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þ
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Filed by the Registrant
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¨
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Filed by a Party other than the Registrant
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Check the appropriate box:
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¨
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Preliminary Proxy Statement
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¨
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CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
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þ
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Definitive Proxy Statement
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¨
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to §.240.14a-12
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Payment of Filing Fee (Check the appropriate box):
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||
þ
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No fee required.
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¨
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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) 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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¨
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Fee paid previously with preliminary materials.
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¨
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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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TIME AND DATE
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10:00 a.m., local time, on Tuesday, July 10, 2018
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LOCATION
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One Museum Place, 3100 West 7
th
Street, 4
th
Floor, Fort Worth, Texas 76107
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PROPOSALS
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I.
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Elect the nine director nominees named in the accompanying Proxy Statement to serve on the Company’s Board of Directors, each for a one-year term.
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II.
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Vote for an advisory approval of a non-binding resolution approving the Company’s executive compensation program.
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III.
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Approval of the AZZ Inc. 2018 Employee Stock Purchase Plan.
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IV.
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Vote for the ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 28, 2019.
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V.
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To transact any other business which may properly come before the Annual Meeting or any adjournment.
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By Order of the Board of Directors,
/s/ Tara D. Mackey
Tara D. Mackey
Chief Legal Officer and Secretary
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TABLE OF CONTENTS
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Page
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Proxy Statement Summary
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Questions and Answers
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PROPOSAL 1 – ELECTION OF DIRECTORS
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Election Process
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Nominees for Election of Directors
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Matters Relating to Corporate Governance, Board Structure, Director Compensation and Stock Ownership
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Certain Relationships and Related Party Transactions
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Director Compensation
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Non-Employee Director Stock Ownership Guidelines
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Procedures for Communicating with Directors
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Director Nomination Process
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Security Ownership of Management and Directors
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Security Ownership of Certain Beneficial Owners
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PROPOSAL 2 – APPROVAL OF THE SAY-ON-PAY PROPOSAL
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Executive Compensation
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Compensation Discussion and Analysis
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Stock Ownership Guidelines for Executive Officers
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Compensation Committee Report
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Summary Compensation Table
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Grants of Plan Based Awards
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Outstanding Equity Awards at Fiscal Year End
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Option/SAR Exercises and Stock Vested for Fiscal Year 2018
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Potential Payments Upon Termination or Change of Control
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PROPOSAL 3 – APPROVAL OF THE AZZ INC. 2018 EMPLOYEE STOCK PURCHASE PLAN
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Audit Committee Report
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Relationship with Independent Auditors
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PROPOSAL 4 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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Other Information
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APPENDIX A: AZZ Inc. 2018 Employee Stock Purchase Plan
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Date and Time
July 10, 2018, 10:00 a.m., local time
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Place
AZZ Inc., One Museum Place, 4
th
Floor,
3100 West 7
th
Street, Fort Worth, Texas 76107
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Notice
We mailed a Notice Regarding the Availability of Proxy Materials (the “Notice”) on or about May 25, 2018.
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Voting
Holders of shares of common stock as of the Record Date are entitled to vote on all matters.
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Record Date
May 11, 2018
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Item
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Company Proposals
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Board Vote Recommendation
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Page
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1.
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Election of nine Directors
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FOR each director nominee
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13
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2.
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Approval, on a non-binding advisory basis, of the Company’s executive compensation program
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FOR
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34
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3.
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Approval of the AZZ Inc. 2018 Employee Stock Purchase Plan
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FOR
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68
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4.
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Ratification of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 28, 2019
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FOR
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74
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Internet (
www.envisionreports.com/AZZ
) until 1:00 a.m. Eastern Time, on July 10, 2018;
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Telephone (1-800-652-8683) until 1:00 a.m. Eastern Time, on July 10, 2018;
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Completing, signing and returning your proxy or voting instruction card before July 10, 2018; or
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In person, at the Annual Meeting, if you are a registered shareholder as of the Record Date. You may deliver a completed proxy card or vote by ballot at the meeting.
|
ü
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Eight out of nine director nominees are independent
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ü
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Independent committee chairs and members
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ü
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Commitment to continuous board refreshment and diversity
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ü
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Separate chairman and CEO
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ü
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Annual election of all directors
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ü
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Regular executive sessions of independent directors
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ü
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Majority voting for directors
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ü
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Risk oversight by full board and committees
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ü
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Stock ownership guidelines for directors and officers
|
ü
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Annual board and committee self-evaluations
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Name
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Age
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DirectorSince
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Occupation
|
Committee Memberships
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Other
Public Company
Boards
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Daniel E. Berce
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64
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2000
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President and Chief Executive Officer, General Motors Financial Company
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Audit
Compensation
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2
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Paul Eisman
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62
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2016
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Former President and Chief Executive Officer, Alon USA Energy, Inc.
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Audit
Compensation
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0
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Daniel R. Feehan
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67
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2000
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Chairman of the Board, FirstCash, Inc.
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Audit
Compensation
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2
|
Thomas E. Ferguson
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61
|
2013
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President and Chief Executive Officer, AZZ Inc.
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Not Applicable
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0
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Kevern R. Joyce
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71
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1997
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Independent Business Consultant and Investor
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Compensation
Nominating and Corporate Governance
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0
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Venita McCellon-Allen
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58
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2016
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President and Chief Operating Officer, Southwestern Electric Power Company
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Compensation
Nominating and Corporate Governance
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0
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Ed McGough
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57
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2017
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Senior Vice President, Global Manufacturing and Technical Operations,
Alcon Laboratories, Inc.
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Compensation
Nominating and Corporate Governance
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0
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Stephen E. Pirnat
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66
|
2014
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Chief Executive Officer, ClearSign Combustion Corporation
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Audit
Nominating and Corporate Governance
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1
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Steven R. Purvis
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53
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2015
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Trustee and Portfolio Manager, Luther King Capital Management
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Audit
Nominating and Corporate Governance
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0
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Name
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Age
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Position
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Since
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Previous Position
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Thomas E. Ferguson
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61
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President and Chief Executive Officer
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2013
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Chief Executive Officer, FlexSteel Pipeline Technologies, Inc.
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Paul W. Fehlman
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54
|
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Senior Vice President and Chief Financial Officer
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2014
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Vice President, Finance, Engineered Products Division, Flowserve Corporation
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Chris Bacius
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57
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Vice President, Corporate Development
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2014
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Vice President, Mergers & Acquisitions, Flowserve Corporation
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Tara D. Mackey
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48
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Chief Legal Officer and Secretary
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2014
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Chief Legal Counsel and Corporate Secretary, First Parts, Inc.
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Tim E. Pendley*
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56
|
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Senior Vice President and Chief Operating Officer, Metal Coatings
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2009
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Vice President Operations, Galvanizing Services
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What We Do
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ü
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A significant portion of our executive officers’ total compensation is financial performance based.
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ü
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Performance measures are highly correlated to the creation of shareholder value.
|
ü
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We review and benchmark pay relative to the market median of our industry peer group on an annual basis.
|
ü
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Our executive compensation program is designed to encourage building long-term shareholder value and attract and retain high performance executive talent.
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ü
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We use annual cash incentive opportunities and equity-based awards to balance the Company’s short- and long-term performance objectives.
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ü
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Our equity awards are equally weighted between time-vested restricted stock units, which vest ratably over a three-year period, and performance share units, which require achievement of financial performance metrics over a three-year performance cycle.
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ü
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The compensation committee engages an independent executive compensation consultant.
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ü
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Our compensation committee conducts an annual review of all executive compensation program components to ensure alignment with our compensation objectives and the Company’s industry peers.
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ü
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We implemented a Compensation Recovery Policy to protect the Company in the event of a financial restatement or an executive officer engages in serious misconduct.
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ü
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We provide a limited number of employment agreements and executive perquisites.
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ü
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We have stock ownership guidelines for directors and executive officers.
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What We Don’t Do
|
û
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We do not provide tax gross ups.
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û
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We do not recycle shares withheld for taxes.
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û
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We do not permit pledging or hedging of Company securities.
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û
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We do not pay dividends or dividend equivalents on unearned RSUs or PSUs until they vest.
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û
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We do not reprice underwater equity awards.
|
û
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We do not have pension or supplemental executive retirement plans.
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Category
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Compensation Element
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Description
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Cash
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Base Salary
|
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Fixed cash compensation based on responsibilities of the position. Reviewed annually for potential adjustments based on factors such as market levels, individual performance and scope of responsibilities.
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Annual Incentive Opportunity
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Annual cash incentive for achievement of specific annual financial operating results.
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Long-Term Incentives
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Restricted Stock Units
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Vest ratably over a three-year period. Settled in shares of AZZ common stock. Dividend equivalent rights accrue with respect to dividends awarded during the vesting period.
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Performance Share Units
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Three-year pre-determined financial performance metric and a potential total shareholder return (“TSR”) modifier. Settled in shares of AZZ common stock. Dividend equivalents accrue during the vesting period and will vest if, and when the PSUs to which such dividend equivalents relate become vested.
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Retirement
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401(k) Plan
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Qualified 401(k) plan available to all U.S. employees. The Company matches 100% of the first 1% and 50% of contributions between 2% and 6%.
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Other
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Employment Agreements
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Sets standard benefits for Messrs. Ferguson and Fehlman in the event of severance.
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Change-in-Control Agreements
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Sets standard benefits for senior executives upon a change-in-control.
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Other Benefits
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Executive supplemental disability insurance and annual physical exam.
