supplemental Pension Plan.
Nonqualified Deferred Compensation TableThis table provides information about contributions and earnings credited to the accounts of the named
executive officers under the Nonqualified Deferred Compensation Plan during 2019.
The
Nonqualified Deferred Compensation Plan provides covered employees, including the named executive officers, the opportunity to defer salary, annual incentive compensation, restricted
Shares and performance Shares. With respect to compensation that could not be deferred under the 401(k) Plan due to the Code limitations that apply to the 401(k) Plan, the Company provides a matching
contribution equal to 100% of the first 4% of base salary and annual incentive compensation deferred under the supplemental 401(k) Plan. Each participant in the supplemental 401(k) Plan may direct the
deferrals of base salary or annual incentive compensation and the matching contributions among the different investment options offered by the Company from time to time. The investment options
currently include a fixed rate fund and various stock index funds. Any restricted Shares or performance Shares deferred are credited in-kind to the participant's account. All amounts credited to a
participant's account under the supplemental 401(k) Plan are 100% vested and will be paid in a lump sum or installments in accordance with the participant's election after the participant terminates
employment with the Company. Distributions of restricted Shares and performance Shares are made in-kind. In the event the participant dies or becomes disabled while employed by the Company, terminates
employment before attaining the age of 60 or within one year after a change of control of the Company, all restricted Shares and performance Shares will be distributed in-kind and all other amounts
credited to the participant's account will be distributed in a lump sum in accordance with the
41
Table of Contents
terms
of the Nonqualified Deferred Compensation Plan. A participant may also elect to receive one or more in-service distributions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
|
Executive
Contributions
in Last FY
($)(1)
|
|
|
|
Registrant
Contributions
in Last FY
($)(2)
|
|
|
|
Aggregate
Earnings (Losses)
in Last FY
($)(3)
|
|
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
|
|
Aggregate
Balance at
Last FYE
($)(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
$
|
103,584
|
|
|
|
$
|
103,584
|
|
|
|
$
|
76,529
|
|
|
|
$
|
288,959
|
|
|
|
$
|
421,456
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Roche
|
|
|
|
$
|
205,210
|
|
|
|
$
|
44,984
|
|
|
|
$
|
55,751
|
|
|
|
$
|
0
|
|
|
|
$
|
2,380,487
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berlin
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
1,800
|
|
|
|
$
|
0
|
|
|
|
$
|
161,840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
$
|
256,866
|
|
|
|
$
|
30,899
|
|
|
|
$
|
99,624
|
|
|
|
$
|
0
|
|
|
|
$
|
2,719,733
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
$
|
37,427
|
|
|
|
$
|
37,427
|
|
|
|
$
|
119,736
|
|
|
|
$
|
0
|
|
|
|
$
|
4,039,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
All
amounts shown in this column are also reported in either the "Salary" or "Non-Equity Incentive Plan Compensation" column of the Summary Compensation Table.
-
(2)
-
All
amounts shown in this column are also reported in the "All Other Compensation" column of the Summary Compensation Table.
-
(3)
-
The
following amounts included in this column are considered "above market" earnings under the SEC rules and are included in the "Change in Pension Value and
Nonqualified Deferred Compensation Earnings" column of the Summary Compensation Table: Mr. Koch, $165; Mr. Roche, $9,321; Mr. Shears, $17,286; and Mr. Selbach, $2,216.
-
(4)
-
Of
the amounts shown in this column, the following amounts were previously reported as compensation to the named executive officers in the Summary Compensation Table
for previous years: Mr. Koch, $119,845; Mr. Roche, $1,558,512; and Mr. Selbach, $66,600.
