UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
STANDEX INTERNATIONAL CORPORATION (Name of Registrant as Specified In Its Charter)
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Guide to Standex’s Proxy Statement
Tuesday, October 9:00 a.m., local time Standex International Corporation Corporate Headquarters 23 Keewaydin Drive, Suite 300, Salem, New Hampshire 03079 Dear Shareholder, We cordially invite you to attend Standex’s Annual Meeting of Shareholders. We hope that you will join me, our Board of Directors, and other shareholders at the meeting. The attached Notice of Annual Meeting of Shareholders and Proxy Statement contain information about the business that will be conducted at the meeting. Following the meeting, I will present information on Standex’s operations and welcome any questions from shareholders. Your vote is important to us! If you plan on attending the meeting, you may vote your shares in person. If you cannot vote in person, we urge you to vote via your proxy card, over the phone or on the Internet prior to the meeting. Detailed instructions on how to vote are found on page Thank you in advance for voting your shares, and thank you for your continued support of Standex. The Audit Committee has approved Deloitte & Touche LLP (“Deloitte”) to serve as our independent
We are asking our shareholders to ratify the appointment of Deloitte as our independent A representative from
All services performed in FY Once the initial audit plan has been approved, any requests for additional services or fees must be submitted to the Audit Committee for approval. These additional services may not commence until the Audit Committee reviews and approves the request. These requests for approval are normally evaluated during regularly scheduled Audit Committee meetings. However, if a request is submitted between meeting times, the
The Audit Committee reviews all relationships between the independent auditor and the Company, including the provision of non-audit services. The Audit Committee considered the effect of
The following table summarizes the aggregate fees for
Approval of this advisory proposal will require the affirmative vote of a majority of the votes cast in person or represented by proxy. Abstentions will not count as votes cast on this proposal, so abstentions will have no effect on the outcome. Broker The Board recommends that you vote “FOR” the ratification of the appointment of Deloitte & Touche LLP as the Company’s independent
Governance The purpose of corporate governance is to ensure that we maximize shareholder value consistent with a business model of integrity, ethical practices and compliance with all applicable law. As part of its duties to the Company, the Board monitors and oversees the proper safeguarding of the assets of the Company, the maintenance of appropriate financial and other internal controls and the Company’s compliance with applicable laws and regulations. Additionally, the Board monitors and oversees the governance practices of the CEO and senior management. In order to serve the best interests of shareholders while carrying out its purpose, the Board has established internal guidelines— the Corporate Governance Guidelines — designed to promote effective oversight of the Company’s governance program and principles, beginning with the Board itself. You can access these materials by going to ir.standex.com and clicking on “Governance.” See page 71for instructions on receiving copies of our corporate governance materials.
► Oversight of whistleblower hotline ► Mandatory Board retirement age ► Periodic committee chair and membership rotations ► Oversight of ESG strategy and reporting
The Board recognizes that one of its key responsibilities is to evaluate and determine its optimal leadership structure in order to best serve shareholders’ interests. To ensure an efficient and high-functioning board, in 2016, the Board elected our President and CEO, David Dunbar, to serve as Chair of the Board. In its determination that Mr. Dunbar should serve in this role, our Board examined several factors and believed that Board independence and management oversight were effectively maintained through the Board’s composition of independent directors, the committee system and a seasoned and engaged Lead Independent Director. A combined CEO and Chair role serves as an effective bridge between the Board and senior management and also provides strong unified leadership of the Company. Optimal Board leadership structure may change as circumstances warrant. The Board reviews its determination annually in accordance with the Corporate Governance Guidelines. This annual review allows the Board to maintain flexibility and promote the execution of the Company’s strategy, the independent oversight of senior management and the best interests of shareholders. In the event the Board determines that a different leadership structure is in the best interests of the Company and its shareholders, the Board will consider a change.
Within the Board leadership structure are three distinct roles with specific duties and responsibilities. These duties and responsibilities are described below and are set forth in the Company’s By-Laws and Corporate Governance Guidelines.
Chair of the Board
Chief Executive Officer
Lead Independent Director
The Board maintains four Committees:
Only independent directors are eligible to serve on the Audit, Compensation and Nominating & Corporate Governance (“N&CG”) Committees. Each committee is governed by a written charter. To view the charters of these committees, please go to ir.standex.com, click on “Governance,” then “Committee Charters.” During FY 2023, the Board formally created the Innovation & Technology Committee.
Under our Corporate Governance Guidelines, directors have a duty to attend, whenever possible, all Board and committee meetings for committees on which the director serves. The Board held
Committee Structure and Membership
The For FY 2023, new chairs were appointed for each of the The following table shows the composition of each committee for FY
For information regarding our Named Executive Officers’ compliance with such policies, refer to “Policy Concerning Transactions Involving Company Securities (Anti-Hedging Policy & Anti-Pledging Policy)” on page
The Board has established a process to facilitate communication by shareholders and other interested parties with directors. Communications can be addressed to directors by emailing boardofdirectors@standex.com, or by writing to: Standex International Corporation 23 Keewaydin Drive, Suite 300 Salem, New Hampshire 03079 Attention: Corporate Governance Officer Communications with the Board are distributed by the Corporate Governance Officer. At the direction of the Board, all mail received may be opened and screened for security purposes. The Corporate Governance Officer uses his or her discretion in determining whether to forward communications to the Board. Communications that are unrelated to the duties and responsibilities of the Board will not be distributed. Such items include, but are not limited to:
In addition, material that is trivial, obscene, unduly hostile, threatening or illegal or similarly unsuitable items will be excluded; however, any communication that is excluded will be made available to any independent, non-employee director upon request.
View The Company’s Governance Materials You can view the Company’s governance materials, including the Certificate of Incorporation, By-Laws, Corporate Governance Guidelines and Board committee charters on the Company’s website, ir.standex.com, by clicking on “Governance” and then selecting the specific Company material. Instructions on how to obtain copies of these materials are included on page 71.
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Director Compensation | ||||||
The compensation elements and amounts are established by the Board after a review of data prepared by the Compensation Committee’s independent compensation consultant. The data and report show competitive director compensation levels for peer companies and the Company’s peer group. More information about the Compensation Committee’s independent consultant report and the methods for determining competitive compensation can be found under “Basis for Determining Executive Compensation” on page 4651.
In FY 2020,2022, the Compensation Committee undertook a review of the compensation paid to our non-employee directors relative to the Company’s peer group. Based on this review, to bring non-employeeAs the Committee typically reviews director compensation every two years, it did not perform a review in lineFY 2023. However, with the medianformation of the peer group,I&T Committee, the Compensation Committee recommended anddid establish the Board approvedI&T member fees.
DIRECTOR COMPENSATION ELEMENTS
The FY 2023 compensation elements are shown in the following adjustmentsadjacent table.
Directors may choose to defer up to 100% of their annual cash retainer into the MSPP, which is described in detail under “Management Stock Purchase Plan” on page 44. The equity portion of non-employee director compensation effective October 23, 2019:was granted in the form of shares of restricted stock having a $120,000 fair market value at the time of grant, which was established using the closing price of the Company’s stock on the date of the annual meeting. These shares of restricted stock vest 3 years after the grant date, are considered beneficially owned by the director and accrue dividend equivalents, which are paid upon vesting. Upon the retirement of a director or a change in control of the Company, all unvested shares of restricted stock are subject to acceleration and immediate vesting.
Directors do not receive fees for attending Board or committee meetings. Directors also do not receive benefits under Standex retirement plans or any perquisites. |
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Under the Company’s Corporate Governance Guidelines, all non- employee directors are expected to accumulate shares of Company stock with a value of at least five times the value of their annual cash retainer. Until a director has the requisite number of shares, they are required to retain at least 50% of the share units they are awarded. As of June 30, 2023, all non-employee directors were in compliance with this requirement. Additionally, the Company has a policy concerning transactions involving Company securities. The policy is explained under “Anti-Hedging and Anti-Pledging Policies” on page 31. None of the directors have engaged in any of the prohibited transactions during FY 2023 or any prior periods.
The following table sets forth certain information with respect to our non-employee director compensation for FY
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DIRECTOR INDEPENDENCE
Under our Corporate Governance Guidelines, the Board requires that at least a majority of directors either meet or exceed the independence requirements of the NYSE. These rules provide that, in order to be considered independent, each director or nominee does not have a material relationship with the Company, either directly or as a partner, shareholder, or officer of an organization that has a relationship with the Company. Furthermore, directors and nominees cannot have any prohibited relationships, such as certain employment relationships, with the Company, its independent auditorauditors or another organization that has an affiliated relationship with the Company.
The Board undertakes an annual evaluation of director independence. At its meeting on July 23, 2020,27, 2023, the Board affirmatively determined that each member of the Board and each nominee, (other than David Dunbar, the Company’s President and CEO), meets the independence standards. In addition, all members of the Audit Committee satisfy the enhanced independence criteria required for members of audit committees, and all members of the Compensation Committee satisfy the enhanced independence criteria required for members of compensation committees.
CERTAIN RELATIONSHIPSAND RELATED PARTY TRANSACTIONS
2023 Proxy Statement33 |
Daniel B. Hogan is the son of Daniel E. Hogan, who was a co-founder of the Company and served in various capacities with the Company, including President and CEO, through 1985, and then as a consultant from 1985 until his death in 1991. The Board determined that this familial relationship has not compromised Mr. Hogan’s ability to exercise independent judgment or to serve as a director. As Dr. Hogan is retiring from the Board on the date of the Annual Meeting, this determination will no longer be necessary in the future.
Any transaction between the Company and its directors, executive officers, beneficial owners, and their immediate family members, is monitored closely. Proposed transactions in excess of $120,000 must be disclosed to the CLO. Furthermore, in the event a transaction is completed without the CLO’s knowledge, the transaction must be disclosed in an annual questionnaire that is completed and submitted to the CLO. During the past fiscal year and all prior periods, there have not been any such related party transactions.
Additionally, the Code of Conduct requires that all directors, executive officers and employees avoid engaging in any activity that might create a conflict of interest. All individuals are required to report any proposed transaction that might reasonably be perceived as creating a conflict of interest to their supervisor and/or the CLO. During the past fiscal year, there have not been any reports of such transactions.Share Ownership
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Delinquent Section 16(a) Reports
Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires Standex directors, executive officers and other persons who beneficially own more than 10% of our common stock, to file reports with the SEC regarding their initial stock ownership and any changes in their stock ownership.
Based solely on a review of the reports filed for FY 20202023 and related written representations, we believe that all of our executive officers and directors filed the required reports on a timely basis under Section 16(a), with the exception of theexcept for a Form 34 filing for Ms. Annemarie Bell, Vice President of Human Resources,Mr. Valashinas, which was delayed by one day due to an external error with the EDGAR filing system.internal process error.
Director & Management Stock Ownership
The following table shows, as of July 31, 2020,2023, the number of shares of our common stock beneficially owned by each of our current directors, director nominees and Named Executive Officers (except Mr. Burns and Mr. Maschera), and all directors and executive officers as a group.
Name of Beneficial Owner
| Common Stock Beneficially Owned 1
| Percent of Outstanding Shares
| Common Stock Beneficially Owned 1 | Percent of Outstanding Shares | ||
Paul C. Burns
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16,367
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*
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Annemarie Bell | 7,542 | * | ||||
Charles H. Cannon, Jr. 2
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25,490
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*
| 20,286 | * | ||
Thomas E. Chorman
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11,105
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*
| 11,950 | * | ||
Thomas D. DeByle 3
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70,401
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*
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David Dunbar 4
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89,770
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*
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Robin J. Davenport | 2,413 | * | ||||
David Dunbar 3 | 161,962 | 1.37% | ||||
B. Joanne Edwards
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2,460
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*
| 6,534 | * | ||
Jeffrey S. Edwards
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10,552
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*
| 12,145 | * | ||
Alan J. Glass
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7,407
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*
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Alan Glass | 25,881 | * | ||||
Thomas J. Hansen
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8,545
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*
| 12,662 | * | ||
Michael A. Hickey
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3,412
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*
| 10,626 | * | ||
Daniel B. Hogan 5
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16,406
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*
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James Hooven
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4,066
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*
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Ademir Sarcevic
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11,883
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*
| 26,880 | * | ||
All Directors & Executive Officers
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286,136
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2.32%
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Sean Valashinas | 9,201 | * | ||||
All Directors & Executive Officers 4 | 310,551 | 2.63% |
* | Less than 1% of outstanding common stock |
1 | “Beneficially Owned” means having the sole or shared power to vote, and/or the sole or shared power to invest the shares of common stock. The column contains stock which is, as of July 31, |
2 | Mr. Cannon has |
3 | Mr. Dunbar has 67,233 shares held in a revocable trust, of which he is the trustee, for the benefit of |
4 |
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342023 Proxy Statement | ||||||
Stock Ownership of Certain Beneficial Owners
Based on the most recent Schedule 13G filings, the following table sets forth information about the number of shares of our common stock held by persons we know to be the beneficial owners, as determined in accordance with Rule 13d-3 of the Exchange Act, of more than 5% of the Company’s issued and outstanding common stock.
Name and Address
| Common Stock Beneficially Owned 1
| Percent of Outstanding Shares as of the
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BlackRock Inc. 2 | ||||||||
55 East 52nd Street | 1,910,170 | 15.3% | ||||||
NewYork, NewYork 10055
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The Vanguard Group 3 | ||||||||
100 Vanguard Blvd. | 1,323,947 | 10.62% | ||||||
Malvern, Pennsylvania 19355
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Champlain Investment Partners, LLC 4 | ||||||||
180 Battery Street | 812,330 | 6.52% | ||||||
Burlington, Vermont 05401 |
Name and Address | Common Stock Beneficially Owned 1 | Percent of Outstanding Shares as of the Dates Specified in their Respective Filings |
BlackRock Inc. 2 | ||
55 East 52nd Street | 1,967,807 | 16.4 % |
New York, New York 10055 | ||
The Vanguard Group 3 100 Vanguard Blvd. Malvern, Pennsylvania 19355 | 1,425,988 | 11.9 % |
Copeland Capital Management, LLC 4 161 Washington Street, Suite 1325 Conshohocken, Pennsylvania 19428 | 612,878 | 5.1 % |
Champlain Investment Partners, LLC 5 180 Battery Street Burlington, Vermont 05401 | 603,791 | 5.04 % |
1 | This column shows shares beneficially owned by the named owner as follows: |
BlackRock
| Vanguard
| Champlain
| BlackRock | Vanguard | Copeland | Champlain | ||||||||||
Sole voting power
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1,881,308
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12,581
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598,810
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| 1,932,838 | - | 431,373 | 461,366 | |||
Shared voting power
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-
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2,181
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-
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| - | 8,247 | 90,455 | - | |||
Sole investment power
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1,910,170
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1,310,998
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812,330
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| 1,967,807 | 1,406,482 | 612,878 | 603,791 | |||
Shares investment power
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-
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12,949
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-
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Shared investment power | - | 19,506 | - | - |
2 | Information on BlackRock is based on a Schedule 13G/A filed by BlackRock on |
3 | Information on Vanguard is based on a Schedule 13G/A filed by Vanguard on February |
4 | Information on Copeland is based on a Schedule 13G filed by Copeland on January 12, 2023. |
5 | Information on Champlain is based on a Schedule 13G/A filed by Champlain on February 13, |
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COMPENSATION DISCUSSIONCompensation Discussion & ANALYSISAnalysis
The following sections contain our Compensation Discussion and Analysis. This CD&A provides an overview and analysis of our executive compensation program and policies and the material compensation decisions we have made for our chief executive officer, chief financial officer and our other executive officers named in the “Summary Compensation Table” starting on page 4854. This group is collectively referred to as our “Named Executive Officers” or “NEOs.” During FY 2020,2023, our NEOs were:
► | David Dunbar, President and Chief Executive Officer (“CEO”); |
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Ademir Sarcevic, Vice President, Chief Financial Officer (“CFO”) and Treasurer; |
► | Alan Glass, Vice President, Chief |
► | Annemarie Bell, Chief Human Resources Officer (“CHRO”); |
| Sean Valashinas, Vice President, Chief |
► | Paul |
► |
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As detailed in the Company’s Form 8-K filed on September 15, 2022, Mr. Sarcevic joinedBurns notified the Company on September 9, 2019 as CFO.
Mr. Hooven joinedthat he will be leaving the Company to pursue an alternative career opportunity. Mr. Burns committed to facilitate completion of certain projects and to ensure a smooth transition of his responsibilities. Mr. Burns’ employment with Standex ultimately terminated on February 17, 2020 as the Vice President of Operations and Supply Chain.
Mr. DeByle retired from the Company effective September 20, 2019.
BUSINESS HIGHLIGHTSMarch 24, 2023.
DueAs detailed in the Company’s Form 8-K filed on April 5, 2023, Mr. Maschera’s employment with Standex terminated on March 30, 2023 in connection with a reorganization of the innovation and technology function.