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Name and
Principal Position
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Year
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|
Salary
($)
|
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Bonus
($)
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Stock
Awards/
RSUs
($)
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Option
/SARs
Awards
($)
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Non-Equity
Incentive
Plan
Compensation
($)
|
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Change in
Pension Value
and Nonquali-
fied Deferred
Compensation
Earnings
($)
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All Other
Compensation
($)
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Total
($)
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||||||||||
Thomas E. Ferguson
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2018
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$
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724,500
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−
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$
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900,000
|
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−
|
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$
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78,246
|
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−
|
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$
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14,129
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$
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1,716,875
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President & Chief
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Executive Officer
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Paul W. Fehlman
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2018
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$
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376,436
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−
|
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$
|
350,000
|
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−
|
|
$
|
26,330
|
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−
|
|
$
|
19,829
|
|
|
$
|
772,595
|
|
Senior Vice President
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||||||||||
& Chief Financial Officer
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||||||||||
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Chris Bacius
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2018
|
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$
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288,707
|
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−
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$
|
150,000
|
|
|
−
|
|
$
|
17,092
|
|
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−
|
|
$
|
10,674
|
|
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$
|
466,473
|
|
Vice President,
|
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Corporate Development
|
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||||||||||
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||||||||||
Tara D. Mackey
|
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2018
|
|
$
|
339,075
|
|
|
−
|
|
$
|
150,000
|
|
|
−
|
|
$
|
20,074
|
|
|
−
|
|
$
|
6,431
|
|
|
$
|
515,580
|
|
Chief Legal Officer
|
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||||||||||
& Secretary
|
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||||||||||
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||||||||||
Tim E. Pendley*
|
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2018
|
|
$
|
382,542
|
|
|
−
|
|
$
|
225,000
|
|
|
−
|
|
−
|
|
−
|
|
$
|
11,797
|
|
|
$
|
619,339
|
|
||
Senior Vice President &
|
|
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||||||||||
Chief Operating Officer, Metal Coatings
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•
|
|
This Proxy Statement for the Annual Meeting; and
|
|
•
|
|
The Company’s Annual Report on Form 10-K for the fiscal year ended February 28, 2018, as filed with the Securities and Exchange Commission (the “SEC”) on May 15, 2018 (the “Annual Report”).
|
•
|
The election of nine nominees to the Company’s board of directors named in this Proxy Statement, each to serve for a one year term (Proposal 1);
|
•
|
A non-binding advisory resolution to approve AZZ’s executive compensation program (Proposal 2);
|
•
|
Approval of the AZZ Inc. 2018 Employee Stock Purchase Plan (Proposal 3); and
|
•
|
Ratification of the appointment of BDO USA, LLP to serve as AZZ’s independent registered public accounting firm for the fiscal year ending February 28, 2019 (Proposal 4).
|
•
|
“FOR” the election of the nine nominees to serve on the Board for a one year term (Proposal 1);
|
•
|
“FOR” the approval of AZZ’s executive compensation program (Proposal 2);
|
•
|
“FOR” the approval of the AZZ Inc. 2018 Employee Stock Purchase Plan (Proposal 3); and
|
•
|
“FOR” the ratification of the appointment of BDO USA, LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending February 28, 2019 (Proposal 4).
|
|
•
|
|
View the Company’s proxy materials for the Annual Meeting; and
|
|
•
|
|
Instruct the Company to send future proxy materials to you by email.
|
|
|
|
In person
. You may vote in person at the Annual Meeting by requesting a ballot when you arrive. You must bring valid picture identification such as a driver’s license or passport and may be requested to provide proof of stock ownership as of the Record Date.
|
|
|
|
Via the Internet
. You may vote by proxy via the Internet by following the instructions provided in the Notice.
|
|
|
|
By Telephone
. If you request printed copies of the proxy materials by mail, you may vote by proxy by calling the toll free number found on the proxy card.
|
|
|
|
By Mail
. If you request printed copies of the proxy materials by mail, you will receive a proxy card and you may vote by proxy by filling out the proxy card and returning it in the envelope provided.
|
|
|
In person
. If you are a beneficial owner of shares held in street name and wish to vote in person at the Annual Meeting, you must obtain a “legal proxy” from the organization that holds your shares. A legal proxy is a written document that will authorize you to vote your shares held in street name at the Annual Meeting. Please contact the organization that holds your shares for instructions regarding obtaining a legal proxy. You must bring a copy of the legal proxy to the Annual Meeting and ask for a ballot when you arrive. You must also bring valid picture identification such as a driver’s license or passport. In order for your vote to be counted, you must provide both the copy of the legal proxy and your completed ballot to the inspector of election.
|
|
•
|
Via the Internet
. You may vote by proxy via the Internet by visiting
www.envisionreports.com/AZZ
and entering the control number found in your Notice. The availability of Internet voting may depend on the voting process of the organization that holds your shares.
|
|
•
|
By Telephone
. If you request printed copies of the proxy materials by mail, you may vote by proxy by calling the toll free number found on the voting instruction form. The availability of telephone voting may depend on the voting process of the organization that holds your shares.
|
|
•
|
By Mail
. If you request printed copies of the proxy materials by mail, you will receive a voting instruction form and you may vote by proxy by filling out the voting instruction form and returning it in the envelope provided.
|
|
•
|
|
Are entitled to vote and you are present in person at the Annual Meeting; or
|
|
•
|
|
Have properly voted by proxy on the Internet, by telephone or by submitting a proxy card by mail.
|
|
•
|
|
Indicate when voting on the Internet or by telephone that you wish to vote as recommended by AZZ’s board of directors; or
|
|
•
|
|
Sign and return a proxy card without giving specific voting instructions,
|
Proposal
|
|
Voting Requirement
|
1. Election of nine director nominees named in this Proxy Statement, each for a one year term.
|
|
Each director must be elected by a majority of the votes cast. A majority of votes cast means that the number of shares voted “FOR” a director must exceed the number of votes cast “AGAINST” that director. Any director not elected by a majority is expected to tender to the Board his or her resignation promptly following the certification of election results pursuant to the Company’s Bylaws. The nominating and corporate governance committee will make a recommendation to the board on whether to accept or reject such resignation. The board will act on such recommendation and publicly disclose its decision within 90 days from the date of the certification of the election results.
|
2. Approval, on a non-binding advisory basis, of the Company’s executive compensation program.
|
|
To be approved, this proposal must be approved by a majority of the votes cast by the shareholders present in person or represented by proxy, meaning that the votes cast by the shareholders “FOR” the approval of the proposal must exceed the number of votes cast “AGAINST” the approval of the proposal.
|
3. Approval of the AZZ Inc. 2018 Employee Stock Purchase Plan.
|
|
To be approved, this proposal must be approved by a majority of the votes cast by the shareholders present in person or represented by proxy, meaning that the votes cast by the shareholders "FOR" the approval of the proposal must exceed the number of votes cast "AGAINST" the approval of the proposal.
|
4. Ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for fiscal year 2019.
|
|
To be approved, this proposal must be approved by a majority of the votes cast by the shareholders present in person or represented by proxy, meaning that the votes cast by the shareholders “FOR” the approval of the proposal must exceed the number of votes cast “AGAINST” the approval of the proposal.
|
|
•
|
|
As necessary to meet applicable legal requirements;
|
|
•
|
|
To allow for the tabulation and certification of votes; and
|
|
•
|
|
To facilitate a successful proxy solicitation.
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “
FOR
” THE ELECTION OF EACH OF THE NOMINEES LISTED BELOW.
|
DANIEL E. BERCE
|
||
Age:
64
Director Since:
2000
|
|
Board Committees:
• Audit Committee
•
Compensation Committee (Chairman)
|
PAUL EISMAN
|
||
Age:
62
Director Since:
2016
|
|
Board Committees:
• Audit Committee
•
Compensation Committee
|
DANIEL R. FEEHAN
|
||
Age:
67
Director Since:
2000
|
|
Board Committees:
• Audit Committee (Chairman)
•
Compensation Committee
|
THOMAS E. FERGUSON
|
||
Age:
61
Director Since:
2013
|
|
Board Committees:
• None
|
KEVERN R. JOYCE
|
||
Age:
71
Director Since:
1997
Chairman of the Board:
Since 2013
|
|
Board Committees:
• Compensation Committee
•
Nominating and Corporate Governance Committee (Chairman)
|
VENITA MCCELLON - ALLEN
|
||
Age:
58
Director Since:
2016
|
|
Board Committees:
• Compensation Committee
•
Nominating and Corporate Governance Committee
|
ED MCGOUGH
|
||
Age:
57
Director Since:
January 2017
|
|
Board Committees:
• Compensation Committee
•
Nominating and Corporate Governance Committee
|
STEPHEN E. PIRNAT
|
||
Age:
66
Director Since:
2014
|
|
Board Committees:
• Audit Committee
•
Nominating and Corporate Governance Committee
|
STEVEN R. PURVIS
|
||
Age:
53
Director Since:
2015
|
|
Board Committees:
• Audit Committee
•
Nominating and Corporate Governance Committee
|
|
|
AZZ Inc.
|
|
Investor Relations
|
|
One Museum Place, Suite 500
|
|
3100 West 7th Street
|
|
Fort Worth, TX 76107
|
|
Telephone: 817-810-0095
|
|
Fax: 817-336-5354
|
|
Email: info@azz.com
|
AUDIT COMMITTEE
|
Committee Members:
Daniel R. Feehan* (Chairman), Daniel E. Berce*, Paul Eisman, Stephen E. Pirnat*
and Steven R. Purvis*
|
|
Committee Functions
|
|
• Oversees the Company’s accounting, auditing, financial reporting, systems of internal controls regarding finance and accounting and corporate finance strategy;
|
• Directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm;
|
• Pre-approval of all auditing services and permitted non-audit services to be performed for the Company by its independent auditor;
|
• Review and discuss with management (i) the guidelines and policies that govern the processes by which the Company assesses and manages its exposure to risk; and (ii) the Company’s major financial and other risk exposures and the steps management has taken to monitor and control such exposures;
|
• Meets regularly in executive session with the Company’s management, internal and independent auditors; and
|
• Review and approve any proposed related-party transactions consistent with the Company’s policy regarding such transactions and report any findings to the full Board.
|
Independent Members: 5
|
*Financial Experts: 4
|
FY2018 Audit Committee Meetings Held: 6
|
COMPENSATION COMMITTEE
|
Committee Members:
Daniel E. Berce (Chairman), Paul Eisman, Daniel R. Feehan,
Kevern R. Joyce, Venita McCellon-Allen and Ed McGough
|
|
Committee Functions
|
|
• Establishes, oversees and adjusts the Company’s incentive-based compensation plans, sets compensation for our CEO and approves compensation for the other executive officers;
|
• Review and discuss with management the Compensation Discussion & Analysis to be included in the Company’s annual report and proxy statement;
|
• Review and approve employment agreements, severance agreements or other significant matters relating to the Company’s CEO and other executive officers, including the annual performance review of the CEO;
|
• Review with management and recommend to the Board changes in the Company’s compensation structure, policies and programs and its competitiveness as an employer; and
|
• Administer the Company’s Compensation Recovery Policy allowing AZZ to recoup incentive based compensation paid to applicable officers and employees in the event of a financial restatement or misconduct.
|
Independent Members: 6
|
FY2018 Compensation Committee Meetings Held: 5
|
NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
|
Committee Members:
Kevern R. Joyce (Chairman), Venita McCellon-Allen, Ed McGough,
Stephen E. Pirnat, and Steven R. Purvis
|
|
Committee Functions
|
|
• Identifies potential individuals qualified to become members of the board consistent with criteria approved by the board;
|
• Recommends director candidates to the board for election at the annual meetings of shareholders or to fill vacancies pursuant to the Company’s Bylaws;
|
• Recommends director nominees to the board for each board committee and the chairman of the board;
|
• Responsible for establishing and overseeing AZZ’s Corporate Governance Guidelines, Code of Conduct and the director nomination process;
|
• Regularly review and make recommendations to the board regarding director compensation; and
|
• Lead an annual process for evaluating the performance of the board as a whole and each of the board committees and report its findings and recommendations to the board.