Potential Payments Upon Termination or Change of Control TableThis table shows the estimated amounts that would have been payable to the named
executives under the change of control agreements described on pages 32 through 33 if a change of control of the Company had occurred on December 31, 2019 and the named executives' employment
with the Company terminated under the terms of their respective change of control agreement immediately thereafter. Footnotes 3, 4 and 5 below also describe vesting of stock options, restricted Shares
and performance Shares if the named executives' employment with the Company had otherwise terminated on December 31, 2019 as result of death, disability, retirement or termination without
cause.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
Benefit
($)(1)
|
|
|
|
|
Continued
Participation
in Health
and Other
Welfare
Benefit Plans
and Fringe
Benefits
($)(2)
|
|
|
|
|
Vesting of
Stock
Options
($)(3)
|
|
|
|
|
Vesting of
Restricted
Shares
($)(4)
|
|
|
|
|
Vesting of
Performance
Shares
($)(5)
|
|
|
|
|
Special
Retirement
Benefits
($)(6)
|
|
|
|
|
Excise Tax
Gross Up
(Reduction
in
Payments)
($)(7)
|
|
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koch
|
|
|
|
$
|
10,016,100
|
|
|
|
$
|
349,000
|
|
|
|
$
|
7,167,175
|
|
|
|
$
|
7,403,856
|
|
|
|
$
|
9,333,312
|
|
|
|
$
|
795,077
|
|
|
|
$
|
10,434,534
|
|
|
|
$
|
45,499,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Roche
|
|
|
|
$
|
4,052,400
|
|
|
|
$
|
99,000
|
|
|
|
$
|
1,432,851
|
|
|
|
$
|
895,784
|
|
|
|
$
|
1,791,568
|
|
|
|
$
|
297,774
|
|
|
|
$
|
0
|
|
|
|
$
|
8,569,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berlin
|
|
|
|
$
|
4,273,500
|
|
|
|
$
|
168,000
|
|
|
|
$
|
1,562,054
|
|
|
|
$
|
992,079
|
|
|
|
$
|
1,984,158
|
|
|
|
$
|
354,113
|
|
|
|
$
|
0
|
|
|
|
$
|
9,333,904
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Shears
|
|
|
|
$
|
4,240,500
|
|
|
|
$
|
95,000
|
|
|
|
$
|
461,391
|
|
|
|
$
|
709,345
|
|
|
|
$
|
582,624
|
|
|
|
$
|
450,814
|
|
|
|
$
|
0
|
|
|
|
$
|
6,539,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Selbach
|
|
|
|
$
|
1,129,087
|
|
|
|
$
|
39,000
|
|
|
|
$
|
899,494
|
|
|
|
$
|
560,776
|
|
|
|
$
|
1,121,552
|
|
|
|
$
|
105,145
|
|
|
|
$
|
0
|
|
|
|
$
|
3,855,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
The
severance benefit is equal to three times the named executive's highest annual compensation (sum of base salary and annual incentive compensation) for any of the
years in the three-year period ended December 31, 2019. The severance benefit for Mr. Selbach is prorated based on his attaining age 65 in 2020.
42
Table of Contents
-
(2)
-
Estimated
value of the named executive's continued participation in the life, accident and health insurance plans of the Company and receipt of currently provided
fringe benefits for three years following termination of employment after a change of control of the Company. These benefits for Mr. Selbach are prorated based on his attaining age 65 in 2020.
Excludes estimated amounts for assistance with relocation available to the named executives within two years following termination of employment after a change of control of the Company.
-
(3)
-
Value
(based on the closing market price of a Common Share on December 31, 2019 of $161.84 per Share) of unvested in-the-money stock options under all
outstanding stock option awards. The stock options would also become fully vested in the event the named executive dies or becomes disabled while employed by the Company or retires from employment
with the Company at or after attaining age 65, under which, in both such cases, the stock options remain exercisable until the expiration of the 10-year term of the options. If the Company terminates
the employment of the named executive without cause (and, in the case of Mr. Shears, upon his retirement before age 65), the stock options will continue to become exercisable in accordance with
the vesting schedule set forth in the award agreement and remain exercisable until the expiration of the 10-year term of the options.
-
(4)
-
Value
(based on the closing market price of a Common Share on December 31, 2019 of $161.84 per Share) of unvested restricted Shares under all outstanding
restricted Share awards. The restricted Shares would also become fully vested in the event the named executive dies or becomes disabled while employed by the Company, upon the named executive reaching
age 65 (and, in the case of Mr. Shears, upon his retirement before age 65), or if the Company terminates the employment of the named executive without cause.
-
(5)
-
Value
(based on the closing market price of a Common Share on December 31, 2019 of $161.84 per Share) of the maximum number of performance Shares under all
outstanding performance Share awards. In the event the named executive dies or becomes disabled while employed by the Company, retires from employment with the Company at or after attaining age 65
(and, in the case of Mr. Shears, upon his retirement before age 65) or the Company terminates the employment of the named executive without cause, the performance Shares will remain
outstanding and will be earned or forfeited following the end of the performance period based on the Company's performance during the performance period applicable to the performance Shares.
-
(6)
-
Approximate
amount of total retirement benefits from all Company plans the named executive would have received had he continued in the employ of the Company for
three years following termination of employment after a change of control of the Company. The special retirement benefits for Mr. Selbach are prorated based on his attaining age 65 in 2020.
-
(7)
-
If
any payments to Messrs. Koch, Berlin or Selbach are considered excess "parachute payments" under Section 280G of the Code and the amount of the
excess is more than 15% of the total parachute payment, the Company is required to provide a tax gross up for the excise taxes he would be required to pay with respect to the payments. In September
2012, the Compensation Committee determined that any future change of control agreements would not provide any tax gross up for excise taxes assessed against any excess parachute payments.
Mr. Roche and Mr. Shears are not entitled to any tax gross up for excess parachute payment excise taxes.
