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Steven R. Loranger Chairman, President and Chief Executive Officer | ITT Corporation White Plains, NY |
Time: | 10:30 a.m. Eastern Time, on Tuesday, May | |
Place: | ||
Items of Business: | 1. Election of | |
2. Ratification of the appointment of Deloitte & Touche LLP as ITT’s Independent | ||
3. Approval of | ||
4. Approval of a proposal to amend the | ||
5. | ||
6. | ||
7. |
Who | You can vote if you were a shareholder at the close of business on March | |
Annual Report to Shareholders andAnnual Report on Form | Copies of our |
Mailing or Availability Date: | Beginning on or about March |
About Proxy Voting: | Your vote is important. Proxy voting permits shareholders unable to attend the Annual Meeting to vote their shares through a proxy. Most shareholders are unable to attend the Annual Meeting. By appointing a |
proxy, your shares will be represented and voted in accordance with your instructions. If you do not provide instructions on how to vote, the proxies will vote as recommended by the Board of Directors. | ||
Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to be held on Tuesday, May 10, 2011 at 10:30 a.m. at 1133 Westchester Avenue, White Plains, NY10604-3543. The Company’s 2011 Proxy Statement, 2010 Annual Report onForm 10-K and Annual Report to Shareholders will be available online at https://www.proxydocs.com/itt. |
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1. | Election of |
2. | Ratification of the appointment of Deloitte & Touche LLP as ITT’s Independent |
3. | Approval of the |
4. | Approval of a proposal to amend the |
5. | |
6. | |
7. |
amend, where applicable, ITT’s policies related to human rights. | |
8. | To transact such other business as may properly come before the |
• | By the Internet, |
• | By Telephone, |
• | By Mail. |
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Non-Management Directors | 5 X Annual Retainer Amount | |
CEO | 5 X Annual Base Salary | |
CFO | 3 X Annual Base Salary | |
Senior Vice Presidents | 2 X Annual Base Salary | |
Vice Presidents | 1 X Annual Base Salary |
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Amount and Nature of Beneficial Ownership | Amount and Nature of Beneficial Ownership | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | ITT Common | Total | ITT Common | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Title of Class | Shares | Stock | Title of Class | Shares | Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||
ITT Common | Beneficially | Shares | Stock | Percentage | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name of Beneficial Owner | Stock | Owned | Owned | Options(1) | Units | of Class | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Name of Beneficial | ITT Common | Beneficially | Shares | Stock | Percentage | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Owner | Stock | Owned(1) | Owned | Options(2) | Units | of Class(5) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven R. Loranger | Common Stock | 382,252 | 99,798 | 282,454 | 213,786 | (3) | 0.328 | % | Common Stock | 1,027,553 | 305,586 | 721,967 | — | 0.557 | % | |||||||||||||||||||||||||||||||||||||||||||
Curtis J. Crawford | Common Stock | 44,181 | 30,654 | 13,527 | — | 0.024 | % | Common Stock | 60,436 | 37,535 | 22,901 | 1,715 | 0.033 | % | ||||||||||||||||||||||||||||||||||||||||||||
Christina A. Gold | Common Stock | 34,684 | 21,157 | 13,527 | — | 0.019 | % | Common Stock | 49,323 | 26,422 | 22,901 | 1,715 | 0.027 | % | ||||||||||||||||||||||||||||||||||||||||||||
Ralph F. Hake | Common Stock | 21,636 | 11,669 | 9,967 | — | 0.012 | % | Common Stock | 36,312 | 16,971 | 19,341 | 1,715 | 0.020 | % | ||||||||||||||||||||||||||||||||||||||||||||
John J. Hamre | Common Stock | 30,757 | 17,230 | 13,527 | — | 0.017 | % | Common Stock | 47,233 | 24,332 | 22,901 | 1,715 | 0.026 | % | ||||||||||||||||||||||||||||||||||||||||||||
Raymond W. LeBoeuf | Common Stock | 33,042 | 19,515 | 13,527 | — | 0.018 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Paul J. Kern | Common Stock | 10,007 | 4,926 | 5,081 | 1,715 | 0.005 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Frank T. MacInnis | Common Stock | 26,813 | 13,286 | 13,527 | — | 0.015 | % | Common Stock | 42,992 | 20,091 | 22,901 | 1,715 | 0.023 | % | ||||||||||||||||||||||||||||||||||||||||||||
Surya N. Mohapatra | Common Stock | 342 | 342 | — | — | 0.000 | % | Common Stock | 14,848 | 7,607 | 7,241 | 1,715 | 0.008 | % | ||||||||||||||||||||||||||||||||||||||||||||
Linda S. Sanford | Common Stock | 35,576 | 22,049 | 13,527 | — | 0.020 | % | Common Stock | 50,315 | 27,414 | 22,901 | 1,715 | 0.027 | % | ||||||||||||||||||||||||||||||||||||||||||||
Markos I. Tambakeras | Common Stock | 27,388 | 13,861 | 13,527 | — | 0.015 | % | Common Stock | 40,577 | 17,676 | 22,901 | 1,715 | 0.022 | % | ||||||||||||||||||||||||||||||||||||||||||||
Denise L. Ramos | Common Stock | 18,930 | 18,930 | — | — | 0.010 | % | Common Stock | 71,618 | 37,074 | 34,544 | — | 0.039 | % | ||||||||||||||||||||||||||||||||||||||||||||
Henry J. Driesse | Common Stock | 171,357 | 37,797 | 133,560 | — | 0.094 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Steven F. Gaffney | Common Stock | 63,524 | 22,476 | 41,048 | — | 0.035 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Gretchen W. McClain | Common Stock | 51,852 | 24,316 | 27,536 | — | 0.029 | % | Common Stock | 160,178 | 86,295 | 73,883 | — | 0.087 | % | ||||||||||||||||||||||||||||||||||||||||||||
George E. Minnich | Common Stock | 24,936 | 24,936 | — | — | 0.014 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
David F. Melcher | Common Stock | 35,451 | 15,224 | 20,227 | — | 0.019 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
Frank R. Jimenez | Common Stock | 16,587 | 7,111 | 9,476 | — | 0.009 | % | |||||||||||||||||||||||||||||||||||||||||||||||||||
All Directors and Executive Officers as a Group | Common Stock | 967,270 | 378,016 | 589,254 | 213,786 | 0.651 | %(5) | Common Stock | 1,771,184 | 671,917 | 1,099,267 | 15,435 | 0.960 | % | ||||||||||||||||||||||||||||||||||||||||||||
(1) | With respect to Mr. Loranger and certain Non-Management Directors, total shares beneficially owned include restricted stock units that have vested but are deferred until a later date. | |
(2) | More detail on outstanding option awards is provided in the |
(3) | On June 28, 2004, Mr. Loranger received an award of 250,000 Restricted Stock Units (“RSUs”) under the ITT Corporation 2003 Equity Incentive Plan (the “2003 Plan”), as amended and restated, in connection with his employment agreement. |
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86,265 units, vested on June 28, 2008 and the remaining one-third of the units vested on June 28, |
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(4) | Mr. Loranger received credit for | |
(5) | Percentage of class includes restricted stock units. |
Amount and | Amount and | |||||||||||||||
nature of | nature of | |||||||||||||||
Name and address | beneficial | Percent of | beneficial | Percent of | ||||||||||||
of beneficial owner | ownership | Class | ownership | Class | ||||||||||||
Barrow, Hanley, Mewhinney & Strauss, Inc.(1) | 11,893,835 | 6.5 | % | |||||||||||||
Barrow, Hanley, Mewhinney & Strauss, LLC(1) | 13,008,379 | 7.09 | % | |||||||||||||
2200 Ross Avenue, 31st Floor Dallas, TX75201-2761 |
(1) | As reported on Schedule |
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1. | Election of Directors |
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Steven R. Loranger Chairman, President and Chief Executive Officer, ITT Corporation |
Curtis J. Crawford, Ph.D. President and Chief Executive Officer, XCEO, Inc., a leadership and corporate governance consulting firm |
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Christina A. Gold Former President, Chief Executive Officer and Director, The Western Union Company, Inc., a global leader in money transfer and financial services |
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Ralph F. Hake Former Chairman and Chief Executive Officer, Maytag Corporation, a home and commercial appliance company |
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John J. Hamre, Ph.D. President and Chief Executive Officer, Center for Strategic & International Studies |
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General Paul J. Kern, U.S. Army (Ret.) Senior Counselor, The Cohen Group |
Frank T. MacInnis Chairman and former Chief Executive Officer, EMCOR Group, Inc., one of the world’s largest providers of electrical and mechanical construction services, energy infrastructure and facilities services. |
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Surya N. Mohapatra, Ph.D. Chairman of the Board, President and Chief Executive Officer of Quest Diagnostics Incorporated, the |
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Linda S. Sanford Senior Vice President, Enterprise |
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Markos I. Tambakeras Former Chairman, President and Chief Executive Officer, Kennametal, Inc., a premier global tooling solutions, engineered components and advanced materials supplier to the automotive, aerospace, energy, mining, construction and other industries |
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2. | Ratification of Appointment of the Independent |
• | independence |
• | experience |
• | |
technical capabilities | |
• | client |
• | responsiveness |
• | financial strength |
• | |
• | PCAOB’s 2009 inspection results |
• | leadership |
• | |
• | management structure |
• | peer review program |
• | commitment to quality report |
• | appropriateness of fees charged |
• | compliance and ethics programs |
Fiscal Year Ended | Fiscal Year Ended | |||||||||||||||
(in thousands) | 2010 | 2009 | ||||||||||||||
2007 | 2006 | (In thousands) | ||||||||||||||
Audit Fees(1) | $ | 8,643 | $ | 7,728 | $ | 8,423 | $ | 8,319 | ||||||||
Audit-Related Fees(2) | 951 | 2,963 | 2,745 | 1,015 | ||||||||||||
Tax Fees(3) | ||||||||||||||||
Tax Compliance Services | 428 | 381 | 1,448 | 1,163 | ||||||||||||
Tax Planning Services | 230 | 62 | 501 | 209 | ||||||||||||
Total Tax Services | 658 | 443 | 1,949 | 1,372 | ||||||||||||
Other Fees(4) | 1,500 | — | ||||||||||||||
Total | $ | 10,252 | $ | 11,134 | $ | 14,617 | $ | 10,706 | ||||||||
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(1) | Fees for audit services billed in |
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• | Audit of the Company’s annual financial statements and internal control over financial reporting; | |
• | Reviews of the Company’s quarterly financial statements; | |
• | Statutory and regulatory audits, consents and other services related to SEC matters; and | |
• | Financial accounting and reporting consultations. |
(2) | Fees for audit-related services billed in |
• | Employee benefit plan audits; | |
• | Audits and other attest work related to acquisitions and dispositions; | |
• | Internal control advisory services; and | |
• | Other miscellaneous attest services. |
(3) | Fees for tax services billed in |
• | Tax compliance services are services rendered, based upon facts already in existence or transactions that have already occurred, to document, compute, and obtain government approval for amounts to be included in tax filings consisting primarily of: |
• | Tax planning services are services and advice rendered with respect to proposed transactions or services that alter the structure of a transaction to obtain an anticipated tax result. Such services consisted primarily of: |
2007 | 2006 | |||||||
Ratio of Tax Planning and Advice to Total Fees | 2.2 | % | 0.6 | % |
(4) | Fees for other services consisted of consulting services in connection with the Company’s value-based commercial excellence programs. |
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1. | Due diligence, closing balance sheet audit services, purchase price dispute support and other services related to mergers, acquisitions and divestitures; |
2. | Employee benefit advisory services, independent audits and preparation of tax returns for the Company’s defined contribution, defined benefit and health and welfare benefit plans, preparation of the associated tax returns or other employee benefit advisory services; |
3. | Tax compliance and certain tax planning and advice work; and |
4. | Accounting consultations and support related to generally accepted accounting principles (“GAAP”) or government contract compliance. |
1. | Bookkeeping or other services related to the accounting records or financial statements of the Company; |
2. | Financial information systems design and implementation; |
3. | Appraisal or valuation services, fairness opinions, orcontribution-in-kind reports; |
4. | Actuarial services; |
5. | Internal auditing services; |
6. | Management functions or human resources services; |
7. | Broker-dealer, investment adviser or investment banking services; or |
8. | Legal services and other expert services unrelated to the audit. |
3. |
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Approval |
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(c) | ||||||||||||
Number of Securities | ||||||||||||
Remaining Available | ||||||||||||
for Future Issuance | ||||||||||||
(a) | Under Equity | |||||||||||
Number of Securities | Compensation Plans | |||||||||||
to be Issued Upon | (b) | (Excluding | ||||||||||
Exercise of | Weighted-Average | Securities | ||||||||||
Outstanding Options, | Exercise Price of | Reflected in | ||||||||||
Warrants and Rights | Outstanding Options, | Column (a)) | ||||||||||
Plan Category | (Thousands) | Warrants and Rights | (Thousands) | |||||||||
Equity Compensation Plans Approved by Security Holders(1)(2) | 9,116 | (3) | $ | 42.54 | (4) | 2,881 | (5) | |||||
Equity Compensation Plans Not Approved by Security Holders | — | — | — | |||||||||
Total | 9,116 | $ | 42.54 | 2,881 |
(1) | Equity compensation plans approved by shareholders include the 1994 ITT Incentive Stock Plan, the 1996 Plan, the 2002 ITT Stock Option Plan for Non-Employee Directors and the 2003 Plan. | |
(2) | Since the approval of the 2003 Plan, no additional awards, including awards of restricted stock, will be granted under the other plans referred to in footnote (1) above. Under the 2003 Plan |
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currently in effect, restricted stock and restricted stock units may be awarded up to a maximum aggregate grant of 300,000 shares or units in any one plan year to any one participant. | ||
(3) | The weighted-average remaining contractual life of the total number of outstanding options was 3.1 years as disclosed in Note 17 to the Consolidated Financial Statements in the Company’s 2010 Annual Report onForm 10-K. | |
(4) | The weighted-average exercise price pertains only to 7,405 outstanding options and not to outstanding restricted stock units, which by their nature have no exercise price. | |
(5) | As of December 31, 2010, the number of shares available for future issuance under the 2003 Plan with respect to restricted stock and restricted stock unit awards was approximately 1,447,257, which is included in the 2,881,070 disclosed above. |
4. | Approval of a Proposal to Amend the Company’s Restated Articles of Incorporation to Allow Shareholders to Call Special Meetings |
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5. | Non-Binding Advisory Vote to Ratify Named Executive Officers’ Compensation |
• | alignment of executive and shareholder interests by providing incentives linked to earnings per share performance, revenue, free cash flow and return on invested capital; |
• | the ability for executives to achieve long-term shareholder value creation without undue business risk; |
• | creating a clear link between an executive’s compensation and his or her individual contribution and performance; |
• | the extremely competitive nature of the industries in which we operate, whether in manufacturing or defense, and our need to attract and retain the most creative and talented industry leaders; and |
• | comparability to the practices of peers in the industries that we operate in and other comparable companies generally. |
6. |
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7. |
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• | Our values are our compass — we strive to do the right thing always | |
• | Treat others fairly and courteously | |
• | Sustain a culture of diversity and inclusion |
• | Providing safe and secure conditions for those working on our Company’s behalf | |
• | Protecting the environment | |
• | Following all applicable wage and hour laws | |
• | Strictly prohibiting human trafficking and the use of child or forced labor, including prison or bonded labor | |
• | Treating each other fairly and equitably |
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• | the Company’s businesses are conducted in conformity with applicable laws and regulations; |
• | the Company’s systems of financial reporting and internal controls are adequate and properly |
• | there is continuity in the leadership of the Company; |
• | management develops sound business strategies; |
• | adequate capital and managerial resources are available to implement the business strategies; |
• | the Company’s long-term strategies, significant investments in new businesses, joint ventures and partnerships and significant business acquisitions, including assessment of balance sheet impacts and other financial matters, are reviewed and approved; and |
• | the Company’s operating plans and capital, research and development and engineering budgets are reviewed and approved. |
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(b) | In addition, a director is not independent if: |
(i) | The director is, or has been within the last three years, an employee of the listed company, or an immediate family member is, or has been within the last three years, an executive officer, of the listed company. |
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(ii) | The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than |