|
Independent Members: 5
|
FY2018 Nominating and Corporate Governance Committee Meetings Held: 4
|
•
|
Recommend the retention of any consultants, legal, financial or other professional advisors who are to report directly to the board of directors;
|
•
|
Coordinate with committee chairs in the development and recommendations regarding board and committee meeting schedules.
|
Initiation of Process
|
>
|
A list of potential topics are circulated by the chairman of the board to the directors for consideration in advance of the board’s self-assessment discussion. Committee chairs follow a similar process for their respective committees.
|
Discussion
|
>
|
The chairman of the board meets with the board to gather their views and obtain feedback. Committee chairs lead their respective committee discussions during executive session.
|
Follow-Up
|
>
|
The chairman of the board shares a summary of the board results which addresses any requests or enhancements in practices that may be applicable to the board or management. Committee chairmen report on their respective self-assessments to the full board.
|
•
|
The audit committee oversees the integrity of the financial statements of the Company, the independent auditor's qualifications and independence, the performance of the Company's internal audit function and independent auditors; and the Company’s compliance with legal and regulatory requirements. Complaints and concerns relating to AZZ’s accounting matters should be communicated to the audit committee. Any such communications may be made on an anonymous basis. Any concerns or complaints may be reported to the audit committee through a third-party vendor, NAVEX Global Inc., which has been retained by the audit committee for this purpose. The AZZ Alertline may be accessed toll-free at 1 (855) 268-6428 or via the website at
https://azz.alertline.com
. Outside parties, including customers, vendors, suppliers or shareholders may bring issues regarding accounting matters to the attention of the audit committee by writing to the Chairman of the Audit Committee, AZZ Inc., 3100 West 7
th
St., Suite 500, Fort Worth, TX 76107. All complaints and concerns will be reviewed under the direction of the audit committee and oversight provided by the chief legal officer and other appropriate persons as determined by the audit committee.
|
•
|
The compensation committee oversees the risks relating to the Company’s compensation philosophy and programs and generally evaluates any potential effect the Company’s compensation structure may have on management risk taking. The compensation committee reviews the recommendations of the Company’s management regarding adjustments to the Company’s executive compensation programs. The compensation committee has retained and regularly meets with Meridian Compensation Partners, LLC ("Meridian"), its independent executive compensation consultant, which assists the compensation committee in evaluating the Company’s compensation programs and adherence to the philosophies and principles as discussed under “Executive Compensation – Compensation Discussion and Analysis.” The compensation committee also monitors risks relating to the overall management and organizational structure, as well as succession planning at the executive officer and key leadership levels.
|
•
|
The nominating and corporate governance committee provides oversight on the composition of the board of directors and it’s committees and provides leadership to the board in maintaining best corporate practices in the Company’s corporate governance principles and practices. Many of our corporate policies are summarized in the Code of Conduct, including our policies regarding conflict of interest, insider trading, related party transactions, confidentiality and compliance with laws and regulations applicable to the conduct of our business. All officers, directors, employees and representatives are required to acknowledge and agree to be bound by the Code of Conduct and are subject to disciplinary action, including termination, for violations. The Code of Conduct is published on our website at
www.azz.com
under the heading “Investor Relations/Corporate Governance/Code of Conduct.” Any amendments to the Code of Conduct or the grant of a waiver from a provision of the Code of Conduct requiring disclosure under applicable SEC rules will be disclosed on our website. Under our Code of Conduct, directors, officers and employees are expected to report any violation or waiver of any provision of the Code of Conduct to the Chief Legal Officer. Anyone may report matters of concern to the AZZ legal department through our anonymous, confidential toll-free AZZ Alertline at 1 (855) 268-6428, online at
https://azz.alertline.com
,
or
by writing to the Chief Legal Officer, AZZ Inc., 3100 West 7
th
St., Suite 500, Fort Worth, TX 76107.
|
Service
|
Fee Amount
|
||
Annual Retainer for Board Service
|
|
$65,000
|
|
Annual Retainer for Board Chairman Service
|
|
$60,000
|
|
Annual Audit Committee Chairman Retainer
|
|
$3,000
|
|
Annual Audit Committee Member Retainer
|
|
$5,000
|
|
Annual Compensation Committee Chairman Retainer
|
|
$2,000
|
|
Annual Nominating and Corporate Governance Committee Chairman Retainer
|
|
$1,500
|
|
Name
|
|
Fees
Earned or
Paid in Cash
($)
|
|
Stock
Awards
($)(1)
|
|
Total
($)
|
||||||
|
|
|
|
|
|
|
||||||
Daniel E. Berce
|
|
$
|
72,000
|
|
|
$100,000
|
|
$
|
172,000
|
|
||
|
|
|
|
|
|
|
||||||
H. Kirk Downey
(2)
|
|
$
|
23,492
|
|
|
−
|
|
$
|
23,492
|
|
||
|
|
|
|
|
|
|
||||||
Paul Eisman
|
|
$
|
70,000
|
|
|
$100,000
|
|
$
|
170,000
|
|
||
|
|
|
|
|
|
|
||||||
Daniel R. Feehan
|
|
$
|
73,000
|
|
|
$100,000
|
|
$
|
173,000
|
|
||
|
|
|
|
|
|
|
||||||
Kevern R. Joyce
|
|
$
|
126,500
|
|
|
$100,000
|
|
$
|
226,500
|
|
||
|
|
|
|
|
|
|
||||||
Venita McCellon-Allen
|
|
$
|
65,000
|
|
|
$100,000
|
|
$
|
165,000
|
|
||
|
|
|
|
|
|
|
||||||
Ed McGough
|
|
$
|
65,000
|
|
|
$100,000
|
|
$
|
165,000
|
|
||
|
|
|
|
|
|
|
||||||
Stephen E. Pirnat
|
|
$
|
70,000
|
|
|
$100,000
|
|
$
|
170,000
|
|
||
|
|
|
|
|
|
|
||||||
Steven R. Purvis
|
|
$
|
70,000
|
|
|
$
|
100,000
|
|
|
$
|
170,000
|
|
(1)
|
Eligible directors received an annual equity grant of common stock of the Company having a $100,000 fair market value at the time of grant, on the date of the annual meeting of shareholders, which was July 11, 2017. The equity values in this column for the fiscal year ended February 28, 2018 reflect the aggregate grant date fair market value calculated in accordance with FASB ASC Topic 718 for stock awards granted to each of the non-employee directors under the 2014 Plan. Assumptions used in the calculation of this amount are included in footnote 11 to the Company’s audited financial statements for the fiscal year ended February 28, 2018, included in the Company’s Annual Report on Form 10-K.
|
(2)
|
The amount reported is pro-rated based upon Dr. Downey’s retirement from the board of directors on July 11, 2017.
|
Mr. Kevern R. Joyce
|
Chairman of the Board
|
AZZ Inc.
|
One Museum Place, Suite 500
|
3100 West 7th Street
|
Fort Worth, Texas 76107
|
• spam;
|
• junk mail and mass mailings;
|
• product or service inquiries or complaints;
|
• new product or service suggestions;
|
• resumés and other forms of job inquiries;
|
• surveys; and
|
• business solicitations or advertisements.
|
• management and leadership experience;
|
|
• relevant industry knowledge and diversity of background and experience; and
|
|
• personal and professional demonstration of ethics, integrity and professionalism.
|
• financial expertise;
|
• general domestic and global knowledge of the electrical and industrial products industry, metal coatings services or the highly engineered welding services industry;
|
• legal, human resources or accounting experience; and
|
• chief executive officer, chief financial officer or other senior management experience.
|
•
|
To add members with significant international experience;
|
•
|
To add members with engineering and manufacturing expertise;
|
•
|
To provide for a smooth transition over time while reducing the average age and tenure of the board;
|
•
|
To expand the board size so that no member served on more than two committees;
|
•
|
To add diversity and strength to the board through race, gender, national origin, differences of viewpoint, and professional experience; and
|
•
|
To gradually add members to the board over the next three years to maintain board stability and culture during the refreshing process.
|
Name of Beneficial Owner
|
|
Amount and Nature of Beneficial
Ownership
(1)
|
|
Percent of
Class
|
Chris Bacius
|
|
6,929
(2)
|
|
*
|
Daniel E. Berce
|
|
60,924
(3)
|
|
*
|
Paul Eisman
|
|
6,681
|
|
*
|
Daniel R. Feehan
|
|
62,674
(4)
|
|
*
|
Paul W. Fehlman
|
|
11,431
(5)
|
|
*
|
Thomas E. Ferguson
|
|
55,983
(6)
|
|
*
|
Kevern R. Joyce
|
|
59,473
(7)
|
|
*
|
Tara D. Mackey
|
|
5,992
(8)
|
|
*
|
Venita McCellon-Allen
|
|
8,681
|
|
*
|
Ed McGough
|
|
2,040
|
|
*
|
Tim E. Pendley
|
|
31,555
(9)
|
|
*
|
Stephen Pirnat
|
|
7,596
|
|
*
|
Steven R. Purvis
|
|
5,596
|
|
*
|
|
|
|
|
|
All Current Directors and Executive
Officers as a Group (16 persons)
(11)
|
|
332,077
|
|
.013%
|
(1) Each person named in the table has sole investment and voting power with respect to all shares of common stock shown to be beneficially owned by such person. Beneficial ownership has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The percentage of voting stock held is based upon 25,996,850 shares outstanding as of April 30, 2018.
|
(2) Does not include 2,724 SARs that Mr. Bacius has the right to exercise within 60 days of April 30, 2018. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price.
|
(3) Does not include 5,689 SARs that Mr. Berce has the right to exercise within 60 days of April 30, 2018. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price.
|
(4) Does not include 5,689 SARs that Mr. Feehan has the right to exercise within 60 days of April 30, 2018. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price.
|
(5) Does not include 8,089 SARs that Mr. Fehlman has the right to exercise within 60 days of April 30, 2018. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price.
|
(6) Does not include 66,471 SARs that Mr. Ferguson has the right to exercise within 60 days of April 30, 2018. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price.
|
(7) Does not include 3,873 SARs that Mr. Joyce has the right to exercise within 60 days of April 30, 2018. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price.
|
(8) Does not include 2,711 SARs that Ms. Mackey has the right to exercise within 60 days of April 30, 2018. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price.
|
(9) Does not include 11,182 SARs that Mr. Pendley has the right to exercise within 60 days of April 30, 2018. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price. Mr. Pendley ceased to serve as Senior Vice President and Chief Operating Officer, Metal Coatings, as of April 3, 2018.
|
(10) The number of shares of our common stock that all of our directors and executive officers own as a group.
|
Name and Address of
Beneficial Owner
|
|
Amount and Nature of Beneficial Ownership
|
|
Percent of Class
|
|
|
|
|
|
BlackRock, Inc.
