¨
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Preliminary Proxy Statement
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¨
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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy Statement
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¨
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to §240.14a-12
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x
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth amount on which the filing fee is calculated and state how it was determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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¨
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Fee paid previously with preliminary materials.
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¨
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing:
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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1.
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Election of two Class I directors;
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2.
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Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2019; and
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3.
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Such other business as may properly come before the Meeting.
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IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 9, 2019
Our Proxy Statement, together with the form of proxy card, and
our 2018 Annual Report are available at:
www.envisionreports.com/APY
|
Time and Date:
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1:00 p.m. Central time on Thursday, May 9, 2019
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Place:
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2445 Technology Forest Boulevard
Building 4, 12
th
Floor
The Woodlands, Texas 77381
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Eligibility to Vote:
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You are entitled to vote if you were a shareholder of record at the close of business on March 11, 2019.
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Board’s Voting
Recommendation
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Page Reference
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Election of Mamatha Chamarthi and Stephen Todd as Class I directors until the 2022 annual meeting of shareholders (
Item 1
)
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FOR EACH DIRECTOR NOMINEE
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11
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Ratify the appointment of PricewaterhouseCoopers LLP as independent registered public accounting firm for 2019 (
Item 2
)
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FOR
|
|
21
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You may submit your vote by Internet, telephone, mail or in person.
|
|||
|
INTERNET
www.envisionreports.com/APY
until 1:00 a.m.
Central Time
On May 9, 2019
|
BY TELEPHONE
1-800-652-8683
until 1:00 a.m.
Central Time
On May 9, 2019
|
BY MAIL
Completing, signing, dating and returning your proxy or voting instruction card
before May 9, 2019
|
IN PERSON
at the Meeting:
If you were a shareholder of record at the close of business on March 11, 2019, we have a record of your ownership.
If your shares are held in the name of a broker, nominee, or other intermediary, you must bring proof of ownership with you to the meeting.
Attendees will be asked to present valid picture identification, such as a driver’s license or passport.
|
|
If you hold shares through Apergy’s
401(k) Savings Plan
or Dover Corporation's
401(k) plan
, your vote must be
received
by
1:00 a.m., Central Time on May 7, 2019 to be counted.
Those votes cannot be changed or revoked after that time and those shares cannot be voted in person at the Annual Meeting.
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Name
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Age
|
Principal Occupation
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Independent
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Committee Memberships
|
Other Public Company Boards
|
Nominees Standing for Election
|
|||||
Mamatha Chamarthi
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49
|
SVP & Chief Digital Officer, ZF Friedrichshafen AG
|
Yes
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COMP
|
None
|
Stephen M. Todd
|
70
|
Retired Global Vice Chairman, Ernst & Young Global Ltd.
|
Yes
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AUD
|
Dover Corp.; PNC Funds
|
|
|
|
|
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Continuing Directors with Terms Expiring in 2020
|
|||||
Gary P. Luquette
|
63
|
Retired Chief Executive Officer, Frank’s International N.V.
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Yes
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COMP, G&N
|
McDermott; Southwestern Energy
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Daniel W. Rabun
|
64
|
Retired Chief Executive Officer, Ensco plc
|
Yes
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COMP, G&N
|
Apache Corp.; Golar LNG
|
|
|
|
|
|
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Continuing Directors with Terms Expiring in 2021
|
|||||
Kenneth M. Fisher
|
57
|
Chief Financial Officer, Noble Energy Inc.
|
Yes
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AUD
|
Noble Midstream Partners LP
|
Sivasankaran Somasundaram
|
53
|
President & Chief Executive Officer, Apergy
|
No
|
|
None
|
Stephen K. Wagner
|
71
|
Retired Partner, Deloitte LLP
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Yes
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AUD, G&N
|
Dover Corp.
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Tenure
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Age
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Diversity
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Independence
|
|
|
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|
•
|
Independent Chairman of the Board
|
•
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6 of 7 directors are independent
|
•
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All members of the Audit Committee, Compensation Committee, and Governance and Nominating Committee are independent under the rules of the New York Stock Exchange (“NYSE”)
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•
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Stock ownership guidelines for directors and senior officers
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•
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Executive compensation clawback policy
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•
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Directors and officers of the Company are prohibited from pledging (subject to limited exceptions) or hedging shares of our stock
|
•
|
Executive sessions of independent directors
|
•
|
We achieved 2018 revenue growth of 20% from 2017, compared to initial guidance of 16% growth;
|
•
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Cash generation was strong with $164 million cash from operating activities in 2018;
|
•
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We repaid $45 million of debt in the two quarters post-spin and reduced our leverage from 2.8x at the time of the spin-off to 2.2x at December 31, 2018; and
|
•
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We successfully transitioned from Dover Corporation and ended all transition services agreements.
|
•
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83% of our CEO’s target compensation was performance based; and
|
•
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64% of the target compensation of our other named executive officers was performance based.
|
•
|
Correlate executive pay with our performance on both a short-term and long-term basis;
|
•
|
Emphasize operating performance and support our business strategies; and
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•
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Link executive pay to measures that drive shareholder value.
|
Name
|
Age
|
Title
|
Sivasankaran (“Soma”) Somasundaram
|
53
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President & Chief Executive Officer
|
Jay A. Nutt
|
56
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Senior Vice President and Chief Financial Officer
|
Julia Wright
|
43
|
Senior Vice President, General Counsel and Secretary
|
Paul E. Mahoney
|
55
|
President, Production and Automation Technologies
|
Rob Galloway
|
52
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President, Drilling Technologies
|
•
|
Shareholder proposals submitted for inclusion under rules of the Securities and Exchange Commission (“SEC”) in the proxy statement for our 2020 annual meeting of shareholders must be submitted in writing and received by our Secretary on or before November 26, 2019.
|
•
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Under our bylaws, shareholder proposals to be presented in person at the 2020 annual meeting of shareholders (but not included in the 2020 proxy statement) must be submitted in writing and received by our Secretary not earlier than the close of business on January 10, 2020 and not later than the close of business on February 7, 2020.
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|
•
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Empowering management and employee accountability, commitment and individual contribution;
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•
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Establishing plans and achieving goals for continual improvement focused on zero incidents and conservation of energy and resources, while reducing the environmental footprint;
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•
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Integrating HSE elements into all business activities;
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•
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Providing training, controls and protective measures as a result of health and safety hazards plus environmental impacts;
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•
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Collaborating with customers, regulators, contractors, suppliers and others to improve overall performance;
|
•
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Complying with applicable regulatory requirements and industry standards;
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•
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Cultivating Stop Work Authority as a valued proactive process; and
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•
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Assessing and reviewing systems and communicating performance.
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GENERAL INFORMATION ABOUT THE ANNUAL MEETING
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Date, Place and Time of Meeting
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Record Date
|
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Quorum
|
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Attending the Meeting
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Electronic Delivery of Proxy Materials
|
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Items of Business
|
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Vote Required
|
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Voting Procedures
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Effect of Abstentions and Broker Non-Votes
|
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Revoking Your Proxy
|
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Shareholders Sharing the Same Address
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Proxy Solicitation Costs
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Inspector of Election
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Voting Results
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CORPORATE GOVERNANCE
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Governance Guidelines and Codes
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Board Leadership Structure
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Risk Oversight
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Change in Director Occupation
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Succession Protocols
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Director Attendance at Shareholders Meetings
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Stock Ownership Guidelines
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Anti-Hedging and Anti-Pledging Policy
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Directors' Meetings
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Procedures for Approval of Related Person Transactions
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Communication with the Board
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Director Independence
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Committees of the Board of Directors
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ITEM 1: ELECTION OF DIRECTORS
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Nominees for Director Standing for Election
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Continuing Directors with Terms Expiring in 2020
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Continuing Directors with Terms Expiring in 2021
|
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Summary of Director Qualifications and Experience
|
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Director Compensation
|
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2018 Director Compensation Table
|
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
|
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
|
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ITEM 2: RATIFY APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
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AUDIT COMMITTEE REPORT
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FEES PAID TO PRICEWATERHOUSECOOPERS LLP
|
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Pre-Approval of Services Provided by Independent Registered Public Accounting Firm
|
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COMPENSATION DISCUSSION AND ANALYSIS
|
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Compensation Principles and Best Practices
|
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Summary of 2018 Compensation to Named Executive Officers
|
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Performance Based Compensation
|
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Elements of Our Executive Compensation Program
|
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Other Benefits
|
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Additional Executive Compensation Governance Considerations
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Conclusion
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COMPENSATION COMMITTEE REPORT
|
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EXECUTIVE COMPENSATION TABLES
|
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2018 Summary Compensation Table
|
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Grants of Plan-Based Awards in 2018
|
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Narrative Disclosure to the Summary Compensation Table and Grants of Plan-Based Awards in 2018 Table
|
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Outstanding Equity Awards at Fiscal Year-End 2018
|
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Option Exercises and Stock Vested in 2018
|
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Pension Benefits
|
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2018 Nonqualified Deferred Compensation
|
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Potential Payments upon Termination or Change-in-Control
|
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Estimate of Potential Payments upon Termination
|
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SHAREHOLDER PROPOSALS AND NOMINATIONS FOR THE 2020 ANNUAL MEETING
|
1.
|
Election of two Class I directors named in this Proxy Statement; and
|
2.
|
Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2019.
|
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Improving Lives Every Day
Apergy’s vision is clear: improving lives. The following are just a few of the many examples of the ways in which we work to give back and enhance the lives of people in our neighborhoods and communities:
•
At its inaugural meeting, our extended leadership team participated in a team-building exercise during which they constructed a dozen bicycles, which were then donated to the children of the Alabama-Coushatta Tribe of Texas;
•
US Synthetic, our subsidiary in Orem, Utah, partnered with Junior Achievement to provide career training to high school students on the Navajo Reservation in San Juan County, Utah as part of a career fair to introduce rural students to a variety of career and education opportunities;
•
Members of our Alberta Oil Tools subsidiary dedicated a day to Habitat for Humanity in Edmonton, Canada, volunteering their time and talent in helping to build homes for families in their community in need of safe, affordable housing;
•
Employees participating in our Leadership Development Series packaged meals at the West Texas Food Bank in Midland, Texas for distribution to those in need in the area; and
•
We partnered with the World Affairs Council of Greater Houston in their efforts to promote understanding of the world’s people, politics, economies and cultures.