(iii) | (A) The director or an immediate family member is a current partner of a firm that is the company’s internal or external auditor; (B) the director is a current employee of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and who participates in the firm’s audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or an immediate family member was within the last three years (but is no longer) a partner or employee of such a firm and personally worked on the listed company’s audit within that time. |
(iv) | The director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the listed company’s present executive officers at the same time serves or served on that company’s compensation committee. |
(v) | The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the listed company for property or services in an amount which, in any of the last three |
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fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues. |
• | has not been employed by the Company in an executive capacity; |
• | has not been an advisor or consultant to the Company, and has not been affiliated with a company or a firm that is; |
• | has not been affiliated with a significant customer or supplier of the Company; |
• | has not had a personal services contract with the Company; |
• | has not been affiliated with a tax-exempt entity that receives significant contributions from the Company; |
• | has not been related to any of the persons described above; and |
• | has not been part of an interlocking directorate in which an executive officer of the Company is a member of the compensation committee of the company that employs the Director. |
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Christina A. Gold | ||
Linda S. Sanford | ||
Meetings in | ||
Responsibilities: | • Subject to any action that may be taken by the full Board, the Audit Committee has the ultimate authority and responsibility to determine | |
• Review and discuss with management and |
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Company and make a recommendation regarding inclusion of those financial statements in any public filing including the Company’s Annual Report onForm 10-K (or the Annual Report to Shareholders if distributed prior to the filing ofForm 10-K), including discussion of the Company’s disclosures under Management’s Discussion and Analysis of Financial | ||
• Review and consider with | ||
• Review with management and | ||
• As a whole, or through the Committee chair, review and discuss with |
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Financial | ||
• Review and discuss with management the types of information to be disclosed and the types of presentations to be made with respect to the Company’s earning releases and rating agency presentations. | ||
• Monitor and discuss with management and | ||
• Annually request from | ||
• With respect to such relationships, the Audit Committee shall: | ||
• Discuss with | ||
• Assess and recommend appropriate action in response to the | ||
• Adopt and monitor implementation and compliance with the Company’s Non-Audit Services Policy, which addresses approval requirements and the |
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limited circumstances in which | ||
• Confirm | ||
• On an annual basis, discuss with | ||
• Review significant findings or unsatisfactory internal audit reports or audit problems or difficulties encountered by | ||
• Provide oversight |
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• Review its performance and Charter at least annually and make recommendations to the Board of Directors for approval and adoption of | ||
• Review regularly and consider the Company’s | ||
• Review expense accounts of senior executives. | ||
• Update the Board of Directors on a regular basis with respect to matters coming to its attention | ||
• Review major issues regarding accounting principles and financial statement presentations, significant changes to the Company’s selection or application of accounting principles and major issues relating to the Company’s internal controls including any specifically required steps to correct identified major internal control issues. The Audit Committee also reviews management or |
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off-balance sheet structures, if any, on the Company’s financial statements. | ||
• Review all material related party transactions prior to initiation of the transaction and make recommendations to the Board of Directors for approval or disapproval. | ||
• In conjunction with the Board of Directors, evaluate the qualifications of its members and its own performance on an annual basis. | ||
• Meet separately, on a regular basis, with | ||
• Establish policies regarding the Company’s employment and retention of current or former employees of | ||
• With respect to complaints concerning accounting, internal accounting controls or auditing matters: | ||
• Review and approve procedures for receipt, retention and treatment of complaints received by the Company; and | ||
• Establish procedures for the confidential, anonymous submission of complaints to the Audit Committee. | ||
• Establish levels for payment by the Company of fees to | ||
• Receive regular reports from the |
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representative on the status of the Company’s disclosure controls and related certifications, including disclosure of any material weaknesses or significant deficiencies in the design or operation of internal controls and any fraud that involves management or other employees with a significant role in internal controls. | ||
• Prepare the Report of the Audit Committee for the Company’s Proxy Statement. | ||
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Linda S. Sanford, Chair Curtis J. Crawford Ralph F. Hake | ||
Meetings in | ||
The Committee’s primary objective is to establish a competitive executive compensation program that clearly links executive compensation to business performance and shareholder return, without excessive enterprise risk. | ||
Responsibilities: | • Approve and oversee administration of the Company’s employee compensation program including incentive plans and | |
• Evaluate senior management and | ||
• Oversee the establishment and administration of the Company’s benefit programs. | ||
• Select, retain and determine the terms of engagement for independent compensation and benefits consultants and other outside counsel, as needed, to provide independent advice to the Committee with respect to the Company’s current and proposed executive compensation and employee benefit programs. In | ||
• Oversee and approve the continuity planning process and review with the full Board of Directors, which provides final approval. | ||
• Regularly report to the Board of Directors on compensation, benefits, continuity and related matters. | ||
• Prepare the Compensation Committee Report for the Company’s Proxy Statement. |
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• Review regularly and consider the Company’s Inclusion & Diversity strategy and the effectiveness of related programs and policies. | ||
• Review its performance and Charter at least annually and make recommendations to the Board of Directors for approval and adoption of | ||
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John J. Hamre, Chair Linda S. Sanford Markos I. Tambakeras | ||
Meetings in | 1 | |
Responsibilities: | • Review and make recommendations concerning the Company’s roles and responsibilities as a good corporate citizen. | |
• Review and consider major claims and litigation involving the Company and its subsidiaries. | ||
• Regularly assess the adequacy and effectiveness of the Company’s Code of Corporate Conduct and review any violations of the Code. | ||
• Review its performance and Charter at least annually and make recommendations to the Board of Directors for approval and adoption of |
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John J. Hamre, Chair Markos I. Tambakeras | ||
Meetings in | ||
Responsibilities: | • Develop, annually review, update and recommend to the Board of Directors corporate governance principles for the Company. |
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• In the event it is necessary to select a new | ||
• Evaluate and make recommendations to the Board of Directors concerning the composition, governance and structure of the Board. | ||
• Make recommendations to the Board of Directors concerning the qualifications, compensation and retirement age of Directors. | ||
• Administer the Board of Directors’ annual evaluation process. | ||
• Review and recommend to the full Board matters and agenda items relating to the Company’s Annual Meeting of | ||
• Review the form of Annual Report to Shareholders, Proxy Statement and related materials. | ||
• Review the Company’s business continuity and disaster recovery programs and plans. | ||
• Review the Company’s communication and advertising program and other activities involving community relations, major charitable contributions and promotion of the Company’s public image. | ||
• Determine desired Board and Director skills and attributes and conduct searches for prospective board members whose skills and attributes reflect those desired for the Board of Directors. | ||
• Identify, evaluate and propose nominees for election to the Board of | ||
• Make recommendations to the Board of Directors concerning the appointment of Directors to Board Committees and the selection of Board Committee Chairs. | ||
• Evaluate and make recommendations regarding senior management requests for approval to accept membership on outside boards. |
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• Review regularly and consider the Company’s programs and policies for effecting compliance with laws and regulations involving the environment, safety and health. | ||
• Provide oversight | ||
• Review and consider the Company’s policies and efforts with respect to compliance with government contracts, international laws and regulations and export controls. | ||
• Review its performance and Charter at least annually and make recommendations to the Board of Directors for approval and adoption of |
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Markos I. Tambakeras, Chair John J. Hamre Surya N. Mohapatra | ||
Meetings in | ||
Responsibilities: | ||
• Receive | ||
• Review and consider the Company’s: | ||
• Strategic | ||
• Operations | ||
• Operating | ||
• Capital structure, including stock repurchases, debt offerings and | ||
• Corporate | ||
• Acquisition | ||
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• | ||
• | ||
• Commodity hedge transactions and strategies; | ||
• Investor relations matters; | ||
• Risk assessment with respect to financial liquidity and financing; and | ||
• Strategic issues. | ||
• Review and recommend for approval significant business acquisitions and divestitures, and other related matters. | ||
• Review and assess its performance on an annual | ||
• Review and approve its Charter at least annually and make recommendations to the Board of Directors for approval and adoption of its Charter. | ||
The Strategy and Finance Committee oversees all areas of strategy and corporate finance to ensure the Company maintains adequate financial liquidity and appropriate credit ratings and to ensure the Company’s strategic initiatives are consistent with the Company’s financial and strategic plans. The Board of Directors retains the ultimate power and authority with respect to strategic direction and major strategic and financial decisions. |
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Change in | ||||||||||||||||||||||||||||||||||||||||||||||||
Pension | ||||||||||||||||||||||||||||||||||||||||||||||||
Value and | ||||||||||||||||||||||||||||||||||||||||||||||||
Fees | Nonqualified | Fees | ||||||||||||||||||||||||||||||||||||||||||||||
Earned or | Non-Equity | Deferred | Earned or | |||||||||||||||||||||||||||||||||||||||||||||
�� | Paid in | Stock | Option | Incentive Plan | Compensation | All Other | Paid in | Stock | Option | All Other | ||||||||||||||||||||||||||||||||||||||
Name | Cash(1) | Awards(2) | Awards(2) | Compensation | Earnings | Compensation | Total | Cash | Awards | Awards | Compensation | Total | ||||||||||||||||||||||||||||||||||||
(a) | (b) ($) | (c) ($) | (d) ($) | (e) ($) | (f) ($) | (g) ($)(3) | (h) ($) | (b) ($) | (c) ($) | (d) ($) | (g) ($) | (h) ($) | ||||||||||||||||||||||||||||||||||||
Curtis J. Crawford | 50,000 | 78,798 | 31,246 | — | — | — | 160,044 | 90,000 | 90,192 | 40,126 | — | 220,318 | ||||||||||||||||||||||||||||||||||||
Christina A. Gold | 50,000 | 56,612 | 31,246 | — | — | — | 137,858 | 90,000 | 90,192 | 40,126 | — | 220,318 | ||||||||||||||||||||||||||||||||||||
Ralph F. Hake | 60,000 | 57,345 | 31,246 | — | — | — | 148,591 | 90,000 | 90,192 | 40,126 | — | 220,318 | ||||||||||||||||||||||||||||||||||||
John J. Hamre | 50,000 | 78,798 | 31,246 | — | — | — | 160,044 | 90,000 | 90,192 | 40,126 | — | 220,318 | ||||||||||||||||||||||||||||||||||||
Raymond W. LeBoeuf | 50,000 | 56,618 | 31,246 | — | — | — | 137,864 | |||||||||||||||||||||||||||||||||||||||||
Paul J. Kern | 90,000 | 90,192 | 40,126 | — | 220,318 | |||||||||||||||||||||||||||||||||||||||||||
Frank T. MacInnis | 50,000 | 66,384 | 31,246 | — | — | — | 147,630 | 100,000 | 90,192 | 40,126 | — | 230,318 | ||||||||||||||||||||||||||||||||||||
Surya N. Mohapatra(4) | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Surya N. Mohapatra | 90,000 | 90,192 | 40,126 | — | 220,318 | |||||||||||||||||||||||||||||||||||||||||||
Linda S. Sanford | 50,000 | 61,563 | 31,246 | — | — | — | 142,809 | 90,000 | 90,192 | 40,126 | — | 220,318 | ||||||||||||||||||||||||||||||||||||
Markos I. Tambakeras | 50,000 | 73,977 | 31,246 | — | — | — | 155,223 | 90,000 | 90,192 | 40,126 | — | 220,318 |
Fees earned | ||
Awards | ||
4644
Outstanding | Outstanding | Outstanding | Outstanding | |||||||||||||
Non-Management | Restricted Common | Stock Option | Restricted Common | Stock Option | ||||||||||||
Director Name | Stock Awards | Awards | Stock Awards | Awards | ||||||||||||
Curtis J. Crawford | 27,147 | 16,340 | 22,160 | 26,130 | ||||||||||||
Christina A. Gold | 20,157 | 16,340 | 23,026 | 26,130 | ||||||||||||
Ralph F. Hake | 7,597 | 12,780 | 10,466 | 22,570 | ||||||||||||
John J. Hamre | 15,441 | 16,340 | 14,224 | 26,130 | ||||||||||||
Raymond W. LeBoeuf | 13,249 | 16,340 | ||||||||||||||
Paul J. Kern | 3,910 | 9,050 | ||||||||||||||
Frank T. MacInnis | 11,097 | 16,340 | 13,314 | 26,130 | ||||||||||||
Surya N. Mohapatra | — | — | 3,412 | 10,470 | ||||||||||||
Linda S. Sanford | 12,405 | 16,340 | 8,591 | 26,130 | ||||||||||||
Markos I. Tambakeras | 9,147 | 16,340 | 4,674 | 26,130 |
• | $ |
• | Approximately2/3 of the remainder provided in the form of restricted stock units (such restricted stock units payable in shares |
• | Approximately1/3 of the remainder provided in the form of non-qualified stock options (vesting over a |
45
47
• | the fifth anniversary of the grant of the shares unless extended as described below; | |
• | the Director retires at age 72; | |
• | there is a Change of Control of the Company; | |
• | the Director becomes disabled or dies; | |
• | the Director’s service is terminated in certain specified, limited circumstances; or | |
• | any other circumstance in which the Compensation and Personnel Committee believes, in its sole discretion, that the purposes for which the grants of restricted stock were made have been fulfilled and, as such, is consistent with the intention of the Plan. |
46
48
• | determination of qualifications and independence of |
• | the appointment, compensation and oversight of |
• | review of financial reports and other financial information provided by the Company, its systems of internal accounting and financial controls, and the annual independent audit of the Company’s financial statements; |
• | oversight and review of procedures developed for consideration of accounting, internal accounting controls and |
• | review of risk assessment and risk management |
• | adoption of and monitoring the implementation and compliance with the Company’s |
47
49
5048
5149
(c) | ||||||||||||
Number of Securities | ||||||||||||
Remaining Available | ||||||||||||
(a) | for Future Issuance | |||||||||||
Number of Securities | Under Equity | |||||||||||
to be Issued Upon | (b) | Compensation Plans | ||||||||||
Exercise of | Weighted-Average | (Excluding Securities | ||||||||||
Outstanding Options, | Exercise Price of | Reflected in | ||||||||||
Warrants and Rights | Outstanding Options, | Column (a)) | ||||||||||
Plan Category | (Thousands) | Warrants and Rights | (Thousands) | |||||||||
Equity Compensation Plans Approved by Security Holders(1)(2) | 8,739 | (3) | $ | 38.13 | 2,631 | (4) | ||||||
Equity Compensation Plans Not Approved by Security Holders | None | None | None | |||||||||
Total | 8,739 | $ | 38.13 | 2,631 |
1. | NEO Compensation Tied to Internal Business Performance and Long-Term Share Price Performance |
2. | Pay for Performance — Compensation At Risk |
• | The Company’s share price performance significantly lagged industrial companies in the TSR Performance Index (the S&P Industrials Companies, without consideration of utility and transportation service industries, (described herein as the “TSR Performance Index”)) for the2008-2010 Total Shareholder Return (“TSR”) award performance period (TSR is an element of NEO compensation based on relative share price performances over three years). The payout for TSR awards for this performance period was zero, as the Company’s total shareholder return over the three year measurement period, ending December 31, 2010 was ranked at the 25.89 percentile relative to the TSR Performance Index. This rank was below the threshold required for any payment. | |
• | In 2010, the Company’s internal business performance was strong, resulting in an Annual Incentive Plan (“AIP”) payout above target (where target is 100%). The AIP award is an element of NEO compensation which rewards annual operating performance and earnings per share appreciation. The 2010 AIP emphasized total Company performance and collaboration among businesses. | |
• | Stock option and restricted stock grants directly tie NEO compensation to absolute share price performance. |
