Check the appropriate box:
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☐
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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Date and Time:
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Tuesday, May 5, 2020
9:00 AM, Central Daylight Time |
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Place:
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All stockholders are cordially invited to attend the National Instruments Corporation (“NI”) 2020 Annual Meeting of Stockholders (“Annual Meeting”) via live webcast by visiting the following website: www.virtualshareholdermeeting.com/NATI2020. You will be able to participate in the Annual Meeting, vote your shares electronically and submit your questions during the live webcast by entering your 16-digit control number found on the voting form provided. Voting at www.proxyvote.com will ensure your representation at the Annual Meeting regardless of whether you participate in our live webcast.
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Business:
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1.
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To elect each of Michael E. McGrath and Alexander M. Davern to the Board of Directors for a term of three years.
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2.
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To approve the National Instruments Corporation 2020 Equity Incentive Plan.
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3.
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To ratify the appointment of Ernst & Young LLP as National Instruments Corporation’s independent registered public accounting firm for the fiscal year ending December 31, 2020.
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4.
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To consider and approve an advisory (non-binding) proposal concerning our executive compensation program.
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5.
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To transact such other business as may properly come before the meeting or any adjournment thereof.
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Record Date:
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Only stockholders of record at the close of business on March 6, 2020, are entitled to receive notice of and to vote at the Annual Meeting.
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Voting By Proxy:
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Whether or not you plan to attend the Annual Meeting via live webcast, we hope that you will vote as soon as possible. You may vote on the Internet or by telephone by following the instructions provided in the Notice of Internet Availability of Proxy Materials you received in the mail. If you received a paper copy of a proxy card by mail in response to your request for a hard copy of the proxy materials for the Annual Meeting, you may also vote by completing, signing and dating your proxy card and mailing it in the postage-prepaid envelope enclosed for that purpose by following the instructions on the proxy card. Voting over the Internet, by telephone or by written proxy will ensure your representation at the Annual Meeting. For more details on how to vote your shares, please review the instructions on the Notice of Internet Availability of Proxy Materials or the proxy card you received in the mail. Stockholders attending the Annual Meeting may vote at the Annual Meeting even if they have submitted a proxy. Attendance at the Annual Meeting will not cause your previously submitted proxy to be revoked unless you vote in person at the Annual Meeting. If your shares are held in the name of a broker, trustee, bank or other nominee, please coordinate with your broker, trustee, bank or other nominee to determine the method of voting your shares.
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1
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2
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3
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4
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Michael E. McGrath, 70 - Director since May 2014; Former Chief Executive Officer of i2 Technologies and Pittiglio Rabin Todd & McGrath, Business Strategy Consultant.
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Business Experience: Mr. McGrath is an experienced executive, director, entrepreneur and author. His areas of expertise include strategy, product development, decision-making techniques, supply chain, and autonomous vehicles. He served as a director of i2 Technologies, a supply chain management and software services company, from September 2004 to May 2008, and as its CEO and President from February 2005 to July 2007. He served on the board of directors of Entrust, Inc., from February 2007, and as Chairman of the Board starting in November 2008, until the company was sold in July 2009. He served as executive chairman of the board of The Thomas Group from February 2008 to March 2012, and as acting CEO for a period of time. The Thomas Group filed for bankruptcy protection in March 2012. He also served on the board of Sensable Technologies from 2000 until 2009 and served on the board of Revolution Analytics from 2014 until 2015. He was a founder and the Chief Executive Officer of Pittiglio Rabin Todd & McGrath, a global management consulting firm, for 28 years, retiring from the firm in July 2004. Mr. McGrath is the author of Autonomous Vehicles: Opportunities, Strategies, and Disruptions; Product Strategy for High-Technology Companies; Business Decisions!; and other books. Mr. McGrath received his bachelor’s degree in Computer Science from Boston College, and his master’s degree in Business Administration from Harvard Business School.
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The Board concluded that Mr. McGrath should serve as a director because he has an extensive background in product development strategy, strategic product marketing, and software services. Having served as CEO of i2 Technologies, a vendor of supply chain management software, he has knowledge of software systems, experience selling into corporate opportunities, and experience developing large accounts. In particular, he has experience with management functions including software marketing and sales force management activities, and software development. He is an experienced consultant and author with knowledge of cloud computing and smartmobile applications, which are relevant for NI’s business. Mr. McGrath serves as the Chair of the Board of Directors. He serves as a member of the Audit Committee and Chair of the Nomination and Governance Committee.
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5
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Alexander M. Davern, 53 - Director since January 2017; Former Chief Executive Officer of NI.
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Business Experience: Mr. Davern joined NI in February 1994 and served as Chief Executive Officer from January 2017 to February 2020. He previously served as President from January 2017 to October 2018. He served as Chief Operating Officer, Executive Vice President, Chief Financial Officer and Treasurer from October 2010 to December 2016. Mr. Davern also served as NI’s Chief Financial Officer, Senior Vice President, IT and Manufacturing Operations and Treasurer from December 2002 to October 2010; as Chief Financial Officer and Treasurer from December 1997 to December 2002; as Acting Chief Financial Officer and Treasurer from July 1997 to December 1997; and as Corporate Controller and International Controller. Prior to joining NI, Mr. Davern worked both in Europe and in the United States for the international accounting firm of Price Waterhouse, LLP. Mr. Davern received his bachelor’s degree in Commerce and a diploma in professional accounting from University College in Dublin, Ireland. Mr. Davern is a director of Cirrus Logic, Inc., a publicly traded company.
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The Board concluded that Mr. Davern should serve as a director because of his former role as NI’s Chief Executive Officer and because he has held other executive officer positions with NI for over 19 years. In these roles, Mr. Davern has gained extensive knowledge of NI’s business, financial and operations matters, and the Board believes that Mr. Davern is well suited to help define and execute NI’s corporate strategy. Mr. Davern also serves as a director for Cirrus Logic, Inc., another publicly traded company, and has strong expertise in governance matters.
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6
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James E. Cashman, III, 66 - Director since March 2019; Former Board Chairman of ANSYS, Inc; Former President and Chief Executive Officer of ANSYS, Inc.
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Business Experience: Mr. Cashman was Chairman of the board of directors ANSYS Inc., an engineering simulation software company, from January 2017 through April 2019. Prior to becoming Chairman of ANSYS, Mr. Cashman was the Chief Executive Officer and a director of ANSYS from February 2000 through December 2016. Prior to his general management role with ANSYS, Mr. Cashman served as Senior Vice President of Operations of ANSYS from September 1997 to April 1999. He also served from 1995 to 1997, as Vice President of Marketing and International Operations at PAR Technology Corporation, a computer software and hardware company, and from 1992 to 1994, he was Vice President of Product Development and Marketing at Metaphase Technology, Inc., a product data management company, which was a joint venture of Structural Dynamics Research Corporation and Control Data Systems. From 1976 to 1992, he worked in various sales and technical positions at Structural Dynamics Research Corporation, a computer-aided design company. Mr. Cashman holds a bachelor’s degree in Mechanical Engineering and a master’s degree in Business Administration, both from the University of Cincinnati.
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The Board concluded that Mr. Cashman should be nominated and serve as a director because he brings a wealth of experience in the areas of technical, financial, operations and sales management and has been key to the success of numerous computer-aided design, product data management, transaction processing, and computer-aided engineering companies. In each role, Mr. Cashman has focused on developing clarity-of-vision and giving appropriate guidance to provide strong leadership. He serves as a member of the Audit Committee and a member of the Compensation Committee.
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7
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Gayla J. Delly, 60 - Director since March 2020; Former Chief Executive Officer of Benchmark Electronics, Inc.
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Business Experience: Ms. Delly served as Chief Executive Officer of Benchmark Electronics Inc. (“Benchmark”), a company that provides contract manufacturing, design, engineering, test and distribution services to manufacturers of computers, medical devices, telecommunications equipment and industrial control and test instruments from January 2012 to September 2016 and served on the board of directors of Benchmark from 2011 to September 2016. At Benchmark, she previously served as President from 2006 to December 2011, Executive Vice President and Chief Financial Officer from 2001 to 2006, and as Corporate Controller and Treasurer from 1995 to 2001. Ms. Delly is a certified public accountant and was a senior audit manager at KPMG before joining Benchmark. Ms. Delly serves as an independent director of Broadcom Inc., a public company listed on the Nasdaq Global Select Market and is a member of its Audit Committee and Nominating and Corporate Governance Committee. Since January 2008, Ms. Delly has served as an independent director of Flowserve Corporation, a public company listed on the New York Stock Exchange, and serves as a member of its Organization and Compensation Committee and the Corporate Governance & Nominating Committee. Ms. Delly served as chair of Flowserve’s audit committee from 2015 to May 2019. Ms. Delly received her bachelor’s degree in Accounting from Samford University.
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The Board concluded that Ms. Delly’s qualifications to serve on our Board include her leadership experience in senior executive and financial management positions, her international manufacturing experience, her education and experience as an accounting professional, as well as public company board and committee experience. The Board has not appointed Ms. Delly to serve on any committees of the Board at this time.
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Gerhard P. Fettweis, PhD, 57 - Director since March 2016; Vodafone Chair Professor at the Technical University of Dresden.
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Business Experience: Since September 1994, Dr. Fettweis has served as the Vodafone Chair Professor of Electrical Engineering at the Technical University of Dresden, where his research focuses on next generation wireless systems. In connection with that role, he has spun-out twelve startup companies from the university. From August 2015 to February 2016, he served as a visiting professor at the University of California at Berkeley and as a senior researcher at the International Computer Science Institute. Dr. Fettweis is a member of the German National Academy of Science and Engineering and a fellow of the Institute of Electrical and Electronics Engineers (“IEEE”). He has received numerous awards recognizing his contributions in the field of electrical engineering. Dr. Fettweis has authored or co-authored two books and is listed as an inventor on over thirty issued patents. Dr. Fettweis received his Dipl.-Ing. in Electrical Engineering in 1986 and his PhD in Electrical Engineering in 1990, each from Aachen University of Technology.
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The Board concluded that Dr. Fettweis should serve as a director because of his strong technical background and extensive knowledge in electrical engineering, as well as his experience in science, technology and business. Additionally, he is very involved in the scientific community and has leadership and management experience through his role as the Vodafone Chair Professor at the Technical University of Dresden. He serves as a member of the Audit Committee and a member of the Compensation Committee.
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8
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Liam K. Griffin, 53 - Director since March 2019; President, Chief Executive Officer and Director of Skyworks Solutions, Inc.