|
|
•
|
stock ownership guidelines for executive officers that align the interests of the executive officers with those of our shareholders;
|
•
|
mix of base salary, cash incentive opportunities, and long-term equity compensation, that provides a balance of short-term and long-term incentives with fixed and variable components;
|
•
|
inclusion of non-financial metrics, such as qualitative performance factors, in determining actual compensation payouts;
|
•
|
use of restricted stock and other equity awards, including performance shares, that typically vest over a multi-year period, to encourage executives to take actions that promote the long-term sustainability of our business; and
|
•
|
an executive compensation clawback policy with a three-year lookback providing for the recovery from an executive officer of any incentive compensation granted on the basis of financial or operating results that are subject to a material negative restatement as the result of fraud, intentional misconduct or gross negligence of the executive officer.
|
•
|
required or advisable in connection with any governmental investigation or report; or
|
•
|
in the interests of Apergy, consistent with the goals of our Code of Business Conduct & Ethics.
|
•
|
Selecting and engaging the independent registered public accounting firm (“independent auditors”);
|
•
|
Overseeing the work of the independent auditors and Apergy’s internal audit function;
|
•
|
Approving in advance all services to be provided by, and all fees to be paid to, the independent auditors, who report directly to the committee;
|
•
|
Overseeing the adequacy and integrity of Apergy’s financial statements and its financial reporting and disclosure practices;
|
•
|
Reviewing with management and the independent auditors the audit plan and results of the auditing engagement; and
|
•
|
Reviewing with management and the independent auditors the quality and adequacy of Apergy’s internal control over financial reporting.
|
•
|
Developing, reviewing, and recommending to the Board corporate governance principles and the Company’s Code of Business Conduct and Ethics;
|
•
|
Identifying and recommending to our Board candidates for election as directors and any changes it believes desirable in the size and composition of the Board;
|
•
|
Making recommendations to our Board concerning the structure and membership of the Board committees; and
|
•
|
Developing and overseeing the process for the Board and committee self-evaluations and the process by which the CEO and senior management are evaluated.
|
•
|
Approving compensation of executive officers who report directly to the CEO;
|
•
|
Granting awards and approving payouts under the Company’s equity plans and its annual executive incentive plan;
|
•
|
Approving changes to the Company’s compensation plans;
|
•
|
Reviewing and recommending compensation for the Board;
|
•
|
Evaluating the relationship between the Company’s incentive compensation arrangements and its risk management policies and practices; and
|
•
|
Supervising the administration of the compensation plans.
|
|
Class I Directors:
|
Mamatha Chamarthi
Stephen M. Todd
|
Term expiring at 2019 annual meeting of shareholders
|
Class II Directors:
|
Gary P. Luquette
Daniel W. Rabun
|
Term expiring at 2020 annual meeting of shareholders
|
Class III Directors:
|
Kenneth M. Fisher
Sivasankaran Somasundaram
Stephen K. Wagner
|
Term expiring at 2021 annual meeting of shareholders
|
Mamatha Chamarthi
Director since May 9, 2018
Age 49
|
Ms. Chamarthi is the Senior Vice President and Chief Digital Officer of ZF Friedrichshafen AG, a German supplier of driveline and chassis technology (from August 2016 to present). She has also served as Senior Vice President, Chief Digital Officer and Chief Information Officer of ZF TRW Automotive Holdings Corporation (from April 2014 to August 2016), Vice President and Chief Information Officer of CMS Energy Corporation (from May 2010 to December 2013) and Senior IT Executive of Daimler Financial Services (from August 2007 to May 2010).
Ms. Chamarthi’s 20 years of domestic and global technology experience in the energy, financial services and automotive industries makes her a valuable resource for the Board. Ms. Chamarthi brings to the Board significant experience collaborating with boards of directors, including technology and audit committees, as an officer of ZF Friedrichshafen AG, ZF TRW Automotive Holdings, CMS Energy and Daimler Financial. Her innovative technology and transformation experience provide her with unique insights into the highly engineered technologies that Apergy provides to its customers.
|
|
Stephen M. Todd
Director since May 9, 2018
Age 70
|
Mr. Todd is a former Global Vice Chairman (from 2003 to 2010) of Assurance Professional Practice of Ernst & Young Global Limited, London, UK, an assurance, tax, transaction and advisory services firm. Prior thereto, he served in various positions with Ernst & Young (since 1971). Mr. Todd is a member of the Board of Trustees and Chairman of the Audit Committee of PNC Funds (registered management investment companies). Mr. Todd is also a member of the Board of Directors and Chairman of the Audit Committee of Dover.
Mr. Todd’s experience in the accounting profession makes him a valuable resource for the Board. Mr. Todd brings to the Board significant financial experience in both domestic and international business following a 40-year career at Ernst & Young where he specialized in assurance and audit. Mr. Todd developed and directed Ernst & Young’s Global Capital Markets Centers, which provide accounting, regulatory, internal control and financial reporting services to multinational companies in connection with cross-border debt and equity securities transactions and acquisitions, making him well suited to advise the Board on capital allocation decisions, financing alternatives, and acquisition activities. His experience, especially his years as Global Vice Chairman of Ernst & Young Global Limited’s Assurance Professional Practice and as audit partner for several multinational companies, gives him unique insights into accounting and financial issues relevant to multinational companies like Apergy, and he brings the perspective of an outside auditor to the Board.
|
|
Gary P. Luquette
Director since May 9, 2018
Age 63
|
Mr. Luquette previously served as President and Chief Executive Officer of Frank’s International N.V., a global provider of engineered tubular services to the oil and gas industry, from January 2015 to November 2016, following which he served as a special advisor to Frank’s International N.V. until his retirement in December 2016. Mr. Luquette also served as a member of Frank’s International N.V.’s Supervisory Board from November 2013 to May 2017. From 2006 to September 2013, Mr. Luquette served as President of Chevron North America Exploration and Production, a unit of Chevron Corporation. Mr. Luquette began his career with Chevron Corporation in 1978 and, prior to serving as President, held several other key exploration and production positions in Europe, California, Indonesia and Louisiana. Mr. Luquette has served as the non-executive Chairman of the Board of Directors of McDermott International, Inc., a global offshore engineering and procurement company, since May 2014, where he is currently a member of the Compensation Committee. He has also served on the Board of Directors of Southwestern Energy Company since 2017, where he is currently a member of the Health, Safety, Environment and Corporate Responsibility Committee.
|
|
Mr. Luquette brings a depth of business, industry and strategic planning experience to the Board, including his two years as President and Chief Executive Officer at Frank’s International N.V., his seven years as President of Chevron North America Exploration and Production, along with his holding several key exploration and production positions at Chevron. Mr. Luquette’s international experience also adds a valuable global perspective to the Board. Mr. Luquette’s extensive board committee participation, including his membership on the Compensation Committee at McDermott International, Inc. and Health, Safety, Environment and Corporate Responsibility Committee at Southwestern Energy Company, makes him well suited to advise the Board on various corporate governance matters.
|
Daniel W. Rabun
Director since May 9, 2018
Age 64
|
From 2007 until his retirement in May 2015, Mr. Rabun served as the Chairman of Ensco plc, an offshore drilling services company, based in London. He retired as President and Chief Executive Officer of Ensco in June 2014, having held the office of Chief Executive Officer for more than seven years and President for more than eight years. From 1986 through 2005, prior to joining Ensco, Mr. Rabun was a partner with the international law firm of Baker & McKenzie LLP, where he provided legal advice to oil and gas companies. Mr. Rabun has served on the Board of Directors and as a member of the Audit Committee of Golar LNG Ltd. since February 2015 and served as the non-executive Chairman from September 2015 to September 2017. He has also served on the Board of Directors of Apache Corporation since May 2015, where he is currently a member of the Corporate Governance and Nominating Committee and the Management Development and Compensation Committee. During 2012, he served as Chairman of the International Association of Drilling Contractors. Mr. Rabun has also been a certified public accountant since 1976.
|
|
Mr. Rabun brings a variety of experiences to the Board, including service as Chairman of the Board, President, and Chief Executive Officer of Ensco. During Mr. Rabun’s term at Ensco, Ensco drilled some of the most complex wells for super majors, national oil companies, and independent operators in nearly every strategic oil and gas area in the world. Mr. Rabun’s legal expertise gathered over many years at Baker & McKenzie LLP, accounting knowledge gained from having been a certified public accountant since 1976, along with his board committee experience as both an Audit Committee and Management Development and Compensation Committee member, provides substantial value to the Board. Mr. Rabun’s international experience, global perspective, experience with strategic acquisitions, and financial acumen from having served a total of more than eight years as the business head of a public company, assists the Board in the assessment and management of risks faced by oil and gas companies.
|
Kenneth M. Fisher
Director since April 26, 2018
Age 57
|
Since April 2014, Mr. Fisher has served as Executive Vice President and Chief Financial Officer of Noble Energy, Inc., an oil and natural gas exploration and production company, and was their Senior Vice President and Chief Financial Officer from November 2009 to April 2014. Before joining Noble Energy, Mr. Fisher served in a number of senior leadership roles at Shell from 2002 to 2009, including as Executive Vice President of Finance for Upstream Americas, Director of Strategy & Business Development for Royal Dutch Shell plc in The Hague, Executive Vice President of Strategy and Portfolio for Global Downstream in London, and Chief Financial Officer of Shell Oil Products U.S. responsible for U.S. downstream finance operations, including Shell Pipeline Company. Prior to joining Shell in 2002, Mr. Fisher held senior finance positions within business units of General Electric Company. Mr. Fisher has served as the Chairman of the Board of Directors of the general partner of Noble Midstream Partners LP since October 2015. He also served on the Board of Directors of the general partner of CONE Midstream Partners LP from May 2014 to December 2017.