Following
termination of employment, the named executive officers receive retirement benefits and nonqualified deferred compensation benefits under the Retirement Plan, the Supplemental
Pension Plan, the Nonqualified Deferred Compensation Plan and the supplemental 401(k) Plan. The value of those benefits as of December 31, 2019 is set forth in the sections above entitled
"Pension Benefits Table" and "Nonqualified Deferred Compensation Table." There are no special or enhanced benefits provided under those plans in connection with a change of control of the Company,
except if a named executive officer terminates employment within one year after a change of control, all amounts credited
43
Table of Contents
to
the named executive officer's account under the supplemental 401(k) Plan will be distributed in a lump sum even if the officer had previously elected to be paid in installments.
G. Pay Ratio Disclosure
The SEC rules require the Company to disclose annually: (i) the median annual total compensation of all employees of the Company (excluding
Mr. Koch, the Company's principal executive officer); (ii) the annual total compensation of Mr. Koch; and (iii) the ratio of Mr. Koch's annual total compensation to
the median annual total compensation of all other employees.
Based
on the methodology and material assumptions described below, the Company has estimated these amounts to be as follows:
|
|
|
|
|
Median annual total compensation of all employees (excluding Mr. Koch)
|
|
$
|
64,629
|
|
Annual total compensation of Mr. Koch
|
|
$
|
9,578,941
|
|
Ratio of Mr. Koch's annual total compensation to the median annual total compensation of all other employees
|
|
|
148:1
|
|
For
2019, the Company used the same median employee selected in 2017 to determine the median annual total compensation of all employees (excluding Mr. Koch). To determine the
median employee in 2017, the Company compiled a list of all employees (excluding Mr. Koch) as of October 2, 2017, sorted the list of employees by their annualized gross compensation
rates as of October 2, 2017 and selected the employee with the median annualized gross compensation amount. The Company did not include in the compensation rates the value of Company-provided
benefits such as retirement and medical and life insurance benefits. As of October 2, 2017, the Company employed 14,181 persons, of which 7,698 employees were employed in foreign countries. The
compensation of employees in foreign countries was converted to an equivalent U.S. dollar amount using foreign exchange rates on October 2, 2017. During 2019, the Company added approximately
1,476 new employees from acquisitions it completed during the year and reduced employment by approximately 350 employees as a result of plant closures. Based on demographic analysis, the Company
reasonably believes that such change in employee population or any change in employee compensation arrangements did not significantly affect the Company's pay ratio disclosure for 2019.
The
annual total compensation of Mr. Koch is the total amount of his compensation presented in the Summary Compensation Table on page 34. The Company calculated the annual total
compensation of the median employee using the same rules applicable to the completion of the Summary Compensation Table for Mr. Koch and the other named executives.
44
Table of Contents
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Robin J. Adams, Robert G. Bohn, Gregg A. Ostrander, Corrine D. Ricard and Jesse G. Singh served on the Compensation Committee in 2019. None of
the directors who served on the Compensation Committee in 2019 has ever served as one of the Company's officers or employees or had any relationship with the Company or any of its subsidiaries since
the beginning of 2019 pursuant to which disclosure would be required under the SEC rules pertaining to the disclosure of
transactions with related persons. During 2019, none of the Company's executive officers served as a director or a member of the compensation committee (or other committee performing equivalent
functions) of any other entity of which an executive officer of such other entity served on the Board or its Compensation Committee.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has reviewed and discussed the "Compensation Discussion and Analysis" section included in this Proxy Statement with
management and, based on such review and discussions, recommended to the Board of Directors that the "Compensation Discussion and Analysis" section be included in this Proxy Statement and in the
Company's Annual Report on Form 10-K for the year ended December 31, 2019.
|
|
|
|
|
CARLISLE COMPANIES INCORPORATED
COMPENSATION COMMITTEE
|
|
|
Robin J. Adams, Chairman
Robert G. Bohn
Gregg A. Ostrander
Corrine D. Ricard
Jesse G. Singh
|
45
Table of Contents
REPORT OF THE AUDIT COMMITTEE
The Audit Committee is comprised of six non-employee directors. The Board has made a determination that the members of the Audit Committee
satisfy the requirements of the NYSE as to independence, financial literacy and experience. The responsibilities of the Audit Committee are set forth in the Charter of the Audit Committee, which is
reviewed annually by the committee.
The
Audit Committee has the sole authority to appoint and terminate the engagement of the Company's independent registered public accounting firm. The Audit Committee also reviews the
arrangements for and the results of the independent registered public accounting firm's examination of the Company's books and records, internal accounting control procedures, the activities and
recommendations of the Company's internal auditors, and the Company's accounting policies, control systems and compliance activities. The Board has determined that Robin J. Adams, James D. Frias,
Lawrence A. Sala and Jesse G. Singh are "audit committee financial experts" as defined by the SEC rules. Below is a report on the Audit Committee's activities relating to 2019.
Review of Audited Consolidated Financial Statements with Management
The Audit Committee has reviewed and discussed with management the audited consolidated financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2019.