Business Highlights
Our 2023 fiscal year built upon the momentum we had built in 2021 and 2022 as we continued our emergence as a growth oriented, industrial operating company with solid operational execution. As a result, despite continued inflationary headwinds, we ended the year with nine consecutive quarters of record adjusted operating margins. Overall, net sales for FY 2023 of $741.0 million increased by $5.7 million or 0.8% when compared to the COVID-19 pandemic, FY 2020 consistedprior year, and income from operations of two distinct periods$171.1 million increased by $82.8 million or 93.8%. After adjusting for us. Duringa one-time gain on the first eight monthsdivestiture of a business unit of $62.1 million, income from operations of $109.0 million reflected an increase of $20.7 million or 23.4%. Adjusting for loss of revenue associated with the divestiture, we realized organic growth of approximately 5.7%, as increases in our sales to fast growth markets that we serve, such as electric vehicles, 5G, smart grid, industrial automation, commercial space and defense, more than offset the slower economic recovery in Asia. The increase in operating income reflected the increase in organic sales, pricing actions and continued improvement in operational performance. Our GDP+ growth process resulted in a third consecutive year of record sales to new applications in Electronics and the introduction of new products in most of our business units. Our balance sheet remains robust as we ended the fiscal year we sawwith a solid performance during which virtually all of our businesses were on target to meet or exceed our expectations. During the last four months, the pandemic adversely impacted our revenues and earnings. We took immediate actions that both responded to the immediate economic impact and also accelerated our strategic priority to become a more focused and higher margin industrial company — first to ensure the health and safety of our employees and then to protect profitability and the strength of our balance sheet. We continued to meet the needs of our customers, many of whom were considered to be in “essential industries” and we succeeded in delivering free cash flow of 300% of net income in the quarter. We also identified and executed cost reduction actions resulting in approximately $7M in annualized savings. We took action to convert floating into fixed rate debt, resulting in a $1M annualized cost savings. The net result for FY 2020 was a 5.5% decrease in year over year sales and a 23.8% decrease in operating income. Despite the impact of the pandemic, we still generated $56.5M in net cash from continuing operating activities and reduced ourposition with a net debt (cash) to EBITDA ratio of net debt to EBITDA to 0.8, down from 0.95 at(0.2) and an available borrowing capacity of approximately $372 million. With an acceleration of ongoing growth and development projects across the end ofCompany, we closed the prior year. We also continued to make progress in improving the quality of our portfolio. The divestiture of our Refrigerated Solutions Group resulted in a pro-forma 200 basis point increase in our operating margins; this divestiture, together with theyear optimistic about FY 2019 Cooking Solutions Group divestiture, has transformed us into a company no longer dependent on sales of standard products to the food service industry and into a more focused group of businesses selling customized solutions to high value end markets. We acquired Renco Electronics just after the conclusion of the fiscal year, which strengthens the high-reliability magnetics portion of our Electronics segment. These actions, together with the increased collaboration of our businesses in responding to the pandemic, positions us well to emerge stronger than ever from the pandemic-induced recession.
Checklist of Compensation PracticesIn addition to the principles and objectives discussed below, the Compensation Committee strives to design the Companys compensation program to include what is considered good practices in the industry. Much like our corporate governance practices, we believe that good compensation practices increase shareholder value, strengthen our business and encourage us to manage risk properly. This checklist provides a highlight of our compensation practices:Executive compensation is tied to performanceCaps on incentive payoutsStrategic performance metricsBenchmarks determined based on peers of comparable size, complexity & industryCompensation Committee has the right to claw back awardsIndependent compensation consultantStock ownership guidelinesEncourage long-range planningCompensation Committee is comprised solely of independent directorsOur incentive programs do not encourage excessive risk takingNo hedging or pledging of Company sharesNo single-trigger change in control severance benefitsNo excise tax gross-up provisionsNo excessive perquisites2024.
Checklist of Compensation Practices | |||||||||
In addition to the principles and objectives discussed below, the Compensation Committee strives to design the Company’s compensation program to include what is considered good practices in the industry. Much like our corporate governance practices, we believe that good compensation practices increase shareholder value, strengthen our business and encourage us to manage risk properly. This checklist provides a highlight of our compensation practices: | |||||||||
Executive compensation is tied to performance | x | Our incentive programs do not encourage excessive risk taking | |||||||
Caps on incentive payouts | x | No hedging or pledging of Company shares | |||||||
Strategic performance metrics | x | No single-trigger change in control severance benefits | |||||||
Benchmarks determined based on peers of comparable size, complexity & industry | x | No excise tax gross-up provisions | |||||||
SEC compliant clawback policy | x | No excessive perquisites | |||||||
Independent compensation consultant | |||||||||
Stock ownership guidelines | |||||||||
Encourage long-range planning and execution | |||||||||
Compensation Committee is comprised solely of independent directors |
362023 Proxy Statement |
Our Compensation Objectives and Principles | |||
These principles have been established by the Compensation Committee to further the objectives and guide the design and administration of specific plans, agreements and arrangements for our executives, including the Named Executive Officers. | |||
Objectives | Principles | ||
► | Align the interests of our executives with the interests of our shareholders | ► | Incentive compensation should be performance-based |
► | Attract, retain and motivate highly qualified executives | ► | Incentive compensation should represent the majority of total target compensation |
► | Pay for performance by rewarding current performance and driving future performance | ► | Incentive compensation should balance short and long- term performance |
► | Appropriately manage risk | ► | Incentive compensation should discourage excessive risk- taking |
► | Provide a competitive pay opportunity | ► | Long term incentives should balance stock price appreciation and financial achievements |
► | Promote long-term commitment to the Company via deferred equity awards and share ownership guidelines for our executives | ► | Compensation levels should be competitive |
► | Executive compensation should be reviewed annually |
Objectives and PrinciplesThese principles have been established by the Compensation Committee to further the objectives and guide the design and administration of specific plans, agreements and arrangements for our executives, including the Named Executive Officers.ObjectivesAlign the interests of our executives with the interests ofour shareholdersAttract, retain and motivate highly qualified executivesPay for performance by rewarding current performanceand driving future performanceAppropriately manage riskProvide a competitive pay opportunityPromote long-term commitment to the Company viadeferred equity awards and share ownership guidelines forour executivesPrinciplesIncentive compensation should be performance-based Incentive compensation should represent the majority oftotal target compensation Incentive compensation should balance short and long-termperformance Incentive compensation should discourage excessive risk-takingLong term incentives should balance stock appreciationand financial achievementsCompensation levels should be competitiveExecutive compensation should be reviewed annuallyPrinciples
INCENTIVE COMPENSATION SHOULD BE PERFORMANCE-BASEDIncentive Compensation Should Be Performance-Based
The Compensation Committee believes that a significant portion of the compensation received by executives, including our Named Executive Officers, should be tied to the performance of the Company relative to established financial objectives and to individual strategic metrics. The elements of the executive compensation program embody this principle by linking the annual incentive opportunity and long-term equity grants directly to such performance.
On an annual basis, the Compensation Committee reviews an independent report, provided by the external compensation consultant, on realizable pay for performance to ensure that our executives’ realizable pay is in line with overall Company performance and is also competitive when compared to the Company’s peer group.
Incentive Compensation Should Represent the Majority of Total Target Compensation The Compensation Committee believes that the majority of an executive’s compensation should be “at risk,” as an incentive to drive the creation of sustainable shareholder value and align the interests of our executives with those of our shareholders. In FY 2023, our
Incentive Compensation Should Balance Short-Term and Long-Term Performance
The Compensation Committee believes that driving sustained shareholder value creation requires that executive incentive compensation be appropriately balanced between short and long-term objectives. In addition, the Compensation Committee believes that such balancing discourages excessive risk taking that otherwise could drive short-term results at the expense of sustained long-term performance. Our executive compensation program promotes this objective by balancing the long-term incentive components in the form of equity-based awards, such as restricted stock awards and contingent performance shares, with short-term annual cash incentive opportunities. The value of long-term incentive components is tied, in part, to our stock price, thereby aligning executives’ interests with those of shareholders. However, the Compensation Committee recognizes that our share price is an incomplete measure of Company performance in the short term, as other factors may significantly impact stock prices. Accordingly, the annual cash incentive opportunity component of executive compensation emphasizes current or short-term corporate performance and the realization of short-term defined business and financial objectives. The Compensation Committee has determined that the balance between annual cash incentive opportunities and long-term equity incentives encourages our Named Executive Officers to focus on creating short and long-term shareholder value, while fulfilling business objectives and strategic goals.
Our FY
The Compensation Committee reviews market compensation data compiled and prepared by the Compensation Committee’s independent executive compensation consultant to evaluate whether our executive compensation program is market competitive. The Compensation Committee uses this data to benchmark our executives’ base salary, annual incentive opportunities and long-term incentive compensation. Generally, the Compensation Committee then sets target compensation at approximately the market median. However, the Compensation Committee considers other relevant factors in setting each Named Executive Officer’s total target compensation, including the Named Executive Officer’s scope of responsibilities and duties, experience, tenure with the Company, and individual performance as well as competitive market data, Company performance and internal pay equity. As a result, the Compensation Committee may set a Named Executive Officer’s total target compensation or an individual component of total target compensation below or above market median. By taking into account market data and other relevant considerations, the Compensation Committee is able to set each Named Executive Officer’s compensation at an appropriate level that enables us to attract and retain the highly qualified executives necessary to drive long-term enhancement of shareholder value.
The Compensation Committee believes that it is prudent to review and evaluate the executive compensation program annually in light of evolving market practices, regulatory requirements, the competitive market for executives and our executive compensation philosophy. This process is repeated in a structured manner annually.
Overview We provide three elements of total direct compensation: base salary, annual incentives and long-term incentives, which are described below. We also provide limited perquisites (see page
Base Salary
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BASE SALARY
Base salary is fixed cash compensation. During the first quarter of each fiscal year, the Compensation Committee reviews and establishes the base salaries of theCompany executives, including the Named Executive Officers. For each Named Executive Officer, the Compensation Committee takes into account a number of factors, including the scope of the executive’s responsibilities and duties, experience, tenure with the Company, and individual performance as well as competitive market data, Company performance and internal pay equity. The Compensation Committee does not assign any relative or specific weights to these factors. Salary levels are reviewed annually and are adjusted when appropriate. Increases in base salary are not automatic or guaranteed in order to promote a performance culture.
Effective October 1st1st of FYs 20192022 and 2020,2023, the base salary of each Named Executive Officer was set as follows:
Name | FY 2020 Base ($) | FY 2019 Base ($) | Increase | |||||||||
David Dunbar | 852,088 | 827,270 | 3% | |||||||||
Ademir Sarcevic | 415,000 | N/A | N/A | |||||||||
Alan J. Glass | 360,500 | 350,000 | 3% | |||||||||
Paul C. Burns | 360,500 | 350,000 | 3% | |||||||||
James Hooven | 330,000 | N/A | N/A | |||||||||
Thomas D. DeByle 1 | N/A | 423,872 | N/A |
Name | FY 2023 Base ($) | FY 2022 Base ($) | Increase |
David Dunbar | 900,419 | 869,130 | 3.6 % |
Ademir Sarcevic | 469,408 | 453,097 | 3.6 % |
Alan Glass | 392,376 | 378,741 | 3.6 % |
Annemarie Bell 1 | 322,885 | 277,393 | 16.4 % |
Sean Valashinas | 278,460 | 267,750 | 3.6 % |
Paul Burns | 392,376 | 378,741 | 3.6 % |
Flavio Maschera 2 | 384,681 | 371,314 | 3.6 % |
1 | Ms. Bell received an above-market raise to bring her compensation in line with comparable positions in the Company’s peer group and due to her performance. |
2 | Mr. |
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ANNUAL INCENTIVE OPPORTUNITY
The Compensation Committee establishes the annual cash incentive opportunity for executives including our Named Executive Officers through a detailed performance planning process called the Balanced Performance Plan (“BPP”). During the BPP process, the Compensation Committee establishes (i) the target incentive amounts; (ii) the respective weight of the financial performance measures and strategic goals; (iii) the Company financial performance goals at “threshold,” “target,” and “superior” levels; and (iv) the strategic goals for each Named Executive Officer. The BPPsfinancial metrics and each strategic goal are reviewed and discussed during the course of two Compensation Committee meetings through the first quarter of each fiscal year before being approved.
2020 ANNUAL INCENTIVE FORMULA2023 Annual Incentive Formula
Base Salary Target Percentage Financial Achievement Factor* Strategic Achievement Factor* Annual Incentive Amount
* These factors are calculated by taking the goal weight and multiplying it by the goal achievement percentage. For example, if the weight of financial goals totals 75%, and the financial achievement percentage is 100%, the financial achievement factor would be 75%; if the weight of financial goals totals 75% and the financial achievement percentage is 200%, the financial achievement factor would be 150%.
TARGET INCENTIVE AMOUNTSTarget Incentive Amounts
Each year the Compensation Committee sets the target incentive amount for each Named Executive Officer, expressed as a percentage of the executive’s base salary. The Compensation Committee sets these target incentives based on a number of factors, including the Named Executive Officer’s role and responsibilities, internal pay equity and competitive market data, in consultation with the compensation consultant and in adherence to our stated executive compensation objectives and principles. The target annual incentive opportunity for each Named Executive Officer in FY 20202023 is as follows:
Name | Target Annual Incentive (% of Base Salary) | Target Annual Incentive Amount ($) | ||||||
David Dunbar | 105% | 894,692 | ||||||
Ademir Sarcevic | 60% | 249,000 | ||||||
Alan J. Glass | 55% | 198,275 | ||||||
Paul C. Burns | 55% | 198,275 | ||||||
James Hooven | 45% | 148,500 | ||||||
Thomas D. DeByle | 0% | - |
Name | Target Annual | Target Annual |
David Dunbar | 105 % | 945,440 |
Ademir Sarcevic | 65 % | 305,115 |
Alan Glass | 55 % | 215,807 |
Annemarie Bell | 55 % | 177,587 |
Sean Valashinas | 35 % | 97,461 |
Paul Burns | 55 % | 215,807 |
Flavio Maschera 1 | 55 % | 211,574 |
1 | Mr. Maschera’s target annual incentive amount was based on his FY 2023 base salary of €352,466 as converted from EUR to USD using the June 30, 2023 exchange rate of 1.0914. |
402023 Proxy Statement |
GOAL WEIGHTWITHIN TARGET INCENTIVEGoal Weight within Target Incentive
After establishing a target incentive amount for each executive, the Compensation Committee determines the relative weight of financial performance measures and strategic goals. For FY 2020,2023, the Compensation Committee set the following relative weight of these performance measures (except for Mr. Burns):measures:
► | 75% of the annual incentive opportunity would be based on the achievement of financial performance goals, and |
| 25% of the annual incentive opportunity would be based on |
|
Payout for the achievement of both financial performance and strategic goals can range between 0% and 200%, where performance below threshold levels corresponds to a payout of 0%, while performance at or above superior levels corresponds to a payout of 200%. For example, if the weight of financial goals is 75%, the maximum financial achievement factor would be 150%. Similarly, if the weight of strategic goals is 25%, the maximum strategic achievement factor would be 50%. The combined factors are capped at 200%.
With respect to Mr. Burns, the Compensation Committee determined that 35% of his annual incentive opportunity would be based on achievement of financial performance goals and 65% of his annual incentive opportunity would be based on strategic goals due to the nature of his position as head of the Company’s strategy and business development function.
Setting Financial Performance Measures
SETTING FINANCIAL PERFORMANCE MEASURES
The Compensation Committee, working with the CEO, evaluates and establishes financial objectives that correlate to the creation of shareholder value, are aligned with the Company’s annual business plan and are appropriate measures for evaluating executive performance. For FY 2020,2023, the Compensation Committee selected the following three financial performance measures:
(i) EBITDA,adjusted Operating Income, (ii) adjusted EPS, and (iii) net working capital turns. The Compensation Committee selected these performance measures because it believes they are important financial factors in preserving and enhancing shareholder value in the short-term and sustaining growth and stability for the long-term.
After determining the performance measures, the Compensation Committee sets “threshold,” “target,” and “superior” performance goals, which correspond to annual incentive payouts of 50%, 100% or 200% of the target incentive amount, respectively, except for “threshold”“entry” for the EBITDAadjusted Operating Income performance measure corresponds to a payout of 25%. If actual performance falls between two performance levels, the amount of the incentive payout would be determined through interpolation. However, no payout would be made if actual performance falls below threshold.entry for the adjusted Operating Income performance measure or below threshold for all other measures. Additionally, if adjusted Operating Income performance exceeds target, the Compensation Committee set a requirement that the adjusted operating income margin must also be at least 12.7% for payout to exceed target. The Compensation Committee included this requirement in order to prevent margin dilution. The Compensation Committee sets the “entry” and “threshold” performance levellevels high enough so that achieving the level is not guaranteed, while setting the “superior” performance level high enough so that achieving it is difficult and represents an outstanding accomplishment. The Compensation Committee may adjust the financial performance targets to reflect the impact of special events, such as acquisitions or divestitures, during a fiscal year. These adjustments are made pursuant to established guidelines and are appropriate in light of long-term growth strategies and business operations.