3. | Changes in the NEO Compensation Program |
• | Tax reimbursements for financial counseling have been eliminated for financial counseling and tax preparation associated with the 2011 tax year. No compensating salary increase will be provided. | |
• | In 2011, the Committee determined to award restricted stock units, rather than restricted stock. This change was made to provide more uniform tax treatment on a global basis. |
4. | Good Pay Practices |
• | Recoupment Policy (p. 67) | |
• | Officer Stock Ownership Guidelines (p. 6) | |
• | Policy Prohibits Speculation in Company Stock (p. 52) |
50
• | Independent Compensation Consultant Advises the Committee (p. 52) | |
• | No Repricing or Replacing of Stock Options Without Shareholder Approval (p. 63) |
Compensation Component or Policy | Risk Mitigation Factor | ||
Salary | • Based on market rates. | ||
• Provides stability and minimizes risk-taking incentives. | |||
Annual Incentive Plan | • AIP design emphasizes overall performance and collaboration among business Groups. The Company’s Fluid Technology, Motion & Flow Control and Defense & Information Solutions businesses are each a business segment or (“Group”). | ||
• AIP components focus on metrics which encourage operating performance and earnings per share appreciation. | |||
• AIP design tailored to meet unique business considerations for Corporate headquarters and business Groups. | |||
• Individual AIP components and total AIP awards are capped. | |||
Long-Term Incentive Awards | • The three-year vesting threshold for senior vice presidents and the Chief Executive Officer and seven and ten-year option terms encourage long-term behaviors. | ||
• Restricted Stock or Restricted Stock Units | • Restricted stock or restricted stock units generally vest after three years. | ||
• Stock Options | • Stock options vest after three years for the Chief Executive Officer and for senior vice presidents and in one-third cumulative annual installments after the first, second and third anniversary of the grant date for other optionees. Options awarded in 2010 and 2011 and options awarded prior to 2005 expire ten years after the grant date. Options awarded between 2005 and 2009 expire seven years after the grant date. | ||
• Total Shareholder Return Awards | • The TSR long-term award is based on three-year share price performance and encourages behaviors focused on long-term goals, while discouraging behaviors focused on short-term risks. | ||
51
Compensation Component or Policy | Risk Mitigation Factor | ||
Perquisites | Limited perquisites are based on competitive market data. The Committee has determined that tax reimbursements related to financial counseling and tax preparation for senior executives associated with the 2011 tax year will be eliminated. No salary increase will be provided to offset the elimination of tax reimbursement. | ||
Severance and Pension benefits | Severance and pension benefits are in line with competitive market data. | ||
Recoupment Policy | Provides mechanism for senior executive compensation recapture in certain situations involving fraud or willful misconduct. | ||
Officer Share Ownership Guidelines | Company officers are required to own Company shares or share equivalents up to 5x base salary, depending on the level of the officer (discussed on page 6). Share ownership guidelines align executive and shareholder interests. Company policy prohibits speculative trading in and out of ITT securities, including prohibitions on short sales and leverage transactions, such as puts, calls, and listed and unlisted options. | ||
Services performed that related solely to work performed for, and at the direction of, the Committee or the Nominating and Governance Committee, and analyses of documents prepared by management for the Committee’s review during 2010: | $308,460 | ||||
Other services performed for the Company during 2010: | $0 | ||||
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53
54
53
Annual Base Salary | Annual Incentive Target | Long-Term Incentive | Total Compensation | |||||||||
Named Executive | Position as Percentage of | Position as Percentage of | Position as Percentage of | Position as Percentage of | ||||||||
Officer and Title | Market Median | Market Median | Market Median | Market Median | ||||||||
Steven R. Loranger, | 96% | 91% | 112% | 105% | ||||||||
Chairman, President and Chief Executive Officer | Above targeted percentage | |||||||||||
Denise L. Ramos, SVP | 98% | 100% | 82% | 90% | ||||||||
and Chief Financial Officer | Below targeted percentage | |||||||||||
Gretchen W. McClain, | 96% | 94% | 84% | 89% | ||||||||
SVP and President, Fluid and Motion Control | Below targeted percentage | Below targeted percentage | ||||||||||
David F. Melcher, SVP | 91% | 83% | 70% | 77% | ||||||||
and President, Defense and Information Solutions | Below targeted percentage | Below targeted percentage | Below targeted percentage | |||||||||
Frank R. Jimenez, VP | 82% | 66% | 50% | 61% | ||||||||
and General Counsel | Below targeted percentage | Below targeted percentage | Below targeted percentage | Below targeted percentage | ||||||||
• | Annual performance reviews for the prior year, | |
• | Base salary merit increases | |
• | AIP target awards, and | |
• | Long-term incentive target awards (including stock options, restricted stock or restricted stock units and |
• | Portfolio Repositioning, | |
• | Differentiated Organic Growth, | |
• | Strategic Execution, and | |
• | Cultural Transformation. |
54
How We Achieve Our Objectives | ||||||
Objective | General Principle | Specific Approach | ||||
Attract and retain well-rounded, capable leaders. | Design our executive compensation program to attract, reward and retain capable executives. Design total executive compensation to provide a competitive balance of salary, short-term and long-term incentive compensation. | The Company’s overarching philosophy is to target total compensation at the competitive median of the CDB. We consider total compensation (salary plus short-term and long-term compensation) when determining each component of NEO compensation. | ||||
Match compensation components to the Company’s short-term and long-term operating and strategic goals. | In addition to salary, we include short-term and long-term performance incentives in our compensation program. | We believe the mix of short-term and long-term performance-based incentives focuses executive behavior on annual performance and operating goals, as well as strategic business objectives that will promote long-term shareholder value creation. | ||||
Provide a clear link between at-risk compensation with business performance. | We believe the measures of performance in our compensation programs must be aligned with measures key to the success of our businesses. The clear link between compensation and performance is intended to provide incentives for achieving performance and business objectives and increasing the long-term value of the Company’s stock. If our businesses succeed, our shareholders will benefit. | The Company links compensation and performance through its long-term incentive program, comprised of restricted stock or restricted stock unit awards, non-qualified stock options awards and total shareholder return target awards. If performance goals are not met, at-risk compensation is reduced or not paid at all. | ||||
Align at-risk compensation with levels of executive responsibility. | As executives move to greater levels of responsibility, the proportion of compensation at risk, whether through annual incentive plans or long-term incentive programs, increases in relation to the increased level of responsibility. | NEO compensation is structured so that a substantial portion of compensation is at risk for executives with greater levels of responsibility. The Committee considered allocation of short-term and long-term compensation, cash and non-cash compensation and different forms of non-cash compensation for NEOs based on its assessment of the proper compensation balance needed to achieve the Company’s short-term and long-term goals. The Compensation Consultant compiled and analyzed data that the Committee considered in weighting compensation components for each of the NEOs. | ||||
Tie short-term executive compensation to specific business objectives. | The AIP performance metrics are designed to further the Company’s total enterprise objectives. By linking AIP performance to total enterprise performance, collaboration across the enterprise is rewarded. | The AIP sets out short-term performance components. If specific short-term performance goals are met, cash payments that reflect performance across the enterprise may be awarded. | ||||
Tie long-term executive compensation to increasing shareholder return. | The long-term incentive award programs link executive compensation to increases in absolute shareholder return or relative shareholder return against industrial peers. | Long-term executive compensation is comprised of restricted stock or restricted stock units, stock options and target TSR cash awards that are tied to the achievement of three-year relative total shareholder return goals. | ||||
55
How We Achieve Our Objectives | ||||||
Objective | General Principle | Specific Approach | ||||
Provide reasonable and competitive benefits and perquisites. | Make sure that other employee benefits, including perquisites, are reasonable in the context of a competitive compensation program. | NEOs participate in many of the same benefit plans with the same benefit plan terms as other employees. Certain other benefit plans are available to NEOs and described more fully on pages 82 to 85. The Compensation Consultant provides survey data on perquisites to the Committee. Perquisites provided to NEOs are designed to be consistent with competitive practice and are regularly reviewed by the Committee. Mr. Loranger has a Special Pension Arrangement discussed on page 83 of this Proxy Statement. | ||||
General Principle | Specific Approach | ||
A competitive salary provides a necessary element of stability. | Salary levels reflect comparable salary levels based on survey data provided by the Compensation Consultant. Salary levels are reviewed annually. | ||
Base salary should recognize individual performance, market value of a position and the incumbent’s tenure, experience, responsibilities, contribution to the Company and growth in his or her role. | Merit increases are based on overall performance and relative competitive market position. | ||
General Principle | Specific Approach | ||
The AIP award recognizes contributions to the year’s results and is determined by performance against specific premier metrics on the enterprise level, as well as qualitative factors, as described in more detail on page 54. The 2010 AIP is structured to reward and emphasize overall enterprise performance and emphasizes collaboration among the Company’s Groups. | The AIP focuses on operating performance, targeting premier metrics considered predictive of top-ranking operating performance. 2010 AIP targets were established based on these four internal premier performance metrics: • earnings per share performance, • free cash flow, • sum of Group return on invested capital, and • the sum of Group revenue. | ||
Structure AIP target awards to achieve competitive compensation levels when targeted performance results are achieved. Use objective formulas to establish potential AIP performance awards. | The Company’s AIP provides for an annual cash payment to participating executives established as a target percentage of base salary. AIP target awards are set with reference to the median of competitive practice based on the CDB. Any AIP payment is the product of the annual base salary rate multiplied by the target base salary percentage multiplied by the AIP annual performance factor based on the approved metrics. The Committee may approve negative discretionary adjustments with respect to NEOs. | ||
5556
General Principle | Specific Approach | ||
Design long-term incentives for NEOs to link payouts to success in the creation of shareholder value over time. | The Committee believes that long-term incentives directly reward NEOs for success in the creation of long-term value creation and enhanced total shareholder return. The Committee employed four considerations in designing the long-term incentive award program: • alignment of executive interests with shareholder interests, • a multi-year plan that balances short-term and long-term decision-making, • long-term awards included as part of a competitive total compensation package, and • retention. | ||
For NEOs, long-term equity-based incentives should recognize current performance as well as the expectation of future contributions. | The Committee grants restricted stock or restricted stock units and stock options awards to link executive compensation to absolute share price performance. It grants TSR awards to provide a link to the Company’s total shareholder return relative to the TSR Performance Index. | ||
Review award programs annually to provide for regular assessment. | As part of its annual compensation review, the Committee determines long-term incentive award program components, the percentage weight of each component, and long-term award target amounts. | ||
Use competitive market survey data provided by the Compensation Consultant from a sample of S&P® Industrial Companies to select long-term components designed to advance the Company’s long-term business goals as well as determining competitive target amounts. | In 2010, the Committee, based on management recommendations, used competitive market data for each of the NEO positions to determine the 2010 long-term award value for each NEO. | ||
Balance absolute share price return and relative share price return. | The Committee balanced long-term awards among awards designed to encourage relative share price performance and awards designed to encourage absolute share price performance. More information on this allocation is provided on pages 62 to 67. | ||
Consider the median of competitive market data, as well as individual contributions and business performance in determining target awards. | Specific target awards are set out in the Grants of Plan-Based Awards table on page 74. | ||
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Return on | Total Corporate | ||||||||||||||||||||||||
Target Award - | Invested | ITT EPS | Free Cash | Performance | |||||||||||||||||||||
Percentage of | Capital | Growth | Flow | (Max 200% of Target | |||||||||||||||||||||
Base Salary | (a) | (b) | (c) | Award) | |||||||||||||||||||||
Steven R. Loranger(1) | 115 | % | 40 | % | 40 | % | 20 | % | a+b+c | ||||||||||||||||
Denise L. Ramos | 75 | % | 40 | % | 40 | % | 20 | % | a+b+c | ||||||||||||||||
George E. Minnich | 75 | % | 40 | % | 40 | % | 20 | % | a+b+c | ||||||||||||||||
Henry J. Driesse | 75 | % | 40 | % | 40 | % | 20 | % | a+b+c | ||||||||||||||||
Target | Return | Total Segment | ||||||||||||||||||||||||||||||||||||
Award - | on | Organic | Performance | |||||||||||||||||||||||||||||||||||
Percentage | Invested | Operating | Organic | Operating | 70% Segment | 30% ITT | (Max 200% of | |||||||||||||||||||||||||||||||
of Base | Capital | Margin | Revenue | Cash Flow | Performance | EPS Growth | Target | |||||||||||||||||||||||||||||||
Salary | (d) | (e) | (f) | (g) | (h) | (i) | Award) | |||||||||||||||||||||||||||||||
Steven F. Gaffney | 75 | % | 60 | % | — | 20 | % | 20 | % | (d+e+f+g) x 70% | b x 30 | % | h + i | |||||||||||||||||||||||||
Gretchen W. McClain | 65 | % | 40 | % | 20 | % | 20 | % | 20 | % | (d+e+f+g) x 70% | b x 30 | % | h + i | ||||||||||||||||||||||||
56
Non-EPS Performance Metrics — % | 85 | % | 100 | % | 120 | % | |||||||||
Non-EPS Metrics — Payout % | 50 | % | 100 | % | 200 | % | |||||||||
3M Co. | General Electric Co. | |
United Technologies Corp. | Emerson Electric Co. | |
Illinois Tool Works, Inc. | Danaher Corp. |
Premier Performance Metric | Why this metric | ||||
• Sum of Group revenue | Revenue reflects the Company’s emphasis on growth. Revenue is defined as reported GAAP revenue excluding the impact of foreign currency fluctuations and contributions from acquisitions and divestitures. The Company’s definition of revenue may not be comparable to similar measures utilized by other companies. Revenue is based on the local currency exchange. | ||||
• Free cash flow | Free cash flow reflects the Company’s emphasis on cash flow generation. Free cash flow is defined as GAAP net cash flow from operating activities, less capital expenditures and adjusted for other non-cash special items and discretionary pension contributions. Free cash flow should not be considered a substitute for cash flow data prepared in accordance with GAAP. The Company’s definition of free cash flow may not be comparable to similar measures utilized by other companies. Management believes that free cash flow is an important measure of performance and it is utilized as a measure of the Company’s ability to generate cash. | ||||
• | |||||
Sum of Group return on invested capital (“ROIC”) | The Committee considers ROIC to be an appropriate measurement of capital utilization in the Company’s businesses and a key element of premier performance. | ||||
• Earnings per share (“EPS”) performance | The Committee believes that EPS performance is an appropriate measure of the Company’s total performance and employed the ITT EPS performance metric to encourage focus on the achievement of premier earnings performance for the overall Company. EPS performance is defined as GAAP net income from continuing operations per diluted share, adjusted to exclude items such as unusual and infrequentnon-operating items, non-operating tax settlements or adjustments relating to prior periods and impacts from acquisitions and divestitures. | ||||
58
Total Enterprise | |||||
2010 Metrics | Performance Percentage | ||||
Sum of Group Revenue | 20 | % | |||
Free Cash Flow | 20 | % | |||
Sum of Group ROIC | 20 | % | |||
EPS Performance | 40 | % | |||
Earnings Per Share Performance | $ | 3.75 | $ | 4.00 | $ | 4.50 | |||||||||
Earnings Per Share Payout Percentage of Target | 50% | 100% | 200% | ||||||||||||