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Business Experience: Mr. Griffin is President and Chief Executive Officer and a director of Skyworks Solutions, Inc. (“Skyworks”). Prior to his appointment as Chief Executive Officer and to the board of directors of Skyworks in May 2016, he had served as President of Skyworks since May 2014. Mr. Griffin also served in the following positions at Skyworks: from November 2012 to May 2014, as Executive Vice President and Corporate General Manager, from May 2011 to November 2012, as Executive Vice President, High Performance Analog, and from August 2001 to May 2011, as Senior Vice President of Sales and Marketing. He also served from 1995 to 2001 as Vice President of North American Sales and then Vice President of Worldwide Sales at Vectron International, a division of Dover Corporation. Prior to that, Mr. Griffin was a Marketing Manager at AT&T Microelectronics, Inc. and a Product and Process Engineer at AT&T Network Systems. Mr. Griffin holds a bachelor’s degree in Mechanical Engineering from the University of Massachusetts-Amherst and a master’s degree in Business Administration from Boston University. He is currently a director of Vicor Corporation, a publicly traded company.
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The Board concluded that Mr. Griffin should serve as a director because of his breadth of leadership experience and in-depth understanding of the semiconductor industry and its competitive landscape gained through serving in several different executive positions at Skyworks over the past 15 years. His service as a director for Vicor Corporation gives Mr. Griffin added perspective as to the challenges confronting public technology companies. In considering the independence of Mr. Griffin, it was noted that Mr. Griffin is Chief Executive Officer, President and a director of Skyworks and that NI has a commercial relationship with Skyworks and received revenue of approximately $963,235 ($960,002 net of credits) from sales to Skyworks in the ordinary course of business for the year ended December 31, 2019. Given the relative size of the businesses of NI and Skyworks, it was determined that such relationship was not a “material interest” under applicable SEC and Nasdaq regulations. He serves as a member of the Compensation Committee and a member of the Nomination and Governance Committee.
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9
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Duy-Loan T. Le, 57 - Director since September 2002; Former Senior Fellow of Texas Instruments, Inc.
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Business Experience: Ms. Le retired in July 2017 from Texas Instruments Inc. (“TI”), one of the leading semiconductor companies in the world. Ms. Le was elected Senior Fellow in 2002 and is the only woman in TI’s history elected to this highest Fellow rank. She held various leadership positions at TI, including Advanced Technology Ramp Manager for the Embedded Processing Division and worldwide project manager for the Memory Division. While at TI, Ms. Le led all aspects of execution for advanced technology nodes, including silica technology development, design, assembly and test, productization, qualification, release to market, high volume ramp, and quality and reliability assurance. She has experience opening international offices and developing engineering talent for the TI business. Ms. Le has been awarded 24 patents. She holds a bachelor’s degree in Electrical Engineering from the University of Texas at Austin and a master’s degree in Business Administration from the Bauer College of Business at the University of Houston. Ms. Le is currently a director of Ballard Power Systems, a publicly traded company; CREE, Inc., a publicly traded company; and Atomera, Inc., a publicly traded company.
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The Board concluded that Ms. Le should serve as a director because she has extensive experience managing platform-based product development and is a results-oriented and highly accomplished technology executive with extensive experience in various aspects of semiconductor design and manufacture, including operations, research and development, product launch, customer interfacing, foundry partnership, and supply chain management while at TI. She also managed global R&D centers for TI, and these centers span multiple countries, disciplines, businesses, and organizations across TI. She has over 20 years of process manufacturing experience. These skills and knowledge are relevant for NI’s business. She serves as Chair of the Compensation Committee and a member of the Nomination and Governance Committee.
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Charles J. Roesslein, 71 - Director since July 2000; Former Chief Executive Officer of Austin Tele-Services, LLC.
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Business Experience: Mr. Roesslein was the co-founder and Chief Executive Officer of Austin Tele-Services, LLC, which is in the secondary market for telecom and IT assets, from 2004 until 2016, when his interests were sold. During 2000, Mr. Roesslein served as the Chairman of the Board of Directors and President of Prodigy Communications Corporation, an internet service provider. He served as President of SBC-CATV, a cable television service provider, from 1999 until 2000, and as President of SBC Technology Resources, the applied research division of SBC Communications Inc., from 1997 until 1999. Prior to 1997, Mr. Roesslein served in executive officer positions with SBC Communications, Inc. and Southwestern Bell. Mr. Roesslein holds a bachelor’s degree in Mechanical Engineering from the University of Missouri-Columbia and a master’s degree in Finance from the University of Missouri-Kansas City. Mr. Roesslein is currently a director of Atlantic Tele-Network, Inc., a publicly traded company, since May 2002.
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The Board concluded that Mr. Roesslein should serve as a director because he brings a wealth of financial and executive experience to the Board including extensive experience in the development of large accounts while serving Southwestern Bell Corporation’s customers. He also has a strong financial background, having served as Vice President and Chief Financial Officer of Southwestern Bell Publications and as Vice President and Chief Financial Officer of Southwestern Bell Telephone Company. Mr. Roesslein has an extensive high level background in the telecom industry and in telecom technologies. He serves as the Chair of the Audit Committee and a member of the Compensation Committee.
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10
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Eric H. Starkloff, 45 - Director since February 2020; President and Chief Executive Officer of NI.
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Business Experience: Mr. Starkloff joined NI in July 1997 and has served as President and Chief Executive Officer since February 2020. Previously, Mr. Starkloff served as President and Chief Operating Officer since October 2018. He has also served as Executive Vice President, Global Sales and Marketing from February 2014 to October 2018; Senior Vice President of Marketing from April 2013 to January 2014; Vice President of Marketing from November 2010 to March 2013; and Vice President of Product Marketing from October 2008 to October 2010. During his tenure at NI, Mr. Starkloff has also held the positions of Director of Product Marketing; Product Marketing Manager; and Applications Engineer. Mr. Starkloff received his bachelor’s degree in Electrical Engineering from the University of Virginia.
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The Board concluded that Mr. Starkloff should serve as a director because he is NI’s Chief Executive Officer and has held other positions with NI for over 23 years. In these roles, Mr. Starkloff has gained extensive knowledge of NI’s business, financial and operations matters, and the Board believes that Mr. Starkloff is well suited to help define and execute NI’s corporate strategy.
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11
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Name of Person or Entity
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Number of
Shares (1) |
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Approximate
Percentage Owned (2) |
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T. Rowe Price Associates, Inc.
100 E. Pratt Street Baltimore, Maryland 21202 |
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17,704,097(3)
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13.54%
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BlackRock, Inc.
55 East 52nd Street New York, NY 10055 |
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13,786,517(4)
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10.54%
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The Vanguard Group
100 Vanguard Blvd. Malvern, Pennsylvania 19355 |
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11,970,552(5)
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9.15%
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Janus Henderson Group PLC
201 Bishopsgate United Kingdom EC2M 3AE |
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9,711,469(6)
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7.43%
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Jeffrey L. Kodosky
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1,680,905(7)
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1.29%
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Alexander M. Davern
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315,017(8)
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*%
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Eric H. Starkloff
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87,876(9)
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*%
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Karen M. Rapp
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28,728(10)
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*%
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Scott A. Rust
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30,917(11)
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*%
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John C. Roiko
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22,909(12)
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*%
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Charles J. Roesslein
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108,714(13)
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*%
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Duy-Loan T. Le
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106,485(14)
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*%
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Michael E. McGrath
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29,802(15)
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*%
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Gerhard P. Fettweis
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17,684(16)
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*%
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James E. Cashman, III
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4,932(17)
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*%
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Liam K. Griffin
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4,932(18)
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*%
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Gayla J. Delly
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—
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—
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All executive officers and directors as a group (14 persons)
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2,447,731(19)
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1.87%
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*
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Represents less than 1% of the outstanding shares of our common stock.
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(1)
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Except as indicated in the footnotes to this table, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.
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For each individual and group included in the table, percentage owned is calculated by dividing the number of shares beneficially owned by such person or group as described above by the sum of the 130,758,784 shares of common stock outstanding on March 6, 2020, and the number of shares of common stock that such person or group had the right to acquire on or within 60 days of March 6, 2020, including time-based restricted stock units (“RSUs”).
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The information as to beneficial ownership is based on a Schedule 13G/A filed with the SEC on February 14, 2020, reflecting beneficial ownership as of December 31, 2019. The Schedule 13G/A states that T. Rowe Price Associates, Inc. and/or its subsidiaries have sole voting power with respect to 5,797,889 shares of common stock and sole dispositive power with respect to 17,704,097 shares of common stock.
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The information as to beneficial ownership is based on a Schedule 13G/A filed with the SEC on February 4, 2020, reflecting beneficial ownership as of December 31, 2019. The Schedule 13G/A states that BlackRock, Inc. and/or
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12
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(5)
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The information as to beneficial ownership is based on a Schedule 13G/A filed with the SEC on February 12, 2020, reflecting beneficial ownership as of December 31, 2019. The Schedule 13G/A states that The Vanguard Group and/or its subsidiaries have sole voting power with respect to 65,938 shares of common stock, shared voting power with respect to 20,168 shares of common stock, sole dispositive power with respect to 11,901,650 shares of common stock and shared dispositive power with respect to 68,902 shares of common stock.
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(6)
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The information as to beneficial ownership is based on a Schedule 13G/A filed with the SEC on February 13, 2020, reflecting beneficial ownership as of December 31, 2019. The Schedule 13G/A states that Janus Henderson Group PLC and/or its subsidiaries have shared voting power with respect to 9,711,469 shares of common stock and shared dispositive power with respect to 9,711,469 shares of common stock.
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(7)
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Includes an aggregate of 816,600 shares held in two trusts for the benefit of Mr. Kodosky’s daughters for which Mr. Kodosky is the trustee; includes 74,529 shares held by a non-profit corporation of which Mr. Kodosky is president and his wife, Gail T. Kodosky, is secretary; includes 80,000 shares held by a charitable remainder trust for the benefit of Mr. Kodosky and his wife; includes 6,000 shares held in a charitable remainder trust for the benefit of Mr. Kodosky’s brother of which Mr. Kodosky is the sole trustee with investment power over the securities held therein; includes an aggregate of 55,620 shares held in three trusts for non-immediate family members of Mr. Kodosky of which Mr. Kodosky is the sole trustee with investment power over the securities held therein; and includes 323,373 shares owned by his wife. Mr. Kodosky disclaims beneficial ownership of the shares owned by his wife. Includes 1,054 shares subject to RSUs of Mr. Kodosky which vest within 60 days of March 6, 2020. Cumulatively, Jeffrey and Gail Kodosky control and/or beneficially own a total of 1,680,905 shares.