2023 Proxy Statement41 |
FINANCIAL GOALSFinancial Goals & RESULTSFORResults for FY 20202023
For FY 2020,2023, the financial performance metrics, weights, achieved performance levels and payout percentages were as follows:
Financial Performance Metric | Threshold Target Superior | Weight | Weighted Achievement | |||||||
EBITDA 1 | 40% | 10% | ||||||||
Adjusted EPS 2 | 5% | 0% | ||||||||
Net Working Capital Turns Q1 3 | 6% | 5.7% | ||||||||
Net Working Capital Turns Q2 | 6% | 4.7% | ||||||||
Net Working Capital Turns Q3 | 6% | 4.2% | ||||||||
Net Working Capital Turns Q4 | 6% | 0% | ||||||||
Net Working Capital Turns 5 Point Average 4 |
| 6% | 4% | |||||||
Financial Goals Weighted Achievement Total | 28.7%5 |
Financial Performance Metric | Entry Threshold Target Superior | Weight | Weighted Achievement |
Adjusted Operating Income 1 | 40 % | 52.5 % | |
Adjusted EPS 2 | 5 % | 7.2 % | |
Net Working Capital Turns Q1 3 | 6 % | 0 % | |
Net Working Capital Turns Q2 | 6 % | 0 % | |
Net Working Capital Turns Q3 | 6 % | 0 % | |
Net Working Capital Turns Q4 | 6 % | 0 % | |
Net Working Capital Turns 5-Point Average 4 | 6 % | 0 % | |
Financial Goals Weighted Achievement Total | 59.7 % |
1 |
|
2 | This value, which is |
3 | Net working capital turns measures the ratio of sales to net working capital. The ratio was calculated by using annualized net sales for the trailing three-months of the listed quarter and dividing by the net working capital (calculated as net accounts receivable and inventory minus accounts payable) at the end of the listed |
4 | This five-point average included the net working capital turns for Q1-Q4 of FY |
422023 Proxy Statement |
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SETTING STRATEGIC GOALS
The Compensation Committee, in consultation with the Board, evaluates and establishes strategic objectives that correlate with the creation of shareholder value, align with the Company’s business plan and are appropriate measures for judging individual executive performance. As with financial performance measures, the Compensation Committee sets relative weights and metrics for each strategic goal. The specific goals are developed based on the individual nature of an executive’s role and responsibilities.
In FY 2020,2023, the Compensation Committee set the following strategic goals for the CEO:
► | Using organic and inorganic actions, deploy the Company’s resources to position Standex to grow sales faster than the rate in our long-range plan; |
| Apply the standard work of the Standex Growth Disciplines, OpEx, Talent Management and |
► | Divest non-core businesses to increase focus of remaining business where Standex can create the most shareholder value; acquire accretive strategic bolt-on acquisitions; and |
| Implement a robust sustainability and ESG strategy to |
|
In consultation with the CEO, the Compensation Committee sets strategic goals for executive officers, including the other Named Executive Officers, that are tied to the completion of specific projects in their functional areas. These projects are important to the Company in that they improve productivity and significantly lower the cost structures of the respective departments, resulting in better processes and reduced costs.
STRATEGIC GOALSStrategic Goals & RESULTSFORResults for FY 20202023
The Compensation Committee met with the CEO to evaluate the performance of each Named Executive Officer (other than the CEO) against their strategic goals. To determine the extent to which each strategic goal was met, the Compensation Committee evaluated several factors including the difficulty of reaching the goal, the work performed to achieve the goal, the quality of the work performed and other factors that influenced the ease or difficulty of meeting the goal. Additionally, the Compensation Committee took into consideration the quality of management’s response to the COVID-19 pandemic and the rapid actions taken to ensure employee safety and mitigate the adverse financial impact to the businesses. The Compensation Committee determined that each Named Executive Officer achieved greater than target on their strategic goals. For the CEO, the Compensation Committee evaluated his performance based on the response to the COVID-19 pandemic, as well as the following:
► | Fast growth market sales increased to $83M; year-to-date new product sales achieved $31.5M; multiple development opportunities are in process. |
| Record cash flows were delivered; Organic sales growth of |
► | Acquisitions since 2015 have delivered ROIC > 14%; Successful divestiture of Procon business. |
| ISS Environmental score improved; Sustainalytics score improved; ESG disclosures were implemented and S&P Global was engaged to |
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OVERALL ANNUAL INCENTIVE OPPORTUNITY RESULTSFOR NEOSOverall Annual Incentive Opportunity Results for NEOs
The following table shows the overall annual incentive opportunity results for FY 2020.2023. Each executive has the opportunity to participate in the Management Stock Purchase Plan, described below, under which executives can defer a pre-selected percentage of their annual incentive awards into the receipt of RSUs at a 25% discount. Neither Mr. Burns nor Mr. Maschera received any portion of the FY 2023 annual incentive opportunity due to the terminations of their employment.
Name | Financial Achievement Factor | Strategic Achievement Factor | Total BPP Score | Target Annual Incentive Amount ($) | Annual Incentive Amount ($) | |||||||||||||||
David Dunbar | 28.7 | 46.3 | 75 | 894,692 | 671,019 | |||||||||||||||
Ademir Sarcevic 1 | 28.7 | 46.3 | 75 | 249,000 | 186,750 | |||||||||||||||
Alan J. Glass | 28.7 | 46.3 | 75 | 198,275 | 148,706 | |||||||||||||||
Paul C. Burns | 13.4 | 79.6 | 93 | 198,275 | 184,396 | |||||||||||||||
James Hooven 2 | 28.7 | 46.3 | 75 | 148,500 | 83,531 | |||||||||||||||
Thomas D. DeByle 3 | - | - | - | - | - |
Target Annual | |||||
Financial | Strategic | Total BPP | Incentive | Annual Incentive | |
Name | Achievement Factor | Achievement Factor | Score | Amount ($) | Amount ($) |
David Dunbar | 59.7 % | 40.0 % | 99.7 % | 945,440 | 942,604 |
Ademir Sarcevic | 59.7 % | 45.0 % | 104.7 % | 305,115 | 319,456 |
Alan Glass | 59.7 % | 30.0 % | 89.7 % | 215,807 | 193,579 |
Annemarie Bell | 59.7 % | 40.0 % | 99.7 % | 177,587 | 177,054 |
Sean Valashinas | 59.7 % | 40.0 % | 99.7 % | 97,461 | 97,169 |
Management Stock Purchase Plan |
|
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MANAGEMENT STOCK PURCHASE PLAN
The Compensation Committee believes that while the annual incentive award provides motivation for executives to meet annual performance goals, the Management Stock Purchase Plan (“MSPP”) adds an additional long-term component. Under the MSPP, management at a certain salary level can elect to defer their annual incentive awards into the receipt of restricted stock units (RSUs)(“RSUs”) at a 25% discount, valued at the lower of (i) the closing price of the Company’s common stock on the last business day of the fiscal year (June 30, 2020)2023) or (ii) the closing price of the Company’s common stock on the date on which the annual incentive award is certified by the Compensation Committee (August 26, 2020)15, 2023). Executives must make their election prior to the beginning of the fiscal year and can defer up to 50% of their annual incentive award. These RSUs cliff vest at the end of a 3-year period and the executive receives shares of stock equal to the amount of RSUs granted. Executives accrue dividends, which are paid upon vesting, on the RSUs, but do not have voting rights until the shares underlying the RSUs are delivered. The following table details, for FY 2020,2023, the percent each Named Executive Officer elected to defer under the MSPP, the value of that deferral and the amount of RSUs granted pursuant to the deferral. Neither Mr. Burns nor Mr. Maschera received any portion of the FY 2023 annual incentive opportunity due to the terminations of their employment and thus were unable to participate in the MSPP.
Name | Annual Incentive Award Deferred (% of Award) | Amount of the Deferral ($) 1 | RSUs Granted (#) 2 | |||||||||
David Dunbar | 50% | 335,510 | 7,773 | |||||||||
Ademir Sarcevic | 20% | 37,350 | 865 | |||||||||
Alan J. Glass | 50% | 74,353 | 1,723 | |||||||||
Paul C. Burns | 20% | 36,879 | 854 | |||||||||
James Hooven | 0% | - | - | |||||||||
Thomas D. DeByle | 0% | - | - |
Annual Incentive Award | Amount of the | RSUs Granted | |
Name | Deferred (% of Award) | Deferral ($) 1 | (#) 2 |
David Dunbar | 50 % | 471,302 | 4,441 |
Ademir Sarcevic | 20 % | 63,891 | 602 |
Alan Glass | 50 % | 96,789 | 912 |
Annemarie Bell | 0 % | - | - |
Sean Valashinas | 30 % | 29,151 | 274 |
1 | The amount of the deferral is the dollar value of the |
2 | Based on the closing price of the Company’s common stock on June 30, |
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LONG-TERM INCENTIVE PLAN
In 2018, the Company, with the approval of its shareholders, adopted the 2018 Omnibus Incentive Plan (“OIP”). An amended and restated OIP was also approved by shareholders in 2021. The purpose of the OIP is to align executives’ interests with those of shareholders through the annual grant of long-term equity awards. These long-term equity awards reward executives for the Company’s performance over a multi-year period. All long term incentive awards to NEOs for FY 20202023 were made in September 2019August 2022 under the OIP. Prior to the approval of the OIP, the Company granted awards under the 2008 Long Term Incentive Plan (“LTIP”), which expired in October 2018. Certain outstanding award grants were made under the LTIP.
OIP STRUCTUREStructure
The FY 20202023 OIP awards consistsconsist of two types of equity awards: time-vested restricted stock awards (RSAs)(“RSAs”) and performance-basedperformance- based performance share units (PSUs)(“PSUs”). The Compensation Committee selected these equity vehicles for FY 20202023 because each aligns the interests of our Named Executive OfficersNEOs with those of our shareholders, enhances retention of our Named Executive OfficersNEOs and provides the opportunity to meaningfully increase the level of stock ownership by our Named Executive Officers.NEOs. In addition, the PSUs motivate our NEOs and reward achievement of financial metrics (and share performance) that are aligned to our long-term business strategy and build long-term shareholder value.
OIP Component | Description | |||
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| |||
Awards of Restricted Stock (“RSAs”) | Time-based, annual pro-rata vesting over a 3-year period | |||
Performance Share Units (“PSUs”) | Cliff vest at the end of a 3-year | |||
|
and further subject to increase or decrease of up to 25% of payout based on relative TSR performance over the performance period (for an ultimate payout range of 0% to 250%). |
Each RSA vests
For FY 2023 RSAs, the RSAs will vest on a pro-rated basis on the 3rd anniversary1st, 2nd and 3rd anniversaries of the grant date, provided that the RSA holder is employed continuously through the particular vest date. However,RSAs from FY 2020 grants vested on the 3rd anniversary of the grant, provided that the RSA holder was employed continuously through the vest date. The Compensation Committee adjusted the vesting schedule for RSAs granted after FY 2020 based on a review of peer practices and the perspective that pro- rata vesting is a more effective tool in attracting and retaining high potential employees. All RSAs will immediately vest upon death, disability or retirement.retirement or in the event of an involuntary termination in connection with a change in control. All RSAs under the OIP and the LTIP are considered beneficially owned by the executive, have voting rights, and earn dividend equivalents, which are paid upon vesting.
Each PSU grant cliff vests at the end of a 3-year performance period based on results achieved against Compensation Committee-approvedCommittee- approved performance metrics. Payouts under the PSU grant may range from 0% to 200% of the target award and are settled in shares of common stock. Payout begins at 50% of target for achieving threshold performance goals. If threshold performance goals are not achieved by the conclusion of the performance period, the PSU award would be forfeited and no shares would be delivered under the award. As noted below, actual achievement may be further modified either upward or downward on a sliding scale of up to 25% of payout, based on the relative TSR performance over the performance period. PSUs are also subject to forfeiture upon termination of employment during the performance period for any reason other than death, disability, retirement or involuntary termination in connection with a change in control.
Additionally, the Compensation Committee has the discretion to grant awards of restricted stock for a variety of reasons, including sign-on bonuses to attract talent and discretionary grants to retain and motivate executives.
The Compensation Committee believes that long-term incentive compensation is essential for retaining and motivating executives. It further believes that providing our executives with long-term incentives will encourage them to operate the Company’s business with a view towards building long-term shareholder value. Based on these considerations, the Compensation Committee, in consultation with its external compensation consultant, establishes (i) the target incentive amounts, (ii) the percentage of the target award that is granted in the form of RSAs and PSUs, and (iii) the performance measures at “threshold,” “target” and “superior” levels.
2023 Proxy Statement45 |
FY 2020 TARGET INCENTIVE AMOUNTS2023 Target Incentive Amounts
For FY 2020,2023, the Compensation Committee set the target long-term incentive compensation for each Named Executive Officer, expressed as a percentage of the executive’s base salary based on a number of factors, including the Named Executive Officer’s role and responsibilities, internal pay equity, competitive market data and our stated executive compensation objectives and principles. The Compensation Committee also set the percentage of the total incentive compensation that will be granted in the form of PSUs and RSAs based on the understanding thatSince the CEO is in the best position to drive overall Company performance, andthe CEO should have a larger portion of his long-term incentive award be awarded in PSUs.PSUs as opposed to RSAs. The Compensation Committee set the CEO’s percentage of PSUs at 60% of the target award, while the other NEOs’ PSU grants were set at 50% of their target award.
For FY 2020,2023, the Compensation Committee established the following target long-term incentive awards, with the percentage of such award granted as PSUs for each Named Executive Officer:
Name
| Target Award
| Target Award
| Target Award
| |||||||||
David Dunbar
|
|
250%
|
|
|
2,130,220
|
|
|
60%
|
| |||
Ademir Sarcevic
|
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150%
|
|
|
622,500
|
|
|
50%
|
| |||
Alan J. Glass
|
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100%
|
|
|
360,500
|
|
|
50%
|
| |||
Paul C. Burns
|
|
100%
|
|
|
360,500
|
|
|
50%
|
| |||
James Hooven 1
|
|
0%
|
|
|
-
|
|
|
-
|
| |||
Thomas D. DeByle 2
|
|
0%
|
|
|
-
|
|
|
-
|
|
Target Award | Target Award | ||
Name | (% of Base Salary) | Target Award Amount ($) | (% Awarded in PSUs) |
David Dunbar | 300 % | 2,701,257 | 60 % |
Ademir Sarcevic | 150 % | 704,112 | 50 % |
Alan Glass | 100 % | 392,376 | 50 % |
Annemarie Bell | 70 % | 226,020 | 50 % |
Sean Valashinas | 40 % | 111,384 | 50 % |
Paul Burns | 100 % | 392,376 | 50 % |
Flavio Maschera | 70 % | 269,277 | 50 % |
Performance Measures |
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PERFORMANCE MEASURES
The most recently certified award forFor the FY 2018-2020 performance period was subject to the following performance metrics:
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The first metric, 3-year cumulative EBITDA, which stands for earnings before interest, tax, depreciation2021-2023 and amortization, is a non-GAAP financial measure that is determined by the sum of (i) income from continuing operations before income taxes, (ii) interest expense, and (iii) depreciation and amortization. The Compensation Committee selected this financial metric because of its direct correlation to profitability and cash flow. Profitability and cash flow are critical to the Company’s ability to complete acquisitions, invest in its core businesses, declare dividends for shareholders and improve overall liquidity.
The second metric, 3-year average return on invested capital, is the average over the three-year period of the Company’s return on invested capital. The Compensation Committee selected average ROIC as the second performance measure because it provides a means of determining whether the Company’s earnings are being invested in a way that optimizes the Company’s returns.
Starting with FY 2019 and applicable for the FYs 2019-2021 and FYs 2020-20222022-2024 performance periods, the Compensation Committee adjusted the performance metrics toset a single modified ROIC measure.measure, as calculated using the 5-point average over the last fiscal year of the particular performance period. The modified ROIC measure is modified in that goodwill is excludedcalculated by adjusting the denominator to eliminate distortion from acquisitions, andadd accumulated depreciation and accumulated amortization is added back intoand remove goodwill. This ratio reflects the calculation.improved efficiency of the Company’s operating assets to generate profits while reducing distortion from the effects of divestitures and acquisitions. The Compensation Committee selected this modified ROIC measure because it reflects the impact of CompanyCompany’s efforts to improve the quality of earnings, both organically and inorganically, andwhether they come from organic actions or through inorganic portfolio moves. The measure supports the Committee’s view that improvement in quality of earnings drives shareholder value creation. To more broadly reflect Standex value creation for shareholders. To further reflect performanceshareholders relative to other industrial companies, the achievement of the measure will beis adjusted by a relative TSR modifier over the three-year performance period. Specifically, actual awards will beare modified up or down as follows:
If TSR over the three-year performance period is: | Then: | |||
At or above the 75th percentile of the comparator group | The award will be increased | |||
At or above the 25th and below the 75th percentile of the comparator group | No change to the award | |||
Below the 25th percentile of the comparator group | The award will be decreased on a sliding scale starting from 15% up to 25% |
462023 Proxy Statement |
For the FY 2023-2025 performance period, the Compensation Committee changed the metric from the modified ROIC measure to a traditional ROIC measure. However, the Compensation Committee retained the 5-point average over the last fiscal year component of the measurement. The Compensation Committee changed the metric to simplify the calculation without detracting from the Company’s focus on improving quality of earnings. Additionally, while keeping the relative TSR modifier, the Compensation Committee adjusted the modifier as follows:
If TSR over the three-year performance period is: | Then: | |
At or above the 66th percentile of the comparator group | The award will be increased on a sliding scale starting from 15% to 25% | |
At or above the 33rd and below the 66th percentile of the comparator group | No change to the award | |
Below the 33rd percentile of the comparator group | The award will be decreased on a sliding scale starting from 15% up to 25% |
The peer group selected for thisboth of these relative TSR modifier is the S&P 600 Capital Goods Index which the Committee believes is a reasonable proxy to measuring a broad, and therefore consistent, group of companies that will experience similar market influences during the performance period. Our NEOs, therefore, are partially compensated based on how our performance compares to similar investment alternatives when considering total shareholder return performance.