Review of Audited Consolidated Financial Statements and Other Matters with Independent Registered Public Accounting Firm
The Audit Committee has discussed with the Company's independent registered public accounting firm the audited consolidated financial statements
and the matters required to be discussed by applicable requirements of the Public Company Accounting Oversight Board (the "PCAOB") and the SEC. The Audit Committee has received the written disclosures
and the letter from the independent registered public accounting firm required by applicable requirements of the PCAOB regarding the independent registered public accounting firm's communications with
the Audit Committee concerning independence, and has discussed with the independent registered public accounting firm its independence. In concluding that such firm is independent, the Audit Committee
considered, among other factors, whether the non-audit services provided by such firm were compatible with its independence. See "Fees Paid to Independent Registered Public Accounting Firm" below.
Recommendation that Audited Consolidated Financial Statements be Included in Annual Report
Based on the reviews, discussions and disclosures referred to above, the Audit Committee recommended to the Board of Directors that the audited
consolidated financial statements for the year ended December 31, 2019 be included in the Company's Annual Report on Form 10-K for such year.
|
|
|
|
|
CARLISLE COMPANIES INCORPORATED AUDIT COMMITTEE
|
|
|
James D. Frias, Chairman
Robin J. Adams
Jonathan R. Collins
Corrine D. Ricard
Lawrence A. Sala
Jesse G. Singh
|
46
Table of Contents
PROPOSAL 2:
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has appointed Deloitte & Touche LLP to serve as the Company's independent registered
public accounting firm for 2020. Deloitte & Touche LLP has served as the Company's independent registered public accounting firm since 2017. The Audit Committee reviewed and discussed
the performance of Deloitte & Touche LLP for 2019 prior to its appointment of Deloitte & Touche LLP to serve as the Company's independent registered public accounting firm
for 2020.
The
Company expects that representatives of Deloitte & Touche LLP will be present at the Annual Meeting, and the representatives will have an opportunity to make a
statement if they desire to do so. The Company also expects that representatives will be available to respond to appropriate questions from stockholders.
Stockholder
ratification of the Audit Committee's appointment of Deloitte & Touche LLP to serve as the Company's independent registered public accounting firm for 2020 is
not required by the Company's Amended and Restated Bylaws or otherwise. Nevertheless, the Board is submitting the appointment of Deloitte & Touche LLP to the Company's stockholders for
ratification as a matter of good corporate governance. If the Company's stockholders fail to ratify the appointment, the Audit Committee will reconsider its appointment of Deloitte &
Touche LLP. Even if this appointment is ratified, the Audit Committee, in its discretion, may direct the appointment of a different independent registered public accounting firm at any time
during the year if the Audit Committee determines that such a change would be in the best interests of the Company and its stockholders.
The Board of Directors recommends that you vote "FOR" the ratification of the appointment of Deloitte & Touche LLP to serve as the Company's
independent registered public accounting firm for 2020. Unless otherwise specified, proxies will be voted "FOR" the ratification
of the appointment of Deloitte & Touche LLP to serve as the Company's independent registered public accounting firm for 2020.
A. Fees Paid to Independent Registered Public Accounting Firm
The following table presents fees for professional audit services rendered by Deloitte & Touche LLP for the audit of the Company's consolidated
financial statements for the years ended December 31, 2019 and 2018 and fees billed for other services rendered by Deloitte & Touche LLP during those periods:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
($)
|
|
|
|
2018
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit Fees(1)
|
|
|
|
$
|
4,449,965
|
|
|
|
$
|
4,434,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit-Related Fees
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Fees(2)
|
|
|
|
$
|
516,303
|
|
|
|
$
|
128,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
(1)
-
Audit
Fees consist of the aggregate fees billed for the respective year for professional services rendered by the independent registered public accounting firm for
the audit of the Company's annual consolidated financial statements, reviews of the Company's interim consolidated financial statements, statutory audits and related services.
47
Table of Contents
-
(2)
-
Tax
Fees consist of the aggregate fees billed for the respective year for professional services rendered by the independent registered public accounting firm for tax
compliance, consulting and advisory services.
B. Audit Committee Pre-Approval of Audit and Non-Audit Services
All audit and permissible non-audit services to be performed by the Company's independent registered public accounting firm are subject to a pre-approval
requirement of the Audit Committee. These services may include audit services, audit-related services, tax services and other services. All such services provided in 2019 were pre-approved by the
Audit Committee. The Audit Committee concluded that the provision of such services by Deloitte & Touche LLP was compatible with the maintenance of that firm's independence. The Audit
Committee has delegated to the Chairman of the Audit Committee pre-approval authority with respect to certain permissible non-audit services. The Chairman's pre-approval authority is limited to
engagements costing no more than $200,000 in the aggregate and any such engagements approved by the Chairman shall be presented to the full Audit Committee at its next regularly scheduled meeting.