|
|
Mr. Fisher’s 33 years of business, strategy, mergers and acquisitions, and extensive financial management experience, along with his significant experience in the oil and gas industry, make him a valuable resource for the Board. His six senior finance leadership roles with Noble Energy, Shell and GE, including his years as the Chief Financial Officer of Noble Energy, make him well suited to advise the Board on financial, auditing and finance-related corporate governance matters.
|
Sivasankaran (“Soma”) Somasundaram
Director since April 18, 2018
Age 53
|
Mr. Somasundaram serves as Apergy’s President and Chief Executive Officer and is a member of the Board. Mr. Somasundaram previously served as a Vice President of Dover and as President and Chief Executive Officer of Dover Energy, in which capacity he acted from August 2013 until the spin-off. Previously, Mr. Somasundaram served as Executive Vice President (from November 2011 to August 2013) of Dover Energy, Executive Vice President (from January 2010 to November 2011) of Dover Fluid Management, President (from January 2008 to December 2009) of Dover’s Fluid Solutions Platform, President (from June 2006 to December 2007) of Dover’s Gas Equipment Group, and President (from March 2004 to May 2006) of Dover’s RPA Process Technologies. Prior to joining Dover, Mr. Somasundaram served in various global leadership roles at GL&V Inc. and Baker Hughes Inc. Mr. Somasundaram received a B.S. in Mechanical Engineering from Anna University and a M.S. in Industrial Engineering from University of Oklahoma.
|
|
Mr. Somasundaram’s strong international business background, having lived and worked in India, Germany, Singapore and Australia, deep operational insights and financial acumen from having served more than four years as President and Chief Executive Officer of Dover Energy, a segment of Dover, a public company, and years of experience in the energy industry makes him a valuable resource for the Board. Mr. Somasundaram’s technical experience developed during his time in a number of positions in businesses that serve the energy, chemical, mining, sanitary and other process industries, including RPA Process Technologies and Baker Hughes, along with his degrees in both Industrial and Mechanical Engineering, provide him with unique insights into the highly engineered technologies that Apergy provides to its customers.
|
Stephen K. Wagner
Director since May 9, 2018
Age 71
|
From 2009 to 2011, Mr. Wagner was the Senior Advisor, Center for Corporate Governance of Deloitte & Touche LLP. Prior to that role, he served in various positions with Deloitte & Touche LLP, which included Managing Partner, Center for Corporate Governance from 2005 to 2009, Deputy Managing Partner, Innovation, Audit and Enterprise Risk, in the United States from 2002 to 2007 and Co-Leader, Sarbanes-Oxley Services from 2002 to 2005. Mr. Wagner’s more than 30 years of experience in accounting make him a valuable resource for the Board.
Mr. Wagner’s work with the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxely”) and other corporate governance regulations makes him well-suited to advise the Board on financial, auditing and finance-related corporate governance matters as well as risk management. Mr. Wagner brings to the Board an outside auditor’s perspective on matters involving audit committee procedures, internal control and accounting and financial reporting matters.
|
|
Knowledge/ Skill/ Experience
|
Ms.
Chamarthi
|
Mr.
Fisher
|
Mr.
Luquette
|
Mr.
Rabun
|
Mr.
Somasundaram
|
Mr.
Todd
|
Mr.
Wagner
|
Environmental, Health & Safety
|
|
|
ü
|
ü
|
ü
|
|
|
Financial Reporting/Accounting Experience
|
|
ü
|
|
ü
|
|
ü
|
ü
|
Corporate Governance & Responsibility
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
Public Company Leadership
|
ü
|
ü
|
ü
|
ü
|
ü
|
|
|
Strategic Planning
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
Global Experience
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
Energy Industry Experience
|
|
ü
|
ü
|
ü
|
ü
|
|
|
Legal & Regulatory Compliance
|
ü
|
|
|
ü
|
|
|
|
Risk Management
|
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
Technology & Innovation
|
ü
|
|
|
|
ü
|
|
ü
|
Value Creation
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
ü
|
•
|
An annual retainer of $225,000, payable $112,500 in cash and $112,500 in stock-based awards;
|
•
|
Chairman of the Board – additional retainer of $75,000, payable in cash; and
|
•
|
Committee Chairs – additional retainer of $15,000 for the Audit Committee Chair and $10,000 for the Chairs of the Compensation Committee and the Governance and Nominating Committee, payable in cash.
|
Name
|
|
Fees Earned
or Paid in Cash ($) |
|
Stock Awards
($)(1)
|
|
Total ($)
|
|
Daniel W. Rabun
|
|
121,747
|
|
184,601
|
|
306,348
|
|
Mamatha Chamarthi
|
|
73,048
|
|
73,753
|
|
146,801
|
|
Kenneth M. Fisher
|
|
82,788
|
|
73,753
|
|
156,541
|
|
Gary P. Luquette
|
|
79,541
|
|
73,753
|
|
153,294
|
|
Stephen M. Todd
|
|
73,048
|
|
73,753
|
|
146,801
|
|
Stephen K. Wagner
|
|
79,541
|
|
73,753
|
|
153,294
|
(1)
|
For Mr. Rabun, the amount reflects a total of 4,539 RSUs, 2,525 of which were granted May 17, 2018 and vest ratably over three years, subject to his continued service on the Board, and 2,014 of which immediately vested upon grant on November 15, 2018. For all other directors, amount reflects 2,014 RSUs which immediately vested upon grant on November 15, 2018. For a description of Mr. Somasundaram’s compensation in 2018, see the
2018
Summary Compensation Table
and
Grants of Plan-Based Awards in 2018
Table
.
In accordance with SEC rules, the amounts shown reflect the aggregate grant date fair value of the RSUs, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC 718”), disregarding the estimate of forfeitures related to service-based vesting conditions. The grant date fair value is measured based on the closing price of our common stock on the date of grant. See Note 17 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 for a discussion of the assumption used in determining the FASB ASC Topic 718 grant date fair value of these awards.
|
|
•
|
Each director and each of our named executive officers shown in
2018 Summary Compensation Table
(the “NEOs”);
|
•
|
All of our directors and executive officers as a group, including the NEOs; and
|
•
|
Each person known to us to own beneficially 5% or more of our outstanding common stock.
|
(1)
|
The address for each of the directors and NEOs is c/o Apergy Corporation, 2445 Technology Forest Boulevard, Building 4, 12th Floor, The Woodlands, Texas 77381.
|
(2)
|
Includes 12,967 shares held in a limited partnership of which Mr. Somasundaram is a partner and 89,264 shares exercisable under an outstanding SSAR award.
|
(3)
|
Includes 67,921 shares exercisable under outstanding SSAR awards.
|
(4)
|
Includes 14,606 shares exercisable under an outstanding SSAR award.
|
(5)
|
Includes 182,630 shares exercisable under outstanding SSAR awards.
|
(6)
|
Based solely on Schedule 13G filed February 11, 2019. The Vanguard Group and certain of its affiliates have sole voting power with respect to 37,197 shares, shared voting power with respect to 9,400 shares, sole dispositive power with respect to 6,991,688 shares and shared dispositive power with respect to 39,209 shares.
|
(7)
|
Based solely on Schedule 13G filed February 8, 2019. BlackRock, Inc. and certain of its affiliates have sole voting power with respect to 6,631,409 shares and sole dispositive power with respect to 7,007,970 shares.
|
(8)
|
Based solely on Schedule 13G filed February 14, 2019. Boston Partners and certain of its affiliates have sole voting power with respect to 5,331,942 shares, shared voting power with respect to 11,660 shares, and sole dispositive power with respect to 5,884,010 shares.
|
|
|
|
|
|
•
|
Met with senior members of the Company’s financial management team at each meeting;
|
•
|
Held private sessions, during regularly scheduled meetings, with the Company’s Chief Financial Officer and head of the Company’s internal audit function, providing an opportunity for candid discussions regarding financial management, accounting, auditing, and internal control matters;
|
•
|
Reviewed and discussed with management the Company’s earnings releases and financial results for each quarterly period and for the fiscal year as set out in the Company’s Form 10-Qs and Form 10-K prior to filing with the SEC;
|
•
|
Discussed with the Company’s financial management the plans and processes for implementation of ASC Topic 842 on Lease Accounting, and the anticipated impact of the new standard on the controls and financial statements of the Company;
|
•
|
Reviewed and discussed with senior management financial risk exposures and plans for mitigation and remediation of any internal control deficiencies;
|
•
|
Received reports from the General Counsel on compliance matters and reviewed the effectiveness of the Company’s compliance program; and
|
•
|
Reviewed the Company’s internal audit plan.
|
|
Type of Fee
|
|
Year Ended
December 31, 2017 ($) |
|
Year Ended
December 31, 2018 ($) |
Audit Fees (1)
|
|
4,326,500
|
|
2,577,704
|
Tax Fees (2)
|
|
52,000
|
|
21,580
|
All Other Fees (3)
|
|
--
|
|
7,903
|
(1)
|
The audit fees for the years ended December 31, 2017 and 2018 were for professional services rendered for the audits of the consolidated financial statements of Apergy and include statutory audits, reviews of the quarterly consolidated financial statements of Apergy, review of registration statement and other documents filed with the SEC and accounting consultations.
|
(2)
|
Tax fees were for professional services rendered with respect to tax compliance matters.
|
(3)
|
Other fees include licensing fees for access to technical accounting literature.
|
|
Name
|
Title
|
Sivasankaran (“Soma”) Somasundaram
|
President & Chief Executive Officer
|
Jay A. Nutt
|
Senior Vice President & Chief Financial Officer
|
Julia Wright
|
Senior Vice President, General Counsel and Secretary
|
Paul E. Mahoney
|
President, Production & Automation Technologies
|
Rob Galloway
|
President, Drilling Technologies
|
•
|
Ensure executive compensation drives behaviors and actions consistent with shareholder interests, prudent risk-taking and a long-term perspective;
|
•
|
Ensure executive compensation allows us to attract, retain, motivate and reward high-performing executive talent. We target reasonable and competitive compensation, and aim to align our compensation with market median levels;
|
•
|
Differentiate based on performance relative to targets, peers and market conditions, with a significant portion of compensation tied to the achievement of annual and long-term goals that promote shareholder value creation; and
|
•
|
Emphasize Apergy stock ownership by requiring stock ownership levels for executives.