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(8)
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Includes 54,417 shares subject to RSUs which vest within 60 days of March 6, 2020, plus an additional 52,108 shares that may accelerate on or about May 5, 2020, pursuant to Mr. Davern's Transition Agreement (defined below).
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(9)
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Includes 50,977 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(10)
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Includes 14,336 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(11)
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Includes 17,304 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(12)
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Includes 4,567 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(13)
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Includes 6,139 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(14)
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Includes 6,139 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(15)
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Includes 6,139 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(16)
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Includes 6,139 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(17)
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Includes 4,932 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(18)
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Includes 4,932 shares subject to RSUs which vest within 60 days of March 6, 2020.
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(19)
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Includes 244,086 shares subject to RSUs which vest within 60 days of March 6, 2020.
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13
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•
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positive feedback about our appointment of Mr. Starkloff as Chief Executive Officer, with our stockholders generally appreciating that Mr. Starkloff has been involved from the outset in the development of our core strategic vision, operating model, and plans toward achieving our goals;
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•
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appreciation of our continued focus on revenue growth, operating margin and employee retention, with our stockholders acknowledging a desire to see sustainable revenue growth going forward in addition to the success we have had in maintaining our operating margin throughout the economic cycle;
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•
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recognition of our achievement of our non-GAAP operating margin target through operational efficiency;
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•
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appreciation of our efforts to identify and attract diverse candidates to serve on our Board;
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•
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appreciation of our efforts to align on our corporate social responsibility activities, with the hiring of a Director of CSR and monetary funding of the program viewed as positive;
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•
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views as to what information about our environmental, social and corporate social responsibility efforts would be helpful to them; and
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•
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positive reaction to the overall reduction in the average age and tenure of the Board.
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14
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15
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16
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17
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18
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19
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Name
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Fees
Earned or Paid in Cash |
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Stock
Awards (1) |
| |
Total
|
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Alexander M. Davern (2)
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$—
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$—
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$—
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Jeffrey L. Kodosky (3)
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| |
—
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| |
—
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| |
—
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Charles J. Roesslein
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91,574
|
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175,037
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266,611
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Duy-Loan T. Le
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88,709
|
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175,037
|
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263,746
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John M. Berra (4)
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34,308
|
| |
—
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34,308
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|
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Michael E. McGrath
|
| |
184,074
|
| |
175,037
|
| |
359,111
|
|
|
Gerhard P. Fettweis
|
| |
75,647
|
| |
175,037
|
| |
250,684
|
|
|
James E. Cashman, III
|
| |
59,605
|
| |
350,073
|
| |
409,678
|
|
|
Liam K. Griffin
|
| |
58,032
|
| |
350,073
|
| |
408,105
|
|
(1)
|
Amounts represent the dollar amount recognized for financial statement reporting purposes for 2019 in accordance with Financial Accounting Standards Board Accounting Standard Codification Topic 718 (“FASB ASC Topic 718”). These dollar amounts reflect the aggregate grant date fair value for these stock awards and may not correspond to the actual value that will be recognized by the directors. The grant date fair value of each award is expensed monthly based on the estimated vesting period of the corresponding grant. Grant date fair value is calculated using the closing price of the day immediately preceding the date of grant multiplied by the number of RSUs granted. On April 24, 2019, Mr. Roesslein, Ms. Le, Mr. McGrath, Dr. Fettweis, Mr. Cashman, and Mr. Griffin were each granted 3,699 RSUs (the “2019 Director Grants”). The grant date fair value of each RSU grant was based on the April 23, 2019 closing price of $47.32 per share and vest on May 1, 2020, which is the one-year anniversary of the vesting commencement date. In connection with their initial appointments to the Board, Mr. Cashman and Mr. Griffin were each granted an additional 3,699 RSUs on April 24, 2019, which vest over a three-year period with 1/3rd of the RSUs vesting on each anniversary of the vesting commencement date, which is May 1, 2019. Such grants had the same grant date fair value as the 2019 Director Grants. As of December 31, 2019, Mr. Roesslein, Ms. Le, Mr. McGrath, and Dr. Fettweis each had 7,326 outstanding and unvested RSUs. As of December 31, 2019, Mr. Cashman and Mr. Griffin each had 7,398 outstanding and unvested RSUs.
|
(2)
|
As an employee director in 2019, Mr. Davern did not receive any additional compensation for his service as a director. His compensation as an NI Named Executive Officer in 2019 is included below in the “Summary Compensation Table”.
|
(3)
|
As an employee director, Mr. Kodosky did not receive any additional compensation for his service as a director. Mr. Kodosky is a Business and Technology Fellow, but not a named executive officer, as such term is defined under Item 402(a)(3) of Regulation S-K. Pursuant to SEC rules, the compensation that a director receives for services as a Business and Technology Fellow does not need to be reported in the table for Director Compensation.
|
(4)
|
Mr. Berra informed the Board in September 2018 that he would not stand for re-election as a director at the Annual Meeting of Stockholders on May 14, 2019.
|
|
| |
20
|
| |
|
|
| |
21
|
| |
|
|
Name of Executive Officer
|
| |
Age
|
| |
Position
|
|
|
Eric H. Starkloff
|
| |
45
|
| |
President and Chief Executive Officer
|
|
|
Karen M. Rapp
|
| |
52
|
| |
Executive Vice President, Chief Financial Officer and Treasurer
|
|
|
Scott A. Rust
|
| |
53
|
| |
Senior Vice President, Global Product Research & Development
|
|
|
Jason E. Green
|
| |
47
|
| |
Senior Vice President, Global Sales, Support, Services, and Operations
|
|
|
Carla Pineyro Sublett
|
| |
47
|
| |
Senior Vice President, Chief Marketing Officer
|
|
|
| |
22
|
| |
|
•
|
Alexander M. Davern, our Chief Executive Officer;
|
•
|
Eric H. Starkloff, our President and Chief Operating Officer;
|
•
|
Karen M. Rapp, our Executive Vice President, Chief Financial Officer and Treasurer;
|
•
|
Scott A. Rust, our Senior Vice President, Global Product Research and Development; and
|
•
|
John C. Roiko, our Vice President, Finance and Chief Accounting Officer.
|
|
| |
23
|
| |
|
•
|
Revenue: We reported net sales of $1.35 billion, relatively flat compared to 2018 despite headwinds from the overall weakness in the industrial economy during most of the year.
|
•
|
Financial Discipline: We reported record operating income of $175 million in 2019, up 46% over three years. We also reported record net income of $162 million, up 96% over three years.
|
•
|
Cash Generation: We generated annual cash flow from operations of $224 million. As of December 31, 2019, we held $433 million in cash and short-term investments.
|
•
|
Capital Deployment: In 2019, we returned over $300 million to our stockholders through dividends and share repurchases. Our strategies for capital deployment remain the same: payment of our quarterly dividend, opportunistic stock repurchases, and acquisitions of strategic accelerators.
|
|
| |
24
|
| |
|
•
|
Product Portfolio: We continued to sharpen our focus on system-level automated test and automated measurement offerings in key growth areas, including semiconductor, transportation, and aerospace, defense, and government.
|
•
|
Base Salary — Approved annual base salary increases ranging from 3.9% to 26.0%, including a base salary increase of 7.0% for our CEO. The 26% base salary increase from 2018 for Mr. Starkloff is predominately due to Mr. Starkloff’s appointment as our President and Chief Operating Officer on October 25, 2018.
|
•
|
Annual Cash Incentive Bonus Programs:
|
•
|
Approved target incentive bonus opportunities for our Named Executive Officers under our Annual Incentive Program (“AIP”) ranging from 30% to 100% of their 2019 annual base salary, for payout amounts ranging from $32,625 to $213,332. This resulted in the payment of an annual cash bonus for our CEO in the amount of $213,332, equal to 28% of his target annual cash bonus opportunity.
|
•
|
Determined no cash bonus payments were to be made pursuant to our Annual Company Performance Bonus Program (“CPB”).
|
•
|
Established an Executive Incentive Program (“EIP”) for executive officers. In January 2020, upon the recommendation of the Compensation Committee, the independent members of the Board approved the implementation of the EIP, which combined the AIP and the CPB into one bonus program for our executive officers. While the EIP bonus targets will replace the combined bonus targets of the AIP and the CPB for our executive officers, the core financial objectives of revenue growth and operating income will remain. The EIP will also maintain the AIP objective related to employee retention. Under the EIP, the Compensation Committee, or the independent members of the Board with respect to the CEO, will not have discretion to modify the attainment of an executive officer goal.
|
•
|
Long-Term Incentive Compensation — Based on feedback from our stockholders, granted LTI compensation opportunities in the form of 50% RSU awards and 50% PRSU awards that will be settled for whole shares of our common stock (with any fraction of a share to be settled in cash), in amounts ranging from target levels of approximately $177,288 for our Named Executive Officers (other than our CEO) to approximately $5,340,969 for our CEO, for the RSUs and PRSUs, at grant date fair value. See below in Note 1 in “Elements of Executive Compensation—Long Term Incentive Compensation” for discussion of value for PRSUs using a Monte Carlo simulation.
|
•
|
Promotion of Mr. Starkloff — Established the following compensation arrangements for Mr. Starkloff in connection with his appointment as our Chief Executive Officer, effective February 1, 2020:
|
•
|
an annual base salary of $700,000;
|
•
|
a target incentive bonus opportunity under our EIP for 2020 equal to 135% of his annual base salary1;
|
•
|
a one-time promotional RSU award for 75,000 shares of NI common stock, scheduled to vest in equal installments annually over a three-year period that commenced February 1, 2020, subject to his continued service on each such vesting date;
|
1
|
The executive employment agreement executed by Mr. Starkloff on October 28, 2019 entitled Mr. Starkloff to participate in the AIP and the CPB with an AIP target of 110% of his base salary and an CPB target of 25% of his base salary, respectively. On February 3, 2020, the executive employment agreement was amended (as amended, the "Starkloff Executive Employment Agreement"), to reflect the implementation of the EIP. Pursuant to the amendment, in lieu of Mr. Starkloff’s participation in the AIP and CPB, Mr. Starkloff will have an annual EIP target of 135% of his base salary.