Status of Long-Term Incentive Plan Programs
|
STATUSOF LONG TERM INCENTIVE PLAN PROGRAMS
Performance Period and Measure | Performance Levels 1 | Weight | Weighted Achievement | Status | ||||
FY 2018-2020 |
u Results were certified in August 2020. u EBITDA and ROIC were both above threshold levels. u Final payout was certified at 57.2% for Company performance and individual share payouts are in the table below. | |||||||
EBITDA |
|
60% |
35.6% | |||||
ROIC |
|
40% |
21.6% | |||||
FY 2019-2021
Modified ROIC |
| u At June 30, 2020, payout was projected below the threshold level. Company performance over the remaining year of the performance period will determine the number of shares earned, if any. u Results will be certified in August 2021, including applying the relative TSR modifier. | ||||||
FY 2020-2022
Modified ROIC |
| u At June 30, 2020, payout was projected below the threshold level. Company performance over the remaining year of the performance period will determine the number of shares earned, if any. u Results will be certified in August 2022, including applying the relative TSR modifier. | ||||||
Period and | Weighted | |||
Measure | Performance Levels | Achievement | Status & Commentary | |
FY 2021-2023 | ► | Results were certified in August 2023. | ||
► | The | |||
Modified ROIC | ► | Company’s 3-year TSR ranked in the 78th percentile amongst the peer group of S&P 600 Capital Goods companies, so the TSR modifier increased payout by 16.2%. | ||
► | Final payout was certified at 232.4% based on Company performance, and |
FY 2022-2024 awards will be certified in August 2024, while FY 2023-2025 awards will be certified in August 2025.
As certified by the Compensation Committee, the FY 2018-20202021-2023 performance period ended on June 30, 20202023 and the PSUs granted on September 6, 20172020 vested at 57.2%232.4%, for the following share payouts and value as of the date of certification:certification. Neither Mr. Burns nor Mr. Maschera received any portion of the FY 2021-2023 PSU vesting due to the terminations of their employment.
Name | Shares granted on September 6, 2017 (#) | Shares Vesting (#) | Value of Shares Vesting ($) 1 | |||||||||
David Dunbar |
| 10,505 |
|
| 6,008 |
|
| 347,732 |
| |||
Ademir Sarcevic 2 |
| - |
|
| - |
|
| - |
| |||
Alan J. Glass |
| 1,852 |
|
| 1,059 |
|
| 61,315 |
| |||
Paul C. Burns |
| 1,301 |
|
| 744 |
|
| 43,073 |
| |||
James Hooven 3 |
| - |
|
| - |
|
| - |
| |||
Thomas D. DeByle 4 |
| 3,364 |
|
| 1,413 |
|
| 81,804 |
|
Shares granted on | Shares | Value of Shares | |
Name | September 6, 2020 (#) | Vesting (#) | Vesting ($) 1 |
David Dunbar | 27,709 | 64,395 | 10,541,462 |
Ademir Sarcevic | 7,012 | 16,295 | 2,667,492 |
Alan Glass | 3,907 | 9,079 | 1,486,232 |
Annemarie Bell | 1,339 | 3,111 | 509,271 |
Sean Valashinas | 1,275 | 2,963 | 485,043 |
1 | Based on the stock price on the date the Compensation Committee certified the award, August |
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Retirement Plans |
Standex Retirement Savings Plan
| ||||||
RETIREMENT PLANS
STANDEX RETIREMENT SAVINGS PLAN
The Company offers a qualified savings and investment 401(k) plan to most of our non-production U.S.-based employees, including our Named Executive Officers.Officers, other than Mr. Maschera, who is an Italian citizen. This plan provides eligible employees an opportunity to save for retirement on both a pre-tax and after-tax basis up to 100% of their eligible pay subject to annual IRS limits. The Company provides eligible employees with a matching contribution equal to:
► | 100% of the employee’s contribution for the first 3% of the employee’s total compensation (base salary plus annual incentive award); and |
50% of the employee’s contribution for the next 2%. |
The Named Executive Officers, other than Mr. Maschera, as well as employees who are at a location that is covered by the now-frozennow- frozen Standex Pension Plan (see below), receive an additional 1% of their eligible pay as a Company contribution regardless of the amount of the employee’s contribution. Some employees receive an additional sliding scale age-based Company contribution if they were employed with the Company on December 31, 2007 and were of a certain age. All eligible employees are immediately 100% vested in all contributions to this plan.
STANDEX DEFERRED COMPENSATION PLANStandex Deferred Compensation Plan
The Standex Deferred Compensation Plan is a non-qualified, “top hat” and unfunded plan maintained for the purpose of permitting a select group of management and highly compensated employees, including Named Executive Officers, other than Mr. Maschera and Mr. Valashinas, to continue saving for retirement once they can no longer make contributions to the Retirement Savings Plan. If a highly compensated employee reaches the IRS compensation limit for the Retirement Savings Plan, the Deferred Compensation Plan allows the employee to continue to save for retirement under nearnearly identical terms. Eligible employees may defer up to 50% of their base salaries and 100% of their annual bonuses that combined exceed the IRS compensation limit. All Company contributions (match and non-match) are made on the same basis as the Retirement Savings Plan described above.
Deferral elections must be made by December 31st31st of each year for the upcoming calendar year and all deferral elections are irrevocable. All eligible employees are immediately 100% vested in all contributions to this plan. Employees may elect the timing and form of distribution of the accrued benefits provided that the accrued benefit is greater than $10,000. For accrued benefits of less than $10,000, the distribution will be paid in a lump sum. Distributions will be paid no sooner than six months after termination of employment for our Named Executive Officers, pursuant to the IRC.Internal Revenue Code (“IRC”).
PENSION PLANSPension Plans
The Standex Retirement Plan, a tax-qualified defined benefit pension plan, and the Standex Supplemental Retirement Plan, a non-qualified defined benefit pension plan for highly compensated employees, are the Company’s two pension plans. Both plans were frozen as to future benefit accruals and new participants on December 31, 2007. All of our Named Executive Officers, except for Mr. Valashinas, became employed with the Company after this date or were ineligible to participate and are not accruing benefits under either of these plans.
Mr. Valashinas became employed with the Company on October 22, 2007 and was eligible to participate and accrue benefits under the Standex Retirement Plan. Since the plan was frozen shortly after Mr. Valashinas’ commencement of employment, his accumulated benefit under the plan is $839.30 and thus, de minimus.
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PERQUISITESAND OTHER BENEFITSPerquisites and Other Benefits
EMPLOYMENT AGREEMENTSEmployment Agreements
We have entered into employment agreements with each of the Named Executive Officers. Even though each Named Executive Officer has an employment agreement which sets out an initial term that automatically renews, the executives serve at the will of the Board because the agreements may be terminated for any reason with 30 days’ notice.notice, except for Mr. Maschera, whose particular situation is described below. All of the provisions within the employment agreements were crafted to consider the needs of the Company and the executive’s specific circumstances. The Compensation Committee believes that the employment agreements are an important tool to attract and retain highly qualified executives in a competitive marketplace, while also protecting the Company in the event of an executive’s termination.
In addition to severance provisions, our employment agreements also contain restrictive covenants including a non-compete provision, which precludes an executive from engaging, in any active capacity, in any business other than Standex while they are employed with the Company. This term is vital to ensure that an executive’s attention and focus during their employment is solely on the Company’s business. The non-compete also precludes the executives from engaging in a business that is competitive with the Company. The non-compete clause also contains a non-poaching provision, which restricts a departing executive’s ability to hire then-current employees of the Company. These terms are beneficial to the Company because they safeguard against executives, who know the most about the Company, its businesses, its employees and its markets, using their knowledge to adversely impact the Company after their employment ends.
Until Mr. Maschera’s termination, he had an employment agreement with the Company that incorporated the above aspects. Additionally, Mr. Maschera is an Italian citizen and the employment relationship between Mr. Maschera and the Company was governed by the Contratto Collettivo Nazionale di Lavoro dei Dirigenti Industria (the “Italian NCBA”) and Italian law. Notice periods, severance in lieu of notice, restrictions on termination, and various termination/severance scenarios are prescribed by the Italian NCBA and Italian law. Due to Mr. Maschera’s termination of employment, a settlement agreement was entered into between Mr. Maschera and the Company on June 30, 2023. In exchange for certain payments, as described in more detail in footnote 4 to the “Summary Compensation Table” on PERQUISITESpage 56, Mr. Maschera released all claims in connection with the termination of his employment and agreed to a 2-year non-compete.
Perquisites
We provide a limited number of perquisites to certain Named Executive Officers, including the CEO. The Compensation Committee designed these perquisites to be competitive and assist in attracting and retaining highly qualified executives. Furthermore, these perquisites also assist the Named Executive Officers in performing their responsibilities. For FY 2020,2023, we provided the following perquisites to certain Named Executive Officers: car allowances, reimbursement of automobile operating expenses (such as gas costs, auto insurance, maintenance and repairs), Mr. Dunbar and Mr. Maschera received reimbursement for tax return preparation and counseling services, and Mr. SarcevicMaschera also received a relocation and moving expenses allowance.travel expense allowance, as per the Italian NCBA. We do not provide gross ups for any attributed income relating to these perquisites.
CHANGEIN CONTROLChange in Control
Our employment agreements contain provisions governing what happens when there is a change in control. The benefits provided to the Named Executive Officers under these provisions, if payable, are in lieu of any other severance benefits. The Compensation Committee believes that these benefits are important to encourage the executives involved in any negotiation or completion of a change in control transaction to act in the best interest of shareholders, without regard for personal interest.
The severance benefits also promote the financial protection and security of an executive’s long-term incentive compensation arrangements in the event of the loss of their positions following a transaction that involves a change in the ownership or control of the Company. None of the severance benefits are triggered if the executive retains their position or a substantially similar position following a change in control. With equity compensation, if the executive is granted an award that substantially mirrors their then-current award, there is no acceleration of that current equity award. This “double trigger” only provides for a payment of benefits if (i) there is a change in control and (ii) the executive is involuntarily terminated or resigns for a specified “good reason.” The Compensation Committee believes that this is appropriate because if an executive retains their position following a change in control, the impact on the executive is not significant enough to warrant the provision of benefits.
The severance benefits include a lump sum payment equal to a multiple of the executive’s annual base salary and annual incentive bonus, accelerated vesting of all outstanding equity awards under the LTIP or OIP and RSUs under the MSPP and a continuation of life insurance and medical plan benefits for a specified period of time. The Compensation Committee believes that these terms and amounts are customary and reasonable. The Compensation Committee, in consultation with its compensation consultant, periodically reviews these terms to evaluate both their effectiveness and competitiveness.
More detailed information concerning the trigger events and the severance benefits of each Named Executive Officer is discussed below under “Potential Payments upon Termination or Change in Control” starting on page 5462.
2023 Proxy Statement49 | ||||||
CEO PAY RATIO DISCLOSUREOther Compensation Information
As required by the SEC rules, we are providing the following information to show the ratio between the annual total compensation of our CEO in FY 2020 and the annual total compensation of the median employee of the Company. The determination date for identifying the median employee was June 30, 2020.Say-on-Pay
As of June 30, 2020, Standex has approximately 3,836 employees in 62 locations across 22 countries. With our global footprint, a majority (approximately 69%) of our employee population is located outside of the United States. In line with the customary nature of manufacturing organizations, a large segment of our employees is operations-based and paid on an hourly basis (approximately 62%). The median annual total compensation disclosed below is based on the Company’s global workforce and is not designed to capture the median compensation of the Company’s US employees. In order to attract and retain employees globally, we pay what we believe to be market competitive rates in each market where we operate. Our pay ratio below is a reasonable estimate that has been calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions summarized below.
We are using a different median employee from the person that was identified in our FY 2019 Proxy Statement. Since June 30, 2019, the date that we identified our last median employee, the Company has experienced significant changes in its employee population due to the April 2020 divestiture of the Refrigerated Solutions Group, which resulted in a decrease of approximately 600 US employees and changed our median employee compensation.
For FY 2020, the median annual total compensation of all employees of the Company and its subsidiaries was $46,094. Our CEO’s annual total compensation for FY 2020, as reported and detailed in the Summary Compensation Table was $4,004,684. Based on this information, the ratio of these two annual total compensations was estimated to be 87 to 1.
This ratio was calculated by first identifying the median employee using our global employee population as of June 30, 2020, which included all global full-time, part-time and temporary employees, including newly hired employees, that were employed on that date. In determining our median employee, we used base annual salary during the period from July 1, 2019 through June 30, 2020. All international employees’ base annual salaries were converted to USD from local currencies using exchange rates for the month ending June 30, 2020. We determined that the median employee was a full-time, hourly employee in our Engraving division, located in the United States. We then calculated the employee’s total compensation in accordance with Item 402(c)(2)(x) of Reg. S-K.
SAY-ON-PAY
Stockholders are afforded the opportunity to cast an advisory vote on an annual basis with respect to the total compensation of our Named Executive Officers. At the 20192022 annual meeting, 96.1%98.1% of the votes cast on the advisory proposal were voted in its favor. After reviewing the results, the Compensation Committee decided to continue to apply the same general philosophy, compensation objectives and governing principles that it used in FY 2019.2022.
CLAWBACK PROVISIONClawback Provision
In the event that the Company’s financial results for any reporting period require restatement so that the period’s financial performance measures are not met, and the restatement is necessary due to the executives’ misconduct, the OIP and LTIP givegives our Board the discretion and authority to “claw-back” or cancel unpaid annual and long-term incentive awards and to recover excess annual and long-term incentive awards that have been paid to any executive officer. The Compensation Committee adopted a new clawback policy in July 2023 to be in line with new SEC rules and forthcoming NYSE guidelines.
POLICY CONCERNING TRANSACTIONS INVOLVING COMPANY SECURITIES (ANTI-HEDGING POLICYPolicy Concerning Transactions Involving Company Securities (Anti-Hedging Policy & ANTI-PLEDGING POLICY)Anti-Pledging Policy)
The Company’s anti-hedging and anti-pledging policy prohibits all named executive officersNamed Executive Officers from engaging in certain transactions involving the Company’s securities. Specifically, they are prohibited from engaging in transactions that are intended to offset, in whole or in part, potential loss in value of Company securities. These transactions include, but are not limited to, hedging transactions, buying or selling put or call options, and short sales. In addition, the policy prohibits pledging Company securities without first providing at least two weeks’ advance notice explaining the purpose of the pledge.securities. No Named Executive Officer has entered into any such prohibited transaction.
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Stock Ownership Guidelines
STOCK OWNERSHIP GUIDELINES
The Compensation Committee believes that Company executives, including the Named Executive Officers, should have at least a minimum level of Company stock ownership to align their interests with those of Company shareholders. The Compensation Committee has adopted stock ownership guidelines through a competitive analysis prepared by management and reviewed by the compensation consultant. These guidelines require the CEO to maintain stock ownership valued at five times his or her base salary and require all other executives to maintain stock ownership valued at two times their base salary. Additionally, the guidelines require all non-executive Vice Presidents, Group Presidents and Division Presidents to maintain stock ownership valued at one times their base salary. Until an executive has attained the requisite stock ownership level, the executive is expected to retain at least 50% of the shares they are awarded, net of amounts required to pay taxes. To determine if the guideline amount is met, shares are valued at the average stock price during the 4th4th quarter of the prior fiscal year. Shares that are either owned outright or are unvested RSAs are considered owned for the purpose of the guidelines. Neither PSUs awarded under the OIP or the LTIP nor RSUs granted pursuant to a deferral under the MSPP are considered in the calculation of stock ownership.
The required amount under the guidelines is recalculated annually or whenever an executive receives an increase in pay. The Compensation Committee monitors compliance with these stock ownership guidelines on an ongoing basis. The following table shows the stock ownership requirements for each Named Executive Officer, except Mr. DeByle, who is no longer employed with the Company, as of their most recent Form 4 filing.Officer.
Name | Stock Ownership Guideline Amount (% of Annual Base Salary) | Required Ownership on June 30, 2020 (#) 1 | Actual Stock Ownership (#) | |||||
David Dunbar 2 |
| 500% |
| 84,066 | 83,762 | |||
Ademir Sarcevic 3 |
| 200% |
| 16,377 | 11,883 | |||
Alan J. Glass 4 |
| 200% |
| 14,227 | 9,493 | |||
Paul C. Burns |
| 200% |
| 14,227 | 15,623 | |||
James Hooven 5 |
| 200% |
| 13,023 | 4,066 |
Stock Ownership | |||
Guideline Amount (% of Annual | Required Ownership on | Actual Stock Ownership as | |
Name | Base Salary) | June 30, 2023 (#) 1 | of June 30, 2023 (#) |
David Dunbar | 500 % | 34,100 | 89,794 |
Ademir Sarcevic | 200 % | 7,111 | 9,720 |
Alan Glass | 200 % | 5,944 | 17,780 |
Annemarie Bell | 200 % | 4,891 | 4,431 |
Sean Valashinas | 200 % | 4,218 | 5,832 |
1 | Based on the average price of the Company’s common stock between April 1, |
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502023 Proxy Statement | ||||||
Basis for Determining Executive Compensation
BASISFOR DETERMINING EXECUTIVE COMPENSATION
The Compensation Committee uses a multi-faceted approach to designing the executive compensation program. The approach includes the use of the independent compensation consultant to advise the Compensation Committee on the selection of an appropriate peer group, analysis of the peer group’s practices and compensation levels and recommendations for the Compensation Committee to consider. Compensation levels for specific executives are based on various factors, including the executive’s experience, individual accomplishments and the breadth of the executive’s organizational responsibilities. The Compensation Committee discusses the program with the CEO and the VP ofChief Human Resources Officer to determine the effectiveness of the program in terms of achieving our stated objectives, including whether the current program is achieving desired motivational effects and properly incentivizing the executives.