55 East 52
nd
Street
New York, NY 10055
|
|
3,239,398
(1)
|
|
12.5%
|
|
|
|
|
|
The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, PA 19355
|
|
2,441,358
(2)
|
|
9.4%
|
|
|
|
|
|
Neuberger Berman Group LLC
Neuberger Berman Investment Advisers LLC
Neuberger Berman Equity Funds
Neuberger Berman Genesis Fund
1290 Avenue of the Americas
New York, NY 10104
|
|
2,054,295
(3)
|
|
7.9%
|
|
|
|
|
|
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
|
|
1,913,006
(4)
|
|
7.3%
|
|
|
|
|
|
FMR LLC
245 Summer Street
Boston, Massachusetts 02210
|
|
1,870,959
(5)
|
|
7.2%
|
(1)
|
Blackrock, Inc. is the parent holding company of certain institutional investment managers, which collectively had sole voting power over 3,176,785 shares and sole investment power over all 3,239,398 shares. Information based solely on Schedule 13G/A filed with the SEC on January 19, 2018.
|
(2)
|
The Vanguard Group, Inc., a registered investment advisor, had sole voting power over 50,467 shares and sole investment power over 2,441,358 shares. Information based solely on a Schedule 13G/A filed with the SEC on February 8, 2018.
|
(3)
|
Neuberger Berman Group LLC, Neuberger Berman Investment Advisers LLC, Neuberger Berman Equity Funds and Neuberger Genesis Fund had shared voting power over 2,042,195 shares and shared investment power over all 2,054,295 shares. Information based solely on Schedule 13G filed with the SEC on February 15, 2018.
|
(4)
|
T. Rowe Price Associates, Inc., a registered broker, had sole voting power over 357,486 shares and sole investment power over all 1,913,006 shares. Information based solely on Schedule 13G/A filed with the SEC on February 14, 2018.
|
(5)
|
FMR LLC, a parent holding company, which collectively had sole voting power over 155,566 shares and sole investment power over all 1,870,959 shares. Information based solely on Schedule 13G/A filed with the SEC on February 13, 2018. Abigail P. Johnson is a director, the chairman and the chief executive officer of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into a shareholders' voting agreement under which all Series B voting common shares will be voted in accordance
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “
FOR
” THE APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF AZZ’S EXECUTIVE COMPENSATION PROGRAM.
|
•
|
Thomas E. Ferguson – President and Chief Executive Officer
|
•
|
Paul W. Fehlman – Senior Vice President and Chief Financial Officer
|
•
|
Chris Bacius – Vice President, Corporate Development
|
•
|
Tara D. Mackey – Chief Legal Officer and Secretary
|
•
|
Tim E. Pendley – Senior Vice President and Chief Operating Officer, Metal Coatings
|
•
|
a decrease in the Company’s consolidated total revenue by 6.2%, to $810.4 million, for the year ended February 28, 2018 compared to the year ended February 28, 2017; and
|
•
|
the Company achieving diluted earnings per share equal to $1.73 as compared to $2.35 in fiscal year 2017.
|
•
|
Our NEOs’ total compensation is comprised of a mix of base salary, annual short-term incentive compensation, long-term incentive awards and other benefits. As illustrated below, the chief executive officer’s total compensation for fiscal years 2014 through 2018 was significantly contingent upon the Company’s performance. Actual total compensation paid to Mr. Ferguson during fiscal year 2018 was lower than fiscal year 2017 as a result of a below target payout under the Company’s annual cash incentive plan. Mr. Ferguson’s total compensation for fiscal year 2017 illustrated in the chart below includes
30,000 RSUs that had a fair market value of $1,663,800 on October 10, 2016, the date of grant, which were issued
in connection with the Amended CEO Agreement with the Company. These RSUs will cliff vest in full on September 29, 2019, provided Mr. Ferguson fulfills the three-year term as defined in the Amended CEO Agreement.
|
•
|
In fiscal year 2018, our NEOs received annual base salary adjustments ranging from 0% to 3% for their performance on the execution of several business initiatives and, with respect to certain officers, on the successful identification and evaluation of potential business acquisition targets, additional corporate responsibilities, expanding international business, product and market development initiatives and reducing corporate expenses. Mr. Ferguson did not receive an adjustment to his base salary for fiscal year 2018. See also the table on page 44 regarding adjustments to the NEOs base salaries.
|
•
|
For fiscal year 2018, our NEOs continued to receive a substantial portion of their compensation in the form of equity compensation, a portion of which is at risk because the awards are tied to increasing shareholder value through return on net assets and stock appreciation performance metrics in the form of performance share units (“PSUs”) and the other portion of equity compensation being tied to time vested RSUs. The grant value of equity awards made to our NEOs in fiscal year 2018 was allocated 50% to RSUs and 50% PSUs. The charts below show the elements of compensation that comprised the mix of total direct
|
|
Named Executive Officer
|
|
Percent of Fiscal Year 2018 Pay “At Risk”
|
|
|
|
|
|
Thomas E. Ferguson
|
|
58
|
%
|
Paul W. Fehlman
|
|
50
|
%
|
Chris Bacius
|
|
37
|
%
|
Tara D. Mackey
|
|
33
|
%
|
Tim E. Pendley
|
|
37
|
%
|
•
|
Messrs. Ferguson and Fehlman each have employment agreements with the Company. Our other NEOs do not have employment agreements. They are employed at-will and are expected to demonstrate exceptional personal performance and leadership in order to continue serving as a member of the executive team.
|
•
|
For fiscal year 2018, payments made under the Company's Senior Management Bonus Plan were below target for the NEOs aligning compensation with the Company's performance.
|
•
|
On the last day of fiscal year 2018, the three year performance cycle for the PSUs granted to our NEOs on April 27, 2015, concluded. As described below under Fiscal Year 2018 Executive Compensation Components - Long Term Incentive Compensation, the payment to be made on these PSUs is determined based on the adjusted return on assets ("Adjusted ROA") achieved during this performance cycle, which was 6.7%. As a result, holders of these PSUs were entitled to a payment of 16% of the target payment thereunder, which reflects the goal of the board of directors to align the compensation of our NEOs with both the financial performance of the Company and the Company's stock price. The TSR modifier did not apply.
|
What We Do
|
|
ü
|
A significant portion of our executive officers’ total compensation is financial performance based.
|
ü
|
Performance measures are highly correlated to the creation of shareholder value.
|
ü
|
We review and benchmark pay relative to the market median of our industry peer group on an annual basis.
|
ü
|
Our executive compensation program is designed to encourage building long-term shareholder value and attract and retain high performance executive talent.
|
ü
|
We use annual cash incentive opportunities and equity-based awards to balance the Company’s short- and long-term performance objectives.
|
ü
|
Our equity awards are equally weighted between time-vested RSUs, which vest ratably over a three-year period, and PSUs, which emphasize achievement of financial performance metrics over a three-year performance cycle.
|
ü
|
The compensation committee engages an independent executive compensation consultant.
|
ü
|
Our compensation committee conducts an annual review of all executive compensation program components to ensure alignment with our compensation objectives.
|
ü
|
We implemented a Compensation Recovery Policy to protect the Company in the event of a financial restatement or an executive officer engages in serious misconduct.
|
ü
|
We provide a limited number of employment agreements and executive perquisites.
|
ü
|
We have stock ownership guidelines for directors and executive officers.
|
What We Don’t Do
|
|
û
|
We do not provide tax gross ups.
|
û
|
We do not recycle shares withheld for taxes.
|
û
|
We do not permit pledging or hedging of Company securities.
|
û
|
We do not pay dividends or dividend equivalents on unearned RSUs and PSUs until they vest.
|
û
|
We do not reprice underwater equity awards.
|
û
|
We do not have pension or supplemental executive retirement plans.
|
•
|
extends Mr. Ferguson’s employment term for an additional three years to expire on September 29, 2019, subject to automatic extensions for successive one-year periods unless either the Company or Mr. Ferguson gives written notice to the other at least one hundred twenty (120) days before such extension would otherwise occur of the Company’s or Mr. Ferguson’s election not to extend the term;
|
•
|
adds a clawback provision for incentive payments to be in compliance under the Dodd-Frank Act and the Company’s Compensation Recovery Policy (as described below under “Compensation Recovery Policy”); and
|
•
|
provides (as consideration for Mr. Ferguson entering into the Amended CEO Agreement) for a one-time grant of 30,000 restricted stock units (“RSUs”), which were issued on October 10, 2016. These RSUs vest in full on September 29, 2019 in the event that Mr. Ferguson remains employed by the Company on such date.
|
Category
|
|
Compensation Element
|
|
Description
|
Cash
|
|
Base Salary
|
|
Fixed cash compensation based on responsibilities of the position. Reviewed annually for potential adjustments based on factors such as market levels, individual performance and scope of responsibilities.
|
|
|
Annual Incentive Opportunity
|
|
Annual cash incentive for achievement of specific annual financial operating results.
|
Long-Term Incentives
|
|
Restricted Stock Units
|
|
Vest ratably over a three-year period. Settled in shares of AZZ common stock. Dividend equivalents rights accrue with respect to dividends awarded during the vesting period.
|
|
|
Performance Share Units
|
|
Three-year pre-determined financial performance metric and a potential TSR modifier. Settled in shares of AZZ common stock. Dividend equivalents accrue during the vesting period and will vest if, and when the PSUs to which such dividend equivalents relate become vested.
|
Retirement
|
|
401(k) Plan
|
|
Qualified 401(k) plan available to all U.S. employees. The Company matches 100% of the first 1% and 50% of contributions between 2% and 6%.
|
Other
|
|
Employment Agreements
|
|
Sets standard benefits for Messrs. Ferguson and Fehlman in the event of severance.
|
|
|
Change-in-Control Agreements
|
|
Sets standard benefits for senior executives upon a change-in-control.
|
|
|
Other Benefits
|
|
Executive supplemental disability insurance and annual physical exam.