|
|
| |
25
|
| |
|
•
|
a one-time promotional PRSU award for 75,000 shares (at target) of NI common stock based on NI’s total shareholder return performance in relation to the performance of the Russell 2000 index (“Index”) over a three-year performance period that commenced January 1, 2020, subject to his continued service on the vesting date of December 31, 2022;
|
•
|
a restricted stock unit award equal to the result (rounded to the nearest whole share) of $2,000,000 divided by the closing price of NI’s common stock on the day immediately preceding the grant date at the next equity award approval cycle (expected in April 2020), of which half will be RSUs, scheduled to vest in equal installments annually over a three-year period and with the remainder to be PRSUs to be earned over a three-year performance period that commenced January 1, 2020, based on NI's total shareholder return performance in relation to the performance of the index over the same three-year performance period, commencing January 1, 2020, subject to his continued service on the vesting date of December 31, 2022; and
|
•
|
Mr. Starkloff's post-employment compensation arrangements were revised in connection with his appointment as CEO (for further discussion please see “Potential Payments Upon Termination or Change in Control” below).
|
•
|
CEO Transition — Established the following compensation arrangements for Mr. Davern in connection with his transition from our Chief Executive Officer to a strategic advisory role, effective January 31, 2020 and until May 5, 2020. During this transition period, Mr. Davern will receive his current base salary and benefits; however, Mr. Davern will not be eligible for any bonus or other incentive pay in 2020. Nor will Mr. Davern be eligible to receive any additional consulting fees outside of his continued base salary and benefits. If Mr. Davern signs a separation agreement, his RSUs that are subject to service-based vesting, and scheduled to vest prior to May 5, 2021, will vest upon signing. Mr. Davern's unvested PRSUs will terminate upon his separation.
|
•
|
2020 Equity Incentive Plan — Subject to stockholder approval of Proposal Two, the Compensation Committee recommended to the Board, and the Board approved, the 2020 Incentive Plan to replace the expiring 2015 Incentive Plan.
|
|
| |
26
|
| |
|
•
|
Maintain an Independent Compensation Committee. The Compensation Committee consists solely of independent directors who establish our compensation practices.
|
•
|
Retain an Independent Compensation Advisor. The Compensation Committee has engaged its own compensation consultant to provide information, analysis and other advice on executive compensation independent of management.
|
•
|
Annual Executive Compensation Review. At least once a year, the Compensation Committee conducts a review of our executive compensation strategy.
|
•
|
Compensation At-Risk. Our executive compensation program is designed so that a significant portion of our executive officer’s compensation is “at risk” based on corporate performance, because it is equity-based, to align the interests of our Named Executive Officers and stockholders.
|
•
|
Annual Compensation-Related Risk Assessment. We consider our compensation-related risk profile to ensure that our compensation-related risks do not create inappropriate or excessive risk and are not reasonably likely to have a material adverse effect on NI.
|
•
|
Stock Ownership Policy. We have adopted stock ownership guidelines for our Named Executive Officers and the non-employee members of our Board of Directors under which they must accumulate and hold, consistent with the terms of the guidelines, a specific amount of shares of NI common stock.
|
•
|
“Double Trigger” Compensation Arrangements in Connection with a Change in Control. In the event of a change in control, our CEO has a “double trigger” compensation arrangement with respect to his base salary and bonus.
|
|
| |
27
|
| |
|
•
|
No Guaranteed Bonuses. We do not provide guaranteed bonuses to our Named Executive Officers.
|
•
|
No Special Retirement Plans. We do not currently offer, nor do we have plans to offer, defined benefit pension plans or any non-qualified deferred compensation plans or arrangements to our Named Executive Officers other than the plans and arrangements that are available to all employees. Our Named Executive Officers are eligible to participate in our Section 401(k) retirement savings plan on the same basis as our other employees.
|
•
|
No Short Selling, Hedging or Derivatives Transactions. We have a policy which prohibits our executive officers from short selling or trading in derivatives of our securities, holding our securities in margin accounts, or engaging in hedging or similar transactions with respect to our securities.
|
•
|
No Excise Tax Payments on Future Post-Employment Compensation Arrangements. We do not provide any excise tax reimbursement payments (including “gross-ups”) on payments or benefits contingent upon certain terminations or a change in control of NI.
|
•
|
No Special Welfare or Health Benefits. We do not provide our Named Executive Officers with any welfare or health benefit programs, other than participation in our broad-based employee programs and an annual physical.
|
•
|
No Special Perquisites. We do not provide significant perquisites or other personal benefits to our Named Executive Officers.
|
•
|
Our compensation practices are designed to support the interests of our stockholders.
|
•
|
Achieving financial goals and other operational targets are the basis for measuring performance.
|
•
|
Sufficient upside, in the form of the potential to earn more than the target amount, and downside, in the form of risk of not earning the full target amount, is built in to deliver appropriate rewards based on results.
|
•
|
Business Driven: Compensation should be aligned to our performance by linking rewards directly to the achievement of specific financial, operational, and strategic objectives that are expected to lead to increased stockholder value and executive retention and engagement.
|
•
|
Performance Differentiated: Compensation should be structured to create an effective link between pay and performance at both the corporate and individual level so that the contributions of our executives are valued and rewarded.
|
•
|
Market Competitive: Compensation should be competitive to attract, retain, and motivate the senior leadership needed to achieve our core strategic vision.
|
•
|
Our overall amount of equity awards should be related to our revenue growth: We believe that our use of equity awards must be sensitive to the dilutive impact that such equity compensation will have on our stockholders. As a result, the overall amount of equity awards for 2019 was linked to our revenue growth.
|
|
| |
28
|
| |
|
•
|
our executive compensation program objectives;
|
•
|
our performance against the financial, operational, and strategic objectives established by the Compensation Committee and our Board of Directors;
|
•
|
each individual executive officer’s knowledge, skills, experience, qualifications, and tenure relative to other similarly-situated executives at the companies in our compensation peer group;
|
•
|
the scope of each executive officer’s role and responsibilities compared to other similarly-situated executives at the companies in our compensation peer group;
|
•
|
the prior performance of each individual executive officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function, and work as part of a team, all of which reflect our core values;
|
•
|
the potential of each individual executive officer to contribute to our long-term financial, operational, and strategic objectives;
|
•
|
the business risk presented to us in the event the executive officer were to leave our employ;
|
•
|
our CEO’s compensation relative to that of our executive officers, and compensation parity among our executive officers;
|
•
|
general compensation trends and practices in the technology industry;
|
•
|
the compensation practices of comparable companies, including our compensation peer group and the positioning of each executive officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data conducted by our independent compensation advisors as well as our in-house compensation experts; and
|
|
| |
29
|
| |
|
•
|
the recommendations of our CEO with respect to the compensation of our executive officers (other than his own compensation).
|
|
| |
30
|
| |
|
|
Company Name
|
| |
Annual
Revenue (in millions) Last Four Quarters |
| |
Market
Capitalization (in millions) |
|
|
ANSYS
|
| |
$1,176
|
| |
$15,501
|
|
|
Cadence Design Systems
|
| |
2,028
|
| |
13,021
|
|
|
Cirrus Logic
|
| |
1,466
|
| |
2,533
|
|
|
Cognex
|
| |
821
|
| |
9,426
|
|
|
Cypress Semiconductor
|
| |
2,406
|
| |
5,725
|
|
|
Keysight Technologies
|
| |
3,709
|
| |
12,163
|
|
|
MKS Instruments
|
| |
2,125
|
| |
4,723
|
|
|
MTS Systems
|
| |
782
|
| |
963
|
|
|
OSI Systems
|
| |
1,089
|
| |
1,384
|
|
|
PTC
|
| |
1,236
|
| |
11,684
|
|
|
Silicon Laboratories
|
| |
822
|
| |
4,121
|
|
|
Synopsys
|
| |
3,023
|
| |
14,906
|
|
|
Teledyne Technologies
|
| |
2,795
|
| |
8,677
|
|
|
Teradyne
|
| |
1,997
|
| |
7,329
|
|
|
Trimble
|
| |
2,906
|
| |
10,637
|
|
|
Financial data per S&P Research Insight as of 10/01/18
|
| |
|
| |
|
|
•
|
Base salary;
|
•
|
the AIP;
|
•
|
the CPB; and
|
•
|
LTI compensation in the form of equity awards.
|
|
| |
31
|
| |
|
|
Named Executive Officer
|
| |
2018 Base
Salary |
| |
2019 Base
Salary (1) |
| |
Percentage
Adjustment |
|
|
Alexander M. Davern
|
| |
$725,004
|
| |
$775,754
|
| |
7.0%
|
|
|
Eric H. Starkloff
|
| |
437,500
|
| |
551,250(2)
|
| |
26.0%
|
|
|
Karen M. Rapp
|
| |
393,750
|
| |
413,438
|
| |
5.0%
|
|
|
Scott A. Rust
|
| |
370,620
|
| |
385,000
|
| |
3.9%
|
|
|
John C. Roiko
|
| |
277,380
|
| |
290,000
|
| |
4.6%
|
|
(1)
|
Reflects the annual salary approved by our Board of Directors. Annual base salary adjustments, if any, are generally effective January 1, 2019.
|
(2)
|
The increase reflected in Mr. Starkloff's 2019 Base Salary is largely due to his appointment as President and Chief Operating Officer, effective October 25, 2018. On October 29, 2019, Mr. Starkloff was appointed as our CEO, effective as of February 1, 2020, and continues to serve as our President. Mr. Starkloff's base salary was increased to $700,000, effective as of February 1, 2020.