EXECUTIVE COMPENSATION CONSULTANTExecutive Compensation Consultant
In FY 2020,2023, the Compensation Committee retained the same independent compensation consultant, Meridian Compensation Partners, LLC (“Meridian”), which has assisted the Compensation Committee since 2015. Meridian is an internationally recognized executive compensation consulting firm. No other compensation consultant was engaged in FY 2020.2023.
Meridian was retained to assist the Compensation Committee in the development of a compensation peer group and to advise the Compensation Committee on our existing executive compensation program. Meridian provided research, data analyses, survey information and design expertise as part of its services. Meridian also notified the Compensation Committee of regulatory developments and market trends relating to executive compensation practices. Meridian did not determine noror recommend the exact amount of compensation for any Named Executive Officer. From time to time, Meridian also performs an analysis of independent director compensation.
For FY 2020,2023, Meridian conducted a competitive assessment of our executive compensation program (including design, features and target pay opportunities) against our compensation peer group. Based on Meridian’s assessment, the Compensation Committee determined that our executive compensation program is reasonable and appropriate when compared to our peer group.
The Compensation Committee, in determining whether to continue retaining Meridian for FY 2020,2023, assessed Meridian’s independence under the NYSE’s listing standards. Meridian provided the Compensation Committee with confirmation of its independent status under the NYSE’s standards. As such, the Compensation Committee believes that Meridian is independent and that there is no conflict of interest between Meridian and the Company, the Company executives, the Compensation Committee or its members.
PEER GROUPPeer Group
The following selection criteria were used to establish the Company’s FY 20202023 compensation peer group:
► | The company should be an industrial and technology manufacturing company; |
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The company should have revenues between |
► | The company should have multiple business units; and |
► | The company should |
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Based on this selection criteria, our FY 20202023 peer group consisted of the following 17 companies:
Albany International Corporation | Enpro Industries, Inc. |
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Altra Industrial Motion Corporation | ESCO Technologies, Inc. | NN, Inc. | ||
Barnes Group, Inc. | Franklin Electric Co., Inc. | Proto Labs, Inc. | ||
Chart Industries, Inc. | Helios Technologies, Inc. | RBC Bearings, Inc. | ||
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CIRCOR International, Inc. |
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Enerpac Tool Group Corp. |
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The Compensation Committee, with Meridian’s assistance, routinely reviews the selection criteria and the peer group companies to achieve a relative size positioning that is within a competitive range of median, that is, between the 40th40th and 60th60th percentile of the peer group companies. As a result of the comprehensive analysis for
For FY 2020, 5 companies2023 compensation, Lydall, Inc. and Welbilt, Inc. were removed and replaced, based largely on those companies no longer meetingfrom the FY 2022 peer group due to actual or pending acquisitions. In April 2023, the Compensation Committee reviewed the peer group criteria, while 5 companies were added (one such company, Milacron Holdings Corp. wasand, for FY 2024, removed Altra Industrial Motion Corporation, due to it being acquired, during FY 2020 and does not appear above).
With the divestiture of the Refrigerated Solutions Group, the Company’s relative size positioning withinFranklin Electric Co., Inc., due to business fit and revenue range. Since this brought the peer group fell below the 40th percentile, so for FY 2021, twodown to 15 companies, (Hurco Companies,4 additional companies were then added (Astronics Corporation; Columbus McKinnon Corporation; CTS Corporation; and Vishay Precision Group, Inc. and Proto Labs, Inc.) are being added to our compensation peer group..
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Risk in Compensation Programs
The Compensation Committee regularly monitors and reviews the executive compensation program to determine the program’s effectiveness at achieving the stated objectives and principles. In August 2020,2023, the Compensation Committee conducted its annual review of the executive compensation policies and practices and assessed whether the current incentives could lead to excessive or inappropriate risk taking by the executives. Following the review, the Compensation Committee concluded that the Company’s executive compensation program elements, when considered both separately and as a whole, are not reasonably likely to have a material adverse effect on the Company. In reaching this conclusion, the Compensation Committee noted the following factors:
► | Compensation elements are mixed.The executive compensation program has a balanced mix of base salary, annual cash incentive awards and long-term equity incentive awards. The |
► | Incentive award metrics contain both short and long-term goals.The annual incentive award is contingent upon the attainment of pre-established short-term corporate, business and financial objectives, while the long-term incentive award is based on long-term stock growth as well as the attainment of financial performance goals. This balance between short and long-term goals reduces the incentive to prioritize short-term |
► | Short-term and long-term performance metrics differ. The performance metrics used to determine the amount of annual incentive awards are different than the performance metrics used to determine the amount of |
► | Annual incentive awards are capped.The total annual incentive award is capped at 200% of target, which reduces the incentive |
► | Long-term incentives are completely equity-based.All long-term incentive awards are paid in the form of shares and are only paid if an executive remains employed with the Company at the time of vesting. This practice aligns the executive’s interests with those of shareholders and reduces the likelihood that an executive |
► | Long-term performance metrics are based on corporate objectives. The performance metrics for long-term incentive awards are based on overall corporate performance rather than individual business unit performance. This reduces the risk that business unit |
► | Incentives have performance thresholds. The annual incentive award and the PSUs granted under the |
► | Compensation is benchmarked.The Compensation Committee benchmarks compensation against the peer group to ensure that the compensation program elements and payout levels |
► |
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Compensation can be recouped.The Board is empowered to “claw-back” any portion of the annual or long-term incentive compensation attributable to |
► | Executives have ownership requirements. Our executives are subject to stock ownership guidelines, which require executives to maintain ownership of a certain amount of Company stock during their employment. This encourages executives to |
522023 Proxy Statement |
REPORTOFTHE COMPENSATION COMMITTEECompensation Committee Interlocks and Insider Participation in Compensation Decisions
Prior to the 2022 annual meeting, the members of the Compensation Committee were Charles H. Cannon, Jr., Thomas E. Chorman, Jeffrey S. Edwards and Michael A. Hickey. As of October 27, 2022, the Compensation Committee membership was realigned and the members became: Robin J. Davenport, B. Joanne Edwards, Jeffrey S. Edwards, and Michael A. Hickey.
None of these directors has ever been an employee or officer of the Company. None of our executive officers serves as a member of the board of directors or on the compensation committee of any other entity that has had any executive officer serving as a member of our Board or Compensation Committee.
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed this Compensation Discussion and Analysis with management. Based on that review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.
Jeffrey S. Edwards, Chair
2023 Proxy Statement53 |
Charles H. Cannon, Jr.
Thomas E. Chorman
Michael A. Hickey
COMPENSATION COMMITTEE INTERLOCKSANDCompensation Tables
INSIDER PARTICIPATIONIN COMPENSATION
DECISIONS
During FY 2020, the members of theSummary Compensation Committee were Charles H. Cannon, Jr., Thomas E. Chorman, Jeffrey S. Edwards and Michael A. Hickey. None of these directors have ever been an employee or officer of the Company. None of our executive officers serve as a member of the board of directors or on the compensation committee of any other entity that has had any executive officer serving as a member of our Board or Compensation Committee.Table
The following table sets forth compensation information for fiscal years 2018, 20192021, 2022 and 20202023 for our Named Executive Officers – the individuals who served during FY 20202023 as CEO and CFO and three other highly compensated executive officers of the Company, plusCompany. Additionally, the table contains compensation information for Mr. DeByle,Burns and Mr. Maschera, who served as CFO during partboth would have been our NEOs if not for the termination of FY 2020 until his retirement on September 20, 2019.their employment prior to June 30, 2023.
Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) 1 | Non-Equity Incentive Plan Compensation ($) 2 | Change in Value and ($) 3 | All Other ($) 4 | Total ($) | ||||||||||||||||||||||||
David Dunbar President and CEO |
| 2020 |
|
| 845,884 |
|
| - |
|
| 2,631,221 |
|
| 335,510 |
|
| 86,932 |
|
| 105,138 |
|
| 4,004,684 |
| ||||||||
| 2019 |
|
| 821,246 |
|
| - |
|
| 2,042,329 |
|
| 240,177 |
|
| (2,274) |
|
| 144,820 |
|
| 3,246,298 |
| |||||||||
| 2018 |
|
| 797,327 |
|
| - |
|
| 2,120,875 |
|
| 357,814 |
|
| 40,012 |
|
| 112,340 |
|
| 3,428,368 |
| |||||||||
Ademir Sarcevic 5 Vice President, CFO and Treasurer |
| 2020 |
|
| 336,521 |
|
| 200,000 6 |
|
| 1,218,302 |
|
| 149,400 |
|
| - |
|
| 93,896 |
|
| 1,998,119 |
| ||||||||
| 2019 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||||||
| 2018 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||||||
Alan J. Glass Vice President, CLO and Secretary |
| 2020 |
|
| 357,875 |
|
| - |
|
| 471,528 |
|
| 74,353 |
|
| 539 |
|
| 19,422 |
|
| 923,717 |
| ||||||||
| 2019 |
|
| 347,443 |
|
| - |
|
| 426,772 |
|
| 53,226 |
|
| 231 |
|
| 14,787 |
|
| 842,459 |
| |||||||||
| 2018 |
|
| 337,297 |
|
| - |
|
| 451,045 |
|
| 77,383 |
|
| - |
|
| 22,303 |
|
| 888,028 |
| |||||||||
Paul C. Burns VP of Strategy and Business Development |
| 2020 |
|
| 357,875 |
|
| - |
|
| 415,570 |
|
| 147,517 |
|
| 7,963 |
|
| 29,250 |
|
| 958,175 |
| ||||||||
| 2019 |
|
| 342,068 |
|
| - |
|
| 609,530 |
|
| 165,088 |
|
| 527 |
|
| 22,337 |
|
| 1,139,550 |
| |||||||||
| 2018 |
|
| 315,953 |
|
| - |
|
| 487,082 |
|
| 134,577 |
|
| 177 |
|
| 16,723 |
|
| 954,512 |
| |||||||||
James Hooven 7 VP of Operations and Supply Chain |
| 2020 |
|
| 123,749 |
|
| 25,000 8 |
|
| 299,950 |
|
| 83,531 |
|
| - |
|
| 7,175 |
|
| 539,405 |
| ||||||||
| 2019 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||||||
| 2018 |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||||||
Thomas D. DeByle, Former Vice President, CFO and Treasurer |
| 2020 |
|
| 105,968 |
|
| - |
|
| - |
|
| - |
|
| 5,464 |
|
| 7,748 |
|
| 119,180 |
| ||||||||
| 2019 |
|
| 420,786 |
|
| - |
|
| 838,916 |
|
| 82,040 |
|
| 11,514 |
|
| 68,456 |
|
| 1,421,712 |
| |||||||||
| 2018 |
|
| 408,530 |
|
| - |
|
| 790,571 |
|
| 120,505 |
|
| 33,668 |
|
| 58,870 |
|
| 1,412,144 |
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Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($) 1 | Non-Equity Incentive Plan Compensation ($) 2 | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) 3 | All Other Compensation ($) 4 | Total ($) | |||||||||||||||||||||
David Dunbar | 2023 | 892,597 | - | 3,405,266 | 471,302 | 164,579 | 164,853 | 5,098,597 | |||||||||||||||||||||
President and CEO | 2022 | 869,130 | - | 3,435,322 | 675,770 | - | 155,513 | 5,135,735 | |||||||||||||||||||||
2021 | 864,870 | - | 3,681,435 | 772,961 | 355,262 | 110,204 | 5,784,732 | ||||||||||||||||||||||
Ademir Sarcevic | 2023 | 465,330 | - | 799,455 | 255,565 | 3,341 | 46,848 | 1,570,539 | |||||||||||||||||||||
Vice President, CFO | 2022 | 449,798 | - | 679,507 | 447,954 | - | 29,098 | 1,606,357 | |||||||||||||||||||||
and Treasurer | 2021 | 433,675 | - | 894,037 | 396,649 | 949 | 26,638 | 1,751,948 | |||||||||||||||||||||
Alan Glass | 2023 | 388,967 | - | 536,910 | 96,789 | 7,507 | 52,462 | 1,082,635 | |||||||||||||||||||||
Vice President, CLO | 2022 | 375,984 | - | 607,643 | 148,003 | - | 51,037 | 1,182,666 | |||||||||||||||||||||
and Secretary | 2021 | 365,907 | - | 675,728 | 171,298 | 7,470 | 33,680 | 1,254,084 | |||||||||||||||||||||
Annemarie Bell 5 | 2023 | 311,512 | - | 225,923 | 177,054 | 126 | 19,689 | 734,304 | |||||||||||||||||||||
Chief Human | 2022 | - | - | - | - | - | - | - | |||||||||||||||||||||
Resources Officer | 2021 | - | - | - | - | - | - | - | |||||||||||||||||||||
Sean Valashinas 6 | 2023 | 275,783 | - | 154,791 | 68,018 | - | 18,140 | 516,731 | |||||||||||||||||||||
Vice President, Chief | 2022 | - | - | - | - | - | - | - | |||||||||||||||||||||
Accounting Officer | 2021 | - | - | - | - | - | - | - | |||||||||||||||||||||
Paul Burns 7 | 2023 | 285,088 | 175,000 8 | 392,302 | - | 4,688 | 24,155 | 881,233 | |||||||||||||||||||||
Former VP of Strategy and | 2022 | 375,984 | - | 451,256 | 265,769 | - | 20,164 | 1,113,173 | |||||||||||||||||||||
Business Development | 2021 | 365,907 | - | 413,611 | 316,709 | - | 28,732 | 1,124,959 | |||||||||||||||||||||
Flavio Maschera 9 | 2023 | 292,824 | - | 245,835 | - | - | 1,312,086 | 1,850,745 | |||||||||||||||||||||
Former VP, Chief Innovation | 2022 | 348,312 | - | 432,713 | 123,056 | - | 14,753 | 918,834 | |||||||||||||||||||||
& Technology Officer | 2021 | - | - | - | - | - | - | - |
Footnotes on following pages.
542023 Proxy Statement |
1 | This column includes the grant date fair value (calculated in accordance with FASB ASC 718) of the long-term incentive awards under the Company’s long-term incentive program (RSAs and PSUs) and RSUs that an executive received pursuant to a deferral election under the MSPP. |
Risk-free interest rate: | ||
Expected life of option grants: | 3 years | |
Expected stock value volatility: | ||
Expected quarterly dividends: | $ |
|
1 (continued)
The grant date fair value of these three separate equity awards is as follows:
Grant Date Fair Value of Annual Incentive Deferred Pursuant to MSPP ($) | Grant Date Fair Value of Restricted Stock Awards under the OIP ($) | Grant Date Fair Value of Performance Share Unit Awards under the OIP ($) | Total ($) | |||||||||||||
David Dunbar |
| 501,001 |
|
| 852,088 |
|
| 1,278,132 |
|
| 2,631,221 |
| ||||
Ademir Sarcevic |
| 55,773 |
|
| 311,250 |
|
| 311,250 |
|
| 1,218,302 a |
| ||||
Alan J. Glass |
| 111,028 |
|
| 180,250 |
|
| 180,250 |
|
| 471,528 |
| ||||
Paul C. Burns |
| 55,070 |
|
| 180,250 |
|
| 180,250 |
|
| 415,570 |
| ||||
James Hooven |
| - |
|
| - |
|
| - |
|
| 299,950 b |
| ||||
Thomas D. DeByle |
| - |
|
| - |
|
| - |
|
| - |
|
Grant Date Fair Value of Annual Incentive Deferred Pursuant to MSPP ($) | Grant Date Fair Value of Restricted Stock Awards under the OIP ($) | Grant Date Fair Value of Performance Share Unit Awards under the OIP ($) | Total ($) | |||||||||||||
David Dunbar | 704,149 | 1,080,409 | 1,620,709 | 3,405,266 | ||||||||||||
Ademir Sarcevic | 95,457 | 351,999 | 351,999 | 799,455 | ||||||||||||
Alan Glass | 144,608 | 196,151 | 196,151 | 536,910 | ||||||||||||
Annemarie Bell | - | 112,961 | 112,961 | 225,923 | ||||||||||||
Sean Valashinas | 43,552 | 55,619 | 55,619 | 154,791 | ||||||||||||
Paul Burns a | - | 196,151 | 196,151 | 392,302 | ||||||||||||
Flavio Maschera b | - | 122,917 | 122,917 | 245,835 |
a |
|
b |
|
The value of performance-based awards is based on the probable outcome of the performance conditions as of the grant date. The payout for 2018FY 2021 grants was 57.2%232.4% of the target levels shown.levels. The payout for 2019FY 2022 and 2020FY 2023 grants will be determined in 2021FY 2024 and 2022,FY 2025, respectively. The probable outcome for 2018, 2019FY 2021, FY 2022 and 2020FY 2023 grants of performance-based awards was estimated at the target payout level, or 100%., at the time of grant. The following table shows the grant date fair value of the performance share units granted in 2020FY 2023 at the target level included in the Summary Compensation Table above and the potential maximum grant date fair value, includingvalue. As described in the Compensation Discussion and Analysis, awards have a maximum payout level of 200% and are further subject to the TSR modifier, increasingwhich, at its maximum level, can increase the awardpayout by 50%:a further 25% of payout, for a combined maximum payout level of 250% of target.