|
•
|
Recommended performance measures, target goals and award schedules for short-term and long-term incentive awards, and reviewed performance goals for consistency with our projected business plan;
|
•
|
Reviewed competitive market data for executive positions; and
|
•
|
Developed specific recommendations regarding the amount and form of equity compensation to be awarded to our NEOs.
|
|
|
2018 Base
Salary
|
Target
2018
Short-Term
Incentive
|
|
Target 2018 Annual
Long-Term
Performance Incentives(1)
|
|
Founder Share Awards(1)(2)
|
|
Total Target
Amount
|
|||
Restricted
Stock Unit Awards
|
|
Performance
Share Award
Target Dollar
Amount
|
||||||||||
Mr. Somasundaram
|
$
|
725,000
|
$
|
725,000
|
$
|
1,450,000
|
$
|
1,450,000
|
$
|
3,625,000
|
$
|
7,975,000
|
Mr. Nutt
|
$
|
475,000
|
$
|
332,500
|
$
|
350,000
|
$
|
350,000
|
$
|
1,000,000
|
$
|
2,507,500
|
Ms. Wright
|
$
|
360,000
|
$
|
216,000
|
$
|
225,000
|
$
|
225,000
|
$
|
600,000
|
$
|
1,626,000
|
Mr. Mahoney
|
$
|
425,000
|
$
|
255,000
|
$
|
250,000
|
$
|
250,000
|
$
|
700,000
|
$
|
1,880,000
|
Mr. Galloway
|
$
|
345,000
|
$
|
172,500
|
$
|
162,500
|
$
|
162,500
|
$
|
365,000
|
$
|
1,207,500
|
(1)
|
The number of shares underlying these awards was determined by reference to the average closing price per share of Apergy’s common stock on the five trading days immediately preceding the date of grant. These values may differ from those found in the compensation tables below, which are required to use an accounting value as of the date of grant or as of December 31, 2018, as the case may be. Neither the values shown in the table above nor the accounting values within the tables that follow this Compensation Discussion and Analysis reflect settlement values, which may be impacted by the price of our common stock, terminations of employment, or change-in-control events, and will not be known until actual settlement occurs, if any.
|
(2)
|
Our NEOs received one-time grants of founder shares in 2018 in connection with the spin-off, which are described further below.
|
|
|
Compensation Element
|
Objective
|
Key Features
|
Performance-Based
|
Long-Term Incentive Plan – Founder Shares
|
To reflect increased responsibility post-spin, recognizes significant additional work required for a successful spin-off, and provides a significant time-based retention feature to ensure continuity for a period post-spin-off.
|
Restricted stock units that vest ratably over four years, providing a long-term correlation to changes in shareholder return.
|
Yes, value increases or decreases in correlation to share price.
|
•
|
experience in current role and equitable compensation relationships among our executives;
|
•
|
performance and leadership; and
|
•
|
external factors involving competitive positioning, general economic conditions, and marketplace compensation trends.
|
Name
|
2018 Target EAIP Award
% of Base Salary
|
|
Mr. Somasundaram
|
100
|
%
|
Mr. Nutt
|
70
|
%
|
Ms. Wright
|
60
|
%
|
Mr. Mahoney
|
60
|
%
|
Mr. Galloway
|
50
|
%
|
•
|
For Messrs. Somasundaram, Mahoney and Galloway, who had been employed by Dover prior to the spin-off, 25% of their EAIP would be a continuation of Dover’s EAIP structure, and 75% of their EAIP would be based on the new Apergy EAIP structure; and
|
•
|
For Mr. Nutt and Ms. Wright, who joined Apergy in anticipation of and in connection with the spin-off, 100% of their EAIP would be based on the new Apergy EAIP structure.
|
Mr. Mahoney
|
|||
10%
|
Apergy Financial Performance
|
40%
|
Revenue
|
60%
|
Adjusted EBITDA
|
||
50%
|
Production & Automation Technologies Segment Performance
|
40%
|
Revenue
|
60%
|
Adjusted EBITDA
|
||
40%
|
Strategic Measures
|
20%
|
Business Unit Safety
|
25%
|
Business Unit Working Capital
|
||
25%
|
Business Unit Productivity
|
||
30%
|
Business Unit Pre-Tax Free Cash Flow
|
Mr. Galloway
|
|||
10%
|
Apergy Financial Performance
|
40%
|
Revenue
|
60%
|
Adjusted EBITDA
|
||
50%
|
Drilling Technologies Segment Performance
|
Business Unit Profit Sharing Arrangement
|
|
40%
|
Strategic Measures
|
20%
|
Business Unit Safety
|
25%
|
Business Unit Working Capital
|
||
25%
|
Business Unit Productivity
|
||
30%
|
Business Unit Pre-Tax Free Cash Flow
|
Free Cash
Flow
|
Defined as net cash provided by operating activities less capital expenditures and reflects the Company objectives to generate positive cash flow for debt reduction and to support the Company’s strategic objectives.
|
Adjusted
EBITDA
|
Defined as total earnings before interest, taxes, depreciation and amortization expense, separation and supplemental benefit costs associated with the spin-off, royalty expense payable to our former parent and incurred only prior to the spin-off, and restructuring and other related charges.
Adjusted EBITDA is a key performance metric for the Company and allows our shareholders to compare our operating performance across periods by excluding items that do not reflect the core ongoing operating results of our businesses.
|
Safety
|
Measures the total recordable incident rate. The Compensation Committee increased the weighting of this metric for the second through fourth quarters to set the “tone from the top” in emphasizing the importance of the Company’s Journey to Zero safety objective.
|
Productivity
|
Dollars identified as saved as a result of productivity initiatives taken throughout the year and measured as a percentage of the cost of goods sold; incentivizes management to increase productivity which correlates to increased shareholder value over time.
|
Strategic
Initiatives
|
Allows the Company to incentivize individual performance by rewarding individual contributions to the Company’s key strategy focus areas.
|
Mr. Somasundaram
|
|||||||||||||||||
|
|
|
|
|
Threshold
|
Target
|
Maximum
|
Actual
|
Weighted
Achievement
|
||||||||
25%
Dover
EAIP
|
60%
|
Apergy Performance
|
40%
|
Revenue
|
|
$204.1
|
|
|
$269.1
|
|
|
$287.9
|
|
|
$283.1
|
|
41.9%
|
60%
|
Adjusted EBITDA
|
|
$43.5
|
|
|
$67.1
|
|
|
$72.7
|
|
|
$67.7
|
|
52.7%
|
|||
40%
|
Strategic Measures
|
10%
|
Safety
|
1.4
|
|
1.05
|
|
0.84
|
|
0.89
|
|
7.0%
|
|||||
20%
|
Working Capital
|
24
|
%
|
20.4
|
%
|
17.3
|
%
|
28.3
|
%
|
0.0%
|
|||||||
10%
|
Productivity
|
3.1
|
%
|
4.2
|
%
|
5.0
|
%
|
4.4
|
%
|
5.0%
|
|||||||
20%
|
Pre-Tax Free Cash Flow
|
|
$34.8
|
|
|
$47.4
|
|
|
$52.1
|
|
|
$31.7
|
|
0.0%
|
|||
40%
|
Strategic Initiatives (
see below
)
|
|
20.8%
|
||||||||||||||
Total:
|
|
127%
|
|||||||||||||||
|
|||||||||||||||||
75%
Apergy
EAIP
|
Apergy
Consolidated
Performance
|
30%
|
Free Cash Flow
|
|
$68.2
|
|
|
$85.3
|
|
|
$98.0
|
|
|
$91.8
|
|
45.4%
|
|
30%
|
Adjusted EBITDA
|
|
$142.1
|
|
|
$220.9
|
|
|
$239.9
|
|
|
$231.4
|
|
46.6%
|
|||
10%
|
Safety
|
1.40
|
|
1.05
|
|
0.84
|
|
0.89
|
|
17.6%
|
|||||||
10%
|
Productivity
|
3.1
|
%
|
4.2
|
%
|
5.0
|
%
|
4.4
|
%
|
12.5%
|
|||||||
Individual Performance
|
20%
|
Strategic Initiatives (
see below
)
|
|
32%
|
|||||||||||||
Total:
|
|
154%
|
|||||||||||||||
Total Weighted Payout:
|
|
147%
|
Mr. Nutt
|
|||||||||||||||
|
|
|
Threshold
|
Target
|
Maximum
|
Actual
|
Weighted
Achievement
|
||||||||
Apergy
Consolidated Performance
|
30%
|
Free Cash Flow
|
|
$68.2
|
|
|
$85.3
|
|
|
$98.0
|
|
|
$91.8
|
|
45.4%
|
30%