|
|
| |
32
|
| |
|
|
Performance
Goal |
| |
Weighting
|
| |
—%
|
| |
50%
|
| |
75%
|
| |
100%
|
| |
125%
|
| |
150%
|
| |
175%
|
| |
200%
|
| |
2019
Actual |
| |
2019
Goal Payout |
|
|
Revenue Growth
|
| |
50% for
Davern, Starkloff and Rust; 40% for Rapp and Roiko |
| |
<4%
|
| |
4.0%
|
| |
5.0%
|
| |
6.0%
|
| |
7.0%
|
| |
8.0%
|
| |
9.0%
|
| |
10.0%
|
| |
—%
|
| |
—%
|
|
|
Non-GAAP Operating Margin
|
| |
40%
|
| |
<18.3%
|
| |
18.3%
|
| |
18.8%
|
| |
19.3%
|
| |
19.5%
|
| |
19.7%
|
| |
20%
|
| |
20.2%
|
| |
18.6%
|
| |
50%
|
|
|
Key Employee Retention
|
| |
10%
|
| |
<94%
|
| |
94%
|
| |
94.5%
|
| |
95%
|
| |
95.5%
|
| |
96%
|
| |
96.5%
|
| |
97%
|
| |
94.5%
|
| |
75%
|
|
|
Operating Expense Budget
|
| |
10% for Rapp
and Roiko |
| |
|
| |
|
| |
|
| |
$842 million
|
| |
|
| |
|
| |
|
| |
|
| |
$795 million
|
| |
100%
|
|
|
| |
33
|
| |
|
|
Named Executive Officer
|
| |
2019
AIP Target % |
| |
2019
AIP Target $ |
| |
2019 AIP Bonus
Target Attainment % |
| |
Amount of
AIP Bonus Paid $ |
|
|
Alexander M. Davern
|
| |
100%
|
| |
$775,754
|
| |
28%
|
| |
$213,332
|
|
|
Eric H. Starkloff
|
| |
70%
|
| |
385,875
|
| |
28%
|
| |
106,116
|
|
|
Karen M. Rapp
|
| |
50%
|
| |
206,719
|
| |
38%
|
| |
77,520
|
|
|
Scott A. Rust
|
| |
40%
|
| |
154,000
|
| |
28%
|
| |
42,350
|
|
|
John C. Roiko
|
| |
30%
|
| |
87,000
|
| |
38%
|
| |
32,625
|
|
•
|
“Eligible earnings” included base salary, overtime pay and commissions, but excluded bonuses, equity awards, relocation payments and previous cash performance bonus payments; and
|
•
|
The “bonus payment percentage” for our Named Executive Officers was determined by multiplying 25% by: (i) our year-over-year organic revenue growth bonus percentage divided by the target revenue growth of 10% and (ii) our non-GAAP operating income as a percentage of revenue (limited by a cap) divided by the target non-GAAP operating income as a percentage of revenue of 18%. Expressed as a formula, the bonus payment percentage for our Named Executive Officers, was as follows:
|
Calendar Year Organic
Revenue Growth |
| |
X
|
| |
Calendar Year Non-GAAP
Operating Income% (not to exceed 20% for payout purposes) |
| |
X
|
| |
25%
|
| |
=
|
| |
Bonus Payment Percentage
|
10%
|
| |
|
| |
18%
|
| |
|
| |
|
| |
|
| |
|
|
| |
34
|
| |
|
|
Named Executive Officer
|
| |
Target PRSUs
|
| |
Target Grant Date
Fair Value (1) |
|
|
Alexander M. Davern (2)
|
| |
53,000
|
| |
$2,997,309
|
|
|
Eric H. Starkloff (3)
|
| |
16,625
|
| |
975,274
|
|
|
Karen M. Rapp (3)
|
| |
13,006
|
| |
762,972
|
|
|
Scott A. Rust (3)
|
| |
8,482
|
| |
497,580
|
|
|
John C. Roiko (3)
|
| |
1,696
|
| |
99,493
|
|
(1)
|
The fair values of PRSUs are estimated using a Monte Carlo simulation. The determination of fair value of the PRSUs by our stock price and a number of assumptions including the expected volatility, expected dividend yield and the risk-free interest rate. Our expected volatility at the date of grant was based on the historical volatilities of our stock and the companies included in the Index over the performance period.
|
(2)
|
Grant date fair value is based on the grant date of February 1, 2019. On October 29, 2019, we announced that Mr. Davern would remain as our CEO until January 31, 2020, and then transition from his service as our CEO into a strategic advisory role until May 5, 2020 (the “Termination Date”). Pursuant to Mr. Davern’s Transition Agreement, all of Mr. Davern's PRSUs will be forfeited as of the Termination Date.
|
(3)
|
Grant date fair value is based on the grant date of January 22, 2019.
|
|
Payout Level
|
| |
TSR Percentile Rank Against
the Russell 2000 Index |
| |
Payout Percentage of Target
Number of Shares |
|
|
Maximum
|
| |
≥80th Percentile
|
| |
200%
|
|
|
Stretch
|
| |
65th Percentile
|
| |
150%
|
|
|
Target
|
| |
55th Percentile
|
| |
100%
|
|
|
Threshold
|
| |
25th Percentile
|
| |
50%
|
|
|
None
|
| |
<25th Percentile
|
| |
0%
|
|
|
| |
35
|
| |
|
|
Named Executive Officer
|
| |
RSUs
(number of shares) |
| |
Grant
Date Fair Value (1) |
|
|
Alexander M. Davern (2)
|
| |
53,000
|
| |
$2,343,660
|
|
|
Eric H. Starkloff
|
| |
16,625
|
| |
762,589
|
|
|
Karen M. Rapp
|
| |
13,006
|
| |
596,585
|
|
|
Scott A. Rust
|
| |
8,482
|
| |
389,069
|
|
|
John C. Roiko
|
| |
1,696
|
| |
77,796
|
|
(1)
|
The fair values of RSUs are estimated using their market price on the date of grant.
|
(2)
|
The fair value of Mr. Davern’s 2019 RSU grant, excluding forfeitures pursuant to arrangements under the Transition Agreement as of October 28, 2019, was $723,464, based on NI’s closing stock price on such date of $40.95 per share. Mr. Davern is expected to receive upon signing of his Separation Agreement (as defined in the Transition Agreement) in May 2020, accelerated vesting of all outstanding equity awards subject solely to service-based vesting that would have vested from October 29, 2019 through May 5, 2021. The fair value of Mr. Davern’s 2019 RSU grant, after such acceleration under the Separation Agreement as of October 28, 2019, was $1,410,359, based on our closing stock price on such date of $40.95 per share.
|
|
| |
36
|
| |
|
|
| |
37
|
| |
|
|
| |
38
|
| |
|
•
|
our CEO hold shares of NI common stock having a value equal to at least three times his annual base salary;
|
•
|
our other Named Executive Officers hold shares of NI common stock having a value equal to at least two times his or her annual base salary; and
|
•
|
the non-employee members of our Board hold shares of NI common stock having a value equal to at least three times the amount of the annual retainer paid to such director for his or her service on our Board.
|
•
|
our CEO hold shares of NI common stock having a value equal to at least six times his annual base salary;
|
•
|
our other Named Executive Officers hold shares of NI common stock having a value equal to at least two times his or her annual base salary; and
|
•
|
the non-employee members of our Board hold shares of NI common stock having a value equal to at least six times the amount of the annual retainer paid to such director for his or her service on our Board.
|
|
| |
39
|
| |
|
*
|
The foregoing Report of the Compensation Committee is not to be deemed to be “soliciting material” or to be “filed” with the Securities Exchange Commission or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent we specifically request that such information be treated as soliciting material or we specifically incorporate it by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
|
|
| |
40
|
| |
|
|
Name and
Principal Position |
| |
Year
|
| |
Salary
|
| |
Bonus
(1) |
| |
Stock
Awards (2) |
| |
Non-Equity
Incentive Plan Compensation (3) |
| |
All Other
Compensation (4) |
| |
Total
|
|
|
Alexander M. Davern*
Chief Executive Officer |
| |
2019
|
| |
$775,754
|
| |
$1,000
|
| |
$7,474,792 (5)
|
| |
$213,332
|
| |
$23,096
|
| |
$8,487,974
|
|
|
2018
|
| |
725,004
|
| |
—
|
| |
2,213,100
|
| |
599,584
|
| |
11,208
|
| |
3,548,896
|
| |||
|
2017
|
| |
700,000
|
| |
—
|
| |
6,364,500
|
| |
429,800
|
| |
11,208
|
| |
7,505,508
|
| |||
|
Eric H. Starkloff**
President and Chief Operating Officer |
| |
2019
|
| |
551,250
|
| |
—
|
| |
1,737,863
|
| |
106,116
|
| |
50,645
|
| |
2,445,874
|
|
|
2018
|
| |
437,500
|
| |
—
|
| |
2,156,673
|
| |
228,813
|
| |
19,343
|
| |
2,842,329
|
| |||
|
2017
|
| |
400,000
|
| |
1,000
|
| |
855,750
|
| |
171,804
|
| |
36,195
|
| |
1,464,749
|
| |||
|
Karen M. Rapp
Executive Vice President, Chief Financial Officer and Treasurer |
| |
2019
|
| |
413,438
|
| |
—
|
| |
1,359,557
|
| |
77,520
|
| |
10,448
|
| |
1,860,964
|
|
|
2018
|
| |
393,750
|
| |
—
|
| |
983,600
|
| |
176,006
|
| |
5,002
|
| |
1,558,358
|
| |||
|
2017
|
| |
241,587
|
| |
—
|
| |
861,000
|
| |
80,546
|
| |
40,318
|
| |
1,223,450
|
| |||
|
Scott A. Rust
Senior Vice President, Global Product Research and Development |
| |
2019
|
| |
385,000
|
| |
—
|
| |
886,650
|
| |
42,350
|
| |
11,160
|
| |
1,325,160
|
|
|
2018
|
| |
370,620
|
| |
—
|
| |
801,880
|
| |
165,668
|
| |
10,588
|
| |
1,348,756
|
| |||
|
2017
|
| |
355,000
|
| |
—
|
| |
684,600
|
| |
125,670
|
| |
32,799
|
| |
1,198,069
|
| |||
|
John C. Roiko
Vice President, Finance and Chief Accounting Officer |
| |
2019
|
| |
290,000
|
| |
—
|
| |
177,288
|
| |
32,625
|
| |
9,543
|
| |
509,457
|
|
|
2018
|
| |
277,380
|
| |
1,000
|
| |
149,704
|
| |
71,286
|
| |
9,364
|
| |
508,735
|
| |||
|
2017
|
| |
268,000
|
| |
—
|
| |
136,920
|
| |
50,652
|
| |
59,226
|
| |
514,798
|
|
*
|
On October 29, 2019, NI announced that Mr. Davern would remain as CEO of NI until January 31, 2020, and then transition into a strategic advisory role until May 5, 2020.
|
**
|
On October 29, 2019, NI announced that Mr. Starkloff was appointed as our CEO, effective February 1, 2020, and continues to serve as President. Mr. Starkloff's base salary increased to $700,000 effective as of February 1, 2020. Mr. Starkloff was promoted to President and Chief Operating Officer in October 2018 and received a salary increase at that time. Mr. Starkloff’s salary shown for 2018 above is pro-rated based upon the number of days during the year the increased salary was in effect.