Grant Date Fair Value of Performance Share Awards under the OIP ($) | Potential Maximum Grant Date Fair Value ($) | |||||||
David Dunbar |
| 1,278,132 |
|
| 3,195,330 |
| ||
Ademir Sarcevic |
| 311,250 |
|
| 778,125 |
| ||
Alan J. Glass |
| 180,250 |
|
| 450,625 |
| ||
Paul C. Burns |
| 180,250 |
|
| 450,625 |
| ||
James Hooven |
| - |
|
| - |
| ||
Thomas D. DeByle |
| - |
|
| - |
|
Grant Date Fair Value of Performance Share Awards under the OIP ($) | Potential Maximum Grant Date Fair Value ($) | |||||||
David Dunbar | 1,620,709 | 4,051,772 | ||||||
Ademir Sarcevic | 351,999 | 879,998 | ||||||
Alan Glass | 196,151 | 490,377 | ||||||
Annemarie Bell | 112,961 | 282,404 | ||||||
Sean Valashinas | 55,619 | 139,048 | ||||||
Paul Burns a | 196,151 | 490,377 | ||||||
Flavio Maschera b | 122,917 | 307,293 |
a | In connection with Mr. Burns’ termination, he forfeited all unvested equity awards that he held at the time, including all previously granted PSUs. |
b | Mr. Maschera’s PSU grant is based on his FY 2023 base salary as converted from Euros to USD using the August 23, 2022 exchange rate of 0.9971. In connection with his termination, he forfeited all unvested equity awards that he held at the time, including all previously granted PSUs. |
2 | This column shows the amounts earned in cash under our annual incentive opportunity. Some of our Named Executive Officers elected to defer a portion of their annual incentive |
3 | This column includes the above-market earnings of the Named Executive Officer’s accumulated benefit under the Standex Deferred Compensation Plan. |
|
401(k) Contributions ($) | Non-qualified Deferred Compensation Contribution ($) | Life Insurance Premium ($) | Perquisites & Personal Benefits ($) a | Total ($) | ||||||||||||||||
David Dunbar |
| 14,250 |
|
| 52,062 |
|
| 10,578 |
|
| 28,248 |
|
| 105,138 |
| |||||
Ademir Sarcevic |
| 12,671 |
|
| 490 |
|
| 1,235 |
|
| 79,500 |
|
| 93,896 |
| |||||
Alan J. Glass |
| 12,729 |
|
| 1,791 |
|
| 4,902 |
|
| - |
|
| 19,422 |
| |||||
Paul C. Burns |
| 12,729 |
|
| 13,940 |
|
| 2,581 |
|
| - |
|
| 29,250 |
| |||||
James Hooven |
| 5,887 |
|
| - |
|
| 1,287 |
|
| - |
|
| 7,175 |
| |||||
Thomas D. DeByle |
| 3,254 |
|
| 2,020 |
|
| 2,474 |
|
| - |
|
| 7,748 |
|
4 | This column includes the following compensation: |
|
|
| |||||
401(k) Contributions ($) | Non-qualified Deferred Compensation Contribution ($) | Life Insurance Premium ($) | Perquisites & Personal Benefits ($) a | Severance ($) b | Holiday ($) c | Total ($) | |
David Dunbar | 16,500 | 95,707 | 16,236 | 36,410 | - | - | 164,853 |
Ademir Sarcevic | 9,336 | 23,802 | 1,710 | 12,000 | - | - | 46,848 |
Alan Glass | 15,591 | 18,658 | 6,213 | 12,000 | - | - | 52,462 |
Annemarie Bell | 11,585 | 1,892 | 6,213 | - | - | - | 19,689 |
Sean Valashinas | 15,518 | - | 2,622 | - | - | - | 18,140 |
Paul Burns | 17,047 | 3,898 | 3,210 | - | - | - | 24,155 |
Flavio Maschera | - | - | 2,714 | 14,086 | 1,262,327 | 32,959 | 1,312,086 |
a | Mr. Dunbar has an automobile allowance of which he used |
b | Mr. |
c | Mr. Maschera also received a payout of accrued but unused vacation time in the amount of €30,199. The value reported herein is converted from Euro to USD based on the June 30, 2023 exchange rate of 1.0914. |
5 | Compensation for Ms. Bell is provided only for FY 2023 because she was not an NEO for FY 2022 or FY 2021. |
6 | Compensation for Mr. Valashinas is provided only for FY 2023 because he was not an NEO for FY 2022 or FY 2021. |
7 | Mr. Burns’ employment with Standex terminated on March 24, 2023 and as a result, Mr. Burns ceased to participate in the Company’s annual incentive program and did not receive an FY 2023 annual incentive award. In addition, Mr. Burns forfeited all unvested equity awards he held at the time and ceased to participate in the OIP. Mr. Burns did receive the cash value of deferrals of prior annual incentive awards under the MSPP. Such values are not reported here as they were accounted for in prior fiscal years. |
8 | Mr. Burns received a one-time cash bonus for the successful divestiture of the Procon business. |
9 | Mr. Maschera was promoted to an officer of the Company on |
|
|
|
562023 Proxy Statement | ||||||
Grants of Plan-Based Awards
The following table sets forth information with respect to FY 20202023 plan-based awards granted to our Named Executive Officers for the year ended June 30, 2020.2023.
Estimated Future Payouts Under Non-Equity Incentive Plan Awards 2 | Estimated Payouts Under Equity Incentive Plan Awards 3 | All Other Stock Awards: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of Shares of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grant | Action | Estimated Future Payouts Plan Awards 2 | Estimated Payouts Under Equity Incentive Plan | All Other Units 4 | Total ($) 5 | Grant | Action | Threshold | Target | Maximum | Threshold | Target | Maximum | Stock or | Total | ||||||||||||||||||||||||||||||||||||||||
Name |
Threshold | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Date | Date 1 | ($) | (#) | Units 4 | ($) 5 | |||||||||||||||||||||||||||||||||||||||||||
David Dunbar | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| 357,877 |
|
| 894,692 |
|
| 1,789,385 |
| 472,720 | 945,440 | 1,890,880 | |||||||||||||||||||||||||||||||||||||||||||
OIP - PSU |
| 9/6/19 |
|
| 9,082 |
|
| 18,163 |
|
| 36,326 |
|
| 1,278,130 |
| 8/23/22 | 8,465 | 16,930 | 33,860 | 1,620,709 | |||||||||||||||||||||||||||||||||||
OIP - RSA |
| 9/6/19 |
|
| 12,109 |
|
| 852,110 |
| 8/23/22 | 11,286 | 1,080,409 | |||||||||||||||||||||||||||||||||||||||||||
Ademir Sarcevic | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| 99,600 |
|
| 249,000 |
|
| 498,000 |
| 152,558 | 305,115 | 610,230 | |||||||||||||||||||||||||||||||||||||||||||
OIP - PSU |
| 9/6/19 |
|
| 2,212 |
|
| 4,423 |
|
| 8,846 |
|
| 311,247 |
| 8/23/22 | 1,839 | 3,677 | 7,354 | 351,999 | |||||||||||||||||||||||||||||||||||
OIP - RSA |
| 9/6/19 |
|
| 4,423 |
|
| 311,247 |
| 8/23/22 | 3,677 | 351,999 | |||||||||||||||||||||||||||||||||||||||||||
Sign-On Grant 6 |
| 9/9/19 |
|
| 7,460 |
|
| 540,029 |
| ||||||||||||||||||||||||||||||||||||||||||||||
Alan J. Glass | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Alan Glass | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| 79,310 |
|
| 198,275 |
|
| 396,550 |
| 107,903 | 215,807 | 431,614 | |||||||||||||||||||||||||||||||||||||||||||
OIP - PSU |
| 9/6/19 |
|
| 1,281 |
|
| 2,561 |
|
| 5,122 |
|
| 180,218 |
| 8/23/22 | 1,025 | 2,049 | 4,098 | 196,151 | |||||||||||||||||||||||||||||||||||
OIP - RSA |
| 9/6/19 |
|
| 2,561 |
|
| 180,218 |
| 8/23/22 | 2,049 | 196,151 | |||||||||||||||||||||||||||||||||||||||||||
Paul C. Burns | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annemarie Bell | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| 79,310 |
|
| 198,275 |
|
| 396,550 |
| 88,793 | 177,587 | 355,174 | |||||||||||||||||||||||||||||||||||||||||||
OIP - PSU |
| 9/6/19 |
|
| 1,281 |
|
| 2,561 |
|
| 5,122 |
|
| 180,218 |
| 8/23/22 | 590 | 1,180 | 2,360 | 112,961 | |||||||||||||||||||||||||||||||||||
OIP - RSA |
| 9/6/19 |
|
| 2,561 |
|
| 180,218 |
| 8/23/22 | 1,180 | 112,961 | |||||||||||||||||||||||||||||||||||||||||||
James Hooven | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sean Valashinas | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive |
| 44,550 |
|
| 111,375 |
|
| 222,750 |
| 48,731 | 97,461 | 194,922 | |||||||||||||||||||||||||||||||||||||||||||
Sign-On Grant 7 |
| 2/17/20 |
|
| 4,066 |
|
| 299,950 |
| ||||||||||||||||||||||||||||||||||||||||||||||
Thomas D. DeByle 8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - PSU | 8/23/22 | 291 | 581 | 1,162 | 55,619 | ||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - RSA | 8/23/22 | 581 | 55,619 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Paul Burns | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive | 107,903 | 215,807 | 431,614 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - PSU | 8/23/22 | 1,025 | 2,049 | 4,098 | 196,151 | ||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - RSA | 8/23/22 | 2,049 | 196,151 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Flavio Maschera | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Annual Incentive 6 | 101,542 | 203,084 | 406,168 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - PSU 7 | 8/23/22 | 642 | 1,284 | 2,568 | 122,917 | ||||||||||||||||||||||||||||||||||||||||||||||||||
OIP - RSA 8 | 8/23/22 | 1,284 | 122,917 |
1 | The date on which the Compensation Committee took action for the grant of all of the plan-based awards was 8/ |
2023 Proxy Statement57 |
2 | The amounts in these columns indicate the threshold, target and maximum amounts payable under the annual incentive |
The amounts reported herein do not take into account any deferral elections under the MSPP. Prior to June 30, 2022, most of our Named Executive Officers elected to defer a portion of their annual incentive opportunity into the receipt of discounted shares under the MSPP. Such shares were delivered on August 23, 2023, and, for accounting purposes, are considered stock grants in FY 2024.
The amount the executives actually received and the amounts they elected to defer for FY 2023 are discussed under the “Annual Incentive Opportunity” and “Management Stock Purchase Plan” sections of the CD&A.
3 | The amounts in these columns indicate the threshold, target and maximum amounts payable under the OIP for PSUs. The OIP PSU amounts are based on the achievement of specific financial performance metrics over a three-year performance period. Payouts range from 50% of target for the attainment of threshold levels, to 200% of target for the attainment of superior performance levels, subject to a relative TSR modifier, as explained in the CD |
4 | The amounts shown in this column reflect the number of RSAs granted to each Named Executive Officer pursuant to the OIP. |
5 | These amounts represent the grant date fair value, as determined under FASB ASC Topic 718. For the PSU awards under the OIP, the fair value assumes performance and payout at the target |
6 |
|
7 |
|
8 | Mr. |
|
Outstanding Equity Awards at Fiscal Year End
OUTSTANDING EQUITY AWARDSAT FISCAL YEAR END
The following table sets forth information with respect to equity awards that were outstanding as of June 30, 2020.2023. The Company has not awarded stock options since 2003 and there are no outstanding option awards. Neither Mr. Burns nor Mr. Maschera had any outstanding equity awards on June 30, 2023 due to the termination of their employment.
Stock Awards | ||||||||||||||||
Name | 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 ($) 4 | ||||||||||||
David Dunbar |
| 42,967 |
|
| 1,718,821 |
|
| 13,754 |
|
| 791,514 |
| ||||
Ademir Sarcevic |
| 11,883 |
|
| 683,867 |
|
| 2,212 |
|
| 127,272 |
| ||||
Alan J. Glass |
| 9,604 |
|
| 389,243 |
|
| 2,084 |
|
| 119,934 |
| ||||
Paul C. Burns |
| 11,667 |
|
| 583,055 |
|
| 2,084 |
|
| 119,934 |
| ||||
James Hooven |
| 4,066 |
|
| 233,998 |
|
| - |
|
| - |
| ||||
Thomas D. DeByle |
| 1,413 |
|
| 81,318 |
|
| 1,654 |
|
| 95,188 |
|
Stock Awards | ||||
Name | Number of Shares or Units of Stock That Have Not Vested (#) 1 | Market Value of Shares or Units of Stock That Have Not Vested ($) 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 |
David Dunbar | 116,214 | 14,656,628 | 62,426 | 8,831,406 |
Ademir Sarcevic | 26,357 | 3,592,222 | 14,122 | 1,997,839 |
Alan Glass | 19,884 | 2,419,416 | 7,870 | 1,113,369 |
Annemarie Bell | 5,201 | 735,762 | 4,016 | 568,144 |
Sean Valashinas | 5,855 | 729,705 | 2,228 | 315,195 |
1 | The outstanding stock awards presented in this column include: RSAs awarded under the OIP, |
Vest Date | David Dunbar | Ademir Sarcevic | Alan J. Glass | Paul C. Burns | James Hooven | Thomas D. DeByle | ||||||||||||||||||
9/6/2020 |
| 15,303 |
|
| - |
|
| 3,395 |
|
| 4,424 |
|
| - |
|
| 1,413 |
| ||||||
9/9/2020 |
| - |
|
| 4,700 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||
2/17/2021 |
| - |
|
| - |
|
| - |
|
| - |
|
| 1,626 |
|
| - |
| ||||||
9/6/2021 |
| 10,898 |
|
| - |
|
| 2,616 |
|
| 3,883 |
|
| - |
|
| - |
| ||||||
9/9/2021 |
| - |
|
| 2,760 |
|
| - |
|
| - |
|
| - |
|
| - |
| ||||||
2/17/2022 |
| - |
|
| - |
|
| - |
|
| - |
|
| 2,440 |
|
| - |
| ||||||
9/6/2022 |
| 16,766 |
|
| 4,423 |
|
| 3,593 |
|
| 3,360 |
|
| - |
|
| - |
| ||||||
Total |
| 42,967 |
|
| 11,883 |
|
| 9,604 |
|
| 11,667 |
|
| 4,066 |
|
| 1,413 |
|
Vest Date | David Dunbar | Ademir Sarcevic | Alan Glass | Annemarie Bell | Sean Valashinas |
8/23/2023 | 6,936 | 2,353 | 1,312 | 669 | 371 |
9/6/2023 | 77,095 | 19,031 | 11,844 | 3,469 | 3,709 |
8/23/2024 | 17,794 | 3,747 | 3,718 | 669 | 927 |
8/23/2025 | 14,389 | 1,226 | 3,010 | 394 | 848 |
Total | 116,214 | 26,357 | 19,884 | 5,201 | 5,855 |
2 | The market values in this column are calculated using a price of |
3 | The shares presented in this column are performance share units granted in fiscal years |
4 | The values shown in this column are calculated using a price of |
2023 Proxy Statement59 | ||||||
Options Exercised and Stock Vested
OPTIONS EXERCISEDAND STOCK VESTED
The following table sets forth information about option exercises and the vesting of stock during the fiscal year. The Company has not awarded stock options since 2003, so no options are reported. The stock vested during the fiscal year represents PSUs and RSAs granted under the LTIPOIP and RSUs granted from an MSPP deferral.
Stock Awards | ||||||||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) 1 | ||||||
David Dunbar |
| 12,981 |
|
| 614,581 |
| ||
Ademir Sarcevic |
| - |
|
| - |
| ||
Alan J. Glass |
| 2,021 |
|
| 119,208 |
| ||
Paul C. Burns |
| 2,272 |
|
| 122,448 |
| ||
James Hooven |
| - |
|
| - |
| ||
Thomas D. DeByle |
| 15,513 |
|
| 627,787 |
|
Stock Awards | |||
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) 1 | |
David Dunbar | 49,022 | 3,997,020 | |
Ademir Sarcevic | 13,303 | 1,152,477 | |
Alan Glass | 8,669 | 696,743 | |
Annemarie Bell | 2,024 | 176,382 | |
Sean Valashinas | 2,291 | 187,889 | |
Paul Burns | 8,436 | 688,768 | |
Flavio Maschera | 4,732 | 363,968 |
1 | The value realized on vesting for the three stock categories was calculated as follows. For PSUs and RSAs granted under the |
PENSION BENEFITSPension Benefits
The Company’s two pensionspension plans, the Standex Retirement Plan and the Standex Supplemental Retirement Plan, were frozen as to future benefit accruals and new participants on December 31, 2007. All of our Named Executive Officers, except for Mr. Valashinas, became employed with the Company after this date or were ineligible to participate and are not accruing benefits under either of these plans.
Mr. Valashinas became employed with the Company on October 22, 2007 and was eligible to participate and accrue benefits under the Standex Retirement Plan. Since the plan was frozen shortly after Mr. Valashinas’ commencement of employment, his accrued benefit under the plan is $839.30 and thus is de minimus.
|
NonQualified Deferred Compensation
NONQUALIFIED DEFERRED COMPENSATION
The following table contains compensation information relating to the Company’s nonqualified deferred compensation plan. For a description of the Standex Deferred Compensation Plan, including material factors, see “Standex Deferred Compensation Plan” on page 4248.