|
Adjusted EBITDA
|
|
$142.1
|
|
|
$220.9
|
|
|
$239.9
|
|
|
$231.4
|
|
46.6%
|
|
10%
|
Safety
|
1.40
|
|
1.05
|
|
0.84
|
|
0.89
|
|
17.6%
|
|||||
10%
|
Productivity
|
3.1
|
%
|
4.2
|
%
|
5.0
|
%
|
4.4
|
%
|
12.5%
|
|||||
Individual
Performance
|
20%
|
Strategic Initiatives (
see below
)
|
|
36.0%
|
|||||||||||
Total Payout:
|
|
158%
|
Ms. Wright
|
|||||||||||||||
|
|
|
Threshold
|
Target
|
Maximum
|
Actual
|
Weighted
Achievement
|
||||||||
Apergy
Consolidated Performance
|
30%
|
Free Cash Flow
|
|
$68.2
|
|
|
$85.3
|
|
|
$98.0
|
|
|
$91.8
|
|
45.4%
|
30%
|
Adjusted EBITDA
|
|
$142.1
|
|
|
$220.9
|
|
|
$239.9
|
|
|
$231.4
|
|
46.6%
|
|
10%
|
Safety
|
1.40
|
|
1.05
|
|
0.84
|
|
0.89
|
|
17.6%
|
|||||
10%
|
Productivity
|
3.1
|
%
|
4.2
|
%
|
5.0
|
%
|
4.4
|
%
|
12.5%
|
|||||
Individual
Performance
|
20%
|
Strategic Initiatives (
see below
)
|
|
34.0%
|
|||||||||||
Total Payout:
|
|
156%
|
Mr. Mahoney
|
|||||||||||||||||
|
|
|
|
|
Threshold
|
Target
|
Maximum
|
Actual
|
Weighted Achievement
|
||||||||
25%
Dover
EAIP
|
50%
|
Segment Performance
|
40%
|
Revenue
|
|
$124.9
|
|
|
$162.2
|
|
|
$167.3
|
|
|
$166.5
|
|
28.9%
|
60%
|
Adjusted EBITDA
|
|
$21.8
|
|
|
$33.5
|
|
|
$35.5
|
|
|
$34.3
|
|
42.0%
|
|||
10%
|
Apergy Performance
|
40%
|
Revenue
|
|
$204.1
|
|
|
$269.1
|
|
|
$287.9
|
|
|
$283.1
|
|
7.0%
|
|
60%
|
Adjusted EBITDA
|
|
$43.5
|
|
|
$67.1
|
|
|
$72.7
|
|
|
$69.7
|
|
8.8%
|
|||
40%
|
Strategic Measures
|
20%
|
Safety
|
1.32
|
|
1.00
|
|
0.79
|
|
0.85
|
|
13.8%
|
|||||
25%
|
Working Capital
|
32.4
|
%
|
25.9
|
%
|
22.0
|
%
|
34.5
|
%
|
0.0%
|
|||||||
25%
|
Productivity
|
3.0
|
%
|
3.9
|
%
|
4.7
|
%
|
3.8
|
%
|
9.0%
|
|||||||
30%
|
Pre-Tax Free Cash Flow
|
|
$20.2
|
|
|
$23.8
|
|
|
$26.2
|
|
|
$18.7
|
|
0.0%
|
|||
Total:
|
|
109%
|
|||||||||||||||
|
|||||||||||||||||
75%
Apergy
EAIP
|
Apergy
Consolidated
Performance
|
12.5%
|
Free Cash Flow
|
|
$68.2
|
|
|
$85.3
|
|
|
$98.0
|
|
|
$91.8
|
|
18.9%
|
|
12.5%
|
Adjusted EBITDA
|
|
$142.1
|
|
|
$220.9
|
|
|
$239.9
|
|
|
$231.4
|
|
19.4%
|
|||
Segment
Performance
|
17.5%
|
Free Cash Flow
|
|
$63.7
|
|
|
$79.6
|
|
|
$91.6
|
|
|
$73.8
|
|
11.1%
|
||
17.5%
|
Adjusted EBITDA
|
|
$108.2
|
|
|
$167.0
|
|
|
$179.6
|
|
|
$164.7
|
|
16.8%
|
|||
10%
|
Safety
|
1.32
|
|
1.00
|
|
0.79
|
|
0.85
|
|
17.2%
|
|||||||
10%
|
Productivity
|
3.0
|
%
|
3.9
|
%
|
4.7
|
%
|
3.8
|
%
|
9.0%
|
|||||||
Individual
Performance
|
20%
|
Strategic Initiatives (
see below
)
|
|
25.0%
|
|||||||||||||
Total:
|
|
117%
|
|||||||||||||||
Total Weighted Payout:
|
|
115%
|
|||||||||||||||
Adjusted Total Payout:
|
|
128%
|
Mr. Galloway
|
|||||||||||||||||
|
|
|
|
|
Threshold
|
Target
|
Maximum
|
Actual
|
Weighted Achievement
|
||||||||
25%
Dover
EAIP
|
10%
|
Apergy Performance
|
40%
|
Revenue
|
|
$204.1
|
|
|
$269.1
|
|
|
$287.9
|
|
|
$283.1
|
|
7.0%
|
60%
|
Adjusted EBITDA
|
|
$43.5
|
|
|
$67.1
|
|
|
$72.7
|
|
|
$69.7
|
|
8.8%
|
|||
50%
|
Segment Performance
|
Profit Sharing
|
|
--
|
|||||||||||||
40%
|
Strategic Measures
|
20%
|
Safety
|
2.33
|
|
1.63
|
|
1.4
|
|
1.14
|
|
16.0%
|
|||||
25%
|
Working Capital
|
16.0
|
%
|
14.4
|
%
|
12.3
|
%
|
18.4
|
%
|
0.0%
|
|||||||
25%
|
Productivity
|
3.3
|
%
|
4.4
|
%
|
5.3
|
%
|
5.3
|
%
|
20.0%
|
|||||||
30%
|
Pre-Tax Free Cash Flow
|
|
$10.1
|
|
|
$17.4
|
|
|
$19.1
|
|
|
$9.0
|
|
0.0%
|
|||
Total:
|
|
52%
|
|||||||||||||||
|
|||||||||||||||||
75% Apergy EAIP
|
Apergy
Consolidated
Performance
|
12.5%
|
Free Cash Flow
|
|
$68.2
|
|
|
$85.3
|
|
|
$98.0
|
|
|
$91.8
|
|
18.9%
|
|
12.5%
|
Adjusted EBITDA
|
|
$142.1
|
|
|
$220.9
|
|
|
$239.9
|
|
|
$231.4
|
|
19.4%
|
|||
Segment Performance
|
35%
|
Segment Profit Sharing
|
|
--
|
|||||||||||||
10%
|
Safety
|
2.33
|
|
1.63
|
|
1.4
|
|
1.14
|
|
20.0%
|
|||||||
10%
|
Productivity
|
3.3
|
%
|
4.4
|
%
|
5.3
|
%
|
5.3
|
%
|
20.0%
|
|||||||
Individual
Performance
|
20%
|
Strategic Initiatives (
see below
)
|
|
35.0%
|
|||||||||||||
Total:
|
|
113%
|
|||||||||||||||
Total Weighted Payout (excluding Segment Profit Sharing):
|
|
98%
|
|||||||||||||||
Total Weighted Payout (including Segment Profit Sharing):
|
|
149%
|
•
|
Driving behaviors and actions consistent with creating shareholder value;
|
•
|
Providing diversification of compensation in recognition of the cyclical nature of our industry;
|
•
|
Resulting in actual share ownership aligned with our executive stock ownership guidelines; and
|
•
|
Supporting executive retention.
|
|
|
C&J Energy Services Inc.
|
MRC Global, Inc.
|
Core Laboratories N.V.
|
NOW, Inc.
|
Dril-Quip, Inc.
|
Oceaneering International, Inc.
|
Exterran Corporation
|
Oil States International, Inc.
|
Forum Energy Technologies, Inc.
|
RPC, Inc.
|
Franks International N.V.
|
Superior Energy Services, Inc.
|
|
Annual LTIP Awards
|
|
|
|||||||||
Executive
|
RSUs
|
PSAs
|
Founder Shares
|
Total Target
|
||||||||
Mr. Somasundaram
|
|
$1,450,000
|
|
|
$1,450,000
|
|
|
$3,625,000
|
|
|
$6,525,000
|
|
Mr. Nutt
|
|
$350,000
|
|
|
$350,000
|
|
|
$1,000,000
|
|
|
$1,700,000
|
|
Ms. Wright
|
|
$225,000
|
|
|
$225,000
|
|
|
$600,000
|
|
|
$1,050,000
|
|
Mr. Mahoney
|
|
$250,000
|
|
|
$250,000
|
|
|
$700,000
|
|
|
$1,200,000
|
|
Mr. Galloway
|
|
$162,500
|
|
|
$162,500
|
|
|
$365,000
|
|
|
$690,000
|
|
•
|
Ensuring shareholder interests are protected during business transactions by providing benefits that promote senior management stability;
|
•
|
Providing and preserving an economic motivation for participating executives to consider a business combination that might result in an executive’s job loss; and
|
•
|
Competing effectively in attracting and retaining executives in an industry that experiences acquisitions and divestitures.
|
•
|
Guide the Compensation Committee’s decision making with respect to executive compensation matters in light of the Company’s business strategy, pay philosophy, prevailing market practices, shareholder interests and relevant regulatory mandates;
|
•
|
Review and provide advice on the Company’s compensation peer group;
|
•
|
Advise on incentive plan design for both annual and long-term incentive awards;
|
•
|
Provide comprehensive competitive market studies as reference for the Compensation Committee in consideration of CEO and senior management compensation;
|
•
|
Review the CEO’s executive compensation recommendations for our senior executives;
|
•
|
Review the CEO’s compensation;
|
•
|
Review and provide competitive market on non-executive director compensation; and
|
•
|
Apprise the Compensation Committee about emerging best practices and changes in regulatory and corporate governance environment.
|
Company
|
Revenues
(in millions)
|
|
Assets
(in millions)
|
||||
C&J Energy Services, Inc.
|
$
|
1,639
|
|
|
$
|
1,609
|
|
Core Laboratories N.V.
|
$
|
660
|
|
|
$
|
585
|
|
Dril-Quip, Inc.
|
$
|
435
|
|
|
$
|
1,398
|
|
Exterran Corporation
|
$
|
1,215
|
|
|
$
|
1,461
|
|
Forum Energy Technologies, Inc.
|
$
|
819
|
|
|
$
|
2,195
|
|
Frank’s International N.V.
|
$
|
455
|
|
|
$
|
1,262
|
|
MRC Global Inc.
|
$
|
3,646
|
|
|
$
|
2,340
|
|
NOW Inc.
|
$
|
2,648
|
|
|
$
|
1,749
|
|
Oceaneering International, Inc.
|
$
|
1,922
|
|
|
$
|
3,024
|
|
Oil States International, Inc.
|
$
|
671
|
|
|
$
|
1,302
|
|
RPC, Inc.
|
$
|
1,595
|
|
|
$
|
1,147
|
|
Superior Energy Services, Inc.