48
Table of Contents
PROPOSAL 3:
ADVISORY VOTE TO APPROVE
NAMED EXECUTIVE OFFICER COMPENSATION
As required by Section 14A of the Exchange Act, this proposal, commonly known as a "say-on-pay" proposal, gives the Company's
stockholders the opportunity to vote to approve or not approve, on an advisory basis, the compensation of the Company's named executive officers, which is described in the "Compensation Discussion and
Analysis" section of this Proxy Statement. This vote is not intended to address any specific item or element of compensation or the compensation of any particular officer, but rather the overall
compensation of the Company's named executive officers and the philosophy, principles and policies used to determine compensation.
Stockholders
were most recently asked to approve the compensation of the Company's named executive officers at the Company's 2019 Annual Meeting of Stockholders, and stockholders
approved the Company's named executive officer compensation with approximately 92% of the votes cast in favor. At the Company's 2017 Annual Meeting of Stockholders, stockholders were asked to indicate
whether future advisory say-on-pay votes should occur every one, two or three years, with the Board recommending an annual advisory vote. Because the Board views it as a good corporate governance
practice, and because at the 2017 Annual Meeting of Stockholders a majority of the votes cast were in favor of an annual advisory vote, the Board adopted a policy that the Company will include an
advisory say-on-pay vote in the Company's proxy materials on an annual basis until the next required advisory stockholder vote on the frequency of advisory say-on-pay votes, which will occur no later
than the Company's annual meeting of stockholders in 2023.
The
compensation program for the Company's named executive officers is based on the following guiding principles:
-
-
Provide competitive total direct compensation opportunity;
-
-
Reward performance that is consistent with key strategic and stockholder goals;
-
-
Balance performance measures and, where appropriate, emphasize overall corporate, operating business and division performance;
-
-
Serve as a retention tool for key executive talent, provide a balance of liquidity and reward executives for superior performance; and
-
-
Be transparent, simple to administer and easy to communicate.
Stockholders
are urged to read the "Compensation Discussion and Analysis" section of this Proxy Statement, which provides a thorough description of how the Compensation Committee has designed and
administered the executive compensation program to comply with these principles.
At
the Annual Meeting, the Company's stockholders will have the opportunity to endorse or not endorse the compensation of the named executive officers through a non-binding vote on the
following resolution:
RESOLVED,
that the compensation paid to the Company's named executive officers, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the
"Compensation Discussion and Analysis" section, the compensation tables and the related narrative discussion, is hereby approved.
This
vote is advisory, which means that the stockholder vote on this proposal will not be binding on the Company, the Compensation Committee or the Board, nor will it create or imply any
change in the fiduciary duties of, or impose any additional fiduciary duty on, the Company, the Compensation Committee or the Board. However, the Compensation Committee and the Board value the
opinions of
49
Table of Contents
the
Company's stockholders and will carefully consider the outcome of the vote when making future compensation decisions for the Company's named executive officers.
The Board of Directors recommends that you vote "FOR" the approval, on an advisory basis, of the compensation of the Company's named executive officers in 2019 as
disclosed in this Proxy Statement. Unless otherwise specified, proxies will be voted "FOR" the approval, on an advisory basis,
of the compensation of the Company's named executive officers in 2019 as disclosed in this Proxy Statement.
STOCKHOLDER PROPOSALS FOR
THE 2021 ANNUAL MEETING OF STOCKHOLDERS
Any stockholder proposal intended to be included in the Company's proxy statement and form of proxy relating to the 2021 Annual Meeting of
Stockholders must be in writing and received by the Company not later than November 24, 2020. Any such stockholder proposal must also comply with Rule 14a-8 of the Exchange Act, which
lists the requirements for the inclusion of stockholder proposals in company-sponsored proxy materials. Stockholder proposals should be addressed to the attention of the Company's Secretary at
Carlisle Companies Incorporated, 16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254. Pursuant to the SEC rules, submitting a proposal will not guarantee that it will be included
in the Company's proxy materials.
In
addition, any stockholder proposal (other than nominations for directors) intended to be presented at the 2021 Annual Meeting of Stockholders, but that will not be included in the
Company's proxy statement and form of proxy relating to the 2021 Annual Meeting of Stockholders, must be received by the Company's Secretary at Carlisle Companies Incorporated, 16430 North Scottsdale
Road, Suite 400, Scottsdale, Arizona 85254, either in person or by U.S. certified mail, postage prepaid, not later than the close of business on the 90th day nor earlier
than the close of business on the 120th day prior to the first anniversary of the Annual Meeting. As a result, any proposals submitted by a stockholder pursuant to the provisions
of the Company's Amended and Restated Bylaws (other than proposals submitted pursuant to Rule 14a-8 or nominations for directors) must be received no earlier than January 6, 2021 and no
later than February 5, 2021. However, in the event that the date of the 2021 Annual Meeting of Stockholders is more than 30 days before or more than 60 days after May 6,
2021, notice by the stockholder to be timely must be so delivered or received not earlier than the close of business on the 120th day prior to the date of the 2021 Annual Meeting
of Stockholders and not later than the close of business on the later of the 90th day prior to such annual meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made by the Company. Stockholder proposals must include the specified information concerning the proposal and the stockholder submitting the
proposal as set forth in the Company's Amended and Restated Bylaws. A copy of the Company's Amended and Restated Bylaws may be obtained by writing to the Company's Secretary at Carlisle Companies
Incorporated, 16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254.