2010 AIP Attainment and Payout Design | ||||||||||||||||||||||||||||||
Revenue | Remaining Metrics | |||||||||||||||||||||||||||||
Performance Percentage of Target | 90% | 100% | 110% | 85% | 100% | 120% | ||||||||||||||||||||||||
Payout Percentage of Target | 50% | 100% | 200% | 50% | 100% | 200% | ||||||||||||||||||||||||
57
Metric | Target | ||||
ITT EPS (for calculating EPS Growth) — Corporate | $ | 3.38 | |||
Organic Revenue (in millions) — Defense | $ | 4.050 | |||
Organic Revenue (in millions) — Fluid Technology | $ | 3.268 | |||
Annual Free Cash Flow (in millions) — Corporate | $ | 627 | |||
59
Metric (all $ amounts in millions other than earnings per share performance) | Performance Target at 100% Payment | 2010 Performance | ||||
EPS Performance | $4.00 | $4.34 | ||||
Free Cash Flow | $740 | $924 | ||||
Sum of Group Revenue | $11,200 | $10,831 | ||||
Performance Target at | ||||||
Metric (all $ amounts in millions other than earnings per share performance) | 100% Payment | 2010 Performance | ||||
EPS Performance | $4.00 | $4.34 | ||||
Free Cash Flow | $740 | $924 | ||||
Sum of Group Revenue | $11,200 | $10,831 | ||||
• | Portfolio Repositioning, | |
• | Differentiated Organic Growth, | |
• | Strategic Execution, and | |
• | Cultural Transformation. |
Target Award | ||||||||||||||||||||||||||||||
Percentage | Sum of Group | Free Cash | Sum of Group | ITT EPS | ||||||||||||||||||||||||||
of | Revenue | Flow | ROIC | Performance | Total Enterprise | |||||||||||||||||||||||||
Named Executive Officer | Base Salary | (a) | (b) | (c) | (d) | Performance | ||||||||||||||||||||||||
Steven R. Loranger | 130 | % | 20 | % | 20 | % | 20 | % | 40 | % | a+b+c+d | |||||||||||||||||||
Denise L. Ramos | 85 | % | 20 | % | 20 | % | 20 | % | 40 | % | a+b+c+d | |||||||||||||||||||
Gretchen W. McClain | 80 | % | 20 | % | 20 | % | 20 | % | 40 | % | a+b+c+d | |||||||||||||||||||
David F. Melcher | 80 | % | 20 | % | 20 | % | 20 | % | 40 | % | a+b+c+d | |||||||||||||||||||
Frank R. Jimenez | 60 | % | 20 | % | 20 | % | 20 | % | 40 | % | a+b+c+d | |||||||||||||||||||
60
Named Executive Officers | AIP | ||
Steven R. Loranger | |||
Denise L. | |||
Gretchen W. | |||
Frank R. Jimenez | $384,500 | ||
58
• | ||
• | ||
• |
TSR, a target cash award | |
61
TSR | Non-Qualified | ||||||||||||||
(Target Cash | Stock Option | Restricted Stock | |||||||||||||
Award) | Award | Award | |||||||||||||
Named Executive Officer | $ | # Options | # Shares | ||||||||||||
Steven R. Loranger | 1,980,000 | 132,265 | 41,267 | ||||||||||||
Denise L. Ramos | 400,000 | 26,721 | 8,337 | ||||||||||||
Gretchen W. McClain | 360,000 | 24,049 | 7,503 | ||||||||||||
David F. Melcher | 360,000 | 24,049 | 7,503 | ||||||||||||
Frank R. Jimenez | 166,700 | 11,890 | 3,474 | ||||||||||||
59
LTIP | Non-Qualified | Individual | ||||||||||||||||
(Target Cash | Stock Option | Restricted Stock | Performance | |||||||||||||||
Named Executive | Award) | Award | Award | Factors | ||||||||||||||
Officer | $ | # Options | # Shares | Considered | ||||||||||||||
Mr. Loranger | 3,000,000 | 89,235 | 24,474 | Strong overall corporate performance | ||||||||||||||
Ms. Ramos | 550,000 | 16,359 | 18,930 | Negotiated employment agreement | ||||||||||||||
Mr. Driesse | — | — | — | Mr. Driesse’s impending retirement was considered with respect to the awards | ||||||||||||||
Mr. Gaffney | 550,000 | 16,360 | 4,487 | Strong Defense segment performance | ||||||||||||||
Ms. McClain | 450,000 | 15,155 | 3,671 | Strong Fluid Technology segment performance | ||||||||||||||
Mr. Minnich(1) | 500,000 | 14,875 | 4,079 | Overall performance | ||||||||||||||
60
• | Holders of restricted stock have the right to receive dividends and vote the | |
• | Restricted stock generally |
is subject to a three-year restriction period, | ||
• | If an acceleration event occurs (as described on pages |
full, | ||
• | If an employee dies or becomes disabled, the restricted stock vests in full, | |
• | If an employee leaves the Company prior to vesting, whether through resignation or termination for cause, the restricted stock is |
62
• | If an employee retires or is terminated other than for cause, a pro-rata portion of the restricted stock award |
61
• | The option exercise price of stock options awarded is the NYSE closing price of the Company’s common stock on the | |
• | For options granted to new executives, the option exercise price of approved stock option awards is the closing price on the grant date, generally the day following the first day of | |
• | Options cannot be exercised prior to | |
• | Three-year cliff vesting is required for executives at the level of senior vice president or above. Stock options vest in one-third cumulative annual installments for executives | |
• | If an acceleration event occurs (as described on pages 90 to 91 of this Proxy Statement) the stock option award vests in full, | |
• | Options awarded in 2010 and 2011 and prior to 2005 expire ten years after the grant date. Options awarded between 2005 and 2009 expire seven years after the grant date. | |
• | If | |
• | The 2003 Plan and the proposed 2011 Omnibus Incentive Plan prohibit the repricing of, or exchange of, stock options and stock appreciation rights which are priced below the prevailing market price with lower-priced stock options or stock appreciation rights without shareholders approval, and | |
• | There may be adjustments to the |
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termination by the Company other than for cause. Any |
• | Currently, no individual may receive more than 600,000 options under the 2003 Plan in any one year. |
Restricted Stock or Restricted Stock Units | Non-qualified Stock Options | ||
A restricted stock award is a grant of Company stock, subject to certain vesting restrictions. A restricted stock unit award is a promise to deliver to the recipient, upon vesting, shares of Company stock. Both restricted stock and restricted stock units carry the same economic risk and reward. | Non-qualified stock options provide the opportunity to purchase Company stock at a specified price called the “exercise price” at a future date. | ||
Holders of restricted stock, as shareholders of the Company, are entitled to vote the shares and receive dividends or dividend equivalents prior to vesting. Holders of restricted stock units are not entitled to vote the shares and do not receive cash dividends during the restriction period. Dividend equivalents are paid in cash upon restricted stock unit vesting beginning with the 2011 awards. | Stock option holders do not receive dividends on shares underlying options and cannot vote their shares. | ||
Restricted stock and restricted stock units have intrinsic value on the day the award is received and retain some realizable value even if the share price declines during the restriction period. Since restricted stock and restricted stock units do not expire, each provides strong employee retention value even after vesting. | Non-qualified stock options increase focus on activities primarily related to absolute share price appreciation. The Company’s non-qualified stock options expire ten or seven years after their grant date depending on the year of award. If the value of the Company’s stock increases and the optionee exercises his or her option to buy at the exercise price, the optionee receives a gain in value equal to the difference between the option exercise price and the price of the stock on the exercise date. If the value of the Company’s stock fails to increase or declines, the stock option has no realizable value. Stock options provide less retention value than restricted stock since stock options have realizable value only if the share price appreciates over the option exercise price before the options expire. | ||
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Feature | Implementation | ||
TSR rewards comparative stock price appreciation relative to that of the TSR Performance Index | The Committee, at its discretion, determines the size and frequency of target TSR awards, performance measures and performance goals, in addition to performance periods. In determining the size of target TSR awards for executives, the Committee considers comparative data provided by the Compensation Consultant and the Company’s internal desired growth in share price. The Company’s target TSR awards provided to NEOs are generally based on a participant’s position, competitive market data, individual performance and anticipated potential contributions to the Company’s long-term goals. | ||
Three-year performance period | A three-year TSR performance period encourages behaviors and performance geared to the Company’s long-term goals and, in the view of the Committee, discourages behaviors that might distract from the three-year period focus. The three-year performance period is consistent with Company’s business cycle because it allows sufficient time for focus on long-term goals and mutes market swings not based on performance. The three-year performance period is also somewhat independent of short-term market cycles. | ||
Performance measurement and award frequency | The Company’s performance for purposes of the TSR awards is measured by comparing the average stock price over the trading days in the month of December immediately prior to the start of the TSR three-year performance period to the average stock price over the trading days in the last month of the three-year cycle as well as dividend yields and other forms of shareholder return. | ||
TSR awards are expressed as target cash awards and paid in cash. | Cash awards compensate relative performance while reducing share dilution. | ||
Components of TSR | The Committee considered the components of a measurable return of value to shareholders, reviewed peer practices and received input from the Compensation Consultant. Based on that review the Committee determined that the most significant factors to measure return of value to shareholders were: | ||
• dividend yields, | |||
• cumulative relative change in stock price, and | |||
• extraordinary shareholder payouts. | |||
TSR calculation | TSR = the sum of 1) dividends paid and reinvested and any other extraordinary shareholder payouts during the three-year performance period and 2) the cumulative change in stock price from the beginning to the end of the performance period as a percentage of beginning stock price. | ||
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• | If a participant’s employment terminates before the end of the three-year performance period, the award is forfeited except in two cases: 1) if a participant dies or becomes disabled, the TSR award vests in full and payment, if any, is made according to its original terms. Vesting in full in the case of death or disability reflects the inability of the participant to control the triggering event and is consistent with benefit plan provisions related to death and disability; and 2) if a participant retires or is terminated by the Company other than for cause, a pro-rata payout, if any, is provided based on the number of full months of employment during the measurement period divided by thirty-six months (the term of the three-year TSR). This pro-rated payout, if any, is provided because it reflects the participant’s service during the pro-rated period. |
• | The Company’s performance for purposes of the TSR awards is measured by comparing the average stock price performance over the trading days in the month of December immediately prior to the start of the TSR three-year performance period to the average stock price performance, over the trading days in the last month of the three-year cycle, including adjustments for dividends and extraordinary payments. (For example, trading days in the month of December 2010 are used as a base for 2011 TSR awards, which will be measured from January 1, 2011 to December 31, 2013). |
• | Payment, if any, of cash awards generally will be made following the end of the applicable three-year performance period and will be based on the Company’s performance measured against the total shareholder return performance of the TSR Performance Index. |
• | Subject to the provisions of Section 409A, in the event of an acceleration event in a change of control (described on pages 90 to 91 of this Proxy Statement), a pro-rata portion of outstanding awards will be paid through the date of the change of control based on actual performance and the balance of the award will be paid at target (100%). There may be up to three outstanding TSR awards at any time. |
• | Performance goals for the applicable TSR performance period are established in writing no later than ninety days after the beginning of the applicable performance period. |
If Company’s Total Shareholder Return Rank Against the | ||||
Companies that Comprise the | Payout Factor | |||
TSR Performance Index is | (% of Target Award) | |||
less than the 35th percentile | 0 | % | ||
at the 35th percentile | 50 | % | ||
at the 50th percentile | 100 | % | ||
at the 80th percentile or more | 200 | % |
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If Company’s Total Shareholder Return Rank Against the | ||||
Companies that Comprise the | Payout Factor | |||
TSR Performance Index is | (% of Target Award) | |||
less than the 35th percentile | 0 | % | ||
at the 35th percentile | 50 | % | ||
at the 50th percentile | 100 | % | ||
at the 80th percentile or more | 200 | % |
TSR | Non-Qualified | ||||||||||||||
(Target Cash | Stock Option | Restricted Stock | |||||||||||||
Named Executive | Award) | Award | Unit Award | ||||||||||||
Officer | $ | # Options | # Units | ||||||||||||
Steven R. Loranger | 2,133,300 | 133,835 | 36,442 | ||||||||||||
Denise L. Ramos | 533,300 | 33,459 | 9,111 | ||||||||||||
Gretchen W. McClain | 533,300 | 33,459 | 9,111 | ||||||||||||
David F. Melcher | 533,300 | 33,459 | 9,111 | ||||||||||||
Frank R. Jimenez | 233,300 | 16,205 | 3,986 | ||||||||||||
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• | the executive terminates his or her own employment, | |
• | the executive’s employment is terminated for cause, | |
• | termination occurs after the executive’s normal retirement date under the ITT Salaried Retirement Plan, or | |
• | termination occurs in certain divestiture instances if the executive accepts employment or refuses comparable employment. |
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• | provide for continuing cohesive operations as executives evaluate a transaction, which, without change of control protection, could be personally adverse to the executive, | |
• | keep executives focused on preserving value for shareholders, | |
• | retain key talent in the face of potential transactions, | |
• | aid in attracting talented employees in the competitive marketplace. |
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Change in | |||||||||||||||||||||||||||||||||||||||||||||
Pension | |||||||||||||||||||||||||||||||||||||||||||||
Value & | |||||||||||||||||||||||||||||||||||||||||||||
Non- | Non- | ||||||||||||||||||||||||||||||||||||||||||||
Equity | qualified | ||||||||||||||||||||||||||||||||||||||||||||
Incentive | Deferred | ||||||||||||||||||||||||||||||||||||||||||||
Name & Principal | Stock | Option | Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||||||||||
Position | Year | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||||||||||||
(a) | (b) | ($)(c) | ($)(d) | ($)(e)(1) | ($)(f)(3) | ($)(g)(4) | ($)(h)(5) | ($)(i)(6) | ($)(j) | ||||||||||||||||||||||||||||||||||||
Steven R. Loranger | 2007 | 1,056,539 | — | 6,690,495 | 2,341,689 | 2,250,000 | 1,220,271 | 211,975 | 13,770,969 | ||||||||||||||||||||||||||||||||||||
Chief Executive Officer | 2006 | 983,846 | — | 5,019,399 | 1,189,442 | 1,732,500 | 1,422,940 | 220,325 | 10,568,452 | ||||||||||||||||||||||||||||||||||||
Denise L. Ramos(2) | 2007 | 250,000 | 150,000 | 407,945 | 52,025 | 525,000 | 17,743 | 358,155 | 1,760,868 | ||||||||||||||||||||||||||||||||||||
SVP & Chief Financial Officer | |||||||||||||||||||||||||||||||||||||||||||||
George E. Minnich (former) | 2007 | 309,308 | — | 1,647,588 | 559,325 | 392,100 | — | 264,950 | 3,173,271 | ||||||||||||||||||||||||||||||||||||
SVP & Chief Financial Officer | 2006 | 476,769 | — | 807,998 | 304,608 | 570,000 | — | 43,718 | 2,203,093 | ||||||||||||||||||||||||||||||||||||
Henry J. Driesse | 2007 | 532,519 | — | 1,907,897 | 452,926 | 629,400 | 381,179 | 35,458 | 3,939,379 | ||||||||||||||||||||||||||||||||||||
SVP Operations(7) | 2006 | 516,769 | — | 1,019,028 | 284,502 | 450,000 | 964,736 | 37,704 | 3,272,739 | ||||||||||||||||||||||||||||||||||||
Steven F. Gaffney | 2007 | 466,731 | — | 1,000,068 | 280,594 | 712,500 | 236,114 | 50,205 | 2,746,212 | ||||||||||||||||||||||||||||||||||||
SVP & President, ITT Defense | 2006 | 422,578 | — | 637,735 | 194,023 | 600,000 | 175,121 | 1,032,548 | 3,062,005 | ||||||||||||||||||||||||||||||||||||
Gretchen W. McClain(8) | 2007 | 381,250 | 49,920 | 964,489 | 323,628 | 340,080 | 29,647 | 213,189 | 2,302,203 | ||||||||||||||||||||||||||||||||||||
SVP & President, ITT Fluid Technology Corp. | |||||||||||||||||||||||||||||||||||||||||||||
Change in | |||||||||||||||||||||||||||||||||||||||||||||
Pension | |||||||||||||||||||||||||||||||||||||||||||||
Non- | Value & | ||||||||||||||||||||||||||||||||||||||||||||
Equity | Nonqualified | ||||||||||||||||||||||||||||||||||||||||||||
Incentive | Deferred | ||||||||||||||||||||||||||||||||||||||||||||
Name and Principal | Stock | Option | Plan | Compensation | All Other | ||||||||||||||||||||||||||||||||||||||||
Position | Year | Salary | Bonus | Awards | Awards | Compensation | Earnings | Compensation | Total | ||||||||||||||||||||||||||||||||||||
(a) | (b) | ($)(c) | ($)(d) | ($)(e) | ($)(f) | ($)(g) | ($)(h) | ($)(i) | ($)(j) | ||||||||||||||||||||||||||||||||||||
Steven R. Loranger | 2010 | 1,154,231 | — | 4,187,372 | 2,047,462 | 2,328,352 | 2,602,844 | 314,791 | 12,635,052 | ||||||||||||||||||||||||||||||||||||
Chief Executive Officer | 2009 | 1,130,000 | — | 3,713,945 | 1,744,716 | 1,909,700 | 4,940,075 | 406,545 | 13,844,981 | ||||||||||||||||||||||||||||||||||||
2008 | 1,119,615 | — | 4,806,163 | 1,499,000 | 2,534,025 | 2,508,911 | 211,125 | 12,678,839 | |||||||||||||||||||||||||||||||||||||