|
$
|
1,955
|
|
|
$
|
3,065
|
|
Apergy Corporation
|
$
|
1,010
|
|
|
$
|
1,909
|
|
Percentile Ranking
|
|
41
|
%
|
|
|
67
|
%
|
Executive Level
|
Salary Multiple
|
Chief Executive Officer
|
5
|
Section 16 Officers
|
3
|
Other Corporate Officers
|
2
|
|
|
Name and
Principal Position
|
Year
|
Salary ($)(1)
|
Bonus ($)(2)
|
Stock Awards ($)(3)
|
Option Awards ($)(4)
|
Non-Equity Incentive Plan Compensation ($)(5)
|
All Other Compensation ($)(6)
|
Total ($)
|
|
Mr. Somasundaram
|
2018
|
644,314
|
--
|
7,690,173
|
--
|
|
1,007,200
|
22,065
|
9,363,752
|
President & Chief
|
2017
|
535,000
|
--
|
549,965
|
350,394
|
|
970,000
|
21,903
|
2,427,262
|
Executive Officer
|
2016
|
502,000
|
--
|
550,001
|
355,313
|
|
355,000
|
13,832
|
1,776,146
|
Mr. Nutt
|
2018
|
395,834
|
--
|
1,994,771
|
--
|
|
437,900
|
--
|
2,828,505
|
Senior Vice President & Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
Ms. Wright
|
2018
|
324,461
|
75,000
|
1,234,855
|
--
|
|
308,900
|
5,954
|
1,949,170
|
Senior Vice President, General Counsel and Secretary
|
|
|
|
|
|
|
|
|
|
Mr. Mahoney
|
2018
|
413,815
|
--
|
1,408,985
|
--
|
|
320,023
|
16,001
|
2,158,824
|
President, Production and Automation Technologies
|
2017
|
386,250
|
--
|
79,994
|
76,462
|
|
240,000
|
16,963
|
799,669
|
Mr. Galloway
|
2018
|
334,055
|
--
|
816,017
|
--
|
|
252,100
|
32,454
|
1,434,626
|
President, Drilling Technologies
|
|
|
|
|
|
|
|
|
(1)
|
Salary equals base pay paid to each NEO during the applicable year. The actual salary paid may fluctuate due to the number of pay periods during the calendar year, the timing of increases in base salary, and the timing of payroll processing at each calendar year-end. Messrs. Somasundaram, Mahoney and Galloway each received increases in their base salary at the time of the spin-off.
|
(2)
|
Amount shown represents payment of a sign-on bonus Ms. Wright received upon joining Apergy to replace, in part, the value of compensation Ms. Wright forfeited from her prior employer to join the Company.
|
(3)
|
Amounts shown represent (a) the aggregate grant date fair value of PSAs granted during the year indicated and (b) the aggregate grant date fair value of RSUs granted during the year, including Founder Share awards, each calculated in accordance with FASB ASC Topic 718 disregarding the estimate for forfeitures related to service-based vesting conditions. The PSAs were valued at target, although payments may vary from 25% to 200% of the target amount granted, or be forfeited altogether depending upon actual performance. The calculation of the grant date fair value for 2018 awards was $56.32 based on a Monte Carlo simulation as the performance targents are classified as a market vesting condition. The grant date fair value for 2017 awards was $79.28, and the grant date fair value for 2016 awards was $57.25, each as determined in accordance with FASB ASC Topic 718. Awards granted in 2017 and 2016 were granted by Dover. Additional detail on replacement of certain of those awards is found in
Narrative Disclosure to the Summary Compensation Table and Grants of Plan-Based Awards in 2018 Table
below.
|
(4)
|
Amounts shown represent the aggregate grant date fair value of SSAR awards granted by Dover during the year indicated, calculated in accordance with FASB ASC Topic 718, disregarding the estimate for forfeitures related to service-based vesting conditions, and do not correspond to the actual value that may be realized by the NEO. For assumptions made in the valuation of the awards reported in this column, see also Note 17 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. See also “Compensation Discussion and Analysis – Long-Term Equity Incentive Compensation” for a further description of these awards.
|
(5)
|
Amounts shown for 2018 represent payments under our EAIP for the 2018 fiscal year, which payments were made in the first quarter of 2019. Amounts shown for 2017 and 2016 represent payments under Dover’s Annual Incentive Plan for the year indicated, for which payments were made in the first quarter of the following year.
|
(6)
|
Amounts shown include the following:
|
Name
|
Year
|
Employer Contributions to 401(k) Plan
($)(a)
|
Dividends
($)(b)
|
Total
($)
|
Mr. Somasundaram
|
2018
|
9,625
|
12,440
|
22,065
|
Mr. Nutt
|
2018
|
--
|
--
|
--
|
Ms. Wright
|
2018
|
5,954
|
--
|
5,954
|
Mr. Mahoney
|
2018
|
6,357
|
9,644
|
16,001
|
Mr. Galloway
|
2018
|
29,063(c)
|
3,391
|
32,454
|
(a)
|
Under the terms of our 401(k) plan, we make contributions to the accounts of all eligible employees, including the NEOs.
|
(b)
|
Amounts shown represent dividend equivalent payments received in 2018 on restricted stock unit awards granted by Dover with respect to shares of common stock of Dover. Apergy did not pay dividends on its common stock in 2018.
|
(c)
|
All eligible employees of our Drilling Technologies segment, including Mr. Galloway, participate in the profit sharing arrangement of that segment, which entitles them, in part, to a contribution to their 401(k) account. Each month 2.9% of total earnings before interest and taxes of the Drilling Technologies segment are accrued for the total 401(k) profit sharing contribution. The amount of each eligible employee’s 401(k) profit sharing contribution is determined by dividing that employee’s qualifying income for the year by the aggregate of all eligible employees’ qualifying income for the year and multiplying by the amount accrued for the year for the total 401(k) profit sharing contribution. Employees must have worked at least 1,000 hours in the year, be employed at December 31 of the year and have reached the age of 21 to be eligible for the 401(k) profit sharing contribution. For 2018, $19,438 was contributed by the Company to Mr. Galloway’s 401(k) plan under the terms of the Drilling Technologies segment profit sharing arrangement. The amount for 2018 was contributed in the first quarter of 2019 following completion of our year-end financial results.
|
Name
|
|
Grant Date
|
|
Estimated Future Payouts Under Non-Equity Incentive Plan Awards
|
|
Estimated Future Payouts Under Equity Incentive Plan Awards
|
|
All Other Stock Awards: Number of Shares of Stock or Units
(#)
|
|
Grant Date Fair Value of Stock and Option Awards
($) |
||||||||
|
Threshold ($)(1)
|
|
Target
($) |
|
Maximum ($)
|
|
Threshold (#)(1)
|
|
Target
(#) |
|
Maximum (#)
|
|
||||||
Mr. Somasundaram
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSUs(2)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,625
|
|
1,607,838
|
Founder Shares(3)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
91,563
|
|
4,019,616
|
PSAs(4)
|
|
5/17/18
|
|
|
|
|
|
|
|
9,156
|
|
36,625
|
|
73,250
|
|
|
|
2,062,720
|
EAIP(5)
|
|
5/9/18
|
|
--
|
|
725,000
|
|
1,450,000
|
|
|
|
|
|
|
|
|
|
|
Mr. Nutt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSUs(2)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,840
|
|
388,076
|
Founder Shares(3)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,258
|
|
1,108,826
|
PSAs(4)
|
|
5/17/18
|
|
|
|
|
|
|
|
2,210
|
|
8,840
|
|
17,680
|
|
|
|
497,869
|
EAIP(5)
|
|
5/9/18
|
|
--
|
|
332,500
|
|
665,000
|
|
|
|
|
|
|
|
|
|
|
Ms. Wright
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSUs(2)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,683
|
|
249,484
|
Founder Shares(3)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,155
|
|
665,305
|
PSAs(4)
|
|
5/17/18
|
|
|
|
|
|
|
|
1,420
|
|
5,683
|
|
11,366
|
|
|
|
320,067
|
EAIP(5)
|
|
5/9/18
|
|
--
|
|
216,000
|
|
432,000
|
|
|
|
|
|
|
|
|
|
|
Mr. Mahoney
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSUs(2)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,314
|
|
277,185
|
Founder Shares(3)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,681
|
|
776,196
|
PSAs(4)
|
|
5/17/18
|
|
|
|
|
|
|
|
1,578
|
|
6,314
|
|
12,628
|
|
|
|
355,604
|
EAIP(5)
|
|
5/9/18
|
|
--
|
|
255,000
|
|
510,000
|
|
|
|
|
|
|
|
|
|
|
Mr. Galloway
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSUs(2)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,104
|
|
180,166
|
Founder Shares(3)
|
|
5/17/18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,219
|
|
404,714
|
PSAs(4)
|
|
5/17/18
|
|
|
|
|
|
|
|
1,026
|
|
4,104
|
|
8,208
|
|
|
|
231,137
|
EAIP(5)
|
|
5/9/18
|
|
--
|
|
172,500
|
|
345,000
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the minimum amount payable for a certain level of performance. There is no guaranteed minimum payment for EAIP awards; performance results that equal the threshold level would result in a 0% achievement of that measure and no payment. PSA awards have a threshold percentage payout of 25% if relative TSR for the performance period results in a ranking of 10 out of 13, with no payout for any ranking below 10.
|
(2)
|
The grant vests in three equal annual installments beginning May 17, 2019. The grant date fair value of the awards was calculated in accordance with FASB ASC Topic 718, disregarding the estimate for forfeitures related to service-based vesting conditions, using a value of $43.90 per share. For assumptions made in the valuation of these awards, see also Note 17 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. See also “Compensation Discussion and Analysis – Long-Term Equity Incentive Compensation” for a further description of these awards.
|
(3)
|
Founder Share awards were granted as RSUs and vest in four equal annual installments beginning May 17, 2019. The grant date fair value of the awards was calculated in accordance with FASB ASC Topic 718, disregarding the estimate for forfeitures related to service-based vesting conditions, using a value of $43.90 per share. For assumptions made in the valuation of these awards, see also Note 17 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. See also “Compensation Discussion and Analysis – Long-Term Equity Incentive Compensation” for a further description of these awards.