|
(1)
|
These amounts reflect cash payments under NI’s service award program under which all employees, including executives, are eligible to receive awards based on the number of years of continued employment with NI. Awards under this program have historically been in the range of $100 to $1,000 per award, with employees receiving $100 in cash at their 5th anniversary of service with NI and $1,000 in cash at their 10th, 15th, 20th and 25th anniversaries of service with NI.
|
|
| |
41
|
| |
|
(2)
|
The amounts included in the table for stock awards is the dollar amount recognized for financial statement reporting purposes with respect to the applicable fiscal year in accordance with FASB ASC Topic 718. These dollar amounts reflect NI’s accounting expense for these stock awards and may not correspond to the actual value that will be recognized by the Named Executive Officers. The dollar amount recognized for financial statement reporting purposes is the aggregate grant date fair value, which is expensed monthly based on the estimated vesting period of the corresponding grant. The estimated vesting period of grants of RSUs to Named Executive Officers ranges from 36 months to 108 months. The fair values of target PRSUs at the grant date are estimated using a Monte Carlo simulation. The determination of fair value of PRSUs is affected by our stock price and a number of assumptions including the expected volatility, expected dividend yield and the risk-free interest rate. Our expected volatility at the date of grant was based on the historical volatilities of our stock and the companies included in the Index over the performance period. Although the assumed probable outcome as of the grant date was achievement at the target level, the terms of the awards for PRSUs also provide for achievement of up to 200% of the target amount (the “maximum”). See Note 5 below for additional information regarding Mr. Davern's equity awards. The table below presents the aggregate grant date fair value of stock awards for the periods presented assuming achievement at the maximum level for PRSUs:
|
|
Name and
Principal Position |
| |
Year
|
| |
RSU Award
|
| |
PRSU Award at
Maximum Level |
| |
Total
|
|
|
Alexander M. Davern
Chief Executive Officer |
| |
2019
|
| |
$2,343,660
|
| |
$4,687,320
|
| |
$7,030,980
|
|
|
2018
|
| |
2,213,100
|
| |
—
|
| |
2,213,100
|
| |||
|
2017
|
| |
6,364,500
|
| |
—
|
| |
6,364,500
|
| |||
|
Eric H. Starkloff
President and Chief Operating Officer |
| |
2019
|
| |
762,589
|
| |
1,525,178
|
| |
2,287,767
|
|
|
2018
|
| |
2,156,673
|
| |
—
|
| |
2,156,673
|
| |||
|
2017
|
| |
855,750
|
| |
—
|
| |
855,750
|
| |||
|
Karen M. Rapp
Executive Vice President, Chief Financial Officer and Treasurer |
| |
2019
|
| |
596,585
|
| |
1,193,170
|
| |
1,789,755
|
|
|
2018
|
| |
983,600
|
| |
—
|
| |
983,600
|
| |||
|
2017
|
| |
861,000
|
| |
—
|
| |
861,000
|
| |||
|
Scott A. Rust
Senior Vice President, Global Product Research and Development |
| |
2019
|
| |
389,069
|
| |
778,139
|
| |
1,167,208
|
|
|
2018
|
| |
801,880
|
| |
—
|
| |
801,880
|
| |||
|
2017
|
| |
684,600
|
| |
—
|
| |
684,600
|
| |||
|
John C. Roiko
Vice President, Finance and Chief Accounting Officer |
| |
2019
|
| |
77,796
|
| |
155,591
|
| |
233,387
|
|
|
2018
|
| |
149,704
|
| |
—
|
| |
149,704
|
| |||
|
2017
|
| |
136,920
|
| |
—
|
| |
136,920
|
|
(3)
|
These amounts reflect the sum of the amounts earned by Named Executives Officers under the CPB and AIP for 2019, 2018 and 2017, as shown in the table below:
|
|
Named Executive Officer
|
| |
Year
|
| |
CPB
|
| |
AIP
|
| |
Total
|
|
|
Alexander M. Davern
|
| |
2019
|
| |
$—
|
| |
$ 213,332
|
| |
$ 213,332
|
|
|
2018
|
| |
48,581
|
| |
551,003
|
| |
599,584
|
| |||
|
2017
|
| |
37,800
|
| |
392,000
|
| |
429,800
|
| |||
|
Eric H. Starkloff
|
| |
2019
|
| |
—
|
| |
106,116
|
| |
106,116
|
|
|
2018
|
| |
29,313
|
| |
199,500
|
| |
228,813
|
| |||
|
2017
|
| |
21,804
|
| |
150,000
|
| |
171,804
|
| |||
|
Karen M. Rapp
|
| |
2019
|
| |
—
|
| |
77,520
|
| |
77,520
|
|
|
2018
|
| |
26,381
|
| |
149,625
|
| |
176,006
|
| |||
|
2017
|
| |
13,046
|
| |
67,500
|
| |
80,546
|
| |||
|
Scott A. Rust
|
| |
2019
|
| |
—
|
| |
42,350
|
| |
42,350
|
|
|
2018
|
| |
24,832
|
| |
140,836
|
| |
165,668
|
| |||
|
2017
|
| |
19,170
|
| |
106,500
|
| |
125,670
|
| |||
|
John C. Roiko
|
| |
2019
|
| |
—
|
| |
32,625
|
| |
32,625
|
|
|
2018
|
| |
18,584
|
| |
52,702
|
| |
71,286
|
| |||
|
2017
|
| |
14,472
|
| |
36,180
|
| |
50,652
|
|
|
| |
42
|
| |
|
(4)
|
These amounts represent NI contributions to the 401(k) Plan on behalf of the Named Executive Officers, the full dollar value of premiums paid by NI for term life insurance on behalf of the Named Executive Officers for 2019, 2018 and 2017, and certain other payments in the amounts shown below:
|
|
Named Executive Officer
|
| |
Year
|
| |
NI
Contributions to 401(k) Plan |
| |
Term Life
Insurance Premium Paid by NI for Benefit of the Insured |
| |
Other *
|
| |
Total
|
|
|
Alexander M. Davern
|
| |
2019
|
| |
$10,800
|
| |
$360
|
| |
$11,936
|
| |
$23,096
|
|
|
2018
|
| |
10,800
|
| |
408
|
| |
—
|
| |
11,208
|
| |||
|
2017
|
| |
10,800
|
| |
408
|
| |
—
|
| |
11,208
|
| |||
|
Eric H. Starkloff
|
| |
2019
|
| |
8,748
|
| |
360
|
| |
41,537
|
| |
50,645
|
|
|
2018
|
| |
8,748
|
| |
408
|
| |
10,187
|
| |
19,343
|
| |||
|
2017
|
| |
8,748
|
| |
408
|
| |
27,039
|
| |
37,195
|
| |||
|
Karen M. Rapp
|
| |
2019
|
| |
10,088
|
| |
360
|
| |
—
|
| |
10,448
|
|
|
2018
|
| |
4,594
|
| |
408
|
| |
—
|
| |
5,002
|
| |||
|
2017
|
| |
—
|
| |
318
|
| |
40,000
|
| |
40,318
|
| |||
|
Scott A. Rust
|
| |
2019
|
| |
10,800
|
| |
360
|
| |
—
|
| |
11,160
|
|
|
2018
|
| |
10,180
|
| |
408
|
| |
—
|
| |
10,588
|
| |||
|
2017
|
| |
8,640
|
| |
408
|
| |
23,751
|
| |
32,799
|
| |||
|
John C. Roiko
|
| |
2019
|
| |
9,183
|
| |
360
|
| |
—
|
| |
9,543
|
|
|
2018
|
| |
8,956
|
| |
408
|
| |
—
|
| |
9,364
|
| |||
|
2017
|
| |
8,818
|
| |
408
|
| |
50,000
|
| |
59,226
|
|
*
|
For 2019, the dollar amounts listed in “Other” reflect fees and expenses paid by NI related to the negotiation of Mr. Davern's Transition Agreement and Mr. Starkloff's Executive Employment Agreement and amounts paid by NI in connection with Mr. Starkloff’s participation in an incentive award trip. For 2018, the dollar amounts listed in “Other” reflect amounts paid by NI in connection with Mr. Starkloff’s participation in an incentive award trip. For 2017, the dollar amounts listed in “Other” reflect amounts paid by NI in connection with Mr. Starkloff and Mr. Rust’s participation in an incentive award trip, a signing bonus paid to Ms. Rapp upon her employment as Chief Financial Officer and a bonus paid to Mr. Roiko as Interim Chief Financial Officer.
|
(5)
|
The disclosed number reflects a calculation made pursuant to FASB ASC Topic 718 which requires disclosure of the combined value of Mr. Davern's Original Grant Value (defined below) and the incremental fair value of the unvested RSUs described below. Mr. Davern, our Chief Executive Officer during 2019, was granted 53,000 RSUs and 53,000 PRSUs in February 2019 with an aggregate grant date fair value of $5,340,969 (“Original Grant Value”). On October 29, 2019, we announced that Mr. Davern would remain as CEO of NI until January 31, 2020, and then transition from his service as CEO of NI into a strategic advisory role until May 5, 2020. Pursuant to Mr. Davern’s Transition Agreement, effective October 28, 2019, all of Mr. Davern’s PRSUs are forfeited and Mr. Davern is expected to receive upon signing of his Separation Agreement in May 2020, accelerated vesting of all outstanding equity awards subject solely to service-based vesting that would have vested from October 29, 2019 through May 5, 2021. All of Mr. Davern’s unvested RSUs subject to outstanding equity awards other than those subject to such accelerated vesting are forfeited as of the Termination Date pursuant to his Transition Agreement. The amount included in the table for Mr. Davern’s stock awards in 2019 reflects the incremental fair value, computed in accordance with FASB ASC Topic 718, associated with the acceleration of such RSUs of $2,133,823 plus the Original Grant Value. Such amount does not deduct a value for RSUs or PRSUs forfeited by Mr. Davern upon signing of the Separation Agreement. The total aggregate grant date fair value of the forfeited RSUs and PRSUs is $5,161,310. Had the total aggregate fair value of the forfeited RSUs and PRSUs been deducted, the amount included in the table for stock awards would have been $2,313,482.