Denise L. Ramos | 2010 | 580,384 | — | 845,946 | 413,641 | 774,300 | 124,047 | 67,981 | 2,806,299 | ||||||||||||||||||||||||||||||||||||
Senior Vice President | 2009 | 540,000 | — | 675,272 | 317,269 | 596,700 | 135,414 | 63,377 | 2,328,032 | ||||||||||||||||||||||||||||||||||||
and Chief Financial Officer | 2008 | 533,077 | 150,000 | 873,838 | 272,593 | 870,900 | 70,593 | 184,727 | 2,955,728 | ||||||||||||||||||||||||||||||||||||
Gretchen W. McClain | 2010 | 527,604 | — | 761,335 | 372,279 | 654,700 | 97,308 | 74,141 | 2,487,367 | ||||||||||||||||||||||||||||||||||||
Senior Vice President and | 2009 | 504,054 | 61,000 | 2,426,708 | 317,269 | 474,600 | 70,753 | 65,453 | 3,919,837 | ||||||||||||||||||||||||||||||||||||
President, Fluid and Motion Control | 2008 | 426,462 | — | 801,010 | 249,883 | 527,700 | 39,611 | 139,099 | 2,183,765 | ||||||||||||||||||||||||||||||||||||
David F. Melcher | 2010 | 509,808 | — | 761,335 | 372,279 | 654,700 | 93,107 | 56,959 | 2,448,188 | ||||||||||||||||||||||||||||||||||||
Senior Vice President and President, Defense & Information Solutions | 2009 | 425,000 | — | 468,921 | 224,733 | 386,750 | 66,150 | 58,217 | 1,629,771 | ||||||||||||||||||||||||||||||||||||
Frank R. Jimenez Vice President and General Counsel | 2010 | 412,115 | — | 352,524 | 166,817 | 384,500 | 47,578 | 54,855 | 1,418,389 | ||||||||||||||||||||||||||||||||||||
Ms. Ramos joined the Company on July 1, 2007. Ms. Ramos received a sign-on payment in 2008 following one year of service. For the 2009 performance year, the Committee awarded Ms. McClain a discretionary bonus of $61,000, which payment was outside the AIP plan. This award was in recognition of Ms. McClain’s exceptional business leadership of the Fluid Technology and Motion and Flow Control business segments during difficult economic conditions. | ||
(e) | Amounts in the Stock Awards column include | |
(f) | Amounts in the Option Awards column include the aggregate grant date fair value of: non-qualified stock option awards in the year of grant based on a binomial lattice value of $15.48 for Mr. Loranger, Ms. Ramos, Ms. McClain, and Mr. Melcher and $14.03 for Mr. Jimenez for the 2010 grant year; $10.53 for Mr. Loranger, Ms. Ramos, Ms. McClain, and $9.06 for Mr. Melcher for the 2009 grant year; and $14.99 for Mr. Loranger, Ms. Ramos and Ms. McClain for the 2008 grant year. A discussion of assumptions relating to option awards may be found in Note 17 to the Consolidated Financial Statements in the Company’s 2010Form 10-K. | |
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Amounts |
(h) | ||
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December 31, 2008, 6.00% at December 31, | ||
(i) | Amounts in this column for 2010 represent items specified in the |
Other Compensation | |||||||||||||||||||||||||||||||||||||||||||||
Personal | |||||||||||||||||||||||||||||||||||||||||||||
Use of | Excess | Tax | Total | ||||||||||||||||||||||||||||||||||||||||||
Corporate | Financial | Auto | Total | Savings Plan | Reimburse- | 401(K) | All Other | ||||||||||||||||||||||||||||||||||||||
Aircraft | Counseling | Allowances | Perquisites | Contributions | ments | Match | Other | Compensation | |||||||||||||||||||||||||||||||||||||
Name | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (f) | (g) | (h) | (i) | (j) | (k) | ||||||||||||||||||||||||||||||||||||
Steven R. Loranger | 152,979 | 63,166 | 15,600 | 231,745 | 31,823 | 37,746 | 8,575 | 4,902 | 314,791 | ||||||||||||||||||||||||||||||||||||
Denise L. Ramos | — | 16,331 | 15,600 | 31,931 | 11,738 | 14,273 | 8,575 | 1,464 | 67,981 | ||||||||||||||||||||||||||||||||||||
Gretchen W. McClain | 8,936 | 15,895 | 15,600 | 40,431 | 10,011 | 14,263 | 8,575 | 861 | 74,141 | ||||||||||||||||||||||||||||||||||||
David F. Melcher | — | 14,648 | 15,139 | 29,787 | 9,267 | 6,957 | 8,575 | 2,373 | 56,959 | ||||||||||||||||||||||||||||||||||||
Frank R. Jimenez | — | 14,800 | 15,600 | 30,400 | 5,849 | 9,079 | 8,575 | 952 | 54,855 | ||||||||||||||||||||||||||||||||||||
Amounts |
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Perquisites | Other Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Savings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Personal | Excess | Plan | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Use of | Savings Plan | Tax | Match | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Corporate | Financial | Club | Auto | Total | Match | Reimburse- | Relocation | and | All Other | |||||||||||||||||||||||||||||||||||||||||||||||||||
Aircraft | Counseling | Dues | Allowances | Other | Perquisites | and Floor | ments | Expense | Floor | Other | Compensation | |||||||||||||||||||||||||||||||||||||||||||||||||
Name | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b)(1) | (c)(2) | (d)(3) | (e) | (f)(4) | (g) | (h)(5) | (i)(6) | (j)(7) | (k)(8) | (l)(9) | (m) | ||||||||||||||||||||||||||||||||||||||||||||||||
Steven R. Loranger | 86,084 | 37,428 | — | 15,600 | 5,302 | 144,414 | 30,516 | 29,170 | — | 7,875 | N/A | 211,975 | ||||||||||||||||||||||||||||||||||||||||||||||||
Denise L. Ramos | — | 15,650 | — | 7,800 | 1,021 | 24,471 | — | 101,709 | 226,667 | 5,308 | N/A | 358,155 | ||||||||||||||||||||||||||||||||||||||||||||||||
George E. Minnich | — | 17,169 | — | 15,600 | 9,076 | 41,845 | 2,052 | 9,639 | — | 7,875 | 203,539 | 264,950 | ||||||||||||||||||||||||||||||||||||||||||||||||
Henry J. Driesse | — | 1,500 | — | 9,100 | 4,218 | 14,818 | 11,469 | 1,296 | — | 7,875 | N/A | 35,458 | ||||||||||||||||||||||||||||||||||||||||||||||||
Steven F. Gaffney | — | 18,624 | 4,977 | 15,600 | 1,148 | 40,349 | — | 3,452 | — | 6,404 | N/A | 50,205 | ||||||||||||||||||||||||||||||||||||||||||||||||
Gretchen W. McClain | — | — | — | 13,200 | 994 | 14,194 | 5,906 | 12,641 | 172,573 | 7,875 | N/A | 213,189 | ||||||||||||||||||||||||||||||||||||||||||||||||
Amounts | ||
Auto allowances are provided to a range of executives, including the | ||
Company contributions to the ITT Excess Savings Plan are unfunded and earnings accrue at the same rate as the Stable Value Fund available to participants in the | ||
Amounts | ||
Amounts | ||
Amounts include taxable group term-life insurance premiums attributable to |
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All | All | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other | Other | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock | All Other | Grant | Stock | All Other | Grant | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards: | Option | Date | Awards: | Option | Date | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number | Awards: | Exercise | Fair | Estimated Future Payouts Under | Number | Awards: | Exercise | Fair | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
of | Number | or Base | Value | Non-Equity Incentive Plan | Estimated Future Payouts Under | of | Number | or Base | Value | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under | Estimated Future Payouts Under | Shares | of Securities | Price of | Equity- | Awards | Equity Incentive Plan Awards | Shares | of Securities | Price of | of Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan Awards(1) | Equity Incentive Plan Awards(2) | of Stock | Underlying | Option | Incentive | of Stock | Underlying | Option | and Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Grant | or Units | Options | Awards | Plan | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | or Units | Options | Awards | Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Date | Threshold | Target | Maximum | Threshold | Target | Maximum | (#)(3) | (#)(4) | ($/Sh)(5) | Awards(6) | Date | ($) | ($) | ($) | (#) | (#) | (#) | (#) | (#) | ($/Sh) | ($) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b) | ($)(c) | ($)(d) | ($)(e) | (#)(f) | (#)(g) | (#)(h) | (i) | (j) | (k) | $(l) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven R. Loranger | 754,000 | 1,508,000 | 3,016,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven R. Loranger | 615,250 | 1,230,500 | 2,461,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
05-Mar-10 | 990,000 | 1,980,000 | 3,960,000 | 1,980,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01-Jan-07 | 1,500,000 | 3,000,000 | 6,000,000 | 3,000,000 | 05-Mar-10 | 41,267 | 2,207,372 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
07-Mar-07 | 24,474 | 1,548,527 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
07-Mar-07 | 89,235 | 57.99 | 1,419,247 | 05-Mar-10 | 132,265 | 53.49 | 2,047,462 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Denise L. Ramos | 187,500 | 375,000 | 750,000 | 250,750 | 501,500 | 1,003,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01-Jan-07 | 275,000 | 550,000 | 1,100,000 | 550,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02-Jul-07 | 18,930 | 1,306,170 | 05-Mar-10 | 200,000 | 400,000 | 800,000 | 400,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
02-Jul-07 | 16,359 | 69.00 | 348,283 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
George E. Minnich | 183,750 | 367,500 | 735,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(7) | 01-Jan-07 | 250,000 | 500,000 | 1,000,000 | 500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
07-Mar-07 | 4,079 | 236,541 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
07-Mar-07 | 14,875 | 57.99 | 240,083 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Henry J. Driesse | 200,625 | 401,250 | 802,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(8) | 01-Jan-07 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven F. Gaffney | 178,125 | 356,250 | 712,500 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01-Jan-07 | 275,000 | 550,000 | 1,100,000 | 550,000 | 05-Mar-10 | 8,337 | 445,946 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
07-Mar-07 | 4,487 | 260,201 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
07-Mar-07 | 16,360 | 57.99 | 264,050 | 05-Mar-10 | 26,721 | 53.49 | 413,641 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gretchen W. McClain | 130,000 | 260,000 | 520,000 | 212,000 | 424,000 | 848,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
01-Jan-07 | 225,000 | 450,000 | 900,000 | 450,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
07-Mar-07 | 3,671 | 212,881 | 05-Mar-10 | 180,000 | 360,000 | 720,000 | 360,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
07-Mar-07 | 15,155 | 57.99 | 205,047 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
05-Mar-10 | 7,503 | 401,335 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
05-Mar-10 | 24,049 | 53.49 | 372,279 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David F. Melcher | 212,000 | 424,000 | 848,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
05-Mar-10 | 180,000 | 360,000 | 720,000 | 360,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
05-Mar-10 | 7,503 | 401,335 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
05-Mar-10 | 24,049 | 53.49 | 372,279 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Frank R. Jimenez | 124,500 | 249,000 | 498,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
05-Mar-10 | 83,350 | 166,700 | 333,400 | 166,700 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
05-Mar-10 | 3,474 | 185,824 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
05-Mar-10 | 11,890 | 53.49 | 166,817 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The |
7274
(i) | Amounts reflect the number of shares of restricted stock granted in | |
73
75
74
76
75
76
• | One-half of the total award |
• | One-fourth of the total award ($275,000) |
• | One-fourth of the total award ($275,000) |
77
the date of grant. These options |
• | 6,000 shares |
• | the remaining 6,000 shares will vest four years after the grant date |
78
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity | Incentive | Equity | Equity | Incentive | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Incentive | Incentive | Plan Awards: | Incentive | Incentive | Plan Awards: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Plan | Plan Awards: | Market or Payout | Plan | Plan Awards: | Market or Payout | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Awards: | Market | Number of | Value of | Awards: | Market | Number of | Value of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of | Number of | Number of | Number of | Value | Unearned | Unearned | Number of | Number of | Number of | Number of | Value | Unearned | Unearned | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities | Securities | Shares | of Shares | Shares, | Shares, | Securities | Securities | Securities | Shares | of Shares | Shares, | Shares, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Underlying | Underlying | Underlying | or Units | or Units | Units or | Units or | Underlying | Underlying | Underlying | or Units | or Units | Units or | Units or | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unexercised | Unexercised | Unexercised | Option | of Stock | of Stock | Other Rights | Other Rights | Unexercised | Unexercised | Unexercised | Option | Option | of Stock | of Stock | Other Rights | Other Rights | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options | Options | Unearned | Exercise | Option | That Have | That Have | That Have | That Have | Options (#) | Options (#) | Unearned | Exercise | Expiration | That Have | That Have | That Have | That Have | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name | Exercisable | Unexercisable | Options | Price | Expiration | Not Vested | Not Vested | Not Vested | Not Vested | Exercisable | Unexercisable | Options | Price | Date | Not Vested | Not Vested | Not Vested | Not Vested | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(a) | (b) (#) | (c) (#) | (e) (#) | (f) ($) | Date | (g) (#) (1) | (i) ($) (2) | (j) ($) (2) | ($) | (b) | (c) | (#)(d) | ($)(e) | (f) | (#)(g) | ($)(h) | (#)(i) | ($)(j) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven R. Loranger | 83,334 | 166,666 | — | 41.52 | 28-Jun-14 | 219,209 | 14,476,562 | 5,500,000 | 11,000,000 | 199,120 | — | — | 45.47 | 3/8/2012 | 121,880 | 6,351,167 | 3,960,000 | 1,980,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 199,120 | — | 45.47 | 08-Mar-12 | 83,612 | — | — | 52.68 | 3/6/2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 83,612 | — | 52.68 | 06-Mar-13 | 89,235 | — | — | 57.99 | 3/7/2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 89,235 | — | 57.99 | 07-Mar-14 | 250,000 | — | — | 41.52 | 6/28/2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 100,000 | — | 53.09 | 3/10/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Denise L. Ramos | — | 16,359 | — | 69.00 | 02-Jul-14 | 18,930 | 1,250,137 | 550,000 | 1,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
George E. Minnich | — | 50,000 | — | 49.27 | 01-Jul-12 | 9,294 | 613,776 | 1,050,000 | 2,100,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 18,395 | — | 52.68 | 06-Mar-13 | — | 165,690 | — | 33.19 | 3/5/2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 14,875 | — | 57.99 | 07-Mar-14 | — | 132,265 | — | 53.49 | 3/5/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Henry J. Driesse | 40,000 | — | 30.91 | 04-Jan-13 | 25,689 | 1,696,502 | 600,000 | 1,200,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
46,000 | — | 37.46 | 02-Feb-14 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 47,560 | — | 45.47 | 08-Mar-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 20,067 | — | 52.68 | 06-Mar-13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Steven F. Gaffney | 15,334 | 7,666 | — | 45.47 | 08-Mar-12 | 20,754 | 1,370,594 | 1,000,000 | 2,000,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Denise L. Ramos | 16,359 | — | — | 69.00 | 7/2/2014 | 28,994 | 1,510,877 | 760,000 | 380,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6,667 | 3,333 | — | 57.45 | 03-Oct-12 | — | 18,185 | — | 53.09 | 3/10/2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5,691 | 11,380 | — | 52.68 | 06-Mar-13 | — | 30,130 | — | 33.19 | 3/5/2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 16,360 | — | 57.99 | 07-Mar-14 | — | 26,721 | — | 53.49 | 3/5/2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gretchen W. McClain | 16,667 | 16,666 | — | 55.59 | 19-Sep-12 | 23,852 | 1,575,186 | 680,000 | 1,360,000 | 33,333 | — | — | 55.59 | 9/19/2012 | 74,500 | 3,882,195 | 720,000 | 360,000 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2,909 | 5,816 | — | 52.68 | 06-Mar-13 | 8,725 | — | — | 52.68 | 3/6/2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 15,155 | — | 57.99 | 07-Mar-14 | 15,155 | — | — | 57.99 | 3/7/2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 16,670 | — | 53.09 | 3/10/2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 30,130 | — | 33.19 | 3/5/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 24,049 | — | 53.49 | 3/5/2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
David F. Melcher | 3,690 | 1,845 | — | 66.45 | 8/18/2015 | 15,224 | 793,323 | 610,000 | 305,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8,269 | 16,536 | — | 33.19 | 3/5/2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 24,049 | — | 53.49 | 3/5/2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Frank R. Jimenez | 5,512 | 11,023 | — | 45.81 | 6/9/2016 | 7,111 | 370,554 | 333,400 | 166,700 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
— | 11,890 | — | 53.49 | 3/5/2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vesting Schedule (#’s) | |||||||||||||||||||||||||
Name | Grant Date | Expiration Date | 2011 | 2012 | 2013 | ||||||||||||||||||||
Steven R. Loranger | 3/10/2008 | 3/10/15 | 100,000 | ||||||||||||||||||||||
3/5/2009 | 3/5/16 | 165,690 | |||||||||||||||||||||||
3/5/2010 | 3/5/20 | 132,265 | |||||||||||||||||||||||
Denise L. Ramos | 3/10/2008 | 3/10/15 | 18,185 | ||||||||||||||||||||||
3/5/2009 | 3/5/16 | 30,130 | |||||||||||||||||||||||
3/5/2010 | 3/5/20 | 26,721 | |||||||||||||||||||||||
Gretchen W. McClain | 3/10/2008 | 3/10/15 | 16,670 | ||||||||||||||||||||||
3/5/2009 | 3/5/16 | 30,130 | |||||||||||||||||||||||
3/5/2010 | 3/5/20 | 24,049 | |||||||||||||||||||||||
David F. Melcher | 8/18/2008 | 8/18/15 | 1,845 | ||||||||||||||||||||||
3/5/2009 | 3/5/16 | 8,268 | 8,268 | ||||||||||||||||||||||
3/5/2010 | 3/5/20 | 24,049 | |||||||||||||||||||||||