|
(4)
|
The PSAs vest and become payable after the end of the three-year performance period calculated based on the 20-trading day period beginning June 5, 2021, subject to the achievement of the performance goal. The performance targets for the PSAs are classified as a market vesting condition and the grant date fair value for the awards was calculated using a Monte Carlo simulations resulting in a valuation of $56.32 per share. PSAs payout between 25% and 200% of the target amount granted, or are forfeited altogether depending upon actual performance. See also Note 17 to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. See also “Compensation Discussion and Analysis – Long-Term Equity Incentive Compensation” for a further description of these awards.
|
(5)
|
Amounts shown reflect the potential payouts in March 2019 for 2018 performance under the EAIP. The amounts actually paid in March 2019 are included in the
2018 Summary Compensation Table
in the Non-Equity Incentive Plan Compensation column for 2018 for each NEO.
|
Name
|
|
Conversion
Date
|
|
Converted RSUs: Number of Shares of Stock or Units
(#)
|
|
Converted SSARs: Number of Securities Underlying SSARs
(#)
|
|
Exercise Price of SSARs
($/Sh)
|
Mr. Somasundaram
|
|
|
|
|
|
|
|
|
RSUs(1)
|
|
5/15/18
|
|
7,272
|
|
|
|
|
SSAR(2)
|
|
5/15/18
|
|
|
|
89,264
|
|
24.65
|
SSAR(3)
|
|
5/15/18
|
|
|
|
64,460
|
|
34.13
|
Mr. Mahoney
|
|
|
|
|
|
|
|
|
RSUs(4)
|
|
5/15/18
|
|
6,703
|
|
|
|
|
SSAR(5)
|
|
5/15/18
|
|
|
|
9,674
|
|
24.81
|
SSAR(6)
|
|
5/15/18
|
|
|
|
11,735
|
|
27.27
|
SSAR(7)
|
|
5/15/18
|
|
|
|
11,823
|
|
35.53
|
SSAR(8)
|
|
5/15/18
|
|
|
|
15,214
|
|
31.55
|
SSAR(2)
|
|
5/15/18
|
|
|
|
19,475
|
|
24.65
|
SSAR(3)
|
|
5/15/18
|
|
|
|
14,062
|
|
34.13
|
Mr. Galloway
|
|
|
|
|
|
|
|
|
RSUs(9)
|
|
5/15/18
|
|
1,986
|
|
|
|
|
SSAR(2)
|
|
5/15/18
|
|
|
|
14,606
|
|
24.65
|
SSAR(3)
|
|
5/15/18
|
|
|
|
10,548
|
|
34.13
|
(1)
|
Represents replacement of (a) 2,975 RSUs awarded by Dover on February 11, 2016, which became vested on March 15, 2019, and (b) 4,297 RSUs awarded by Dover on February 10, 2017, 2,148 of which vested on March 15, 2019 and 2,149 of which will vest on March 15, 2020.
|
(2)
|
Represents replacement of SSAR awarded by Dover on February 11, 2016. SSAR became exercisable February 11, 2019.
|
(3)
|
Represents replacement of SSAR awarded by Dover on February 10, 2017. SSAR becomes exercisable February 10, 2020.
|
(4)
|
Represents replacement of (a) 5,140 RSUs awarded by Dover on February 11, 2016, which became vested on March 15, 2019, and (b) 1,563 RSUS awarded by Dover on February 10, 2017, 781 of which vested on March 15, 2019 and 782 of which will vest on March 15, 2020.
|
(5)
|
Represents replacement of SSAR awarded by Dover on February 9, 2012. SSAR became exercisable February 9, 2015.
|
(6)
|
Represents replacement of SSAR awarded by Dover on February 14, 2013. SSAR became exercisable on February 14, 2016.
|
(7)
|
Represents replacement of SSAR awarded by Dover on March 10, 2014. SSAR became exercisable on March 10, 2017.
|
(8)
|
Represents replacement of SSAR awarded by Dover on February 12, 2015. SSAR became exercisable on February 12, 2018.
|
(9)
|
Represents replacement of (i) 813 RSUs awarded by Dover on February 11, 2016, which became vested on March 15, 2019, and (b) 1,173 RSUs awarded by Dover on February 10, 2017, 586 of which vested on March 15, 2019 and 587 of which will vest on March 15, 2020.
|
|
Option Awards
|
|
Stock Awards
|
|||||||||
Name
|
Number of Securities Underlying Unexercised Options Exercisable
(#)
|
Number of Securities Underlying Unexercised Options Unexercisable
(#)
|
Option Exercise Price
($)
|
Option Expiration Date
|
|
Number of Shares or Units of Stock That Have Not Vested
(#)
|
Market Value of Shares or Units of Stock That Have Not Vested ($)
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
(#)(1)
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)
|
|||
Mr. Somasundaram
|
|
|
89,264
|
(2)
|
24.65
|
2/11/2026
|
|
|
|
|
|
|
|
|
|
64,460
|
(3)
|
34.13
|
2/10/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
135,460
|
(4)
|
3,668,257
|
67,756
|
1,834,832
|
Mr. Nutt
|
|
|
|
|
|
|
|
34,098
|
(5)
|
923,374
|
16,354
|
442,866
|
Ms. Wright
|
|
|
|
|
|
|
|
20,838
|
(6)
|
564,293
|
10,514
|
284,719
|
Mr. Mahoney
|
9,674
|
(7)
|
|
|
24.81
|
2/9/2022
|
|
|
|
|
|
|
|
11,735
|
(8)
|
|
|
27.27
|
2/14/2023
|
|
|
|
|
|
|
|
11,823
|
(9)
|
|
|
35.53
|
3/10/2024
|
|
|
|
|
|
|
|
15,214
|
(10)
|
|
|
31.55
|
2/12/2025
|
|
|
|
|
|
|
|
|
|
19,475
|
(11)
|
24.65
|
2/11/2026
|
|
|
|
|
|
|
|
|
|
14,062
|
(12)
|
34.13
|
2/10/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,698
|
(13)
|
831,302
|
11,681
|
316,321
|
Mr. Galloway
|
|
|
14,606
|
(14)
|
24.65
|
2/11/2026
|
|
|
|
|
|
|
|
|
|
10,548
|
(15)
|
34.13
|
2/10/2027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,309
|
(16)
|
414,568
|
7,592
|
205,591
|
|
(1)
|
PSAs granted May 17, 2018 and become payable after July 2, 2021 subject to the achievement of the applicable performance goal. Had the PSAs become payable at December 31, 2018, they would have been paid at 163%. Accordingly, pursuant to SEC rules, the amount reflected in the table represents the number of shares payable based on achievement at 185%. Actual shares issued could be between 0% and 200%.
|
(2)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on February 11, 2016, which became exercisable February 11, 2019.
|
(3)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on February 10, 2017, which becomes exercisable on February 10, 2020.
|
(4)
|
Includes (a) 2,975 RSUs that vested on March 15, 2019, and (b) 4,297 RSUs, 2,148 of which vested on March 15, 2019 and 2,149 of which will vest on March 15, 2020, in each case, which were issued May 15, 2018 under the terms of the EMA to replace unvested RSUs granted by Dover on February 11, 2016 and February 10, 2017, respectively. Also includes (i) 36,625 RSUs granted May 17, 2018 that vest in three equal annual installments beginning on May 17, 2019, and (ii) 91,563 RSUs granted as Founder Shares on May 17, 2018 that vest in four equal annual installments beginning on May 17, 2019.
|
(5)
|
Includes (a) 8,840 RSUs granted May 17, 2018 that vest in three equal annual installments beginning on May 17, 2019, and (b) 25,258 RSUs granted as Founder Shares on May 17, 2018 that vest in four equal annual installments beginning on May 17, 2019.
|
(6)
|
Includes (a) 5,683 RSUs granted May 17, 2018 that vest in three equal annual installments beginning on May 17, 2019, and (b) 15,155 RSUs granted as Founder Shares on May 17, 2018 that vest in four equal annual installments beginning on May 17, 2019.
|
(7)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on February 9, 2012, which became exercisable February 9, 2015.
|
(8)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on February 14, 2013, which became exercisable February 14, 2016.
|
(9)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on March 10, 2014, which became exercisable March 10, 2017.
|
(10)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on February 12, 2015, which became exercisable February 12, 2018.
|
(11)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on February 11, 2016, which became exercisable February 11, 2019.
|
(12)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on February 10, 2017, which becomes exercisable February 10, 2020.
|
(13)
|
Includes (a) 5,140 RSUs that vested on March 15, 2019, and (b) 1,563 RSUs, 781 of which vested on March 15, 2019 and 782 of which will vest on March 15, 2020, in each case, which were issued May 15, 2018 under the terms of the EMA to replace unvested RSUs granted by Dover on February 11, 2016 and February 10, 2017, respectively. Also includes (i) 6,314 RSUs granted May 17, 2018 that vest in three equal annual installments beginning May 17, 2019 and (ii) 17,681 RSUs granted as Founder Shares on May 17, 2018 that vest in four equal annual installments beginning May 17, 2019.
|
(14)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on February 11, 2016, which became exercisable February 11, 2019.
|
(15)
|
SSAR issued May 15, 2018 under the terms of the EMA to replace SSAR granted by Dover on February 10, 2017, which becomes exercisable February 10, 2020.
|
(16)
|
Includes (a) 813 RSUs that vested March 15, 2019, and (b) 1,173 RSUs, 586 of which vested on March 15, 2019 and 587 of which will vest on March 15, 2020, in each case, which were issued on May 15, 2018 under the terms of the EMA to replace unvested RSUs granted by Dover on February 11, 2016 and February 10, 2017, respectively. Also includes (i) 4,104 RSUs granted May 17, 2018 that vest in three equal annual installments beginning May 17, 2019 and (ii) 9,219 RSUs granted as Founder Shares on May 17, 2018 that vest in four equal annual installments beginning May 17, 2019.
|
Name
|
Aggregate Earnings in Last FY ($)
|
Aggregate Withdrawals/
Distributions ($)
|
Aggregate Balance at Last FYE ($)
|
|
||
Mr. Somasundaram
|
--(1)
|
114,979
|
4,050,507
|
|
(2
|
)
|
Mr. Mahoney
|
1,695
|
--
|
73,333
|
|
(3
|
)
|
Mr. Galloway
|
2,226
|
--
|
96,307
|
|
(4
|
)
|
(1)
|
Mr. Somasundaram’s earnings in 2018 were negative.