Name | Executive Contributions in Last FY ($) 1 | Registrant Contributions in Last FY ($) 2 | Aggregate Earnings in Last FY ($) 3 | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE ($) 4 | |||||||||||||||
David Dunbar |
| 52,062 |
|
| 52,062 |
|
| 97,609 |
|
| - |
|
| 882,393 |
| |||||
Ademir Sarcevic |
| - |
|
| 490 |
|
| (18) |
|
| - |
|
| 472 |
| |||||
Alan J. Glass |
| - |
|
| 1,791 |
|
| 770 |
|
| - |
|
| 19,105 |
| |||||
Paul C. Burns |
| 13,940 |
|
| 13,940 |
|
| 8,736 |
|
| - |
|
| 63,852 |
| |||||
James Hooven |
| - |
|
| - |
|
| - |
|
| - |
|
| - |
| |||||
Thomas D. DeByle |
| - |
|
| 2,020 |
|
| 5,681 |
|
| 451,565 |
|
| - |
|
Name | Executive Contributions in Last FY ($) 1 | Registrant Contributions in Last FY ($) 2 | Aggregate Earnings in Last FY ($) 3 | Aggregate Withdrawals/ Distributions | Aggregate Balance at Last FYE ($) 4 |
David Dunbar | 95,707 | 95,707 | 247,041 | - | 1,721,542 |
Ademir Sarcevic | 44,502 | 23,802 | 7,408 | - | 84,891 |
Alan Glass | 67,358 | 18,658 | 15,895 | - | 175,103 |
Annemarie Bell | - | 1,892 | 257 | - | 2,725 |
Sean Valashinas | - | - | - | - | - |
Paul Burns | - | 3,898 | 4,924 | 43,678 | - |
Flavio Maschera | - | - | - | - | - |
1 | All amounts in this column are included in the salary and non-equity incentive plan compensation columns of the “Summary Compensation Table” above. |
2 | All amounts in this column are included in the other compensation column and detailed in footnote (4) of the “Summary Compensation Table” above. |
3 | The amount of aggregate earnings is reported in the change in pension value and nonqualified deferred compensation plans column of the |
Above-Market Earnings Reported in the Summary Compensation Table ($) | ||||
David Dunbar | 164,579 | |||
| 3,341 | |||
Alan Glass | 7,507 | |||
Annemarie Bell | 126 | |||
Sean Valashinas | - | |||
Paul Burns | 4,688 | |||
Flavio Maschera | - |
4 |
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| |||
|
| |||
|
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The aggregate balance includes amounts that were reported in previous Summary Compensation Tables as |
Amounts Previously Reported ($) | |
David Dunbar | 1,468,194 |
Ademir Sarcevic | 11,159 |
Alan Glass | 84,838 |
Annemarie Bell | - |
Sean Valashinas | - |
Paul Burns | 92,175 |
Flavio Maschera | - |
2023 Proxy Statement61 |
Amounts Previously Reported ($) | Credited Contribution ($) | Credited Interest ($) | ||||||||||
David Dunbar |
| 586,281 |
|
| 35,795 |
|
| 895 |
| |||
Ademir Sarcevic |
| - |
|
| - |
|
| - |
| |||
Alan J. Glass |
| 15,500 |
|
| - |
|
| - |
| |||
Paul C. Burns |
| 26,191 |
|
| - |
|
| - |
| |||
James Hooven |
| - |
|
| - |
|
| - |
| |||
Thomas D. DeByle |
| 404,353 |
|
| 12,055 |
|
| 251 |
|
Potential Payments upon Termination or Change in Control
POTENTIAL PAYMENTSUPON TERMINATIONOR CHANGEIN CONTROL
EMPLOYMENT AGREEMENTSEmployment Agreements
The following table lists the compensation and benefits that an executive would generally be provided in various scenarios involving a termination of employment. The amounts denoted in the table are for the CEO, Mr. Dunbar. Where the amounts or time periods differ between Mr. Dunbar and the other executives, the differences are explained in a footnote.
Termination Scenario | ||||||||||||||
Compensation Element | Death | Disability 1 | Retirement 2 | Termination with Cause 3 | Termination without Cause 4 | Termination due to Change in Control 5 | ||||||||
Base Salary | Ceases immediately | Continuation for 2 years6 | Ceases immediately | Ceases immediately | Continuation for 2 years7 | Ceases immediately | ||||||||
Severance Pay | None | None | None | None | None | Lump sum equal to 3 times base salary8 | ||||||||
Annual Incentive | Prorated for the year | Prorated for the year | Prorated for the year | None | None9 | Lump sum equal to 3 times the higher of (i) the most recent annual incentive award or (ii) the current FY’s target incentive award | ||||||||
Restricted Stock | Awards vest immediately | Awards vest | immediately | Awards vest immediately | Forfeited | Forfeited | Awards vest immediately | |||||||
PSUs | Awards are prorated and vest in normal course | Awards are prorated and vest in normal course | Awards are prorated and vest in normal course | Forfeited | Forfeited | Awards vest immediately | ||||||||
Deferred Compensation | Payable immediately | Distributions commence after 6 months per participants election | Distributions commence after 6 months per participants election | Distributions commence after 6 months per participants | Distributions 6 months per election |
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| Medical and dental coverage for 1 year | None | None | Medical and dental coverage for 1 year | Life insurance and medical benefits coverage for 3 years |
1 | Disability is defined as a condition where the executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to |
2 | Retirement is defined as a voluntary termination of employment when either (i) the executive has reached age 55 and has at least 10 years of service with Standex, or (ii) the executive has reached age |
3 | Termination with cause, under the terms of the executives’ employment agreements, is defined as a termination by Standex for the executive’s material breach of the employment agreement. A material breach is (i) an act of dishonesty which is intended to enrich the executive at the Company’s expense, or (ii) the willful, deliberate and continuous failure to perform the executive’s duties after being properly demanded to do so. |
4 | Termination without cause is a termination by Standex where the executive has not committed a material breach of the employment agreement. |
622023 Proxy Statement |
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A change in control is defined as an event where (i) any person or group (as used in sections 13(d) and 14(d) of the Exchange Act) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act), directly or indirectly, of at least a majority of the equity securities of Standex entitled to vote for members of the Board of Directors; (ii) Standex is a party to a merger or consolidation, which results in Standex voting securities representing less than a majority of the resulting voting securities; (iii) the sale or disposition of all or substantially all of Standex’s assets; or (iv) a greater than 75% change in the composition of the Board of Directors during a consecutive 12-month period. |
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5 (continued)
An executive would be entitled to the payments described in this column after such a change in control only if, within 2 years of the change in control, either (i) the executive is terminated without cause,(a)or (ii) the executive voluntarily terminates their employment for “good cause.” (b)
(a) | Termination without cause is any termination by Standex other than a termination where there is conclusive evidence of substantial and indisputable intentional personal malfeasance in office, such as a conviction for embezzlement of Standex funds. |
(b) | Good cause for Mr. Dunbar is defined as any of the following: (i) the assignment to any position other than President & CEO; (ii) any change in the reporting relationship such that he is no longer reporting solely to the Board of Directors; (iii) any reduction in the budget which results in him no longer having 100% control over the budget; (iv) any material diminution of base salary or incentive compensation; (v) any change in the location of employment to a location greater than 10 miles from the present location; and (vi) any other action or inaction of Standex that constitutes a material breach of the employment agreement. |
Good cause for the other executives is defined as any of the following: (i) |
Good cause for the other executives is defined as any of the following: (i) a change in their general area of responsibility; (ii) a change in their title; (iii) a change in the place of employment; and (iv) a decrease in base salary or diminished benefits.
6 | Mr. Dunbar’s employment agreement provides for a continuation of base salary for a period of 2 years up to the IRS compensation limit specified in IRC Section 401(a)(17), with the excess payable immediately upon termination. |
7 | Mr. Dunbar’s employment agreement provides for a continuation of base salary for a period of 2 years up to the IRS compensation limit specified in IRC Section 401(a)(17), with the excess payable immediately upon termination. The other executives’ employment agreements provide for a continuation of base salary for a period of |
8 | Mr. Dunbar’s employment agreement provides for a lump sum severance payment in the amount of 3 times his then-current base salary. The remaining executives’ employment agreements provide for a lump sum severance payment in the amount of |
9 | On a |
10 | Mr. Dunbar’s employment agreement provides for an annual incentive payment equal to 3 times the higher of (i) the most recent annual incentive award or (ii) the current FY’s target incentive award. The remaining executives’ employment agreements provide for an annual incentive payment equal to 2 times the higher of (i) the most recent annual incentive award or (ii) the current FY’s target incentive award. Mr. Valashinas’ agreement also specifies a lump sum payment equivalent to the greater of (i) the current FY’s target incentive awards or (ii) the level of bonus accrual on the Company’s books as of the date of termination. |
11 | Included in the |
12 | For PSUs, except in the case of a termination for cause, without cause or due to a |
|
See the “Standex Deferred Compensation Plan” section on page |
14 | Mr. Valashinas has an accumulated benefit under the now-frozen Standex Pension Plan. In every termination scenario, Mr. Valashinas would be entitled to a lump sum payment of his accumulated benefit amount under the Standex Pension Plan. The payment would be made in a lump sum due to the accumulated benefit value being less than $1,000. |
15 | Mr. Dunbar’s employment agreement provides for a continuation of medical and dental benefits for a period of 1 year. The other executives’ employment agreements do not provide for any health or welfare benefit continuation. |
16 | Mr. Dunbar’s employment agreement provides for a continuation of medical and dental benefits for a period of 1 year. Mr. Valashinas’ employment agreement provides for a reimbursement of COBRA premiums for a period of 1 year. The other executives’ employment agreements do not provide for any health or welfare benefit continuation. |
17 | Mr. Dunbar’s employment agreement provides for a continuation of medical and |
|
2023 Proxy Statement63 |
Quantification of Potential Payments
QUANTIFICATIONOF POTENTIAL PAYMENTS
The following table contains compensation information relating to the potential payments that an executive would receive in the various scenarios described above if the executive hadwas terminated due to a triggering event on June 30, 2020.2023. All such potential payments are largely based on the executive’s employment agreement with the Company, with the remaining payments based on award agreements under the LTIPOIP. Payments due to any executive upon actual termination of employment can only be determined at the time of termination. There can be no assurance that an actual termination or OIP.change in control would produce the same or similar results as those described below if it were to occur on any other date or if the actual circumstances at the time of termination were different. Potential payouts for Mr. DeByle’sBurns and Mr. Maschera are not included herein as their employment agreement and award agreements expired upon his departure in September 2019.was terminated prior to June 30, 2023.
Triggering | Compensation | Payout ($) 1 | |||||||||||||||||||||||||||||||
Event | Component | David Dunbar | Ademir Sarcevic | Alan Glass | Annemarie Bell | Sean Valashinas 2 | |||||||||||||||||||||||||||
Annual Incentive | 942,604 | 319,456 | 193,579 | 177,054 | 97,169 | ||||||||||||||||||||||||||||
Triggering Event | Compensation Component | Payout ($) 1 | |||||||||||||||||||||||||||||||
David Dunbar | Ademir Sarcevic | Alan J. Glass | Paul C. Burns | James Hooven | |||||||||||||||||||||||||||||
Death |
Acceleration of Outstanding Equity Awards | 1,718,821 | 683,867 | 389,243 | 583,055 | 233,998 | Acceleration of Outstanding Equity Awards | 14,656,628 | 3,592,222 | 2,419,416 | 735,762 | 729,705 | |||||||||||||||||||||
Pro-rata Performance Share Vesting | 582,291 | - | 101,883 | 80,743 | - | ||||||||||||||||||||||||||||
Total |
2,301,112 |
683,867 |
491,126 |
663,797 |
233,998 | ||||||||||||||||||||||||||||
Pro-rata Performance Share Vesting 3 | 13,400,941 | 3,290,482 | 1,833,527 | 707,704 | 574,524 | ||||||||||||||||||||||||||||
Total | 29,000,173 | 7,202,159 | 4,446,522 | 1,620,520 | 1,402,237 | ||||||||||||||||||||||||||||
| Termination Payment - Salary | 1,800,838 | 469,408 | 392,376 | 322,885 | 278,460 | |||||||||||||||||||||||||||
Annual Incentive | 942,604 | 319,456 | 193,579 | 177,054 | 97,169 | ||||||||||||||||||||||||||||
Disability |
Termination Payment - Salary | 1,704,176 | 415,000 | 360,500 | 360,500 | 330,000 | Acceleration of Outstanding Equity Awards | 14,656,628 | 3,592,222 | 2,419,416 | 735,762 | 729,705 | |||||||||||||||||||||
Acceleration of Outstanding Equity Awards | 1,718,821 | 683,867 | 389,243 | 583,055 | 233,998 | ||||||||||||||||||||||||||||
Pro-rata Performance Share Vesting | 582,291 | - | 101,883 | 80,743 | - | ||||||||||||||||||||||||||||
Health &Welfare Benefits | 17,595 | - | - | - | - | ||||||||||||||||||||||||||||
Total |
4,022,883 |
1,098,867 |
851,626 |
1,024,297 |
563,998 | ||||||||||||||||||||||||||||
Pro-rata Performance Share Vesting 3 | 13,400,941 | 3,290,482 | 1,833,527 | 707,704 | 574,524 | ||||||||||||||||||||||||||||
Health & Welfare Benefits | 15,839 | - | - | - | - | ||||||||||||||||||||||||||||
Total | 30,816,850 | 7,671,567 | 4,838,898 | 1,943,405 | 1,679,858 | ||||||||||||||||||||||||||||
| Annual Incentive | 942,604 | 319,456 | 193,579 | 177,054 | 97,169 | |||||||||||||||||||||||||||
Retirement |
Acceleration of Outstanding Equity Awards | 1,718,821 | 683,867 | 389,243 | 583,055 | 233,998 | Acceleration of Outstanding Equity Awards | 14,656,628 | 3,592,222 | 2,419,416 | 735,762 | 729,705 | |||||||||||||||||||||
Pro-rata Performance Share Vesting | 582,291 | - | 101,883 | 80,743 | - | ||||||||||||||||||||||||||||
Total |
2,301,112 |
683,867 |
491,126 |
663,797 |
233,998 | ||||||||||||||||||||||||||||
Pro-rata Performance Share Vesting 3 | 13,400,941 | 3,290,482 | 1,833,527 | 707,704 | 574,524 | ||||||||||||||||||||||||||||
Total | 29,000,173 | 7,202,159 | 4,446,522 | 1,620,520 | 1,402,237 | ||||||||||||||||||||||||||||
Termination Without Cause by the Company |
Termination Payment - Salary | 1,704,176 | 415,000 | 360,500 | 360,500 | 330,000 | Termination Payment - Salary | 1,800,838 | 469,408 | 392,376 | 322,885 | 278,460 | |||||||||||||||||||||
Health &Welfare Benefits | 17,595 | - | - | - | - | Health & Welfare Benefits | 15,839 | - | - | - | 22,125 | ||||||||||||||||||||||
Total |
1,721,771 |
415,000 |
360,500 |
360,500 |
330,000 | Total | 1,816,677 | 469,408 | 392,376 | 322,885 | 301,424 | ||||||||||||||||||||||
Change in Control 2 |
Termination Payment - Salary | 2,556,264 | 830,000 | 721,000 | 721,000 | 660,000 | |||||||||||||||||||||||||||
Termination Payment - Annual Incentive | 2,684,077 | 498,000 | 396,550 | 412,335 | 297,000 | ||||||||||||||||||||||||||||
Acceleration of Outstanding Equity Awards | 2,510,335 | 811,138 | 509,177 | 702,989 | 233,998 | ||||||||||||||||||||||||||||
Health &Welfare Benefits | 64,351 | 52,831 | 52,831 | 54,609 | 47,800 | ||||||||||||||||||||||||||||
Total |
7,815,028 |
2,191,970 |
1,679,559 |
1,890,932 |
1,238,798 | ||||||||||||||||||||||||||||
Severance Pay | 2,701,257 | 938,816 | 784,752 | 645,770 | 556,920 | ||||||||||||||||||||||||||||
Annual Incentive | 4,054,623 | 895,909 | 592,011 | 410,818 | 375,094 | ||||||||||||||||||||||||||||
Change in Control 4 | Acceleration of Outstanding Equity Awards 5 | 19,072,331 | 4,591,141 | 2,976,101 | 1,019,834 | 887,303 | |||||||||||||||||||||||||||
Health & Welfare Benefits | 59,612 | 48,089 | 43,181 | 29,268 | 48,089 | ||||||||||||||||||||||||||||
Total | 25,887,823 | 6,473,955 | 4,396,045 | 2,105,691 | 1,868,245 |
1 | The payout values for equity awards are based on the closing price of the Company’s stock on June 30, |
642023 Proxy Statement |
2 | In every termination scenario, Mr. Valashinas would be entitled to a lump sum payment of his accumulated benefit amount under the Standex Pension Plan in the amount of $839.30. This value is included in the totals but not listed separately in the table. |
3 | The pro-rata performance share vesting is based on the following: |
For FY 2021 PSU awards, the number of shares used in the calculation is based on the certified performance percentage of 232.4%.
For FY 2022 PSU awards, the number of shares used in the calculation is based on achievement of superior performance and pro-rated at 2/3 since the termination event is 2/3 of the way through the performance period.
For FY 2023 PSU awards, the number of shares used in the calculation is based on achievement of superior performance and pro-rated at 1/3 since the termination event is 1/3 of the way through the performance period.
4 | Upon a change in control, if the termination payments are triggered and exceed the amounts prescribed under IRC Section 280G such that the Company will be required to pay a tax under IRC Section 4999, the payment will be reduced to an amount such that the payment does not exceed IRC Section 280G. |
5 | Upon a change in control, |
CEO Pay Ratio Disclosure
As required by the SEC rules, we are providing the following information to show the ratio between the annual total compensation of our CEO in FY 2023 and the annual total compensation of the median employee of the Company.