Frank R. Jimenez | 6/9/2009 | 6/9/16 | 5,512 | 5,511 | |||||||||||||||||||||
3/5/2010 | 3/5/20 | 3,964 | 3,963 | 3,963 | |||||||||||||||||||||
79
(g) | Vesting Schedule for Restricted Stock (restricted stock |
Vesting Schedule(#) | |||||||||||||||||||||||||
Name | Grant Date | 2011 | 2012 | 2013 | 2014 | ||||||||||||||||||||
Steven R. Loranger | 3/10/2008 | 28,370 | |||||||||||||||||||||||
3/5/2009 | 52,243 | ||||||||||||||||||||||||
3/5/2010 | 41,267 | ||||||||||||||||||||||||
Denise L. Ramos | 7/2/2007 | 6,000 | |||||||||||||||||||||||
3/10/2008 | 5,158 | ||||||||||||||||||||||||
3/5/2009 | 9,499 | ||||||||||||||||||||||||
3/5/2010 | 8,337 | ||||||||||||||||||||||||
Gretchen W. McClain | 3/10/2008 | 4,728 | |||||||||||||||||||||||
3/5/2009 | 9,499 | ||||||||||||||||||||||||
3/5/2009 | 52,770 | ||||||||||||||||||||||||
3/5/2010 | 7,503 | ||||||||||||||||||||||||
David F. Melcher | 8/18/2008 | 1,125 | |||||||||||||||||||||||
3/5/2009 | 6,596 | ||||||||||||||||||||||||
3/5/2010 | 7,503 | ||||||||||||||||||||||||
Frank R. Jimenez | 6/9/2009 | 3,637 | |||||||||||||||||||||||
3/5/2010 | 3,474 | ||||||||||||||||||||||||
(i)(j) | Awards are typically expressed as target cash awards and |
The following table represents the vesting schedule of TSR on December 31 of each year awards with each TSR unit reflecting $1 of value. |
Vesting Schedule | ||||||||||||||||||
Equity Incentive Plan Awards | Approval Date(1) | Target Award in units(#) | 2011 | 2012 | ||||||||||||||
Steven R. Loranger | 3/5/2009 | 1,980,000 | 1,980,000 | |||||||||||||||
3/5/2010 | 1,980,000 | 1,980,000 | ||||||||||||||||
Denise L. Ramos | 3/5/2009 | 360,000 | 360,000 | |||||||||||||||
3/5/2010 | 400,000 | 400,000 | ||||||||||||||||
Gretchen W. McClain | 3/5/2009 | 360,000 | 360,000 | |||||||||||||||
3/5/2010 | 360,000 | 360,000 | ||||||||||||||||
David F. Melcher | 3/5/2009 | 250,000 | 250,000 | |||||||||||||||
3/5/2010 | 360,000 | 360,000 | ||||||||||||||||
Frank R. Jimenez(2) | 6/9/2009 | 166,700 | 166,700 | |||||||||||||||
3/5/2010 | 166,700 | 166,700 | ||||||||||||||||
(1) | For purposes of the TSR, the grant date is January 1, the first day of the performance period for the year in which the award is approved. | |
(2) | Mr. Jimenez joined the Company on June 8, 2009. His target TSR award was granted effective on the next business day. |
7980
Option Awards | Stock Awards | Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||||
Number of | Value | Number of | Value | Number of | Value | Number of | Value | |||||||||||||||||||||||||||||||||
Shares | Realized | Shares | Realized | Shares | Realized | Shares | Realized | |||||||||||||||||||||||||||||||||
Acquired on | on | Acquired on | on | Acquired on | on | Acquired on | on | |||||||||||||||||||||||||||||||||
Exercise | Exercise | Vesting | Vesting | Exercise | Exercise | Vesting | Vesting | |||||||||||||||||||||||||||||||||
Name | (#) | ($) | (#) | ($) | (#) | ($) | (#) | ($)(1) | ||||||||||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (1)(e) | (b) | (c) | (d) | (e) | ||||||||||||||||||||||||||||||||
Steven R. Loranger | — | — | 85,342 | 9,625,496 | — | — | 115,522 | 5,562,859 | ||||||||||||||||||||||||||||||||
Denise L. Ramos | — | — | — | — | — | — | 6,930 | 309,702 | ||||||||||||||||||||||||||||||||
George E. Minnich(3) | — | — | 20,000 | 1,290,000 | ||||||||||||||||||||||||||||||||||||
Gretchen W. McClain | — | — | 3,671 | 195,150 | ||||||||||||||||||||||||||||||||||||
Henry J. Driesse | 50,000 | 1,634,000 | — | 911,086 | ||||||||||||||||||||||||||||||||||||
David F. Melcher | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Steven F. Gaffney | — | — | — | 656,613 | ||||||||||||||||||||||||||||||||||||
Frank R. Jimenez | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Gretchen W. McClain(4) | 16,667 | 173,670 | 6,000 | 999,656 | ||||||||||||||||||||||||||||||||||||
(1) | ||
On June 28, 2004, Mr. Loranger received an award of 250,000 Restricted Stock Units (“RSUs”) under the ITT 2003 Equity Incentive Plan in connection with his employment agreement. | ||
With respect to all NEOs, the amount in column (e) | ||
80
• | 11/2% of his or her average final compensation (as defined below) for each year of benefit service up to 40 years, reduced by | |
• | 11/4% of his or her primary Social Security benefit for each year of benefit service up to a maximum of 40 years. |
81
• | the participant’s average annual base salary for the five calendar years of the last 120 consecutive calendar months of eligibility service that would result in the highest average annual base salary amount, plus | |
• | the participant’s average annual pension eligible compensation, not including base salary, for the five calendar years of the participant’s last 120 consecutive calendar months of eligibility service that would result in the highest average annual compensation amount. |
81
82
82
Present Value | |||||||||||||||||||||||
of Accumulated | |||||||||||||||||||||||
Present Value | Benefit at | ||||||||||||||||||||||
Number of | of Accumulated | Earliest | |||||||||||||||||||||
Years | Benefit at | Date for | Payments | ||||||||||||||||||||
Credited | Normal | Unreduced | During Last | ||||||||||||||||||||
Name | Plan Name | Service | Retirement Age | Benefits | Fiscal Year | ||||||||||||||||||
(a) | (b) | (#)(c) | ($)(d) (1) | ($)(e) (2) | ($)(f) | ||||||||||||||||||
Steven R. Loranger(3) | ITT Salaried Retirement Plan | 3.51 | 61,547 | 61,547 | — | ||||||||||||||||||
ITT Excess Pension Plan | 3.51 | 606,030 | 606,030 | — | |||||||||||||||||||
Special Pension Arrangement | 3.51 | 2,181,781 | 2,181,781 | — | |||||||||||||||||||
Denise L. Ramos | ITT Salaried Retirement Plan | 0.50 | 7,517 | 7,517 | — | ||||||||||||||||||
ITT Excess Pension Plan | 0.50 | 10,226 | 10,226 | — | |||||||||||||||||||
George E. Minnich(4) | ITT Salaried Retirement Plan | 2.50 | — | — | — | ||||||||||||||||||
ITT Excess Pension Plan | 2.50 | — | — | — | |||||||||||||||||||
Henry J. Driesse | ITT Salaried Retirement Plan | 26.95 | 1,003,653 | 1,087,089 | — | ||||||||||||||||||
ITT Excess Pension Plan | 26.95 | 3,679,725 | 3,985,631 | — | |||||||||||||||||||
Steven F. Gaffney | ITT Salaried Retirement Plan | 9.54 | 146,422 | 221,029 | — | ||||||||||||||||||
ITT Excess Pension Plan | 9.54 | 375,063 | 566,170 | — | |||||||||||||||||||
Gretchen W. McClain | ITT Salaried Retirement Plan | 2.29 | 23,554 | 23,554 | — | ||||||||||||||||||
ITT Excess Pension Plan | 2.29 | 34,424 | 34,424 | — | |||||||||||||||||||
Present Value | |||||||||||||||||||||||
of Accumulated | |||||||||||||||||||||||
Present Value | Benefit at | ||||||||||||||||||||||
Number of | of Accumulated | Earliest | Payments | ||||||||||||||||||||
Years | Benefit at | Date for | During | ||||||||||||||||||||
Credited | Normal | Unreduced | Last Fiscal | ||||||||||||||||||||
Service | Retirement | Benefit | Year | ||||||||||||||||||||
Name(a) | Plan Name(b) | (#)(c) | ($)(d)(1) | (e) | ($)(f) | ||||||||||||||||||
Steven R. Loranger | ITT Salaried Retirement Plan | 6.51 | 150,257 | 150,257 | — | ||||||||||||||||||
ITT Excess Pension Plan | 6.51 | 2,017,943 | 2,017,943 | — | |||||||||||||||||||
Special Pension Arrangement | 6.51 | 5,579,701 | 10,732,988 | ||||||||||||||||||||
Denise L. Ramos | ITT Salaried Retirement Plan | 3.50 | 68,423 | 68,423 | — | ||||||||||||||||||
ITT Excess Pension Plan | 3.50 | 279,374 | 279,374 | — | |||||||||||||||||||
Gretchen W. McClain | ITT Salaried Retirement Plan | 5.29 | 72,062 | 72,062 | — | ||||||||||||||||||
ITT Excess Pension Plan | 5.29 | 193,588 | 193,588 | — | |||||||||||||||||||
David F. Melcher | ITT Salaried Retirement Plan | 2.38 | 50,938 | 50,938 | — | ||||||||||||||||||
ITT Excess Pension Plan | 2.38 | 133,311 | 133,311 | — | |||||||||||||||||||
Frank R. Jimenez | ITT Salaried Retirement Plan | 1.56 | 17,912 | 17,912 | — | ||||||||||||||||||
ITT Excess Pension Plan | 1.56 | 29,666 | 29,666 | — | |||||||||||||||||||
(1) | Assumptions used to determine present value as of December 31, 2010 are as follows: |
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(d) | The accumulated benefit is based on service and earnings (base salary and bonus and/or AIP payment) considered by the plans for the period through December 31, | |
(e) | The amounts | |
Mr. |
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Executive | Registrant | Aggregate | Aggregate | Executive | Registrant | Aggregate | Aggregate | |||||||||||||||||||||||||||||||||||||||||||
Contributions | Contributions | Aggregate | Withdrawals/ | Balance at | Contributions in | Contributions | Aggregate | Withdrawals/ | Balance at | |||||||||||||||||||||||||||||||||||||||||
Name | in Last FY | in Last | Earnings in | Distributions | Last FYE | Last FY | in Last | Earnings in | Distributions | Last FYE | ||||||||||||||||||||||||||||||||||||||||
(a) | ($)(b) | FY ($)(c)(3) | Last FY ($)(d) | ($)(e) | ($)(f) | ($)(b) | FY ($)(c) | Last FY ($)(d) | ($)(e) | ($)(f) | ||||||||||||||||||||||||||||||||||||||||
Steven R. Loranger | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-qualified savings | 52,313 | 30,516 | 10,139 | 251,147 | 54,554 | 31,823 | 15,197 | — | 545,021 | |||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | 1,212,750 | — | 298,739 | — | 4,300,092 | — | — | 424,590 | — | 7,829,325 | ||||||||||||||||||||||||||||||||||||||||
Vested but Undelivered Shares(1) | — | 2,086,701 | 452,801 | — | 6,921,198 | |||||||||||||||||||||||||||||||||||||||||||||
Total | 1,265,063 | 30,516 | 308,878 | — | 4,551,239 | 54,554 | 2,118,524 | 892,588 | — | 15,295,544 | ||||||||||||||||||||||||||||||||||||||||
Denise L. Ramos | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Non-qualified savings | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Total | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
George E. Minnich | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-qualified savings | 3,505 | 2,052 | 1,499 | — | 29,980 | |||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | 285,000 | — | 27,864 | — | 576,482 | |||||||||||||||||||||||||||||||||||||||||||||
Total | 288,505 | 2,052 | 29,363 | — | 606,462 | |||||||||||||||||||||||||||||||||||||||||||||
Henry J. Driesse | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Non-qualified savings | 19,651 | 11,469 | 9,518 | — | 210,306 | |||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | 450,000 | — | 190,788 | — | 2,735,200 | |||||||||||||||||||||||||||||||||||||||||||||
Total | 469,651 | 11,469 | 200,306 | — | 2,945,506 | |||||||||||||||||||||||||||||||||||||||||||||
Steven F. Gaffney | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Non-qualified savings | 1,553 | 30,548 | 20,123 | 11,738 | 1,901 | — | 84,121 | |||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | — | — | — | — | 696,870 | — | 24,951 | — | 1,258,851 | |||||||||||||||||||||||||||||||||||||||||
Total | — | — | 1,553 | — | 30,548 | 716,993 | 11,738 | 26,852 | — | 1,342,972 | ||||||||||||||||||||||||||||||||||||||||
Gretchen W. McClain | ||||||||||||||||||||||||||||||||||||||||||||||||||
Non-qualified savings | 10,125 | 5,906 | 645 | — | 25,252 | 16,956 | 10,011 | 2,498 | — | 100,417 | ||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | 66,000 | — | 3,749 | — | 69,749 | 229,145 | — | 23,976 | — | 612,990 | ||||||||||||||||||||||||||||||||||||||||
Total | 76,125 | 5,906 | 4,394 | — | 95,001 | 246,101 | 10,011 | 26,474 | — | 713,407 | ||||||||||||||||||||||||||||||||||||||||
David F. Melcher | ||||||||||||||||||||||||||||||||||||||||||||||||||
Non-qualified savings | 15,888 | 9,267 | 736 | — | 43,180 | |||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Total | 15,888 | 9,267 | 736 | — | 43,180 | |||||||||||||||||||||||||||||||||||||||||||||
Frank R. Jimenez | ||||||||||||||||||||||||||||||||||||||||||||||||||
Non-qualified savings | 10,027 | 5,849 | 105 | — | 15,981 | |||||||||||||||||||||||||||||||||||||||||||||
Deferred Compensation | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Total | 10,027 | 5,849 | 105 | — | 15,981 | |||||||||||||||||||||||||||||||||||||||||||||
(1) | ||
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The amounts in column (c) non-qualified savings are also reflected in column | ||
(d) | See note (1) above for a discussion of Mr. Loranger’s restricted stock units. | |
(f) | The amounts in column (f), which include Executive Contributions in the Last Fiscal Year, represent the deferred portion of the earned 2010 AIP, which amounts were credited to the executives’ accounts in 2011 and reported in the Company’s 2011 proxy statement and the Summary Compensation Table on page 72. Registrant Contributions in the Last Fiscal Year for Non-qualified savings for all NEOs are included in the All Other Compensation Table on page 73 and the Summary Compensation Table on page 72. |
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Rate of | Rate of | ||||||||||||
Return | Return | ||||||||||||
1/1/07– | 1/1/07– | ||||||||||||
Name of Fund | 12/31/07 | Name of Fund | 12/31/07 | ||||||||||
Fixed Rate Option(1) | 7.15 | % | American Funds Growth Fund of America R4 (RGAEX) | 10.88 | % | ||||||||
JPMorgan Prime Money Market Fund (VPMXX) | 4.97 | % | Oppenheimer Global Fund (OPPAX) | 5.97 | % | ||||||||
PIMCO Short-Term Institutional (PTSHX) | 4.55 | % | Hotchkis and Wiley Mid-Cap Value A (HWMAX) | (17.19 | )% | ||||||||
Managers Intermediate Duration Govt (MGIDX) | 6.35 | % | Artisan Mid Cap (ARTMX) | 21.20 | % | ||||||||
Vanguard Total Bond Index (VBMFX) | 6.92 | % | American Century Small Cap Value (ASVIX) | (2.72 | )% | ||||||||
Western Asset Core Fl (WAPIX) | 1.15 | % | Baron Small Cap (BSCFX) | 11.69 | % | ||||||||
American Funds American Balanced R4 (RLBEX) | 6.50 | % | Vanguard Developed Markets Index (VDMIX) | 10.99 | % | ||||||||
UBS Global Allocation Y (BPGLX) | 5.01 | % | Julius Baer International Equity A (BJBIX) | 17.56 | % | ||||||||
American Century Real Estate Inv (REACX) | (16.49 | )% | First Eagle Overseas A (SGOVX) | 8.39 | % | ||||||||
Vanguard 500 Index (VFINX) | 5.39 | % | Lehman Brothers High Income Bond Fund Inv (LBHBX) | 1.61 | % | ||||||||
American Century Equity Income Inv (TWEIX) | 1.79 | % | Bernstein Emerging Markets Value (SNEMX) | 34.04 | % | ||||||||
Legg Mason Value Trust — Financial Intermediary (LMVFX) | (6.05 | )% | ABN AMRO/Veredus SciTech N (AVSTX) | 14.42 | % | ||||||||
Dodge & Cox Stock (DODGX) | .14 | % | ITT Corporation Stock Fund (ITT) | 17.26 | % | ||||||||
Rate of | Rate of | ||||||||||||
Return | Return | ||||||||||||
1/1/10 | 1/1/10 | ||||||||||||
Name of Fund | 12/31/10 | Name of Fund | 12/31/10 | ||||||||||
Fixed Rate Option(1) | 5.80 | % | Vanguard Developed Markets Index (VDMIX) | 8.54% | |||||||||
PIMCO Total Return Institutional (PTTRX) | 8.86 | % | Artio International Equity A (BJBIX) | 8.52% | |||||||||
PIMCO Real Return Institutional (PRRIX) | 7.68 | % | American Fnds EuroPacific Growth (REREX) | 9.39% | |||||||||
T Rowe Price High Yield (PRHYX) | 14.40 | % | First Eagle Overseas A (SGOVX) | 19.24% | |||||||||
Dodge & Cox Stock (DODGX) | 13.49 | % | Lazard Emerging Markets Equity Open (LZOEX) | 22.43% | |||||||||
Vanguard 500 Index (VFINX) | 14.91 | % | AIM Global Real Estate (AGREX) | 16.97% | |||||||||
American Funds Growth Fund of America R4 (RGAEX) | 12.29 | % | Model Portfolio* — Conservative | 8.11% | |||||||||
Perkins Mid Cap Value (JMCVX) | 14.81 | % | Model Portfolio* — Moderate Conservative | 10.51% | |||||||||
Artisan Mid Cap (ARTMX) | 31.57 | % | Model Portfolio* — Moderate | 12.43% | |||||||||
American Century Small Cap Value (ASVIX) | 24.15 | % | Model Portfolio* — Moderate Aggressive | 13.45% | |||||||||
Perimeter Small Cap Growth (PSCGX) | 25.14 | % | Model Portfolio* — Aggressive | 14.70% | |||||||||
Harbor International (HIINX) | 11.57 | % | ITT Corporation Stock Fund (ITT) | 6.97% | |||||||||
Vanguard Total Bond Market Index (VBMFX) | 6.42 | % | |||||||||||
(1) | The Fixed Rate Option | |
* | The returns shown in the model portfolio are not subsidized by the Company, but represent returns for a managed portfolio based on funds available to deferred compensation participants. |
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• | Accrued salary and vacation pay; | |
• | Regular pension benefits under the ITT Salaried Retirement Plan; | |
• | Health care benefits provided to retirees under the ITT Salaried Retirement Plan, including retiree medical and dental insurance. Employees who terminate prior to retirement are eligible for continued benefits under COBRA; and | |
• | Distributions of plan balances under the ITT Salaried Investment and Savings Plan and amounts currently vested under the ITT Excess Savings Plan. |
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• | any accrued but unpaid base salary, bonus (AIP payment), unreimbursed expenses and employee benefits, including vacation; | |
• | two or three times the highest annual base salary rate during the three fiscal years immediately preceding the date of termination and two or three times the highest annual | |
• | continuation of health and life insurance benefits and certain perquisites at the same levels for two or three years; | |
• | a lump-sum payment equal to the difference between the total lump-sum value of his or her pension benefit under the Company’s pension plans, or any successor pension plans (provided such plans are no less favorable to the executive than the Company pension plans), and the total lump-sum value of his or her pension benefit under the pension plans after crediting an additional two or three years of age and eligibility and benefit service using the highest annual base salary rate and bonus for purposes of determining final average compensation under the pension plans; | |
• | credit for an additional two or three years of age and two or three years of eligibility service under the retiree health and retiree life insurance benefits; | |
• | a lump-sum payment equal to two or three times the highest annual base salary rate during the three years preceding termination or an acceleration event times the highest percentage rate of the Company’s contributions to the ITT Salaried Investment and Savings Plan and the ITT Excess Savings Plan, such payment not to exceed 3.5% per year; and | |
• | taxgross-up for excise taxes imposed on the covered | |