|
(2)
|
Amount includes $1,511,400, the balance of Mr. Somasundaram’s Dover PRP account rolled into the Apergy deferred compensation plan on May 9, 2018, and $2,752,717, the balance of Mr. Somasundaram’s Dover deferred compensation plan account rolled into the Apergy deferred compensation plan on May 9, 2018, and reflects the effects of negative earnings in the year.
|
(3)
|
Includes $71,638, the balance of Mr. Mahoney’s Dover PRP account rolled into the Apergy deferred compensation plan on May 9, 2018.
|
(4)
|
Includes $94,081, the balance of Mr. Galloway’s Dover PRP account rolled into the Apergy deferred compensation plan on May 9, 2018.
|
|
Termination / Change-in-Control Scenarios
|
|||||
Compensation Elements
|
Retirement(1)
|
Death or Disability
|
Resignation or Termination with Cause (2)
|
Termination without Cause
|
Change-in-Control without Termination of Employment
|
Change-in-Control with Termination of Employment without Cause or for Good Reason(3)
|
Cash Severance
|
None
|
None
|
None
|
Base salary continues for a period of 12 months
|
None
|
2x (salary plus target annual cash incentive) (4)
|
Executive Annual Incentive Plan
|
Forfeited
|
Forfeited
|
Forfeited
|
Prorated and paid based on EAIP paid in prior year
|
Continues
|
Included in cash severance amount
|
Restricted Stock Units – Annual Grants and Founder Shares
|
Remain in effect for 5 years (5)
|
All time-based vesting immediately lapses
|
Forfeited
|
Forfeited
|
Awards immediately vest unless assumed or replaced
|
Awards immediately vest
|
Performance Share Awards
|
Oldest award remains in effect for period of award; any remaining awards subject to Committee discretion
|
Service condition satisfied as to a pro-rata portion; remains outstanding for period of award based on actual performance
|
Forfeited
|
Forfeited
|
Awards immediately vest unless assumed or replaced
|
Awards immediately vest at the target performance level
|
SSARs
|
Remain in effect for a period following retirement (6)
|
Awards immediately vest
|
Period of 3 months to exercise exercisable awards; unexercisable awards forfeited
|
Period of 3 months to exercise exercisable awards; unexercisable awards forfeited
|
Awards immediately vest unless assumed or replaced
|
Awards immediately vest
|
Health, Welfare and Other Benefits
|
None
|
None
|
None
|
COBRA health continuation coverage for 12 months
|
|
Lump sum payment equal to 12 months of COBRA health coverage
|
(1)
|
None of our NEOs are eligible for “normal retirement” or “early retirement” under the terms of our LTIP.
|
(2)
|
No special or additional payments are payable to any of the NEOs in the event of termination of employment by way of resignation or termination for “cause.”
|
(3)
|
Under the CICSP, severance is payable if a NEO’s employment is terminated by the Company without “cause” or for “good reason” within 18 months following a change-in-control. “Cause” means (i) willful misconduct, dishonesty or gross negligence in the performance of duties, breach of fiduciary duties to the Company, or willful failure to follow lawful directions, (ii) engaging in conduct materially injurious to the Company or materially harms the Company’s reputation, good will or business, (iii) engaging in conduct reported in the press which is scandalous, immoral or illegal; (iv) conviction of a felony, or a misdemeanor or moral turpitude, dishonesty or fraud, (v) being found liable in any securities law action or having a cease and desist order applied, (vi) breach of confidentiality, non-solicitation or non-competition provisions to which the executive is subject, or (vii) breach of Company policies. “Good Reason” includes (i) a material reduction in compensation, (ii) a material and adverse change in title, (iii) a material and adverse change in authority, responsibility or reporting relationship, or (iv) relocation or principal place of employment by 50 miles, unless the relocation does not increase the executive’s commute by more than 20 miles.
|
(4)
|
The amount payable is equal to the NEO’s annual salary and target annual incentive bonus, as in place on the termination date or the date of the change-in-control, whichever is higher.
|
(5)
|
The portion of RSUs held by Messrs. Somasundaram and Mahoney converted from grants initially awarded by Dover are subject to the same early retirement provisions as SSARs initially granted by Dover after August 6, 2014 as described in note (6) below.
|
(6)
|
Under the LTIP, normal retirement applicable to the SSARs held by our NEOs, which replace SSARs initially awarded by Dover, is defined as age 62, and early retirement is defined as (i) the executive has at least 10 years of service with the Company (including service with Dover), the sum of the executive’s age and years of service upon termination equals at least 65, and for awards initially granted by Dover on or after August 6, 2014, is at least 55 years old, and the executive complies with certain notice requirements (“Early Retirement I”), (ii) the executive has at least 15 years of service with the Company (including service with Dover), the sum of the executive’s age and years of service upon termination equals at least 70, and for awards granted on or after August 6, 2014, is at least 60 years old, and the executive complies with certain notice requirements (“Early Retirement II”), or (iii) the executive’s employment terminates because the business unit in which the executive is employed is sold and the executive remains in good standing until the closing date (“Early Retirement III”). Any person who takes normal or early retirement must agree to standard non-competition provisions to receive the retirement treatment of these SSARs. SSARs initially awarded by Dover prior to August 6, 2014 remain in effect for a five-year period following retirement, and SSARs granted thereafter remain in effect for two years, three years or one year based on whether the early retirement is classified as Early Retirement I, Early Retirement II, or Early Retirement III, respectively.
|
Name
|
Death or Disability ($)
|
|
Resignation or Termination with Cause ($)
|
|
Termination without Cause ($)(1)
|
|
Change-in-Control without Termination ($)(2)
|
|
Change-in-Control with Termination ($)
|
Mr. Somasundaram
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
0
|
|
0
|
|
1,695,000
|
|
0
|
|
2,900,000
|
RSUs (including Founder Shares)
|
3,668,257
|
|
0
|
|
0
|
|
0
|
|
3,668,257
|
PSAs(3)
|
220,401
|
|
0
|
|
0
|
|
0
|
|
991,805
|
SSARs(4)
|
216,912
|
|
0
|
|
0
|
|
0
|
|
216,912
|
Health, Welfare and Other Benefits
|
0
|
|
0
|
|
20,477
|
|
0
|
|
20,477
|
Total:
|
4,105,570
|
|
0
|
|
1,715,477
|
|
0
|
|
7,797,451
|
Mr. Nutt
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
0
|
|
0
|
|
752,083
|
|
0
|
|
1,615,000
|
RSUs (including Founder Shares)
|
923,374
|
|
0
|
|
0
|
|
0
|
|
923,374
|
PSAs(3)
|
53,197
|
|
0
|
|
0
|
|
0
|
|
239,387
|
SSARs(4)
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
Health, Welfare and Other Benefits
|
0
|
|
0
|
|
17,526
|
|
0
|
|
17,526
|
Total:
|
976,571
|
|
0
|
|
769,609
|
|
0
|
|
2,795,287
|
Ms. Wright
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
0
|
|
0
|
|
558,000
|
|
0
|
|
1,152,000
|
RSUs (including Founder Shares)
|
564,293
|
|
0
|
|
0
|
|
0
|
|
564,293
|
PSAs(3)
|
34,199
|
|
0
|
|
0
|
|
0
|
|
153,896
|
SSARs(4)
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
Health, Welfare and Other Benefits
|
0
|
|
0
|
|
6,466
|
|
0
|
|
6,466
|
Total:
|
598,492
|
|
0
|
|
564,466
|
|
0
|
|
1,876,655
|
Mr. Mahoney
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
0
|
|
0
|
|
665,000
|
|
0
|
|
1,360,000
|
RSUs (including Founder Shares)
|
831,302
|
|
0
|
|
0
|
|
0
|
|
831,302
|
PSAs(3)
|
37,996
|
|
0
|
|
0
|
|
0
|
|
170,983
|
SSARs(4)
|
69,284
|
|
21,960
|
|
21,960
|
|
0
|
|
69,284
|
Health, Welfare and Other Benefits
|
0
|
|
0
|
|
20,574
|
|
0
|
|
20,574
|
Total:
|
938,582
|
|
21,960
|
|
707,534
|
|
0
|
|
2,452,143
|
Mr. Galloway
|
|
|
|
|
|
|
|
|
|
Cash Severance
|
0
|
|
0
|
|
416,250
|
|
0
|
|
1,035,000
|
RSUs (including Founder Shares)
|
414,568
|
|
0
|
|
0
|
|
0
|
|
414,568
|
PSAs(3)
|
24,697
|
|
0
|
|
0
|
|
0
|
|
111,136
|
SSARs(4)
|
35,493
|
|
0
|
|
0
|
|
0
|
|
35,493
|
Health, Welfare and Other Benefits
|
0
|
|
0
|
|
18,628
|
|
0
|
|
18,628
|
Total:
|
474,758
|
|
0
|
|
434,878
|
|
0
|
|
1,614,825
|
(1)
|
Under the ESP, upon a termination of employment by the Company without Cause (as defined in the ESP), each NEO is entitled to a prorated amount of the previous year’s EAIP bonus paid to such NEO, or, if such NEO has been employed for less than one year, an
|
(2)
|
Assumes awards were assumed in the change-in-control, resulting in no acceleration of RSUs, PSAs and SSARs under the terms of the LTIP.
|
(3)
|
Represents payout of PSAs for the 2018-2021 performance period, assuming the Compensation Committee approves payout of the PSAs. In the case of termination due to death or disability, the amounts shown assume the 2018 PSAs pay out at target and are prorated for eight months.
|
(4)
|
Reflects the value of vested SSARs as of December 31, 2018, which is the difference between the closing price of $27.08 per share of our common stock on December 31, 2018 and the exercise price of each SSAR award, multiplied by the number of shares covered by such award.
|
|
|
By authority of the Board of Directors,
|
|
JULIA WRIGHT
Senior Vice President, General Counsel and Secretary
|