|
•
|
market data and advisory services periodically provided by Meridian, the compensation committee’s external consultant;
|
•
|
internal data regarding the executive’s compensation, both individually and relative to other executive officers; and
|
•
|
individual performance of the executive.
|
•
|
Mr. Ferguson’s efforts in leading the Company to focus on operational excellence, enhancing the sales force, driving accountability throughout the platforms, and in building a high performance team of executives to execute the Company’s current growth and long-term strategy;
|
•
|
Mr. Fehlman’s efforts in continuing to further develop AZZ’s financial team, enhancing its Tax, Treasury and Internal Audit functions while improving the Company’s debt structure, cash flow and relations with investors and financial institutions;
|
•
|
Mr. Bacius's efforts in driving the strategic planning process, developing a robust M&A pipeline, establishing a disciplined process for acquisition evaluation, integration and general portfolio management activities;
|
•
|
Ms. Mackey's leadership in managing the Company's legal function focused on compliance, risk mitigation, M&A transactions, supporting corporate initiatives, litigation management, implementing corporate governance best practices, and maintaining awareness of changes in the regulatory environment where AZZ does business; and
|
•
|
The relative value to AZZ of the contributions made by each officer.
|
Name
|
|
FY2017 Base Salary
|
|
FY2018 Base Salary
|
|
Change
|
|||||
Thomas E. Ferguson
|
|
|
$724,500
|
|
|
|
$724,500
|
|
|
0
|
%
|
Paul W. Fehlman
|
|
|
$365,472
|
|
|
|
$376,436
|
|
|
3
|
%
|
Chris Bacius
|
|
|
$280,978
|
|
|
|
$288,705
|
|
|
2.75
|
%
|
Tara D. Mackey
|
|
|
$330,000
|
|
|
|
$339,075
|
|
|
2.75
|
%
|
Tim E. Pendley
|
|
|
$373,212
|
|
|
|
$382,542
|
|
|
2.5
|
%
|
Named Executive Officer
|
Weight
|
Performance Measure
|
FY2018 Target Performance Goal
|
FY2018 Achieved Performance
|
% of
Target Performance Achieved
|
||||
|
|
|
|
|
|
||||
Mr. Ferguson
|
70%
|
Diluted earnings per share (“EPS”)
|
|
$2.75
|
|
$1.35
(1)
|
|
49%
|
|
|
30%
|
FY2018 Cash Flow
(2)
|
|
$71,700,000
|
|
|
$48,997,000
|
|
68%
|
|
|
|
|
|
|
||||
Mr. Fehlman
|
70%
|
EPS
|
|
$2.75
|
|
|
$1.35
|
|
49%
|
|
30%
|
FY2018 Cash Flow
|
|
$71,700,000
|
|
|
$48,997,000
|
|
68%
|
|
|
|
|
|
|
||||
Mr. Bacius
|
70%
|
EPS
|
|
$2.75
|
|
|
$1.35
|
|
49%
|
|
30%
|
FY2018 Cash Flow
|
|
$71,700,000
|
|
|
$48,997,000
|
|
68%
|
|
|
|
|
|
|
||||
Ms. Mackey
|
70%
|
EPS
|
|
$2.75
|
|
|
$1.35
|
|
49%
|
|
30%
|
FY2018 Cash Flow
|
|
$71,700,000
|
|
$48,997,000
|
|
68%
|
|
|
|
|
|
|
|
||||
Mr. Pendley
|
50%
|
EPS
|
|
$2.75
|
|
|
$1.35
|
|
49%
|
|
25%
|
Segment ROA
(3)
|
16.9
|
%
|
13.4
|
%
|
79%
|
||
|
25%
|
Segment Operating Income
(4)
|
|
$101,207,800
|
|
|
$84,332,356
|
|
83%
|
(1)
|
|
Includes an adjustment of $0.38 per share, or $9.9 million after tax, of non-reoccurring restructuring charges that occurred during fiscal year 2018.
|
(2)
|
|
Cash flow from operations minus capital expenditures.
|
(3)
|
|
Segment ROA is calculated as a percentage using a numerator of tax adjusted segment operating income, divided by a denominator of total segment assets, minus segment current liabilities, plus segment current portion of long-term debt.
|
(4)
|
|
Segment operating income consists of net sales less cost of sales, specifically identifiable selling, general and administrative expenses and other income and expense items that are specifically identifiable to a segment.
|
•
|
enhance the link between the creation of shareholder value and long-term executive incentive compensation;
|
•
|
provide an opportunity for increased equity ownership in the Company by directors and executives;
|
•
|
maintain competitive levels of total compensation; and
|
•
|
facilitate compliance with the policy of the board of directors, as described above under the heading “Stock Ownership Guidelines,” requiring AZZ’s executive officers and directors to hold shares of AZZ’s common stock.
|
•
|
the practice of granting equity awards only once every year;
|
•
|
the emphasis placed on equity in the mix of total compensation;
|
•
|
the officer’s experience and performance;
|
•
|
the scope, responsibility and business impact of the NEOs position;
|
•
|
the perceived retention value of the total compensation package in light of the competitive labor market;
|
•
|
alignment with AZZ's compensation philosophy and objectives;
|
•
|
cost and dilution impact;
|
•
|
grant practices of our industry peer group; and
|
•
|
input and advice from our executive compensation consultant.
|
Adjusted ROA is
|
Adjusted Net Income
|
Total Assets – (Current Liabilities – Current Debt)
|
% of Adjusted ROA Target Achieved
(No TSR Modifier
)
|
% of Target Award Amount Paid
|
|
% of Adjusted ROA Target Achieved
(With TSR Modifier)
|
% of Target Award Amount Paid
|
76%
|
4%
|
|
76%
|
5%
|
100%
|
100%
|
|
100%
|
125%
|
125%
|
200%
|
|
125%
|
250%
|
Position
|
Ownership Requirement
|
Maximum Number of Shares Required
|
Chief Executive Officer
|
4 x Base Salary
|
100,000
|
Chief Financial Officer, Chief Operating Officer and Senior Vice Presidents
|
3 x Base Salary
|
30,000
|
Vice Presidents and other Officers
|
1 x Base Salary
|
7,500
|
Name and
Principal Position
(a)
|
|
Year
(b)
|
|
Salary
($)
(c)
|
|
Bonus
($)
(d)
|
|
Stock
Awards/
RSUs
($)
(e)(1)
|
|
Option
/SARs
Awards
($)
(f)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
(g)(2)
|
|
Change in
Pension Value
and Nonquali-
fied Deferred
Compensation
Earnings
($)
(h)
|
|
All Other
Compensation
($)
(i)(3)
|
|
Total
($)
(j)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Thomas E. Ferguson
|
|
2018
|
|
$
|
724,500
|
|
|
—
|
|
$
|
900,000
|
|
|
$
|
—
|
|
|
$
|
78,246
|
|
|
—
|
|
$
|
14,129
|
|
|
$
|
1,716,875
|
|
President & Chief
|
|
2017
|
|
$
|
724,500
|
|
|
—
|
|
$
|
2,563,800
|
|
|
$
|
—
|
|
|
$
|
382,536
|
|
|
—
|
|
$
|
14,156
|
|
|
$
|
3,684,992
|
|
Executive Officer
|
|
2016
|
|
$
|
690,000
|
|
|
—
|
|
$
|
900,000
|
|
|
$
|
—
|
|
|
$
|
726,087
|
|
|
—
|
|
$
|
14,542
|
|
|
$
|
2,330,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Paul W. Fehlman
|
|
2018
|
|
$
|
376,436
|
|
|
—
|
|
$
|
350,000
|
|
|
$
|
—
|
|
|
$
|
26,330
|
|
|
—
|
|
$
|
19,829
|
|
|
$
|
772,595
|
|
Senior Vice President
|
|
2017
|
|
$
|
365,472
|
|
|
—
|
|
$
|
275,000
|
|
|
$
|
—
|
|
|
$
|
125,430
|
|
|
—
|
|
$
|
11,900
|
|
|
$
|
777,802
|
|
& Chief Financial Officer
|
|
2016
|
|
$
|
344,784
|
|
|
—
|
|
$
|
275,000
|
|
|
$
|
—
|
|
|
$
|
256,106
|
|
|
—
|
|
$
|
8,694
|
|
|
$
|
884,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Chris Bacius
|
|
2018
|
|
$
|
288,705
|
|
|
—
|
|
$
|
150,000
|
|
|
$
|
—
|
|
|
$
|
17,092
|
|
|
—
|
|
$
|
10,674
|
|
|
$
|
466,473
|
|
Vice President,
|
|
2017
|
|
$
|
280,978
|
|
|
—
|
|
$
|
140,000
|
|
|
$
|
—
|
|
|
$
|
81,596
|
|
|
—
|
|
$
|
13,731
|
|
|
$
|
516,305
|
|
Corporate Development
|
|
2016
|
|
$
|
261,375
|
|
|
—
|
|
$
|
110,000
|
|
|
$
|
—
|
|
|
$
|
177,970
|
|
|
—
|
|
$
|
13,349
|
|
|
$
|
562,694
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tara D. Mackey
|
|
2018
|
|
$
|
339,075
|
|
|
—
|
|
$
|
150,000
|
|
|
$
|
—
|
|
|
$
|
20,074
|
|
|
—
|
|
$
|
6,431
|
|
|
$
|
515,580
|
|
Chief Legal Officer
|
|
2017
|
|
$
|
330,000
|
|
|
—
|
|
$
|
140,000
|
|
|
$
|
—
|
|
|
$
|
95,832
|
|
|
—
|
|
$
|
11,462
|
|
|
$
|
577,294
|
|
& Secretary
|
|
2016
|
|
$
|
272,536
|
|
|
—
|
|
$
|
168,020
|
|
|
$
|
—
|
|
|
$
|
185,570
|
|
|
—
|
|
$
|
12,557
|
|
|
$
|
638,683
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Tim E. Pendley
|
|
2018
|
|
$
|
382,542
|
|
|
—
|
|
$
|
225,000
|
|
|
$
|
—
|
|
|
$
|
(4
|
)
|
|
—
|
|
$
|
11,797
|
|
|
$
|
619,339
|
|
Senior Vice President &
|
|
2017
|
|
$
|
373,212
|
|
|
—
|
|
$
|
225,000
|
|
|
$
|
—
|
|
|
$
|
121,294
|
|
|
—
|
|
$
|
13,296
|
|
|
$
|
732,802
|
|
Chief Operating Officer, Galvanizing
|
|
2016
|
|
$
|
360,591
|
|
|
—
|
|
$
|
225,000
|
|
|
$
|
—
|
|
|
$
|
233,663
|
|
|
—
|
|
$
|
11,568
|
|
|
$
|
830,822
|
|
(1)
|
The amounts in this column for the fiscal year ended February 28, 2018 reflect the aggregate grant date fair market value calculated in accordance with FASB ASC Topic 718 for RSU and PSU awards granted to the NEOs under the 2014 Plan. Assumptions used in the calculation of this amount are included in footnote 11 to the Company’s audited financial statements for the fiscal year ended February 28, 2018, included in the Company’s Annual Report on Form 10-K.