VOTING BY PROXY AND CONFIRMATION OF BENEFICIAL OWNERSHIP
Whether or not you plan to attend the Annual Meeting, please follow the instructions shown on the Notice of Internet Availability of Proxy
Materials (or proxy card if you received or request one) to vote your Shares by proxy to ensure that your Shares are represented at the Annual Meeting. Shares represented by a valid proxy received and
not revoked before the Annual Meeting will be voted as specified.
You
may revoke your proxy or change your vote at any time before the vote is taken at the Annual Meeting. If you are a stockholder of record, you may revoke your proxy or change your
vote by: (i) submitting a written notice of revocation to the Company's Secretary at Carlisle Companies
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Incorporated,
16430 North Scottsdale Road, Suite 400, Scottsdale, Arizona 85254; (ii) delivering a proxy bearing a later date via the Internet, by telephone or by mail until the
applicable deadline for each method; or (iii) attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked
unless you specifically make that request or vote in person at the meeting. For all methods of voting, the last vote cast will supersede all previous votes. If you hold your Shares in street name and
you have instructed your bank, broker or other nominee to vote your Shares, you may revoke or change your voting instructions by following the specific instructions provided to you by your bank,
broker or other nominee, or, if you have obtained a legal proxy from your bank, broker or other nominee, by attending the Annual Meeting and voting in person.
The
number of votes that each stockholder will be entitled to cast at the Annual Meeting will depend on when the Shares were acquired and whether or not there has been a change in
beneficial ownership since the date of acquisition, with respect to each of such holder's Shares.
Stockholders
whose Shares are held by banks or brokers or in nominee name are requested to confirm to the Company how many of the Shares they owned as of March 11, 2020 were
beneficially owned before March 11, 2016, entitling such stockholder to five votes per Share, and how many were acquired after March 10, 2016, entitling such stockholder to one vote per
Share. If no confirmation of beneficial ownership is received from a stockholder prior to the Annual Meeting, it will be deemed by the Company that beneficial ownership of all such Shares was effected
after March 10, 2016, and the stockholder will be entitled to one vote for each Share. If a stockholder provides incorrect information,
he or she may provide correct information at any time prior to the voting of his or her Shares at the Annual Meeting.
The
Notice of Internet Availability of Proxy Materials, or a printed copy of the proxy materials (including the Proxy Statement and form of proxy), as applicable, is being furnished to
stockholders of record on March 11, 2020 whose Shares on the records of the Company show the following:
(i) that
such stockholder had beneficial ownership of such Shares before March 11, 2016, and there has been no change since that date, thus entitling such
stockholder to five votes for each Share; or
(ii) that
beneficial ownership of such Shares was effected after March 10, 2016, thus entitling such stockholder to one vote for each Share; or
(iii) that
the dates on which beneficial ownership of such Shares were effected are such that such stockholder is entitled to five votes for some Shares and one vote for
other Shares.
Printed
on the Notice of Internet Availability of Proxy Materials (or proxy card if you received or request one) for each individual stockholder of record is the number of Shares for
which he or she is entitled to cast five votes each and/or one vote each, as the case may be, as shown on the records of the Company.
Stockholders
of record are urged to review the number of Shares shown on their Notice of Internet Availability of Proxy Materials (or proxy card if they received or request one) in the
five-vote and one-vote categories. If the number of Shares shown in a voting category is believed to be incorrect, the stockholder should notify the Company in writing of that fact and either mail the
notice directly to the Company at the address indicated above or enclose the notice along with the proxy card (if the stockholder received or requests one) in the postage-paid envelope provided. The
stockholder should identify the Shares improperly classified for voting purposes and provide information as to the date beneficial ownership was acquired. Any notification of improper classification
of votes must be made at least three business days prior to the Annual Meeting or the stockholder will be entitled at the Annual Meeting to the number of votes indicated on the records of the Company.
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In
certain cases record ownership may change but beneficial ownership for voting purposes does not change. The Restated Certificate of Incorporation of the Company states the exceptions
where beneficial ownership is deemed not to have changed upon the transfer of Shares. Stockholders should consult the pertinent provision of the Restated Certificate of Incorporation attached as
Appendix A to this Proxy Statement for those exceptions.
By
resolution duly adopted by the Board of Directors of the Company pursuant to subparagraph B of Article FOURTH of the Restated Certificate of Incorporation, the following
procedures have been adopted for use in determining the number of votes to which a stockholder is entitled:
(i) The
Company may accept the written and signed statement of a stockholder to the effect that no change in beneficial ownership has occurred during the four years
immediately preceding the date on which a determination is made of the stockholders of the Company who are entitled to vote or take any other action. Such statement may be abbreviated to state only
the number of Shares as to which such stockholder is entitled to exercise five votes or one vote.