• | one year of outplacement. |
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• | the 2011 Omnibus Incentive Plan, as proposed for shareholders approval in this 2011 Proxy Statement; | |
• | the 2003 Equity Incentive Plan; | |
• | the 1994 Incentive Stock Plan; | |
• | the 1996 Restricted Stock Plan for Non-Employee Directors; | |
• | the 1997 Annual Incentive Plan for Executive Officers; | |
• | the 1997 Annual Incentive Plan; | |
• | the 1997 Long-Term Incentive Plan; | |
• | the Special Senior Executive Severance Pay Plan; | |
• | the Enhanced Severance Pay Plan; | |
• | the Deferred Compensation Plan; | |
• | the Excess Savings Plan; | |
• | the Excess Pension Plans; | |
• | the Salaried Retirement Plan; | |
• | the Steven R. Loranger Employment Agreement; |
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• | the Ramos Letter |
91
Steven R. Loranger | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | Of Control | |||||||||||||||||||||||||
($)(a) | ($)(b) | ($)(c) | ($)(d) | ($)(e) | ($)(f) | |||||||||||||||||||||||||
Cash Severance(1) | ||||||||||||||||||||||||||||||
Salary | — | — | — | — | 2,140,000 | 3,210,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | 2,461,000 | 5,197,500 | ||||||||||||||||||||||||
Total | — | — | — | — | 4,601,000 | 8,407,500 | ||||||||||||||||||||||||
Unvested LTIP Unit Awards(2) | ||||||||||||||||||||||||||||||
2006 — 08 LTIP Units | — | — | 2,500,000 | 2,500,000 | 2,500,000 | 5,000,000 | ||||||||||||||||||||||||
2007 — 09 LTIP Units | — | — | 3,000,000 | 3,000,000 | 3,000,000 | 6,000,000 | ||||||||||||||||||||||||
Total | — | — | 5,500,000 | 5,500,000 | 5,500,000 | 11,000,000 | ||||||||||||||||||||||||
Unvested Equity Awards(3) | ||||||||||||||||||||||||||||||
6/28/04 Stock Option | — | — | 4,086,650 | 4,086,650 | 4,086,650 | 4,086,650 | ||||||||||||||||||||||||
6/28/04 RSUs | — | — | 11,294,755 | 11,294,755 | 11,294,755 | 11,294,755 | ||||||||||||||||||||||||
3/8/05 Stock Option | — | — | 4,095,898 | 4,095,898 | 4,095,898 | 4,095,898 | ||||||||||||||||||||||||
3/6/06 Stock Option | — | — | 1,117,056 | 1,117,056 | 1,117,056 | 1,117,056 | ||||||||||||||||||||||||
3/6/06 Restricted Stock | — | — | 1,565,544 | 1,565,544 | 1,565,544 | 1,565,544 | ||||||||||||||||||||||||
3/7/07 Stock Option | — | — | 718,342 | 718,342 | — | 718,342 | ||||||||||||||||||||||||
3/7/07 Restricted Stock | — | — | 1,616,263 | 1,616,263 | 1,526,471 | 1,616,263 | ||||||||||||||||||||||||
Total | — | — | 24,494,508 | 24,494,508 | 23,686,374 | 24,494,508 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits | ||||||||||||||||||||||||||||||
ITT Excess Pension Plan(4) | 667,847 | 667,847 | 300,531 | 667,847 | 667,847 | 667,847 | ||||||||||||||||||||||||
Special Pension Arrangement(5) | — | — | 2,181,781 | 2,181,781 | 2,181,781 | 7,277,349 | ||||||||||||||||||||||||
ITT Excess Savings Plan(6) | — | — | 31,724 | 31,724 | — | — | ||||||||||||||||||||||||
Total | 667,847 | 667,847 | 2,514,036 | 2,881,352 | 2,849,628 | 7,945,196 | ||||||||||||||||||||||||
Other Non-Qualified Benefits | ||||||||||||||||||||||||||||||
Outplacement | — | — | — | — | — | — | ||||||||||||||||||||||||
Health & Welfare(7) | — | — | — | — | 12,612 | 14,840 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up(8) | — | — | — | — | — | 12,736,431 | ||||||||||||||||||||||||
Total | 667,847 | 667,847 | 32,508,544 | 32,875,860 | 36,649,614 | 64,598,475 | ||||||||||||||||||||||||
Steven R. Loranger | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | Of Control | |||||||||||||||||||||||||
($)(a) | ($)(b) | ($)(c) | ($)(d) | ($)(e) | ($)(f) | |||||||||||||||||||||||||
Cash Severance(1) Salary | — | — | — | — | 2,320,000 | 3,480,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | 3,016,000 | 7,602,075 | ||||||||||||||||||||||||
Total | — | — | — | — | 5,336,000 | 11,082,075 | ||||||||||||||||||||||||
Unvested Non-Equity Awards(2) | ||||||||||||||||||||||||||||||
2009 — 11 TSR Award | — | — | — | — | — | 660,000 | ||||||||||||||||||||||||
2010 — 12 TSR Award | — | — | — | — | — | 1,320,000 | ||||||||||||||||||||||||
Total | — | — | — | �� | — | — | 1,980,000 | |||||||||||||||||||||||
Unvested Equity Awards(3) | ||||||||||||||||||||||||||||||
3/10/08 Stock Option | — | — | — | — | — | — | ||||||||||||||||||||||||
3/10/08 Restricted Stock | 1,355,164 | — | 1,478,361 | 1,478,361 | 1,478,361 | 1,478,361 | ||||||||||||||||||||||||
3/5/09 Stock Option | 1,828,665 | — | 3,134,855 | 3,134,855 | 3,134,855 | 3,134,855 | ||||||||||||||||||||||||
3/5/09 Restricted Stock | 1,588,057 | 2,722,383 | 2,722,383 | 2,722,383 | 2,722,383 | |||||||||||||||||||||||||
3/5/10 Stock Option | — | — | — | — | — | — | ||||||||||||||||||||||||
3/5/10 Restricted Stock | 537,606 | 2,150,423 | 2,150,423 | 1,971,221 | 2,150,423 | |||||||||||||||||||||||||
Total | 5,309,492 | — | 9,486,022 | 9,486,022 | 9,306,820 | 9,486,022 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits | ||||||||||||||||||||||||||||||
ITT Excess Pension Plan(4) | 2,017,943 | 2,017,943 | 1,060,143 | — | 2,017,943 | 3,329,785 | ||||||||||||||||||||||||
Special Pension Arrangement(5) | 10,689,765 | 10,689,765 | 10,689,765 | — | 10,689,765 | 13,741,918 | ||||||||||||||||||||||||
ITT Excess Savings Plan(6) | — | — | — | — | — | 121,800 | ||||||||||||||||||||||||
Total | 12,707,708 | 12,707,708 | 11,749,908 | — | 12,707,708 | 17,193,503 | ||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||||
Outplacement | — | — | — | — | — | — | ||||||||||||||||||||||||
Health & Welfare(7) | — | — | — | 4,992 | 4,992 | 7,488 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up(8) | — | — | — | — | — | — | ||||||||||||||||||||||||
Total | — | — | — | 4,992 | 4,992 | 7,488 | ||||||||||||||||||||||||
Total | 18,017,200 | 12,707,708 | 21,235,930 | 9,491,014 | 27,355,520 | 39,749,088 | ||||||||||||||||||||||||
(b) | If Mr. Loranger voluntarily terminates without good reason or is terminated for cause prior to the normal retirement age of 65 under the ITT Salaried Retirement Plan, he is entitled only to his base salary through the date of termination. He has no further rights to any compensation or any other benefits not vested prior to his termination date. Mr. Loranger is eligible to retire under the Steven R. Loranger Special Pension Arrangement. | |
(c) | and (d) If Mr. Loranger terminates due to death or disability, Mr. Loranger, or his estate, is entitled to receive his 1) base salary and 2) any |
90
(e) | Termination |
(1) |
92
(the “accrued obligations”) plus cash severance in the amount of two times salary and two times the target AIP award payable in twenty-four installments over two years. If Mr. Loranger is terminated |
(2) | Based on total shareholder return performance through December 31, 2010, outstanding TSR awards for the2009-11 and2010-12 performance periods would not earn a payout. Should Mr. Loranger resign or be terminated for cause, he would receive no TSR payment. In the event of death or disability, he would receive payment, if any, for outstanding TSR awards at target and in the event of termination without cause |
(3) |
(4) | Mr. Loranger became vested in the ITT Excess Pension Plan benefit effective January 1, 2008 |
(5) | Mr. Loranger vested in The Special Pension Arrangement |
(6) | No additional ITT Excess Savings Plan payments are made in the event of voluntary or involuntary termination or termination for cause, because vesting in ITT Excess Savings Plan contributions occurs at five years of employment. Mr. Loranger was fully vested as of December 31, 2010 under the terms of the Steven R. Loranger Employment Agreement. ITT Excess Savings Plan amounts reflect credits in addition to any currently vested amount. |
(7) | In accordance with |
(8) | Amounts in column (f) assume termination occurs immediately upon a change of control based on the Company’s |
9193
Denise L. Ramos | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | of Control | |||||||||||||||||||||||||
$ (a) | $ (b) | $ (c) | $ (d) | $ (e) | $ (f) | |||||||||||||||||||||||||
Cash Severance | ||||||||||||||||||||||||||||||
Salary | — | — | — | — | 1,000,000 | 1,500,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | — | — | ||||||||||||||||||||||||
Bonus | — | — | — | — | 150,000 | 150,000 | ||||||||||||||||||||||||
Total | — | — | — | — | 1,150,000 | 1,650,000 | ||||||||||||||||||||||||
Unvested LTIP Unit Awards | ||||||||||||||||||||||||||||||
2007 — 09 LTIP Units | — | — | 550,000 | 550,000 | 550,000 | 1,100,000 | ||||||||||||||||||||||||
Total | — | — | 550,000 | 550,000 | 550,000 | 1,100,000 | ||||||||||||||||||||||||
Unvested Equity Awards | ||||||||||||||||||||||||||||||
7/2/07 Stock Option | — | — | — | — | — | — | ||||||||||||||||||||||||
7/2/07 Restricted Stock | — | — | 1,250,137 | 1,250,137 | 1,205,978 | 1,250,137 | ||||||||||||||||||||||||
Total | — | — | 1,250,137 | 1,250,137 | 1,205,978 | 1,250,137 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits | ||||||||||||||||||||||||||||||
ITT Excess Pension Plan(1) | — | — | — | — | — | 202,994 | ||||||||||||||||||||||||
ITT Excess Savings Plan(2) | — | — | — | — | — | 52,500 | ||||||||||||||||||||||||
Total | — | — | — | — | — | 255,494 | ||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||||
Outplacement | — | — | — | — | 75,000 | 75,000 | ||||||||||||||||||||||||
Health & Welfare | — | — | — | — | — | 1,686 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up | — | — | — | — | — | — | ||||||||||||||||||||||||
Total | — | — | 1,800,137 | 1,800,137 | 2,980,978 | 4,332,317 | ||||||||||||||||||||||||
Denise L. Ramos | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | of Control | |||||||||||||||||||||||||
$(a) | $(b) | $(c) | $(d) | $(e) | $(f) | |||||||||||||||||||||||||
Cash Severance(1) | ||||||||||||||||||||||||||||||
Salary | — | — | — | — | 1,180,000 | 1,770,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | — | 2,612,700 | ||||||||||||||||||||||||
Total | — | — | — | — | 1,180,000 | 4,382,700 | ||||||||||||||||||||||||
Unvested Non-Equity Awards(2) | ||||||||||||||||||||||||||||||
2009 — 11 TSR Award | — | — | — | — | — | 120,000 | ||||||||||||||||||||||||
2010 — 12 TSR Award | — | — | — | — | — | 266,667 | ||||||||||||||||||||||||
Total | — | — | — | — | — | 386,667 | ||||||||||||||||||||||||
Unvested Equity Awards(3) | ||||||||||||||||||||||||||||||
7/2/07 Restricted Stock | — | — | 312,660 | 312,660 | 312,660 | 312,660 | ||||||||||||||||||||||||
3/10/08 Stock Option | — | — | — | — | — | — | ||||||||||||||||||||||||
3/10/08 Restricted Stock | — | — | 268,783 | 268,783 | 268,783 | 268,783 | ||||||||||||||||||||||||
3/5/09 Stock Option | — | — | 570,060 | 570,060 | 570,060 | 570,060 | ||||||||||||||||||||||||
3/5/09 Restricted Stock | — | — | 494,993 | 494,993 | 494,993 | 494,993 | ||||||||||||||||||||||||
3/5/10 Stock Option | — | — | — | — | — | — | ||||||||||||||||||||||||
3/5/10 Restricted Stock | — | — | 434,441 | 434,441 | 398,238 | 434,441 | ||||||||||||||||||||||||
Total | — | — | 2,080,937 | 2,080,937 | 2,044,734 | 2,080,937 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits | ||||||||||||||||||||||||||||||
ITT Excess Pension Plan(4) | 279,374 | 279,374 | 151,980 | — | 279,374 | 1,533,284 | ||||||||||||||||||||||||
ITT Excess Savings Plan(5) | — | — | 10,611 | 10,611 | — | 61,950 | ||||||||||||||||||||||||
Total | 279,374 | 279,374 | 162,591 | 10,611 | 279,374 | 1,595,234 | ||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||||
Outplacement(6) | — | — | — | — | 75,000 | 75,000 | ||||||||||||||||||||||||
Health & Welfare(7) | — | — | — | — | 7,392 | 11,088 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up(8) | — | — | — | — | — | 2,711,673 | ||||||||||||||||||||||||
Total | — | — | — | — | 82,392 | 2,797,761 | ||||||||||||||||||||||||
Total | 279,374 | 279,374 | 2,243,528 | 2,091,548 | 3,586,500 | 11,243,299 | ||||||||||||||||||||||||
(1) | Under Ms. Ramos’ employment agreement, described on pages 77 to 78 of this Proxy Statement, Ms. Ramos | |
(2) | Based on total shareholder return performance through December 31, 2010, outstanding TSR awards for the 2009-11 and 2010-12 performance periods would not |
94
(3) | Unvested equity awards reflect the market value of stock and in the money value of options based on the Company’s December 31, 2010 closing stock price of $52.11. | |
(4) | Column (a) and column (b) amounts reflect the present value of the annual vested |
No additional ITT Excess Savings Plan payments are made in the event of voluntary or involuntary termination, or termination for | ||
(6) | The Company’s Senior Executive Severance Pay Plan includes one year of outplacement services. | |
(7) | In the event of termination not for cause, the Company will pay life insurance premiums for two years and in the event of a change of control, the Company will pay life insurance premiums for three years. | |
(8) | Amounts in column (f) assume termination occurs immediately upon a change of control based on the Company’s December 31, 2010 closing stock price of $52.11. |
9295
Gretchen W. McClain | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | of Control | |||||||||||||||||||||||||
$(a) | $(b) | $(c) | $(d) | $(e) | $(f) | |||||||||||||||||||||||||
Cash Severance(1) | ||||||||||||||||||||||||||||||
Salary | — | — | — | — | 618,333 | 1,590,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | — | 1,606,800 | ||||||||||||||||||||||||
Total | — | — | — | — | 618,333 | 3,196,800 | ||||||||||||||||||||||||
Unvested Non-Equity Units(2) | ||||||||||||||||||||||||||||||
2009 — 11 TSR Award | — | — | — | — | — | 120,000 | ||||||||||||||||||||||||
2010 — 12 TSR Award | — | — | — | — | — | 240,000 | ||||||||||||||||||||||||
Total | — | — | — | — | — | 360,000 | ||||||||||||||||||||||||
Unvested Equity Awards(3) | ||||||||||||||||||||||||||||||
3/10/08 Stock Option | — | — | — | — | — | — | ||||||||||||||||||||||||
3/10/08 Restricted Stock | — | — | 246,376 | 246,376 | 246,376 | 246,376 | ||||||||||||||||||||||||
3/5/09 Stock Option | — | — | 570,060 | 570,060 | — | 570,060 | ||||||||||||||||||||||||
3/5/09 Restricted Stock | — | — | 3,244,838 | 3,244,838 | 2,085,319 | 3,244,838 | ||||||||||||||||||||||||
3/5/10 Stock Option | — | — | — | — | — | — | ||||||||||||||||||||||||
3/5/10 Restricted Stock | — | — | 390,081 | 390,081 | 249,794 | 390,081 | ||||||||||||||||||||||||
Total | — | — | 4,451,355 | 4,451,355 | 2,581,489 | 4,451,355 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits ITT Excess Pension Plan(4) | 193,588 | 193,588 | 105,312 | — | 193,588 | 1,057,111 | ||||||||||||||||||||||||
ITT Excess Savings Plan(5) | — | — | — | — | — | 55,650 | ||||||||||||||||||||||||
Total | 193,588 | 193,588 | 105,312 | — | 193,588 | 1,112,761 | ||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||||
Outplacement(6) | — | — | — | — | 75,000 | 75,000 | ||||||||||||||||||||||||
Health & Welfare(7) | — | — | — | — | 5,940 | 8,910 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up(8) | — | — | — | — | — | 2,747,791 | ||||||||||||||||||||||||
Total | — | — | — | — | 80,940 | 2,831,701 | ||||||||||||||||||||||||
Total | 193,588 | 193,588 | 4,556,667 | 4,451,355 | 3,474,350 | 11,952,617 | ||||||||||||||||||||||||
93
Henry J. Driesse | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | of Control | |||||||||||||||||||||||||
$ (a) | $ (b) | $ (c) | $ (d) | $ (e) | $ (f) | |||||||||||||||||||||||||
Cash Severance(1) | ||||||||||||||||||||||||||||||
Salary | — | — | — | — | 1,070,000 | 1,605,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | — | 2,100,000 | ||||||||||||||||||||||||
Total | — | — | — | — | 1,070,000 | 3,705,000 | ||||||||||||||||||||||||
Unvested LTIP Unit Awards(2) | ||||||||||||||||||||||||||||||
2006 — 08 LTIP Units | 400,000 | — | 600,000 | 600,000 | 600,000 | 1,200,000 | ||||||||||||||||||||||||
Total | 400,000 | — | 600,000 | 600,000 | 600,000 | 1,200,000 | ||||||||||||||||||||||||
Unvested Equity Awards(3) | ||||||||||||||||||||||||||||||
3/8/05 Stock Option(4) | 923,959 | — | 978,309 | 978,309 | 978,309 | 978,309 | ||||||||||||||||||||||||
10/1/05 Restricted Stock(5) | 742,950 | — | 1,320,800 | 1,320,800 | 1,320,800 | 1,320,800 | ||||||||||||||||||||||||
3/6/06 Stock Option(4) | 163,836 | — | 268,095 | 268,095 | 268,095 | 268,095 | ||||||||||||||||||||||||
3/6/06 Restricted Stock(5) | 229,595 | — | 375,702 | 375,702 | 375,702 | 375,702 | ||||||||||||||||||||||||
Total | 2,060,340 | — | 2,942,906 | 2,942,906 | 2,942,906 | 2,942,906 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits | ||||||||||||||||||||||||||||||
ITT Excess Pension Plan(6) | 3,964,870 | 3,964,870 | 2,973,621 | N/A | 3,964,870 | 8,028,927 | ||||||||||||||||||||||||
ITT Excess Savings Plan(7) | — | — | — | — | — | 56,175 | ||||||||||||||||||||||||
Total | 3,964,870 | 3,964,870 | 2,973,621 | — | 3,964,870 | 8,085,102 | ||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||||
Outplacement(9) | — | — | — | — | 75,000 | 75,000 | ||||||||||||||||||||||||
Health & Welfare(8) | — | — | — | — | — | 3,605 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up(10) | — | — | — | — | — | — | ||||||||||||||||||||||||
Total | 6,425,210 | 3,964,870 | 6,516,527 | 3,542,906 | 8,652,776 | 16,011,613 | ||||||||||||||||||||||||
(1) | ||
(2) | Based on total shareholder return performance through December 31, 2010, outstanding TSR awards would not earn a payout. Should Ms. McClain resign or be terminated for cause, she would receive no TSR payment. In the event of death or disability, she would receive payment, if any, for outstanding TSR awards and in the event of termination without cause she would receive payment, if any, based on a pro-rata portion of the outstanding TSR awards as of the termination date, based on the Company’s performance during the three-year period, in accordance with Section 409A. TSR awards, provide that in the event of a change of control, a pro-rata portion of outstanding awards will be paid through the date of the change of control based on actual performance and the balance of the award will be paid at target (100%). | |
(3) | Unvested equity awards reflect the market value of stock andin-the-money value of options based on the Company’s December 31, 2010 closing stock price of $52.11. |
96