|
(2)
|
The amounts in this column reflect the cash awards granted under the Company's Senior Management Bonus Plan.
|
(3)
|
All other compensation in column (i) consists of the perquisites as described in the table below entitled “Perquisites” on a per executive basis for fiscal year 2018.
|
(4)
|
Mr. Pendley ceased to serve as Senior Vice President and Chief Operating Officer, Metal Coatings, as of April 3, 2018, and in connection therewith did not receive any payment under the Senior Management Bonus Plan for fiscal year 2018.
|
Perquisites
|
|||||||||||||||||||||||
Name
|
|
Contribution to 401(k) Plan
(1)
|
|
Insurance Benefits
(2)
|
|
Club Dues
|
|
Physical Exams
|
|
All Other Perquisites
|
|
Total
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Thomas E. Ferguson
|
|
|
$9,450
|
|
|
|
$3,079
|
|
|
—
|
|
|
|
$1,600
|
|
|
—
|
|
|
|
$14,129
|
|
|
Paul W. Fehlman
|
|
|
$13,729
|
|
|
|
$2,389
|
|
|
|
$3,711
|
|
|
—
|
|
|
—
|
|
|
|
$19,829
|
|
|
Chris Bacius
|
|
|
$7,932
|
|
|
|
$2,742
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
$10,674
|
|
||
Tara D. Mackey
|
|
|
$4,419
|
|
|
|
$2,012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
$6,431
|
|
||
Tim E. Pendley
|
|
|
$9,450
|
|
|
|
$2,347
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
$11,797
|
|
(1)
|
|
Matching 401(k) contributions allocated by the Company during fiscal year 2018 to each of the NEOs pursuant to the Company’s Benefit Plan (which is more fully described on page 49 under the heading “Retirement and Other Benefits”).
|
(2)
|
|
The value attributable to each of the NEOs pursuant to the AZZ Supplemental Individual Disability Insurance Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock/RSU
Awards:
|
|
All Other
Option/SARs Awards:
|
|
|
Grant
Date
Fair
Value
|
||||||||||||
|
|
Estimated Future Payouts Under Non- Equity Incentive Plan Awards (1)
|
Estimated Future Payouts Under Equity Incentive
Plan Awards (2)
|
|
Number
of
Shares
of
Stock
|
|
Number
of
Securities
Underlying
Options/
|
|
Exercise
or Base
Price of
Option/
SARs
|
of
Stock/RSU
and
Option/
SARs
|
||||||||||||||||||||
Name
|
Grant
Date
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
Threshold
(#)
|
|
Target
(#)(2)
|
|
Maximum
(#)
|
|
or Units
(#) (3)
|
|
SARs
(#) (4)
|
|
Awards
($/sh)
|
Awards
($) (5)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Thomas E. Ferguson
|
3/1/17
|
|
14,490
|
|
|
724,500
|
|
|
1,449,000
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,475
|
|
|
—
|
|
|
—
|
|
|
450,000
|
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
7,475
|
|
|
18,687
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
450,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Paul W. Fehlman
|
3/1/17
|
|
4,894
|
|
|
244,683
|
|
|
489,366
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,284
|
|
|
—
|
|
|
—
|
|
|
175,000
|
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
2,284
|
|
|
7,267
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175,000
|
|
|
7/11/17
|
(6)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
765
|
|
|
—
|
|
|
—
|
|
|
37,500
|
|
|
7/11/17
|
(6)
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
765
|
|
|
1,557
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Chris Bacius
|
3/1/17
|
|
3,176
|
|
|
158,788
|
|
|
317,576
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,245
|
|
|
—
|
|
|
—
|
|
|
75,000
|
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
1,245
|
|
|
3,114
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tara D. Mackey
|
3/1/17
|
|
3,730
|
|
|
186,491
|
|
|
372,983
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,245
|
|
|
—
|
|
|
—
|
|
|
75,000
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
1,245
|
|
|
3,114
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tim E. Pendley
|
3/1/17
|
|
4,973
|
|
|
248,652
|
|
|
497,305
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,868
|
|
|
—
|
|
|
—
|
|
|
112,500
|
|
|
4/27/17
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
1,868
|
|
|
4,671
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112,500
|
|
(1)
|
Possible pay-outs to each NEO under the Company’s Senior Management Bonus Plan.
|
(2)
|
In fiscal year 2018, long-term equity incentive grants included PSUs, which will vest at the end of three years, if at all, based on an annual average Adjusted ROA during the performance cycle (March 1, 2017 to February 29, 2020) with a potential TSR modifier at the end of the performance cycle. Payouts may range from 0% to 200% with a maximum award payout of 250% with the TSR modifier. The PSUs granted accrue dividend equivalents during the performance cycle, which will be paid either in cash or shares of AZZ common stock at the discretion of the compensation committee upon the vesting of the underlying award.
|
(3)
|
Number of RSUs granted to the NEOs under the 2014 Plan. These RSUs vest ratably over a three-year period beginning on the first anniversary of the grant date. The RSUs granted accrue dividend equivalents during the restricted vesting period, which will be paid either in cash or shares of AZZ common stock at the discretion of the compensation committee upon the vesting of the underlying award.
|
(4)
|
Beginning in fiscal year 2016, SARs were no longer granted as a component of the Company’s executive compensation program. The final vesting date for outstanding SARs awarded under the 2005 Plan was on March 1, 2017, with an expiration date of March 1, 2021 for all such unexercised SARs.
|
(5)
|
The amounts in this column for the fiscal year ended February 28, 2018 reflect the aggregate grant date fair market value calculated in accordance with FASB ASC Topic 718 for RSU and PSU awards granted to the NEOs under the 2014 Plan. Assumptions used in the calculation of this amount are included in footnote 11 to the Company’s audited financial statements for the fiscal year ended February 28, 2018, included in the Company’s Annual Report on Form 10-K.
|
(6)
|
On July 11, 2017, the compensation committee approved an increase to the target value of RSUs and PSUs to be awarded to Mr. Fehlman for fiscal year 2018. The increased target amount is $75,000 more than previously determined by the compensation committee, and the compensation committee implemented this increase by issuing an equal mix of RSUs and PSUs to Mr. Fehlman. These additional RSUs shall be eligible to vest over a three-year period with one-third of the RSUs vesting on each of the first, second and third anniversaries beginning on April 27, 2018. The additional PSUs will vest and become payable if at all, based on an annual average Adjusted ROA during the performance cycle beginning on March 1, 2017 through February 29, 2020, with a potential TSR modifier at the end of the performance cycle. Payouts may range from 0% to 200% with a maximum award payout of 250% with the TSR.
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLES
|
||||||||||||||||||||
|
|
|
|
OPTION/SAR AWARDS
|
||||||||||||||||
Name
|
|
Grant Date
|
|
Number of
Securities
Underlying
Unexercised
Options/SARs
(#)
Exercisable
(1)
|
|
Number of
Securities
Underlying
Unexercised
Options/SARs
(#)
Unexercisable
(2)
|
|
Option/SARs
Exercise
Price
($)
|
|
Option/SARs
Expiration
Date
(3)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas E. Ferguson
|
|
|
11/04/13
|
|
|
|
40,000
|
|
|
|
—
|
|
|
|
45.26
|
|
|
|
11/04/20
|
|
|
|
|
03/01/14
|
|
|
|
26,471
|
|
|
|
—
|
|
|
|
43.92
|
|
|
|
03/01/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul W. Fehlman
|
|
|
03/01/14
|
|
|
|
8,089
|
|
|
|
—
|
|
|
|
43.92
|
|
|
|
03/01/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chris Bacius
|
|
|
09/01/14
|
(4)
|
|
|
2,724
|
|
|
|
—
|
|
|
|
46.30
|
|
|
|
09/01/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tara D. Mackey
|
|
|
05/09/14
|
(4)
|
|
|
2,711
|
|
|
|
—
|
|
|
|
43.89
|
|
|
|
05/09/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tim E. Pendley
|
|
|
03/01/13
|
|
|
|
5,005
|
|
|
|
—
|
|
|
|
45.36
|
|
|
|
03/01/20
|
|
|
|
|
03/01/14
|
|
|
|
6,177
|
|
|
|
—
|
|
|
|
43.92
|
|
|
|
03/01/21
|
|
(1)
|
Amounts in this column represent vested but unexercised SAR awards.
|
(2)
|
All of the SARs granted to the NEOs have fully vested. Beginning in fiscal year 2016, SARs were no longer granted as a component of the Company's executive compensation program. The final vesting date for outstanding SARs awarded under the 2005 Plan was on March 1, 2017.
|
(3)
|
The SARs have a seven year term.
|
(4)
|
The SARs listed vested and became exercisable over a three-year period with one-third of the SARs vesting on each of March 1, 2015, March 1, 2016 and March 1, 2017.