As of June 30, 2023, Standex has approximately 3,900 employees in 57 locations across 19 countries. Approximately 68% of our employee population is located outside of the United States and approximately 66% of our global workforce is paid on an hourly basis. The median annual total compensation disclosed below is based on the Company’s global workforce and is not designed to capture the median compensation of Standex’s US employees. In order to attract and retain employees globally, we pay what we believe to be market competitive rates in each market where we operate. Our pay ratio below is a reasonable estimate that has been calculated in a manner consistent with Item 402(u) of Regulation S-K using the data and assumptions summarized below.
As allowed by the SEC regulations, we have used the same median employee for the past three years. As required, for FY 2023, we have identified a new median employee for FY 2023. We used our global population as of June 30, 2023, including all global full- time, part-time and temporary employees, including newly hired employees, that were employed on that date. In determining our median employee, we used base annual salary during the period July 1, 2022 through June 30, 2023. All international employees’ base annual salaries were converted to USD from local currencies using exchange rates as of June 30, 2023. We determined that the median employee was a full-time, hourly employee in our Electronics division, located in the United Kingdom.
For FY 2023, our median employee’s total compensation was £23,394, as calculated in accordance with Item 402(c)(2)(x) of Reg. S-K. This total compensation converted to USD is $31,941, using the June 30, 2023 GBP to USD exchange rate of 1.2699. Our CEO’s annual total compensation for FY 2023, as reported and detailed in the Summary Compensation Table was $5,098,597. Based on this information, the ratio of these two annual total compensations was estimated to be 160 to 1.
2023 Proxy Statement65 |
Pay Versus Performance
PvP Table
As required by the SEC rules, we are providing the following information about the relationship between Compensation Actually Paid (“CAP”) to our CEO, Mr. Dunbar, and other NEOs and certain financial performance metrics of Standex using the methodology that has been prescribed by the SEC.
Value of Initial Fixed $100 | ||||||||||||||||||||||||||||||||
Average | Investment Based on: | |||||||||||||||||||||||||||||||
Summary | Summary | Average | Peer Group | Company | ||||||||||||||||||||||||||||
Compensation | Compensation | Compensation | Compensation | Total | Total | Selected | ||||||||||||||||||||||||||
Table Total for | Actually Paid | Table Total for | Actually Paid | Shareholder | Shareholder | Net | Measure | |||||||||||||||||||||||||
PEO | to PEO | Other NEOs | to Other NEOs | Return | Return | Income | EBITDA | |||||||||||||||||||||||||
Year | ($) 1 | ($) 2 | ($) 3 | ($) 2 | ($) | ($) 4 | ($) | ($) 5 | ||||||||||||||||||||||||
2023 | 5,098,597 | 13,895,157 | 1,106,031 | 1,453,920 | 253.88 | 182.76 | 138,992,000 | 139,500,000 | ||||||||||||||||||||||||
2022 | 5,135,735 | 5,047,799 | 1,205,257 | 1,157,888 | 150.63 | 141.55 | 61,393,000 | 129,057,000 | ||||||||||||||||||||||||
2021 | 5,784,732 | 9,313,380 | 1,231,148 | 1,953,168 | 166.94 | 159.57 | 36,473,000 | 111,559,000 |
1 | Our PEO for all years in the table was our CEO, David Dunbar. |
2 | The adjustments, each of which is prescribed by SEC rules, to calculate the CAP are described in the table below. |
3 | Our Other NEOs for FY 2023 were: Ademir Sarcevic, Alan Glass, Annemarie Bell, Sean Valashinas, Paul Burns and Flavio Maschera. | |
Our Other NEOs for FY 2022 were: Ademir Sarcevic, Alan Glass, Paul Burns and Flavio Maschera. | ||
Our Other NEOs for FY 2021 were: Ademir Sarcevic, Alan Glass, Paul Burns and Jim Hooven. |
4 | The peer group is the S&P SmallCap 600 Industrial Sector Index, which is the same peer group used in our Annual Report on Form 10-K. |
5 | The Company selected measure, adjusted EBITDA, stands for earnings before income tax, depreciation and amortization, and is a non-GAAP financial measure that is determined by the sum of (i) income from operations before income taxes, (ii) interest expense and (iii) depreciation and amortization. Adjusted EBITDA adjusts for restructuring charges, litigation charges, purchase accounting and acquisition related costs. |
Financial Performance Measures
The following table lists the financial performance measures that, in the Company’s assessment, represent the most important measures used to link CAP for our NEOs to Company performance for FY 2023.
Adjusted Operating Income |
Adjusted Operating Margin |
Adjusted EPS |
Net Working Capital Turns |
ROIC |
662023 Proxy Statement |
Adjustments to Calculate CAP to PEO and Average CAP to Other NEOs
The table below describes the adjustments, each of which is required by SEC rules, to calculate CAP amounts from the SCT Total of our PEO and our Other NEOs. The SCT Total and CAP amounts do not reflect the actual amount of compensation earned or paid to our executives during the applicable years, but rather, are amounts determined in accordance with Item 402(v).
2023 | 2022 | 2021 | ||||||||||||||||||||||
Adjustment | PEO | Other NEOs | PEO | Other NEOs | PEO | Other NEOs | ||||||||||||||||||
SCT Total | 5,098,597 | 1,106,031 | 5,135,735 | 1,205,257 | 5,784,732 | 1,231,148 | ||||||||||||||||||
Adjustment for defined benefit plans | - | - | - | - | - | - | ||||||||||||||||||
Adjustment for stock awards 1 | ||||||||||||||||||||||||
(Deduct): Aggregate value for stock awards included in SCT | (3,405,266 | ) | (392,536 | ) | (3,435,322 | ) | (542,780 | ) | (3,681,435 | ) | (543,157 | ) | ||||||||||||
Add: Fair value at FYE of awards granted during the FY that were outstanding at FYE | 5,005,533 | 428,779 | 3,168,159 | 480,938 | 5,837,304 | 954,192 | ||||||||||||||||||
Add (Deduct): Change in fair value from prior FYE to current FYE of awards granted in prior years that were outstanding at FYE | 7,282,679 | 608,518 | 599,759 | 116,769 | 1,505,821 | 297,995 | ||||||||||||||||||
Add: Fair value on vesting date of awards granted in the FY that vested during the FY | - | - | - | - | - | - | ||||||||||||||||||
Add (Deduct): Change in fair value from prior FYE to vesting date of awards granted in prior years that vested during the FY | (115,452 | ) | (8,733 | ) | (455,113 | ) | (110,118 | ) | (162,627 | ) | 5,244 | |||||||||||||
(Deduct): Fair value at prior FYE of awards granted in prior years that failed to meet the applicable vesting conditions during the FY | - | (291,719 | ) | - | - | - | - | |||||||||||||||||
Add: Dividends or other earnings paid on awards in the FY | 29,066 | 3,580 | 34,581 | 7,822 | 29,585 | 7,746 | ||||||||||||||||||
CAP Amounts (as calculated) | 13,895,157 | 1,453,920 | 5,047,799 | 1,157,888 | 9,313,380 | 1,953,168 |
1 | For (i) PSUs granted in the current FY with future vesting, and (ii) PSUs granted in prior FYs with future vesting, the number of PSUs used in the valuation is the number of PSUs granted at their probable outcome. For PSUs granted in prior FYs that vested in the current FY, the number of PSUs used in the valuation is the number of PSUs that vested. | |
For RSUs granted pursuant to a deferral under the MSPP, the CAP adjustment includes such RSUs in the year in which they are granted in accordance with ASC 718, rather than the year in which they are reported in the SCT. The fair value for such RSUs uses the Black-Scholes valuation model to determine the value of the discount on the shares at the various points in time required in the adjustments. The fair value of the discount is then added to the cash value of the executive’s annual incentive deferral underlying the specific MSPP deferral. E.g., for the annual incentive opportunity for FY 2022, the value of the annual incentive received in cash is reported in the Non-Equity Incentive Compensation column of the SCT for FY 2022 and the corresponding grant date fair value of any RSUs received pursuant to a deferral election under the MSPP for such annual incentive is reported in the SCT for FY 2022. The adjustment for CAP removes the grant date fair value of such RSUs reported in the SCT for FY 2022, but then includes the FYE fair value of such RSUs in FY 2023 because such RSUs were granted in FY 2023 and remained outstanding as of the FYE. The FYE fair value is determined by adding the value of the annual incentive opportunity deferred into the receipt of discounted RSUs and the value of the discount as of the FYE. |
2023 Proxy Statement67 |
Relationship Between Compensation Actually Paid and Performance
The graphs below show the relationship between “compensation actually paid” to our PEO and Other NEOs to (i) TSR of both the Company and the S&P SmallCap 600 Industrial Sector Index, with the value of the initial fixed $100 investment measured as of June 30, 2020; (ii) the Company’s net income; and (iii) the Company’s adjusted EBITDA (non-GAAP).
CAP vs. Company TSR and Peer Group TSR
CAP vs. Net Income
CAP vs. Company-Selected Measure (Adjusted EBITDA)
682023 Proxy Statement |
Questions & Answers
Voting Q&A | How to Vote: | |||||
How can I vote & how many votes do I have? |
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Shareholders at the close of business on August 31, | ||||
You may change your vote by revoking your proxy at any time before it has been exercised by:
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► | Delivering a written notification to our Corporate Secretary that you are revoking your proxy; | Vote by Internet.You may vote your shares via the Internet by visiting www.envisionreports.com/sxi and following the on-screen instructions.
Please have your proxy card available when you access the website. | ||
► | Delivering a revised proxy dated later than the proxy you are revoking;
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► | Voting again by Internet or telephone until
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► | Attending the Annual Meeting and voting in person. | |||
What is a Quorum? | Vote by Telephone.You may vote your shares by telephone by calling toll-free to 1-800-652-8683 from the United States and Canada and following the series of voice instructions.
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A quorum is necessary to conduct business at the Annual Meeting. A majority of the outstanding shares of common stock entitled to vote at the Annual Meeting and represented either in person or by proxy constitutes a quorum. Your shares are counted as present if you have voted. If you abstain from voting, your shares are counted as present in determining a quorum. Broker non-votes are counted as present in determining a quorum. | ||||
What are Broker Non-votes? | Vote by Mail.You may vote your shares by requesting a paper copy of the Proxy Statement (see page 71on how to do this) and signing, dating and mailing it in the enclosed envelope.
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A broker non-vote occurs when a bank, broker or other nominee of share held in street name is represented at the Annual Meeting either in person or by proxy, but has not received instructions from the beneficial owner on how to vote the shares and cannot or chooses not to vote the shares. We strongly encourage shareholders who own shares in street name to instruct their bank, broker or other nominee on how to vote. | ||||
How are the votes counted? | Vote in Person.You may attend the Annual Meeting in person and deliver a completed proxy card or vote by ballot.
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The Company has engaged
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Official tabulation of voted proxies will be handled by Computershare, the Company’s transfer agent. |
2023 Proxy Statement69 |
What is Householding?
As permitted by the Exchange Act, and to reduce the expenses of delivering duplicate proxy materials, we deliver one Notice and, if applicable, Annual Report on Form 10-K and Proxy Statement, to multiple shareholders sharing the same mailing address unless otherwise requested. This is known as “householding.” We will promptly send a separate Annual Report on Form 10-K and Proxy Statement to a shareholder at a shared address upon request at no cost. Shareholders with a shared address may also request that we send a single copy in the future if we are currently sending multiple copies to the same address.
| Requests related to the delivery of proxy materials may be made by calling Investor Relations at (603) 893-9701 or writing to: Standex International Corporation 23 Keewaydin Drive, Suite 300 Salem, New Hampshire 03079 Attention: Investor Relations Shareholders who hold shares in “street name” (as described above) may contact their brokerage firm, bank or other nominee to request information about this householding procedure. |
Communications, Shareholder Proposals & Nominations and Company Documents
How Can I Communicate with the Company’s Directors? The Board welcomes input and suggestions from shareholders and interested parties. Shareholders may communicate with the Board or any member of the Board by writing to the following address and addressing the correspondence accordingly: Standex International Corporation 23 Keewaydin Drive, Suite 300 Salem, New Hampshire 03079 Attention: Corporate Governance Officer Alternatively, shareholders may send an email to boardofdirectors@standex.com and specify the director, committee or group to be contacted in the message line. |
WHATIS HOUSEHOLDING?
As permitted by the Securities and Exchange Act of 1934, and
Communications with the Board are distributed by the Corporate Governance Officer. The Corporate Governance Officer uses his or her discretion in determining whether to reduce the expenses of delivering duplicate proxy materials, we deliver one Notice and, if applicable, Annual Report on Form 10-K and Proxy Statement, to multiple shareholders sharing the same mailing address unless otherwise requested. This is known as “householding.”
We will promptly send a separate Annual Report on Form 10-K and Proxy Statement to a shareholder at a shared address upon request at no cost. Shareholders with a shared address may also request that we send a single copy in the future if we are currently sending multiple copies to the same address.
Requests related to the delivery of proxy materials may be made by calling Investor Relations at (603) 893-9701 or writing to:
Standex International Corporation
23 Keewaydin Drive, Suite 300
Salem, New Hampshire 03079
Attention: Investor Relations
Shareholders who hold shares in “street name” (as described above) may contact their brokerage firm, bank or other nominee to request information about this householding procedure.
COMMUNICATIONS, SHAREHOLDER PROPOSALS & NOMINATIONSAND COMPANY DOCUMENTS
HOW CAN I COMMUNICATEWITHTHE COMPANY’S DIRECTORS?
The Board welcomes input and suggestions from shareholders and interested parties. Shareholders may communicate with the Board or any member of the Board by writing to the following address and addressing the correspondence accordingly:
Standex International Corporation
23 Keewaydin Drive, Suite 300
Salem, New Hampshire 03079
Attention: Corporate Governance Officer
Alternatively, shareholders may send an email to boardofdirectors@standex.com and specify the director, committee or group to be contacted in the message line.
Communications with the Board are distributed by the Corporate Governance Officer. The Corporate Governance Officer uses his or her discretion in determining whether to
forward communications to the Board. Communications that are unrelated to the duties and responsibilities of the Board will not be distributed. Such items include, but are not limited to:
► | spam |
► | junk mail and mass mailings |
► | product complaints or inquiries |
► | new product suggestions |
► | resumes and other forms of job inquiries |
► | surveys |
► | business solicitations or advertisements | ||
In addition, material that is trivial, obscene, unduly hostile, threatening or illegal or similarly unsuitable items will be excluded; however, any communication that is excluded will be made available to any independent, non-employee director upon request. |
In addition, material that is trivial, obscene, unduly hostile, threatening or illegal or similarly unsuitable items will be excluded; however, any communication that is excluded will be made available to any independent, non-employee director upon request.
HOW CANHow Can I SUBMITA SHAREHOLDER PROPOSALOR DIRECTOR NOMINATION?Submit a Shareholder Proposal or Director Nomination?
In accordance with Rule 14a-8 of the Exchange Act, certain shareholder proposals may be eligible for inclusion in our 2021 Proxy Statement. All shareholder proposals must comply with the requirements of Rule 14a-8 and must be received by our Corporate Secretary, in writing, no later than May 11, 2021. We strongly encourage any interested shareholder to contact our Corporate Secretary prior to the deadline to discuss the proposal. Submission of a proposal does not guarantee that it will be included in our Proxy Statement.
Shareholders may also nominate a director nominee for election at our 2021 annual meeting by following the provisions of the Company’s By-Laws. All nomination and supporting materials must comply with the requirements set forth in our By-Laws. Notice of such a nomination must be received by our Corporate Secretary, in writing, between May 11, 2021 and June 10, 2021. However, if the 2021 annual meeting is held more than 30 days before or more than 90 days after the anniversary of the 2020 Annual Meeting, the shareholder must submit the notice either (i) by 120 calendar days prior to the 2021 annual meeting or (ii) within 10 calendar days following the date on which the public announcement of the date of the 2021
In accordance with Rule 14a-8 of the Exchange Act, certain shareholder proposals may be eligible for inclusion in our 2024 Proxy Statement. All shareholder proposals must comply with the requirements of Rule 14a-8 and must be received by our Corporate Secretary, in writing, no later than May 11, 2024. We strongly encourage any interested shareholder to contact our Corporate Secretary prior to the deadline to discuss the proposal. Submission of a proposal does not guarantee that it will be included in our Proxy Statement. Shareholders may also nominate a director nominee for election at our 2024 annual meeting by following the provisions of the Company’s By-Laws. All nomination and supporting materials must comply with the requirements set forth in our By-Laws. Notice of such a nomination must be received by our Corporate Secretary, in writing, between May 11, 2024 and June 10, 2024. However, if the 2024 annual meeting is held more than 30 days before or more than 90 days after the anniversary of the 2023 Annual Meeting, the shareholder must submit the notice either (i) by 120 calendar days prior to the 2024 annual meeting or (ii) within 10 calendar days following the date on which the public announcement of the date of the 2024 annual meeting is made.
Both this Proxy Statement and the Annual Report on Form 10-K may be viewed online at: www.envisionreports.com/SXI and on Standex’s website at ir.standex.com/annual-reports. Shareholders may obtain print or emailed copies, free of charge, of this Proxy Statement, Annual Report on Form 10-K, the Codes of Conduct, Committee Charters or the Corporate Governance Guidelines by writing to: Standex International Corporation 23 Keewaydin Drive, Suite 300 Salem, NH 03079 Attention: Investor Relations Department Shareholders may also call Standex’s Investor Relations at (603) 893-9701 to request copies. Alternatively, print copies can also be requested by e-mailing the request to investorrelations@standex.com. All requests will be fulfilled within 3 business days of receipt and copies will be sent via first class mail.
Helpful Resources
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