(ii) In
the event the Vice President, Treasurer of the Company, in his or her sole discretion, taking into account the standards set forth in the Company's Restated
Certificate of Incorporation, deems any such statement to be inadequate or for any reason deems it in the best interest of the Company to require further evidence of the absence of change of
beneficial ownership during the four-year period preceding the record date, he or she may require such additional evidence and, until it is provided in form and substance satisfactory to him or her, a
change in beneficial ownership during such period shall be deemed to have taken place.
(iii) Information
supplementing that contemplated by paragraph (i) and additional evidence contemplated by paragraph (ii) may be provided by a stockholder at
any time but must be furnished at least three business days prior to any meeting of stockholders at which such Shares are to be voted for any change to be effective at such meeting.
HOUSEHOLDING
The SEC has adopted rules permitting companies to mail one proxy statement and annual report, or notice of internet availability of proxy
materials, as applicable, in one envelope to all stockholders residing at the same address if certain conditions are met. This is called "householding" and can result in significant savings of paper
and mailing costs. The Company has not implemented householding with respect to its stockholders of record; however, a number of brokerage firms have instituted householding that may impact certain
beneficial owners of Shares held in street name. If members of your household have multiple accounts through which they hold Shares, you may have received a householding notification from your bank,
broker or other nominee.
Please
contact your bank, broker or other nominee directly if you have any questions or wish to revoke your decision to household or to receive an additional copy of this Proxy
Statement, the 2019 Annual Report to Stockholders or the Notice of Internet Availability of Proxy Materials for members of your household.
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OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors is not aware of any other matters to be presented at the Annual Meeting. If other
matters are properly raised at the Annual Meeting, the proxy holders may vote any Shares represented by proxy in their discretion.
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By Order of the Board of Directors,
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/s/ SCOTT C. SELBACH
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Scott C. Selbach
Vice President, Secretary and General Counsel
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Dated:
March 24, 2020
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Appendix A
Subparagraph B of Article FOURTH of the Restated Certificate
of Incorporation of Carlisle Companies Incorporated
B.
(i) Each
outstanding share of Common Stock shall entitle the holder thereof to five (5) votes on each matter properly submitted to the stockholders of the Corporation
for their vote, waiver, release or other action; except that no holder of outstanding shares of Common Stock shall be entitled to exercise more than one (1) vote on any such matter in respect
of any share of Common Stock with respect to which there has been a change in beneficial ownership during the four (4) years immediately preceding the date on which a determination is made of
the stockholders of the Corporation who are entitled to vote or to take any other action.
(ii) A
change in beneficial ownership of an outstanding share of Common Stock shall be deemed to have occurred whenever a change occurs in any person or persons who,
directly or indirectly, through any contract, agreement, arrangement, understanding, relationship or otherwise has or shares any of the following:
(a) Voting
power, which includes, without limitation, the power to vote or to direct the voting power of such share of Common Stock.
(b) Investment
power, which includes, without limitation, the power to direct the sale or other disposition of such share of Common Stock.
(c) The
right to receive or to retain the proceeds of any sale or other disposition of such share of Common Stock.
(d) The
right to receive or to retain any distributions, including, without limitation, cash dividends, in respect of such share of Common Stock.
(iii) Without
limiting the generality of the foregoing section (ii) of this subparagraph B, the following events or conditions shall be deemed to involve a
change in beneficial ownership of a share of Common Stock:
(a) In
the absence of proof to the contrary provided in accordance with the procedures set forth in section (v) of this subparagraph B, a change in beneficial
ownership shall be deemed to have occurred whenever an outstanding share of Common Stock is transferred of record into the name of any other person.
(b) In
the case of an outstanding share of Common Stock held of record in the name of a corporation, general partnership, limited partnership, voting trustee, bank, trust
company, broker, nominee or clearing agency, if it has not been established pursuant to the procedures set forth in section (v) of this subparagraph B that there has been no change in
the person or persons who or that direct the exercise of the rights referred to in clauses (ii)(a) through (ii)(d), inclusive, of this subparagraph B with respect to such outstanding
share of Common Stock during the period of four (4) years immediately preceding the date on which a determination is made of the stockholders of the Corporation entitled to vote or to take any
other action (or since May 30, 1986 for any period ending on or before May 30, 1990), then a change in beneficial ownership of such share of Common Stock shall be deemed to have occurred
during such period.
(c) In
the case of an outstanding share of Common Stock held of record in the name of any person as a trustee, agent, guardian or custodian under the Uniform Gifts to Minors
Act as in effect in any jurisdiction, a change in beneficial ownership shall be deemed to have occurred
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whenever
there is a change in the beneficiary of such trust, the principal of such agent, the ward of such guardian, the minor for whom such custodian is acting or in such trustee, agent, guardian or
custodian.