(4) | Column (a) and column (b) amounts reflect the present value of the annual vested benefit payable under the ITT Excess Pension Plan, as of December 31, 2010 assuming a retirement at age 65. Column (c) provides the value of the benefit payable to Ms. McClain’s beneficiary upon death. Column (d) is inapplicable because disability would not affect retirement benefits. Column (e) provides the present value of the benefit payable by the Company after imputing 24 months of eligibility service in the determination of the benefit. Column (f) provides the lump sum payable by the Company in accordance with the Special Senior Executive Severance Pay Plan in the event of a change of control. | |
(5) | No additional ITT Excess Savings Plan payments are made in the event of voluntary or involuntary termination, or termination for cause. In the case of death or disability, the participant becomes 100% vested in the Company match. Column (f) reflects the additional cash payment representing Company contributions, which would be made following a change of control as described in the Special Senior Executive Severance Pay Plan on pages 89-90 this Proxy Statement. | |
(6) | The Company’s Senior Executive Severance Pay Plan includes one year of outplacement services. Amounts shown in columns (e) and (f) are based on a current competitive bid. | |
(7) | In the event of termination not for cause, the Company will pay life insurance premiums for fourteen months and in the event of a change of control, the Company will pay life insurance premiums for three years. | |
(8) | Amounts in column (f) assume termination occurs immediately upon a change of control based on the Company’s December 31, 2010 closing stock price of $52.11. |
97
David F. Melcher | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | of Control | |||||||||||||||||||||||||
$(a) | $(b) | $(c) | $(d) | $(e) | $(f) | |||||||||||||||||||||||||
Cash Severance(1) | ||||||||||||||||||||||||||||||
Salary | — | — | — | — | 530,000 | 1,590,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | — | 1,460,700 | ||||||||||||||||||||||||
Total | — | — | — | — | 530,000 | 3,050,700 | ||||||||||||||||||||||||
Unvested Non-Equity Awards(2) | ||||||||||||||||||||||||||||||
2009 — 11 TSR Award | — | — | — | — | — | 83,333 | ||||||||||||||||||||||||
2010 — 12 TSR Award | — | — | — | — | — | 240,000 | ||||||||||||||||||||||||
Total | — | — | — | — | — | 323,333 | ||||||||||||||||||||||||
Unvested Equity Awards(3) | ||||||||||||||||||||||||||||||
8/18/08 Stock Option | — | — | — | — | — | — | ||||||||||||||||||||||||
8/18/08 Restricted Stock | — | — | 58,624 | 58,624 | 58,624 | 58,624 | ||||||||||||||||||||||||
3/5/09 Stock Option | — | — | 312,861 | 312,861 | 156,431 | 312,861 | ||||||||||||||||||||||||
3/5/09 Restricted Stock | — | — | 343,718 | 343,718 | 315,074 | 343,718 | ||||||||||||||||||||||||
3/5/10 Stock Option | — | — | — | — | — | — | ||||||||||||||||||||||||
3/5/10 Restricted Stock | — | — | 390,981 | 390,981 | 228,072 | 390,981 | ||||||||||||||||||||||||
Total | — | — | 1,106,184 | 1,106,184 | 758,201 | 1,106,184 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits | ||||||||||||||||||||||||||||||
ITT Excess Pension Plan(4) | — | — | — | — | — | 1,016,262 | ||||||||||||||||||||||||
ITT Excess Savings Plan(5) | — | — | 8,166 | 8,166 | — | 55,650 | ||||||||||||||||||||||||
Total | — | — | 8,166 | 8,166 | — | 1,071,912 | ||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||||
Outplacement(6) | — | — | — | — | 75,000 | 75,000 | ||||||||||||||||||||||||
Health & Welfare(7) | — | — | — | — | 1,872 | 2,808 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up(8) | — | — | — | — | — | 1,989,845 | ||||||||||||||||||||||||
Total | — | — | — | — | 76,872 | 2,067,653 | ||||||||||||||||||||||||
Total | — | — | 1,114,350 | 1,114,350 | 1,365,073 | 7,619,782 | ||||||||||||||||||||||||
(1) | Mr. Melcher is covered under the Senior Executive Severance Pay Plan. Under that plan, the Company will pay a severance benefit equal to 12 months of base salary if terminated other than for cause unless termination occurs after the normal retirement date. In the event of a change of control, Mr. Melcher is covered under the Company’s Special Senior Executive Severance Pay Plan, described on pages 89 to 90 of this Proxy Statement, and under the terms of the plan, would be paid a lump sum payment equal to three times his current salary plus three times the highest AIP award paid in the three years prior to a change of control. |
(2) |
94
(3) | Unvested equity awards reflect the market value of stock andin-the-money value of options based on the Company’s |
98
(4) |
No additional ITT Excess Savings Plan payments are made in the event of voluntary or involuntary termination, or termination for |
(6) | The Company’s Senior Executive Severance Pay Plan includes one year of outplacement services. Amounts shown in columns (e) and (f) are based on a current competitive bid. | |
(7) | In the event of | |
9599
Steven F. Gaffney | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | of Control | |||||||||||||||||||||||||
$ (a) | $ (b) | $ (c) | $ (d) | $ (e) | $ (f) | |||||||||||||||||||||||||
Cash Severance(1) | ||||||||||||||||||||||||||||||
Salary | — | — | — | — | 712,500 | 1,425,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | — | 1,800,000 | ||||||||||||||||||||||||
Total | — | — | — | — | 712,500 | 3,225,000 | ||||||||||||||||||||||||
Unvested LTIP Unit Awards(2) | ||||||||||||||||||||||||||||||
2006 — 08 LTIP Units | — | — | 450,000 | 450,000 | 450,000 | 900,000 | ||||||||||||||||||||||||
2007 — 09 LTIP Units | — | — | 550,000 | 550,000 | 458,333 | 1,100,000 | ||||||||||||||||||||||||
Total | — | — | 1,000,000 | 1,000,000 | 908,333 | 2,000,000 | ||||||||||||||||||||||||
Unvested Equity Awards(3) | ||||||||||||||||||||||||||||||
3/8/05 Stock Option | — | — | 157,690 | 157,690 | 157,690 | 157,690 | ||||||||||||||||||||||||
10/3/05 Stock Option | — | — | 28,630 | 28,630 | 28,630 | 28,630 | ||||||||||||||||||||||||
10/3/05 Restricted Stock | — | — | 792,480 | 792,480 | 792,480 | 792,480 | ||||||||||||||||||||||||
3/6/06 Stock Option | — | — | 152,037 | 152,037 | 152,037 | 152,037 | ||||||||||||||||||||||||
3/6/06 Restricted Stock | — | — | 281,793 | 281,793 | 281,793 | 281,793 | ||||||||||||||||||||||||
3/7/07 Stock Option | — | — | 131,698 | 131,698 | — | 131,698 | ||||||||||||||||||||||||
3/7/07 Restricted Stock | — | — | 296,321 | 296,321 | 230,472 | 296,321 | ||||||||||||||||||||||||
Total | — | — | 1,840,649 | 1,840,649 | 1,643,102 | 1,840,649 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits | ||||||||||||||||||||||||||||||
ITT Excess Pension Plan(4) | 416,875 | 416,875 | 187,503 | N/A | 416,875 | 1,664,254 | ||||||||||||||||||||||||
ITT Excess Savings Plan(5) | — | — | — | — | — | 49,875 | ||||||||||||||||||||||||
Total | 416,875 | 416,875 | 187,503 | — | 416,875 | 1,714,129 | ||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||||
Outplacement(7) | — | — | — | — | 75,000 | 75,000 | ||||||||||||||||||||||||
Health & Welfare(6) | — | — | — | — | 2,138 | 3,207 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up(8) | — | — | — | — | — | 2,858,459 | ||||||||||||||||||||||||
Total | 416,875 | 416,875 | 3,028,152 | 2,840,649 | 3,757,948 | 11,716,444 | ||||||||||||||||||||||||
Frank R. Jimenez | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | of Control | |||||||||||||||||||||||||
$(a) | $(b) | $(c) | $(d) | $(e) | $(f) | |||||||||||||||||||||||||
Cash Severance(1) | ||||||||||||||||||||||||||||||
Salary | — | — | — | — | 415,000 | 830,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | — | 624,000 | ||||||||||||||||||||||||
Total | — | — | — | — | 415,000 | 1,454,000 | ||||||||||||||||||||||||
Unvested TSR Non-Equity Awards(2) | ||||||||||||||||||||||||||||||
2009 — 11 TSR Award | — | — | — | — | — | 55,567 | ||||||||||||||||||||||||
2010 — 12 TSR Award | — | — | — | — | — | 111,133 | ||||||||||||||||||||||||
Total | — | — | — | — | — | 166,700 | ||||||||||||||||||||||||
Unvested Equity Awards(3) | ||||||||||||||||||||||||||||||
6/9/09 Stock Options | — | — | 69,445 | 69,445 | 34,726 | 69,445 | ||||||||||||||||||||||||
6/9/09 Restricted Stock | — | — | 189,524 | 189,524 | 157,937 | 189,524 | ||||||||||||||||||||||||
3/5/10 Stock Options | — | — | — | — | — | — | ||||||||||||||||||||||||
3/5/10 Restricted Stock | — | — | 181,030 | 181,030 | 105,601 | 181,030 | ||||||||||||||||||||||||
Total | — | — | 439,999 | 439,999 | 298,264 | 439,999 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits | ||||||||||||||||||||||||||||||
ITT Excess Pension Plan(4) | — | — | — | — | — | 463,661 | ||||||||||||||||||||||||
ITT Excess Savings Plan(5) | — | — | 4,037 | 4,037 | — | 29,050 | ||||||||||||||||||||||||
Total | — | — | 4,037 | 4,037 | — | 492,711 | ||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||||
Outplacement(6) | — | — | — | — | 75,000 | 75,000 | ||||||||||||||||||||||||
Health & Welfare(7) | — | — | — | — | 1,494 | 1,494 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up(8) | — | — | — | — | — | — | ||||||||||||||||||||||||
Total | — | — | — | — | 76,494 | 76,494 | ||||||||||||||||||||||||
Total | — | — | 444,036 | 444,036 | 789,758 | 2,629,904 | ||||||||||||||||||||||||
(1) | Mr. |
(2) |
(3) | Unvested equity awards reflect the market value of stock andin-the-money value of options based on the Company’s |
96100
(4) |
(5) | No additional ITT Excess Savings Plan payments are made in the event of voluntary or involuntary termination, or termination for |
(6) | The Company’s Senior Executive Severance Pay Plan includes one year of outplacement services. Amounts shown in columns (e) and (f) are based on a current competitive bid. | |
(7) | In the event of | |
(8) |
97101
Gretchen W. McClain | ||||||||||||||||||||||||||||||
Termination | ||||||||||||||||||||||||||||||
Not For Cause | ||||||||||||||||||||||||||||||
or With Good | ||||||||||||||||||||||||||||||
Reason | ||||||||||||||||||||||||||||||
Termination | Termination | After Change | ||||||||||||||||||||||||||||
Resignation | For Cause | Death | Disability | Not For Cause | of Control | |||||||||||||||||||||||||
$ (a) | $ (b) | $ (c) | $ (d) | $ (e) | $ (f)(1) | |||||||||||||||||||||||||
Cash Severance | ||||||||||||||||||||||||||||||
Salary | — | — | — | — | 400,000 | 800,000 | ||||||||||||||||||||||||
AIP | — | — | — | — | — | 440,000 | ||||||||||||||||||||||||
Total | — | — | — | — | 400,000 | 1,240,000 | ||||||||||||||||||||||||
Unvested Non-LTIP Unit | ||||||||||||||||||||||||||||||
2006 — 08 LTIP Units | — | — | 230,000 | 230,000 | 230,000 | 460,000 | ||||||||||||||||||||||||
2007 — 09 LTIP Units | — | — | 450,000 | 450,000 | 300,000 | 900,000 | ||||||||||||||||||||||||
Total | — | — | 680,000 | 680,000 | 530,000 | 1,360,000 | ||||||||||||||||||||||||
Unvested Equity Awards | ||||||||||||||||||||||||||||||
9/19/05 Stock Option | — | — | 174,160 | 174,160 | 174,160 | 174,160 | ||||||||||||||||||||||||
9/19/05 Restricted Stock | — | — | 1,188,720 | 1,188,720 | 1,188,720 | 1,188,720 | ||||||||||||||||||||||||
3/6/06 Stock Option | — | — | 77,702 | 77,702 | 38,851 | 77,702 | ||||||||||||||||||||||||
3/6/06 Restricted Stock | — | — | 144,033 | 144,033 | 136,031 | 144,033 | ||||||||||||||||||||||||
3/7/07 Stock Option | — | — | 121,998 | 121,998 | 40,669 | 121,998 | ||||||||||||||||||||||||
3/7/07 Restricted Stock | — | — | 242,433 | 242,433 | 148,153 | 242,433 | ||||||||||||||||||||||||
Total | — | — | 1,949,046 | 1,949,046 | 1,726,584 | 1,949,046 | ||||||||||||||||||||||||
Non-Qualified Retirement Benefits | ||||||||||||||||||||||||||||||
Excess Pension Plan | — | — | — | — | — | 302,282 | ||||||||||||||||||||||||
ITT Excess Savings Plan(2) | — | — | 4,785 | 4,785 | — | 46,785 | ||||||||||||||||||||||||
ITT Total | — | — | 4,785 | 4,785 | — | 349,067 | ||||||||||||||||||||||||
Other Benefits | ||||||||||||||||||||||||||||||
Outplacement(4) | — | — | — | — | 75,000 | 75,000 | ||||||||||||||||||||||||
Health & Welfare(3) | — | — | — | — | — | 4,204 | ||||||||||||||||||||||||
IRC 280(g) TaxGross-Up(5) | — | — | — | — | — | 1,533,302 | ||||||||||||||||||||||||
Total | — | — | 2,633,831 | 2,633,831 | 2,731,584 | 6,510,619 | ||||||||||||||||||||||||
98
A-1
Abbott Laboratories | eBay | Kohl’s | Sara Lee | |||
Advanced Micro Devices | Ecolab | Leggett and Platt | Schering-Plough | |||
Agilent Technologies | Eli Lilly | Lexmark International | Schlumberger | |||
Air Products and Chemicals | El Paso Corporation | Life Technologies | Sealed Air | |||
Alcoa | EMC | Limited | Sherwin-Williams | |||
Allergan | Emerson | Lockheed Martin | Spectra Energy | |||
Amazon.com | Equifax | Lorillard Tobacco | Sprint Nextel | |||
Amgen | Fiserv | L-3 Communications | Staples | |||
Apollo Group | Fluor | Marriott International | Starbucks | |||
Applied Materials | Ford | Masco | Starwood Hotels & Resorts | |||
AT&T | Forest Laboratories | Mattel | Sun Microsystems | |||
Automatic Data Processing | Fortune Brands | McDonald’s | Sunoco | |||
Avery Dennison | Freeport-McMoRan Copper & Gold | McKesson | Target | |||
Avon Products | Gannett | MeadWestvaco | Tellabs | |||
Ball | Gap | Medco Health Solutions | Tenet Healthcare | |||
Baxter International | General Dynamics | Medtronic | Teradata | |||
Best Buy | General Electric | Merck & Co | Textron | |||
Big Lots | General Mills | Microsoft | 3M | |||
Biogen Idec | Genzyme | Millipore | Time Warner | |||
Boeing | Gilead Sciences | Molson Coors Brewing | Time Warner Cable | |||
Boston Scientific | Goodrich | Monsanto | UnitedHealth | |||
Bristol-Myers Squibb | Goodyear Tire & Rubber | Motorola | United States Steel | |||
Brown-Forman | Newmont Mining | United Technologies | ||||
CA | Harley-Davidson | New York Times | Valero Energy | |||
Cameron International | Harman International Industries | NIKE | Verizon | |||
Cardinal Health | Hershey | Northrop Grumman | VF | |||
Caterpillar | Hess | Novell | Viacom | |||
Celgene | Honeywell | Occidental Petroleum | Vulcan Materials | |||
Cephalon | Hormel Foods | Office Depot | Walt Disney | |||
CIGNA | Hospira | Owens-Illinois | Waste Management | |||
Parker Hannifin | Watson Pharmaceuticals | |||||
Colgate-Palmolive | IBM | PepsiCo | Western Digital | |||
ConAgra Foods | IMS Health | Pfizer | Western Union | |||
Convergys | Intel | Pitney Bowes | Weyerhaeuser | |||
CVS Caremark | International Flavors & Fragrances | PPG Industries | Whirlpool | |||
Dean Foods | International Game Technology | Praxair | Whole Foods Market | |||
Dentsply | International Paper | Pulte Homes | Williams Companies | |||
DIRECTV | Jacobs Engineering | QUALCOMM | W.W. Grainger | |||
Dow Chemical | Johnson Controls | Quest Diagnostics | Wyeth Pharmaceuticals | |||
Dr Pepper Snapple | Johnson & Johnson | Qwest Communications | Wyndham Worldwide | |||
DuPont | KB Home | Raytheon | Xerox | |||
Eastman Chemical | Kellogg | Rockwell Automation | Yum! Brands | |||
Eastman Kodak | Kimberly-Clark | Rockwell Collins | ||||
KLA-Tencor | ||||||
R.R. Donnelley |
A-2
A-3A-1
B-1
B-1
B-2
B-2
B-3
B-3
B-4
B-5
B-5
B-6
B-6
B-7
B-7
B-8
B-8
B-9
B-9
B-10
B-10
B-11
B-11
B-12
B-12
B-13
B-13
B-14
B-14
B-15
C-1
C-2
C-3
C-4
C-5
C-6
C-7
B-15C-8
C-9
C-10
1. |
D-1
D-2
D-3
D-4
D-5
2. |
D-6
D-7
C-1D-8
D-9
D-10
D-11
3. |
C-2D-12
D-13
D-14
C-3D-15
D-16
D-17
C-4D-18
5. | CAPITAL STOCK. |
D-19
6. | SECURITIES HELD BY THE CORPORATION. |
D-20
7. | DEPOSITARIES AND SIGNATORIES. |
D-21
8. | SEAL. |
9. |
C-5
D-1
D-2
D-3
D-4
D-5
10. |
11. | POLITICAL NONPARTISANSHIP OF THE CORPORATION. |
12. | AMENDMENT OF BY-LAWS. |
D-6D-22
13. | OFFICES AND AGENT. |
D-23
ITT CORPORATION 1133 WESTCHESTER AVENUE WHITE PLAINS, NY 10604 WWW.ITT.COM | WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE | ||
VOTING, BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK. Internet and telephone voting is available through 11:59 PM Eastern Time the day before the 2011 Annual Meeting. Your Internet or telephone vote authorizes the named proxies to vote the shares in the same manner as if you marked, signed and returned your proxy card. If you vote your proxy by Internet or by telephone, you do not need to mail back your proxy card. | |||
VOTE BY INTERNET -www.proxyvote.com Use the Internet to vote your proxy. Have your proxy card in hand when you access the website. VOTE BY TELEPHONE - 1-800-690-6903 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. |
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | M30902-P06787 | KEEP THIS PORTION FOR YOUR RECORDS | ||
DETACH AND RETURN THIS PORTION ONLY |
ITT CORPORATION THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” PROPOSALS 1, 2, 3, 4 AND 5. | FOR ALL | WITHHOLD ALL | FOR ALL EXCEPT | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | ||||||||
Vote on Directors | ¨ | ¨ | ¨ |
1. | Election of ten members of the Board of Directors. Nominees: | |||||||||||
01) Steven R. Loranger, 02) Curtis J. Crawford, 03) Christina A. Gold, 04) Ralph F. Hake, 05) John J. Hamre, | 06) Paul J. Kern, 07) Frank T. MacInnis, 08) Surya N. Mohapatra, 09) Linda S. Sanford, and 10) Markos I. Tambakeras |
Vote on Proposals | ||||||||||
2. | Ratification of the appointment of Deloitte & Touche LLP as ITT’s Independent Registered Public Accounting Firm for 2011. | ¨ | ¨ | ¨ | ||||||
3. | Approval of the ITT Corporation 2011 Omnibus Incentive Plan. | ¨ | ¨ | ¨ | ||||||
4. | Approval of a proposal to amend the Company’s Restated Articles of Incorporation to allow shareholders to call special meetings. | ¨ | ¨ | ¨ | ||||||
5. | To approve, in a non-binding vote, the compensation of our named executive officers. | ¨ | ¨ | ¨ |
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE 1 YEAR ON THE FOLLOWING PROPOSAL: | 2 YEARS | |||||||||||
ABSTAIN | ||||||||||||
6. | ||||||||
¨ | ||||||||
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE AGAINST | FOR | AGAINST | ABSTAIN | ||||||
To vote on a shareholder proposal requesting that the Company amend, where applicable, ITT’s policies related to human rights. | ¨ | ¨ | ¨ |
For address changes and/or comments, please check this box and write them on the back where indicated. | ¨ | |||||||
¨ Yes | ¨ No | ||||||||||
(When signing as attorney, executor, administrator, trustee or guardian, give full |
Signature [PLEASE SIGN WITHIN BOX] | Date | Signature (Joint Owners) | Date |
FOLD AND DETACH HERE | M30903-P06787 |
109