|
|
|
|
|
STOCK AWARDS
|
|||||||||||||||||
Name
|
|
Grant Date
|
|
Number of
Shares or Units
of Stock That
Have Not
Vested
(#)(1)(2)
|
|
Market Value of
Shares or Units of
Stock That Have
Not Vested
($)(3)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(4)
|
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)(3)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Thomas E. Ferguson
|
|
|
04/27/15
|
|
|
|
3,174
|
|
|
|
|
129,658
|
|
|
|
9,524
|
|
|
|
389,055
|
|
|
|
|
04/27/16
|
|
|
|
5,279
|
|
|
|
|
215,647
|
|
|
|
7,919
|
|
|
|
323,491
|
|
|
|
|
10/10/16
|
|
|
|
30,184
|
|
|
|
|
1,233,016
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
04/27/17
|
|
|
|
7,475
|
|
|
|
|
305,354
|
|
|
|
7,745
|
|
|
|
305,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Paul W. Fehlman
|
|
|
04/27/15
|
|
|
|
969
|
|
|
|
|
39,584
|
|
|
|
2,910
|
|
|
|
118,874
|
|
|
|
|
04/27/16
|
|
|
|
1,613
|
|
|
|
|
65,891
|
|
|
|
2,419
|
|
|
|
98,816
|
|
|
|
|
04/27/17
|
|
|
|
2,284
|
|
|
|
|
93,301
|
|
|
|
2,284
|
|
|
|
93,301
|
|
|
|
|
07/11/17
|
|
|
|
765
|
|
|
|
|
31,250
|
|
|
|
765
|
|
|
|
31,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Chris Bacius
|
|
|
04/27/15
|
|
|
|
387
|
|
|
|
|
15,809
|
|
|
|
1,164
|
|
|
|
47,549
|
|
|
|
|
04/27/16
|
|
|
|
821
|
|
|
|
|
33,538
|
|
|
|
1,231
|
|
|
|
50,286
|
|
|
|
|
04/27/17
|
|
|
|
1,245
|
|
|
|
|
50,858
|
|
|
|
1,245
|
|
|
|
50,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Tara D. Mackey
|
|
|
04/27/15
|
|
|
|
387
|
|
|
|
|
15,809
|
|
|
|
1,164
|
|
|
|
47,549
|
|
|
|
|
11/06/15
|
(5)
|
|
|
338
|
|
|
|
|
13,807
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
03/07/16
|
(5)
|
|
|
338
|
|
|
|
|
13,807
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
04/27/16
|
|
|
|
821
|
|
|
|
|
33,538
|
|
|
|
1,231
|
|
|
|
50,286
|
|
|
|
|
04/27/17
|
|
|
|
1,245
|
|
|
|
|
50,858
|
|
|
|
1,245
|
|
|
|
50,858
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Tim E. Pendley
|
|
|
04/27/15
|
|
|
|
793
|
|
|
|
|
32,394
|
|
|
|
2,381
|
|
|
|
97,264
|
|
|
|
|
04/27/16
|
|
|
|
1,319
|
|
|
|
|
53,881
|
|
|
|
1,979
|
|
|
|
80,842
|
|
|
|
|
04/27/17
|
|
|
|
1,868
|
|
|
|
|
76,308
|
|
|
|
1,868
|
|
|
|
76,308
|
|
(1)
|
Amounts in this column represent RSU awards, which vest ratably over a three-year period from the grant date.
|
|
(2)
|
The amounts in this column include dividend equivalents accrued through February 28, 2018, of the underlying equity award that will vest if, and when the RSUs to which such dividend equivalent relate becomes vested.
|
|
(3)
|
The fair market value of the RSU and the PSU awards is based upon the closing market price of AZZ common stock as of February 28, 2018, which was $40.85.
|
|
(4)
|
Amounts in this column represent PSUs granted on April 27, 2015, April 27, 2016 and April 27, 2017, which have a three-year performance cycle and will vest and become payable, if at all, on the third anniversary of the grant date. The amounts in this column also include accrued dividend equivalents through February 28, 2018, that will vest if, and when the PSUs to which such dividend equivalents relate become vested.
|
|
(5)
|
These RSUs vest ratably over a three-year period beginning on April 27, 2016.
|
|
|
|
|
|
|
|
|
|
|
|
Option/SAR Awards
|
|
Stock Awards
(2)
|
||||
Name
|
|
Number of Shares
Acquired on Exercise (1) (#) |
|
Value Realized
on Exercise ($) |
|
Number of Shares
Acquired on Vesting
(#)
|
|
Value Realized on
Vesting ($) |
Thomas E. Ferguson
Paul W. Fehlman
Chris Bacius
Tara D. Mackey
Tim E. Pendley
|
|
—
—
—
—
—
|
|
—
—
—
—
—
|
|
16,206
(3)
4,951
(5)
1,115
(7)
2,475
(9)
3,877
(11)
|
|
984,344
(4)
300,721
(6)
68,266
(8)
150,528
(10)
235,520
(12)
|
(1)
|
There were no SARs exercised during fiscal year 2018.
|
(2)
|
Awards vested were RSUs. The RSUs awarded under the Company's 2014 Plan accrue dividend equivalents during the restricted vesting period, which will be paid either in cash or shares of AZZ common stock at the discretion of the compensation committee upon the vesting of the underlying award.
|
(3)
|
This number includes: (i) 10,492 RSUs that vested on March 1, 2017 under the 2005 Plan, which did not accrue dividend equivalents; (ii) 3,104 RSUs that vested on April 27, 2017 plus 62 accrued dividend equivalents; and (iiI) 2,610 RSUs that vested on April 27, 2017 plus 22 accrued dividend equivalents.
|
(4)
|
The value realized upon the vesting of (i) 10,492 RSUs based on the closing price of our common stock on the vesting date, March 1, 2017, of $60.55; and (ii) 5,714 RSUs and 84 accrued dividend equivalents based on the closing price of our common stock on the vesting date, April 27, 2017, of $60.20.
|
(5)
|
This number includes: (i) 3,206 RSUs that vested on March 1, 2017 under the 2005 Plan, which did not accrue dividend equivalents: (ii) 948 RSUs that vested on April 27, 2017 plus 18 accrued dividend equivalents; and (iii) 797 RSUs that vested on April 27, 2017 plus 6 accrued dividend equivalents.
|
(6)
|
The value realized upon the vesting of (i) 3,206 RSUs based on the closing price of our common stock on the vesting date, March 1, 2017, of $60.55; and (ii) 1,745 RSUs and 24 accrued dividend equivalents based on the closing price of our common stock on the vesting date, April 27, 2017, of $60.20.
|
(7)
|
This number includes (i) 330 RSUs that vested on March 1, 2017 plus 6 accrued dividend equivalents; (ii) 379 RSUs that vested on April 27, 2017 plus 3 accrued dividend equivalents; and (iii) 406 RSUs that vested on April 27, 2017 plus 7 accrued dividend equivalents.
|
(8)
|
The value realized upon the vesting of (i) 330 RSUs plus 6 accrued dividend equivalents based on the closing price of our common stock on the vesting date of March 1, 2017, of $60.55; and (ii) 785 RSUs plus 10 accrued dividend equivalents based on the closing price of our common stock on the vesting date, April 27, 2017, of $60.20.
|
(9)
|
This number includes: (i) 1,024 RSUs that vested on March 1, 2017 under the 2005 Plan, which did not accrue dividend equivalents; (ii) 379 RSUs that vested on April 27, 2017 plus 4 accrued dividend equivalents; (iii) 666 RSUs that vested on April 27, 2017 plus 6 accrued dividend equivalents; and (iv) 406 RSUs that vested on April 27, 2017 plus 7 accrued dividend equivalents.
|
(10)
|
The value realized upon the vesting of (i) 1,024 RSUs based on the closing price of our common stock on the vesting date, March 1, 2017, of $60.55; and (ii) 1,451 RSUs plus 17 accrued dividend equivalents based on the closing price of our common stock on the vesting date, April 27 2017, of $60.20.
|
(11)
|
This number includes (i) 2,449 RSUs that vested on March 1, 2017 under the 2005 Plan, which did not accrue dividend equivalents; (ii) 776 RSUs that vested on April 27, 2017 plus 15 accrued dividend equivalents; and (iii) 652 RSUs that vested on April 27, 2017 plus 5 accrued dividend equivalents.
|
(12)
|
The value realized upon the vesting of (i) 2,449 RSUs based on the closing price of our common stock on the vesting date, March 1, 2017, of $60.55; and (ii) 1,428 RSUs plus 20 accrued dividend equivalents based on the closing price of our common stock on the vesting date, April 27, 2017, of $60.20.
|
|
•
|
|
If the executive’s employment is terminated within one year following a change in control by the Company for Cause or by the executive for other than Good Reason, the Company must pay him or her their full base salary through the date of termination plus all other amounts to which he or she is entitled under any compensation or benefit plan of the Company at the time such payments are due, and the Company shall have no further obligation to him or her under the Change in Control Agreement.
|
|
•
|
|
If the executive’s employment is terminated before one year following a change in control by the Company other than for Cause or disability, or by the executive for Good Reason, he or she shall be entitled to a lump sum payment of his or her base salary through the date of termination plus any other amounts to which he or she is entitled under any compensation plan of the Company at the time such payments are due; a lump sum severance payment in an amount equal to two times his or her base amount, as defined in Section 280G(b)(3) of the Internal Revenue Code, and the vesting and immediate exercisability of all stock options, RSUs and SARs; and reimbursement for all legal fees and expenses incurred in seeking to enforce the Executive Change in Control Severance Agreement.
|
|
•
|
|
“Cause” as used in the Executive Change in Control Severance Agreements is defined as (1) conviction of a crime involving moral turpitude or providing for imprisonment, (2) commission of any willful malfeasance or gross negligence in the discharge of his or her duties to the Company or any of its subsidiaries, having a material adverse effect on the Company or any of its subsidiaries or (3) failure to timely correct after written notice, any specific failure in performance of the duties of his or her position with the Company.