(d) In
the case of outstanding shares of Common Stock beneficially owned by a person or group of persons who, after acquiring, directly or indirectly, the beneficial
ownership of five percent (5%) of the outstanding shares of Common Stock, fails to notify the Corporation of such ownership within ten (10) days after such acquisition, a change in beneficial
ownership of such shares of Common Stock shall be deemed to occur on each day while such failure continues.
(iv) Notwithstanding
any other provision in this subparagraph B to the contrary, no change in beneficial ownership of an outstanding share of Common Stock shall be
deemed to have occurred solely as a result of:
(a) Any
event that occurred prior to May 30, 1986 or pursuant to the terms of any contract (other than a contract for the purchase and sale of shares of Common Stock
contemplating prompt settlement), including contracts providing for options, rights of first refusal and similar arrangements, in existence on May 30, 1986 and to which any holder of shares of
Common Stock is a party; provided, however, that any exercise by an officer or employee of the Corporation or any subsidiary of the Corporation of an option to purchase Common Stock after
May 30, 1986 shall, notwithstanding the foregoing and clause (iv)(f) hereof, be deemed a change in beneficial ownership irrespective of when that option was granted to said officer or
employee.
(b) Any
transfer of any interest in an outstanding share of Common Stock pursuant to a bequest or inheritance, by operation of law upon the death of any individual, or by
any other transfer without valuable consideration, including, without limitation, a gift that is made in good faith and not for the purpose of circumventing the provisions of this Article FOURTH.
(c) Any
changes in the beneficiary of any trust, or any distribution of an outstanding share of Common Stock from trust, by reason of the birth, death, marriage or divorce
of any natural person, the adoption of any natural person prior to age eighteen (18) or the passage of a given period of time or the attainment by any natural person of a specific age, or the
creation or termination of any guardianship or custodial arrangement.
(d) Any
appointment of a successor trustee, agent, guardian or custodian with respect to an outstanding share of Common Stock if neither such successor has nor its
predecessor had the power to vote or to dispose of such share of Common Stock without further instructions from others.
(e) Any
change in the person to whom dividends or other distributions in respect of an outstanding share of Common Stock are to be paid pursuant to the issuance or
modification of a revocable dividend payment order.
(f) Any
issuance of a share of Common Stock by the Corporation or any transfer by the Corporation of a share of Common Stock held in treasury, unless otherwise determined by
the Board of Directors at the time of authorizing such issuance or transfer.
(g) Any
giving of a proxy in connection with a solicitation of proxies subject to the provisions of Section 14 of the Securities Exchange Act of 1934 and the rules
and regulations thereunder promulgated.
(h) Any
transfer, whether or not with consideration, among individuals related or formerly related by blood, marriage or adoption ("Relatives") or between a Relative and any
Person (as defined in Article
SEVENTH) controlled by one or more Relatives where the principal purpose for the transfer is to further the estate tax planning objectives of the transferor or of Relatives of the transferor.
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(i) Any
appointment of a successor trustee as a result of the death of the predecessor trustee (which predecessor trustee shall have been a natural person).
(j) Any
appointment of a successor trustee who or which was specifically named in a trust instrument prior to May 30, 1986.
(k) Any
appointment of a successor trustee as a result of the resignation, removal or failure to qualify of a predecessor trustee or as a result of mandatory retirement
pursuant to the express terms of a trust instrument; provided, that less than fifty percent (50%) of the trustees administering any single trust will have changed (including in such percentage the
appointment of the successor trustee) during the four (4)-year period preceding the appointment of such successor trustee.
(v) For
purposes of this subparagraph B, all determinations concerning changes in beneficial ownership, or the absence of any such change, shall be made by the Board
of Directors of the Corporation or, at any time when the Corporation employs a transfer agent with respect to the shares of Common Stock, at the Corporation's request, by such transfer agent on the
Corporation's behalf. Written procedures designed to facilitate such determinations shall be established and may be amended, from time to time, by the Board of Directors. Such procedures shall
provide, among other things, the manner of proof of facts that will be accepted and the frequency with which such proof may be required to be renewed. The Corporation and any transfer agent shall be
entitled to rely on any and all information concerning beneficial ownership of the outstanding shares of Common Stock coming to their attention from any source and in any manner reasonably deemed by
them to be reliable, but neither the Corporation nor any transfer agent shall be charged with any other knowledge concerning the beneficial ownership of outstanding shares of Common Stock.
(vi) In
the event of any stock split or stock dividend with respect to the outstanding shares of Common Stock, each share of Common Stock acquired by reason of such split or
dividend shall be deemed to have been beneficially owned by the same person from the same date as that on which beneficial ownership of the outstanding share or shares of Common Stock, with respect to
which such share of Common Stock was distributed, was acquired.
(vii) Each
outstanding share of Common Stock, whether at any particular time the holder thereof is entitled to exercise five (5) votes or one (1) vote, shall
be identical to all other shares of Common Stock in all respects, and together the outstanding shares of Common Stock shall constitute a single class of shares of the Corporation.
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