|
|
| |
43
|
| |
|
|
Name
|
| |
Grant
Date (1) |
| |
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards |
| |
Estimated Future Payouts Under
Equity Incentive Plan Awards: Number of Shares of Stock or Stock Units |
| |
All Other
Stock Awards: Number of Shares of Stock or Units (5) |
| |
Aggregate
Grant Date Fair Value of Stock Awards |
| ||||||||||||
|
Threshold
(2) |
| |
Target
(3) |
| |
Maximum
(4) |
| |
Threshold
|
| |
Target
|
| |
Maximum
|
| ||||||||||||
|
Alexander M. Davern
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Incentive Program (AIP)
|
| |
|
| |
—
|
| |
$775,754
|
| |
$1,551,508
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
Annual Company Performance Bonus Program (CPB)
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
2015 Incentive Plan - 2019 RSU Grant
|
| |
2/1/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
53,000
|
| |
$2,343,660
|
|
|
2015 Incentive Plan - 2019 PRSU Grant
|
| |
2/1/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
26,500
|
| |
53,000
|
| |
106,000
|
| |
53,000
|
| |
2,997,309
|
|
|
RSU Modification (6)
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
52,108
|
| |
2,133,823
|
|
|
Eric H. Starkloff
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Incentive Program (AIP)
|
| |
|
| |
—
|
| |
385,875
|
| |
771,750
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
Annual Company Performance Bonus Program (CPB)
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
2015 Incentive Plan - RSUs
|
| |
1/22/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
16,625
|
| |
762,589
|
|
|
2015 Incentive Plan - PRSUs
|
| |
1/22/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
8,312.5
|
| |
16,625
|
| |
33,250
|
| |
16,625
|
| |
975,274
|
|
|
Karen M. Rapp
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Incentive Program (AIP)
|
| |
|
| |
—
|
| |
206,719
|
| |
392,766
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
Annual Company Performance Bonus Program (CPB)
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
2015 Incentive Plan - RSUs
|
| |
1/22/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
13,006
|
| |
596,585
|
|
|
2015 Incentive Plan - PRSUs
|
| |
1/22/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
6,503
|
| |
13,006
|
| |
26,012
|
| |
13,006
|
| |
762,972
|
|
|
Scott A. Rust
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Incentive Program (AIP)
|
| |
|
| |
—
|
| |
154,000
|
| |
308,000
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
Annual Company Performance Bonus Program (CPB)
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
2015 Incentive Plan - RSUs
|
| |
1/22/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
8,482
|
| |
389,069
|
|
|
2015 Incentive Plan - PRSUs
|
| |
1/22/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
4,241
|
| |
8,482
|
| |
16,964
|
| |
8,482
|
| |
497,580
|
|
|
John C. Roiko
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
Annual Incentive Program (AIP)
|
| |
|
| |
—
|
| |
87,000
|
| |
165,300
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
Annual Company Performance Bonus Program (CPB)
|
| |
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
—
|
| |
—
|
|
|
2015 Incentive Plan - RSUs
|
| |
1/22/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
|
| |
|
| |
|
| |
1,696
|
| |
77,796
|
|
|
2015 Incentive Plan - PRSUs
|
| |
1/22/2019
|
| |
—
|
| |
—
|
| |
—
|
| |
848
|
| |
1,696
|
| |
3,392
|
| |
1,696
|
| |
99,493
|
|
(1)
|
In accordance with Item 402(d)(2)(ii) of Regulation S-K, only grant dates for equity-based awards are reported in this table.
|
(2)
|
The AIP and the CPB did not set a threshold amount. See “Compensation Discussion and Analysis” for a description of these programs.
|
(3)
|
The AIP and the CPB do not set target amounts. See “Compensation Discussion and Analysis” for a further description of these programs. In accordance with Instruction 2 to Item 402(d) of Regulation S-K, the amounts included under the “Target” column represent the amounts earned in the fiscal year ended December 31, 2019 by the named executive officer under the AIP and the CPB, as applicable.
|
(4)
|
The CPB does not set maximum amounts. See “Compensation Discussion and Analysis” for a further description of this program. The amounts set forth in the table above represent the maximum amounts that were achievable under the AIP for 2019.
|
(5)
|
For 2019, the Named Executive Officer RSU grants had three-year annual vesting with a vesting commencement date of May 1, 2019.
|
(6)
|
We granted these RSUs to Mr. Davern under our equity incentive plans between 2011 and 2019. Their vesting is expected to be accelerated upon signing of the Separation Agreement in connection with Mr. Davern’s Transition Agreement, as described in Note (5) to the Summary Compensation Table. The Transition Agreement was effective as of October 28, 2019. The amount shown in the “Aggregate Grant Date Fair Value of Stock Awards” column represents the incremental change in the grant date fair value under FASB ASC Topic 718 that resulted from the acceleration of vesting.
|
|
| |
44
|
| |
|
|
|
| |
Stock Awards
|
| |||||||||
|
Named Executive Officer
|
| |
Number of
shares or units of stock that have not vested (#) (1) |
| |
Market value
of shares or units of stock that have not vested ($) (2) |
| |
Equity
Incentive plan awards; number of unearned shares, units or other rights that have not vested (#) (3) |
| |
Equity
Incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($) (4) |
|
|
Alexander M. Davern
|
| |
163,624
|
| |
$6,927,840
|
| |
53,000
|
| |
$1,862,228
|
|
|
Eric H. Starkloff
|
| |
113,423
|
| |
4,802,330
|
| |
16,625
|
| |
605,938
|
|
|
Karen M. Rapp
|
| |
38,006
|
| |
1,609,174
|
| |
13,006
|
| |
474,035
|
|
|
Scott A. Rust
|
| |
55,589
|
| |
2,353,638
|
| |
8,482
|
| |
309,147
|
|
|
John C. Roiko
|
| |
13,875
|
| |
587,468
|
| |
1,696
|
| |
61,815
|
|
(1)
|
Reflects RSUs granted. The RSUs were granted under the 2010 Incentive Plan and 2015 Incentive Plan. RSUs granted under the 2010 Incentive Plan and 2015 Incentive Plan prior to April 2016 vest as to 1/10th of the RSUs on each anniversary of the vesting commencement date, subject to acceleration of vesting in the event that NI achieves certain financial performance goals. The maximum amount of vesting acceleration is an additional 10% of the award per year. For grants made pursuant to the 2010 Incentive Plan, the number of RSUs that can have vesting acceleration each year is determined based upon the extent to which NI attains 40% year over year revenue growth and 18% non-GAAP operating profit as a percent of revenue. Specifically, if NI achieves 40% year over year revenue growth and 18% non-GAAP operating profit as a percent of revenue, then 10% of the total number of RSUs subject to the award shall accelerate. For grants made pursuant to the 2015 Incentive Plan prior to April 2016, the number of RSUs that can have vesting acceleration each year is determined based upon the extent to which NI attains 20% year over year revenue growth and 18% non-GAAP operating profit as a percent of revenue. Specifically, if NI achieves 20% year-over-year revenue growth and 18% non-GAAP operating profit as a percent of revenue, then 10% of the total number of RSUs subject to the award shall accelerate. The earliest an award eligible for acceleration may fully vest is in five years. RSUs granted under the 2010 Incentive Plan and 2015 Incentive Plan prior to April 2016 have a vesting term of ten years. RSUs granted under the 2015 Incentive Plan from April 2016 to April 2018 vest as to 25% of the RSUs on each anniversary of the vesting commencement date. In October 2018, Mr. Starkloff received a 25,000 RSU award that will vest 100% on the anniversary of the vesting commencement date. In January 2019 and thereafter RSUs vest as to 1/3rd of the RSUs on each anniversary of the vesting commencement date. These RSUs are subject to the continued service of the Named Executive Officer on each such vesting date. The vesting commencement dates for these awards are set forth in the table below.
|
|
| |
45
|
| |
|
|
Named Executive Officer
|
| |
Number of
Shares or Units of Stock That Have Not Vested |
| |
Grant Date
|
| |
Vesting
Commencement Date |
|
|
Alexander M. Davern
|
| |
53,000
|
| |
2/1/2019
|
| |
5/1/2019
|
|
|
|
| |
33,750
|
| |
4/25/2018
|
| |
5/1/2018
|
|
|
|
| |
25,000
|
| |
4/25/2017
|
| |
5/1/2017
|
|
|
|
| |
—
|
| |
1/24/2017
|
| |
12/15/2017
|
|
|
|
| |
16,295
|
| |
4/26/2016
|
| |
5/1/2016
|
|
|
|
| |
14,397
|
| |
4/21/2015
|
| |
5/1/2015
|
|
|
|
| |
6,948
|
| |
4/22/2014
|
| |
5/1/2014
|
|
|
|
| |
5,415
|
| |
4/23/2013
|
| |
5/1/2013
|
|
|
|
| |
6,127
|
| |
4/18/2012
|
| |
5/1/2012
|
|
|
|
| |
2,692
|
| |
4/20/2011
|
| |
5/1/2011
|
|
|
Eric H. Starkloff
|
| |
16,625
|
| |
1/22/2019
|
| |
5/1/2019
|
|
|
|
| |
25,000
|
| |
10/23/2018
|
| |
5/1/2019
|
|
|
|
| |
16,305
|
| |
4/25/2018
|
| |
5/1/2018
|
|
|
|
| |
12,500
|
| |
4/25/2017
|
| |
5/1/2017
|
|
|
|
| |
16,295
|
| |
4/26/2016
|
| |
5/1/2016
|
|
|
|
| |
14,397
|
| |
4/21/2015
|
| |
5/1/2015
|
|
|
|
| |
6,948
|
| |
4/22/2014
|
| |
5/1/2014
|
|
|
|
| |
2,707
|
| |
4/23/2013
|
| |
5/1/2013
|
|
|
|
| |
1,838
|
| |
4/18/2012
|
| |
5/1/2012
|
|
|
|
| |
808
|
| |
4/20/2011
|
| |
5/1/2011
|
|
|
Karen M. Rapp
|
| |
13,006
|
| |
1/22/2019
|
| |
5/1/2019
|
|
|
|
| |
15,000
|
| |
4/25/2018
|
| |
5/1/2018
|
|
|
|
| |
10,000
|
| |
7/25/2017
|
| |
5/1/2017
|
|
|
Scott A. Rust
|
| |
8,482
|
| |
1/22/2019
|
| |
5/1/2019
|
|
|
|
| |
12,228
|
| |
4/25/2018
|
| |
5/1/2018
|
|
|
|
| |
10,000
|
| |
4/25/2017
|
| |
5/1/2017
|
|
|
|
| |
9,776
|
| |
4/26/2016
|
| |
5/1/2016
|
|
|
|
| |
8,639
|
| |
4/21/2015
|
| |
5/1/2015
|
|
|
|
| |
2,316
|
| |
4/22/2014
|
| |
5/1/2014
|
|
|
|
| |
1,625
|
| |
4/23/2013
|
| |
5/1/2013
|
|
|
|
| |
1,715
|
| |
4/18/2012
|
| |
5/1/2012
|
|
|
|
| |
808
|
| |
4/20/2011
|
| |
5/1/2011
|
|
|
John C. Roiko
|
| |
1,696
|
| |
1/22/2019
|
| |
5/1/2019
|
|
|
|
| |
2,283
|
| |
4/25/2018
|
| |
5/1/2018
|
|
|
|
| |
2,000
|
| |
4/25/2017
|
| |
5/1/2017
|
|
|
|
| |
2,608
|
| |
4/26/2016
|
| |
5/1/2016
|
|
|
|
| |
2,303
|
| |
4/21/2015
|
| |
5/1/2015
|
|
|
|
| |
867
|
| |
4/23/2013
|
| |
5/1/2013
|
|
|
|
| |
1,471
|
| |
4/18/2012
|
| |
5/1/2012
|
|
|
|
| |
647
|
| |
4/20/2011
|
| |
5/1/2011
|
|
(2)
|
Calculated by multiplying the number of shares of RSUs by $42.34, the closing price of our Common Stock on December 31, 2019.