|
|
•
|
|
“Good Reason” as used in such Executive Change in Control Severance Agreements includes, with respect to each executive:
|
TRIGGERING EVENTS
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Termination of Employment Before Change in Control
|
|
|
Termination of Employment Within
Two Years After Change in Control
|
||||||||||||||||||||||||||||||
|
Death/ Disability
|
|
Termination for Cause
|
|
Termination Without Cause
|
|
|
Death/ Disability
|
|
Termination for Cause
|
|
Termination Without Cause
|
|
|
Voluntary For Good Reason
|
|
|
Voluntary Without Good Reason
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mr. Ferguson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Severance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,173,500
|
|
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,166,255
|
|
(2)
|
|
$
|
2,166,255
|
|
(2)
|
|
$
|
—
|
|
Short-Term
Cash Incentive
(3)
|
$
|
724,500
|
|
|
$
|
—
|
|
|
$
|
724,500
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
SARs
(4)
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
—
|
|
RSUs
(5)
|
$
|
1,883,716
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1,883,716
|
|
|
$
|
—
|
|
|
$
|
1,883,716
|
|
|
|
$
|
1,883,716
|
|
|
|
$
|
—
|
|
PSUs
(6)
|
$
|
628,886
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
628,886
|
|
|
$
|
—
|
|
|
$
|
628,886
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
TOTAL
|
$
|
3,237,102
|
|
|
$
|
—
|
|
|
$
|
2,898,000
|
|
|
|
$
|
2,512,602
|
|
|
$
|
—
|
|
|
$
|
4,678,857
|
|
|
|
$
|
4,049,971
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mr. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Severance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
583,476
|
|
(7)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,023,065
|
|
(8)
|
|
$
|
1,023,065
|
|
(8)
|
|
$
|
—
|
|
Short-Term
Cash Incentive
(3)
|
$
|
244,683
|
|
|
$
|
—
|
|
|
$
|
244,683
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
SARs
(4)
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
—
|
|
RSUs
(5)
|
$
|
230,068
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
230,068
|
|
|
$
|
—
|
|
|
$
|
230,068
|
|
|
|
$
|
230,068
|
|
|
|
$
|
—
|
|
PSUs
(6)
|
$
|
223,368
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
223,368
|
|
|
$
|
—
|
|
|
$
|
223,368
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
TOTAL
|
$
|
698,119
|
|
|
$
|
—
|
|
|
$
|
828,159
|
|
|
|
$
|
453,436
|
|
|
$
|
—
|
|
|
$
|
1,476,501
|
|
|
|
$
|
1,253,133
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mr. Bacius
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Severance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
577,414
|
|
|
$
|
—
|
|
|
$
|
577,414
|
|
(9)
|
|
$
|
577,414
|
|
(9)
|
|
$
|
—
|
|
Short-Term
Cash Incentive
(3)
|
$
|
158,789
|
|
|
$
|
—
|
|
|
$
|
158,789
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
SARs
(4)
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
—
|
|
RSUs
(5)
|
$
|
100,246
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
100,246
|
|
|
$
|
—
|
|
|
$
|
100,246
|
|
|
|
$
|
100,246
|
|
|
|
$
|
—
|
|
PSUs
(6)
|
$
|
101,185
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
101,185
|
|
|
$
|
—
|
|
|
$
|
101,185
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
TOTAL
|
$
|
360,220
|
|
|
$
|
—
|
|
|
$
|
158,789
|
|
|
|
$
|
778,845
|
|
|
$
|
—
|
|
|
$
|
778,845
|
|
|
|
$
|
677,660
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ms. Mackey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Severance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
678,150
|
|
|
$
|
—
|
|
|
$
|
678,150
|
|
(9)
|
|
$
|
678,150
|
|
(9)
|
|
$
|
—
|
|
Short-Term
Cash Incentive
(3)
|
$
|
186,491
|
|
|
$
|
—
|
|
|
$
|
186,491
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
SARs
(4)
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
—
|
|
RSUs
(5)
|
$
|
127,891
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
127,891
|
|
|
$
|
—
|
|
|
$
|
127,891
|
|
|
|
$
|
127,891
|
|
|
|
$
|
—
|
|
PSUs
(6)
|
$
|
101,185
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
101,185
|
|
|
$
|
—
|
|
|
$
|
101,185
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
TOTAL
|
$
|
415,567
|
|
|
$
|
—
|
|
|
$
|
186,491
|
|
|
|
$
|
907,226
|
|
|
$
|
—
|
|
|
$
|
907,226
|
|
|
|
$
|
806,041
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
This amount is
Mr. Ferguson’s base salary for a period of 24 months plus a pro-rated short-term cash incentive payment. Mr. Ferguson’s Amended CEO Agreement with the Company provides that if he is terminated without cause, he will be entitled to his base salary for the period from the date of termination to the end of the term of the Amended CEO Agreement, but in any case a period of at least 24 months.
|
(2)
|
This amount is 2.99 times the base salary of Mr. Ferguson.
|
(3)
|
Assuming a termination date of February 28, 2018, Mr. Ferguson would be eligible to a target annual cash incentive of 100% of his fiscal year 2018 annual base salary. Mr. Fehlman would be eligible to a target annual cash incentive of 65% of his annual base salary for fiscal year 2018 and Ms. Mackey and Mr. Bacius would be eligible to a target annual cash incentive of 55%.
|
(4)
|
All SARs for the NEOs have vested. The value of exercising the SARs are calculated based upon the difference between the closing price of the Company's common stock on February 28, 2018 ($40.85) and the grant date price. Based on the closing price of our common stock on February 28, 2018, no amounts would be payable to our NEOs with respect to any SARs.
|
(5)
|
The value of the accelerated vesting of RSUs, including any dividend equivalents accrued during the vesting period, are calculated based upon the closing price of the Company’s common stock on February 28, 2018 ($40.85).
|
(6)
|
Pursuant to the 2014 Plan and the accompanying award agreements, the compensation committee in its sole discretion may deem that the PSUs be payable at the target amount (i.e., 100% achievement of the performance goals) in the event that the vesting date of such PSUs is accelerated. The value of the PSUs granted during fiscal years 2017 and 2018, including any dividend equivalents accrued was calculated using the closing price of the Company's common stock on February 28, 2018 ($40.85) and assuming that the compensation committee determined that these PSUs were each payable at their respective target amounts.
|
(7)
|
This amount is Mr. Fehlman’s base salary for a period of 12 months plus a pro-rated short-term cash incentive payment. Mr. Fehlman’s employment agreement with the Company provides that if he is terminated without cause, he will be entitled to his base salary for the period from the date of termination to the end of the term of the employment agreement, but in any case a period of at least 12 months.
|
(8)
|
This amount is two times Mr. Fehlman’s base salary plus the average amount of cash bonus actually paid to Mr. Fehlman with respect to the five (5) fiscal years of the Company immediately preceding the occurrence of the event.
|
(9)
|
This amount represents two times the base salary for each of Mr. Bacius and Ms. Mackey.
|
Year
|
Mr. Ferguson’s Total Compensation
($)
(1)
|
Median Employee Total Compensation ($)
|
Pay Ratio of CEO Compensation to Median Employee
|
|
2017
|
1,716,875
|
|
44,492
|
39:1
|
(1)
|
The annual total compensation of Mr. Ferguson, as reported in the Summary Compensation Table presented on page 55 in this Proxy Statement.
|
•
|
We selected December 31, 2017, as the date upon which the Company identified the “median employee”, which is within the last three months of the Company’s fiscal year end and enables us to make an identification in a reasonably efficient and economical manner.
|
•
|
We determined that as of December 31, 2017, AZZ’s employee population consisted of approximately 4,407 individuals (full-time, part-time and our variable workforce) working at the parent company headquarters and consolidated subsidiaries. Of these individuals, 3,923 were located in the United States and 484 were located in the following countries:
|
Country
|
Employees(#)
|
Brazil
|
27
|
Canada
|
266
|
China
|
13
|
Netherlands
|
25
|
Poland
|
152
|
Saudi Arabia
|
1
|
•
|
AZZ’s employee population, after taking into consideration the adjustments permitted by SEC rules as described above, consisted of approximately 4,019 individuals as of December 31, 2017.
|
•
|
We identified our median employee based on the total cash compensation paid during the 12-month period ending December 31, 2017, which was consistently applied to all of our employees included in the calculation. We annualized the compensation of all full-time employees hired during this period. Since we do not widely distribute annual equity awards to our employees, such awards were excluded from our compensation measure. For purposes of determining the median employee, we considered for each of our employees (i) actual base salary (in the case of hourly workers, base wages including overtime pay); (ii) cash bonuses paid during the year; and (iii) sales commissions, if applicable. For our employees located in Canada, we applied a Canadian to U.S. dollar exchange rate as of December 31, 2017, to the compensation elements paid in Canadian currency.
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “
FOR
” THE AZZ INC. 2018 EMPLOYEE STOCK PURCHASE PLAN.
|
|
•
|
|
reviewed and discussed the audited consolidated financial statements with management;
|
|
|
|
|
|
•
|
|
discussed with BDO the independence of BDO and the matters, if any, required to be discussed by PCAOB Auditing Standard No. 1301 "Communications with Audit Committees"; and
|
|
|
|
|
|
•
|
|
received the letter and the written disclosures from BDO required by Rule 3520 of the PCAOB.
|
|
|
February 28, 2018
|
|
|
February 28, 2017
|
|
||
Audit Fees (1)
|
|
$
|
579,128
|
|
|
$
|
571,518
|
|
Audit-Related Fees (2)
|
|
$
|
80,000
|
|
|
$
|
15,000
|
|
Tax Fees (3)
|
|
$
|
156,755
|
|
|
$
|
228,491
|
|
All Other Fees
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
$
|
815,883
|
|
|
$
|
815,009
|
|
(1)
|
Includes fees for services related to the annual audit of the consolidated financial statements, and reviews of our quarterly reports on Form 10-Q.
|
(2)
|
Audit related fees associated with the implementation of Accounting Standards Codification as Topic 606: Revenue from Contracts with Customers ("ASC 606") and the review of the related Sarbanes-Oxley Act of 2002 ("SOX") controls, as well as the opening balance sheet procedures in connection with the Company's acquisitions of Enhanced Powder Coating, Ltd. and Powergrid Solutions, Inc. during fiscal year 2018 and Power Electronics Inc. during fiscal year 2017.
|
(3)
|
Includes fees for services related to tax compliance, tax advice and tax planning.
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "
FOR
" THE RATIFICATION OF BDO TO SERVE AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING FEBRUARY 28, 2019.
|
(a)
|
First Offering Period
.
The first Offering Period under the Plan will commence on September 3, 2018, and will end on December 31, 2018.
|
(a)
|
Exhaustion of Stock.
As of the Purchase Date on which Participants purchase a number of shares of Common Stock that substantially exhausts the number of shares available for issuance under the Plan to such an extent that the Committee determines that no subsequent offerings are practicable;
|
(b)
|
End of Term of the Plan
. As of the last day of the last Offering Period that commences on or before the last day of the 10-year period commencing on the date the Plan is effective; and
|
(c)
|
Action by the Board
. At any time upon action of the Board as provided in Section 17.
|
1.
|
Head toward South 22nd Ave. on West 32nd St. (183 ft)
|
2.
|
Make a U-Turn onto West 32nd St. (0.1 miles)
|
3.
|
Turn slightly right onto South Service Rd. (1.3 miles)
|
4.
|
Take left ramp onto International Pkwy South (TX-97-SPUR) toward TX-183/TX-360 (0.9 miles)
|
5.
|
Take ramp onto TX-183 West (Airport Fwy) toward Ft. Worth (10.7 miles)
|
6.
|
Continue on I-820 (0.7 miles)
|
7.
|
Keep left onto TX-121 South toward Downtown Ft. Worth (7.1 miles)
|
8.
|
Take the exit toward Downtown/Belknap St. onto East Belknap St. (1.7 miles)
|
9.
|
Turn slightly left onto Energy Way (0.1 miles)
|
10.
|
Turn slightly right onto Summit Ave. (301 ft)
|
11.
|
Turn right onto West 7th St. (1.2 miles)
|
12.
|
Arrive at West 7th St. (One Museum Place) Your destination is on the right.
|
1.
|
Head toward West 6th St. on Taylor St. (124 ft)
|
2.
|
Turn right onto West 6th St. (0.2 miles)
|
3.
|
Turn slightly right onto West 7th St. (1.6 miles)
|
4.
|
Arrive at West 7th St. (One Museum Place) Your destination is on the right.
|