|
(3)
|
Reflects PRSU awards granted. The PRSU awards were made under the 2015 Incentive Plan. As previously noted, Mr. Davern's PRSUs are forfeited as of the Termination Date pursuant to the Transition Agreement.
|
(4)
|
The fair values of PRSUs are as of on December 31, 2019 and estimated using a Monte Carlo simulation. The determination of fair value of the PRSUs is affected by our stock price and a number of assumptions including the expected volatility, expected dividend yield and the risk-free interest rate. Our expected volatility at the date of grant was based on the historical volatilities of our stock and the companies included in the Index over the performance period. As previously noted, Mr. Davern's PRSUs are forfeited as of the Termination Date pursuant to the Transition Agreement.
|
|
| |
46
|
| |
|
|
|
| |
Stock Awards
|
| |||
|
Named Executive Officer
|
| |
Number of
Shares Acquired on Vesting |
| |
Value
Realized on Vesting |
|
|
Alexander M. Davern (1)
|
| |
38,831
|
| |
$1,828,940
|
|
|
Alexander M. Davern (2)
|
| |
50,000
|
| |
2,127,500
|
|
|
Eric H. Starkloff (1)
|
| |
21,946
|
| |
1,033,657
|
|
|
Karen M. Rapp (1)
|
| |
10,000
|
| |
471,000
|
|
|
Scott A. Rust (1)
|
| |
15,403
|
| |
725,481
|
|
|
John C. Roiko (1)
|
| |
4,356
|
| |
205,168
|
|
(1)
|
Calculated by using the NI common stock closing price for the day immediately preceding the vesting date of May 1, 2019, which was $47.10 per share.
|
(2)
|
Calculated by using the NI common stock closing price for the day immediately preceding the vesting date of December 16, 2019, which was $42.55 per share.
|
|
| |
47
|
| |
|
|
| |
48
|
| |
|
•
|
any person becomes the beneficial owner of fifty percent (50%) or more of the total voting power represented by NI’s outstanding voting securities;
|
•
|
existing members of NI’s Board of Directors cease to constitute at least a majority of the Board of Directors;
|
•
|
a public announcement is made of a tender or exchange offer for fifty percent (50%) or more of the outstanding voting securities of NI and it is not opposed by NI’s Board of Directors;
|
•
|
the stockholders of NI approve a merger or consolidation of NI with any other corporation or partnership, unless NI stockholders prior to such transaction will hold a majority of the voting power of the surviving or acquiring entity; or
|
•
|
the stockholders of NI approve a plan of complete liquidation of NI or an agreement for the sale or disposition by NI of all or substantially all of NI’s assets.
|
•
|
any person becomes the beneficial owner of fifty percent (50%) or more of the total voting power represented by NI’s outstanding voting securities;
|
•
|
the sale or disposition by NI of all or substantially all of its assets;
|
•
|
existing members of NI’s Board of Directors cease to constitute at least a majority of the Board of Directors; or
|
|
| |
49
|
| |
|
•
|
the consummation of a merger or consolidation of NI with any other corporation, unless NI stockholders prior to such transaction will hold at least 50% of the voting power of the surviving or acquiring entity.
|
|
Named Executive Officer
|
| |
RSUs
|
| |
PRSUs
|
|
|
Alexander M. Davern
|
| |
$6,927,840
|
| |
$2,244,020
|
|
|
Eric H. Starkloff
|
| |
4,802,330
|
| |
703,903
|
|
|
Karen M. Rapp
|
| |
1,609,174
|
| |
550,674
|
|
|
Scott A. Rust
|
| |
2,353,638
|
| |
359,128
|
|
|
John C. Roiko
|
| |
587,468
|
| |
71,809
|
|
•
|
We selected December 6, 2017, the date of the most recent and validated global employee data file, as the date upon which we identified the median employee. We used the same median employee as last year because we believe there has been no change in our employee population or employee compensation arrangements during 2019 that would significantly impact the pay ratio disclosure.
|
•
|
We excluded employees in those countries that represented less than 0.5% of our total global population. The total number of employees subject to this exclusion equaled 4.6% of our total global population, as permitted by the applicable SEC de minimis rule. The jurisdictions from which those employees are being excluded, and the approximate number of employees excluded from each jurisdiction, are as follows: Lebanon, 34, Canada, 31, Sweden, 29, Netherlands, 27, Ireland, 24, Australia, 22, Switzerland, 22, Philippines, 20, Spain, 18, Finland, 16, Poland, 14, Belgium, 12, Israel, 11, Thailand, 11, Czech Republic, 10, Hong Kong, 10, Austria, 9, Indonesia, 9, Colombia, 8, Turkey, 8, South Africa, 7, Denmark, 5, Viet Nam, 5, Egypt, 3, Slovenia, 3, Chile, 2, New Zealand, 2, and Norway, 2. The total number of U.S. and non-U.S.
|
|
| |
50
|
| |
|
•
|
We identified the “median employee” taking all employees, excluding the CEO and the other excluded groups described above, and ranking them based on annualized U.S. dollar equivalent base salary, converting the base salary in local currency utilizing the latest exchange rate table provided by our finance team.
|
•
|
After identifying the “median employee,” we identified and calculated the elements of such employee’s compensation for fiscal year 2019 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $49,581.
|
•
|
With respect to the annual total compensation for the CEO, we used the amount reported in the “Total” column of our 2019 Summary Compensation Table.
|
|
Plan category
|
| |
Number of
shares to be issued upon vesting of outstanding options, warrants and rights |
| |
Weighted-
average exercise price of outstanding options, warrants and rights (2) |
| |
Number of
shares remaining for future issuance under equity compensation plans |
|
|
Equity compensation plans approved by stockholders
|
| |
3,289,637(1)
|
| |
—
|
| |
6,006,541(3)
|
|
|
Equity compensation plans not approved by stockholders
|
| |
—
|
| |
—
|
| |
—
|
|
|
Total
|
| |
3,289,637
|
| |
—
|
| |
6,006,541
|
|
(1)
|
Includes 3,289,637 shares to be issued upon the vesting of outstanding RSUs.
|
(2)
|
All awards were RSUs which do not have an exercise price. The weighted average grant date fair value per share of outstanding RSUs was $41.01.
|
(3)
|
Includes 1,920,771 shares available for future issuance under the 2015 Incentive Plan and 4,085,770 shares available for future issuance under the ESPP.
|
|
| |
51
|
| |
|
*
|
The foregoing Report of the Audit Committee is not to be deemed to be “soliciting material” or to be “filed” with the Securities Exchange Commission or subject to Regulation 14A or 14C or to the liabilities of Section 18 of the Securities Exchange Act of 1934, except to the extent we specifically request that such information be treated as soliciting material or we specifically incorporate it by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
|
|
| |
52
|
| |
|
|
| |
53
|
| |
|
|
| |
54
|
| |
|
|
Name of Individual or Group
|
| |
RSUs
Granted (#) |
| |
Grant Date
Fair Value of RSUs |
| |
PRSUs
Granted (#)(1) |
| |
Grant Date
Fair Value of PRSUs ($) |
|
|
Alexander M. Davern
Former Chief Executive Officer |
| |
53,000
|
| |
$2,343,660
|
| |
106,000
|
| |
$4,687,320
|
|
|
Eric H. Starkloff
President and Chief Executive Officer |
| |
16,625
|
| |
762,589
|
| |
33,250
|
| |
1,525,178
|
|
|
Karen M. Rapp
Executive Vice President, Chief Financial Officer and Treasurer |
| |
13,006
|
| |
596,585
|
| |
26,012
|
| |
1,193,170
|
|
|
Scott A. Rust
Senior Vice President, Global Product Research and Development |
| |
8,482
|
| |
389,069
|
| |
16,964
|
| |
778,139
|
|
|
John C. Roiko
Vice President, Finance and Chief Accounting Officer |
| |
1,696
|
| |
77,796
|
| |
3,392
|
| |
155,591
|
|
|
All current executive officers as a group (5 people)
|
| |
77,297
|
| |
3,554,181
|
| |
76,226
|
| |
3,496,487
|
|
|
All current non-employee directors as a group (7 people)
|
| |
29,592
|
| |
1,400,293
|
| |
—
|
| |
—
|
|
|
All employees who are not executive officers as a group
|
| |
1,106,689
|
| |
50,863,360
|
| |
109,392
|
| |
4,842,911
|
|
(1)
|
Amounts indicated are based on maximum achievement of the applicable performance goals.
|
|
| |
55
|
| |
|
|
| |
56
|
| |
|
|
| |
57
|
| |
|
|
| |
58
|
| |
|
|
| |
59
|
| |
|
|
| |
|
| |
|
•
|
to attract and retain the best available personnel for positions of substantial responsibility,
|
•
|
to provide incentives to individuals who perform services to the Company, and
|
•
|
to promote the success of the Company’s business.
|
|
| |
A-1
|
| |
|
|
| |
A-2
|
| |
|
|
| |
A-3
|
| |
|
|
| |
A-4
|
| |
|
|
| |
A-5
|
| |
|
|
| |
A-6
|
| |
|
|
| |
A-7
|
| |
|
|
| |
A-8
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A-9
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