DEF 14A 1 d865066ddef14a.htm DEF 14A DEF 14A
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SCHEDULE 14A

(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934

Filed by the Registrant  

Filed by a Party other than the Registrant  

Check the appropriate box:

 

  Preliminary Proxy Statement
  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
  Definitive Proxy Statement
  Definitive Additional Materials
  Soliciting Material Pursuant to Section 240.14a-11c or Section 240.14a-12

 

TELEDYNE TECHNOLOGIES INCORPORATED

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
  No fee required.
 

 

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

  (1)   Title of each class of securities to which transaction applies:
   

 

  (2)   Aggregate number of securities to which transaction applies:
   

 

 

 

(3)

  Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
   

 

  (4)   Proposed maximum aggregate value of transaction:
   

 

  (5)   Total fee paid:
   

 

  Fee paid previously with preliminary materials.
  Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
  (1)   Amount Previously Paid:
   

 

  (2)   Form, Schedule or Registration Statement No.:
   

 

  (3)   Filing Party:
   

 

  (4)   Date Filed:
   

 


Table of Contents

Teledyne Technologies Incorporated

1049 Camino Dos Rios

Thousand Oaks, CA 91360

   LOGO

 

 

March 10, 2020

Dear Stockholder:

We are pleased to invite you to attend the 2020 Annual Meeting of Stockholders of Teledyne Technologies Incorporated. The meeting will be held on Wednesday, April 22, 2020, beginning at 9:00 a.m. (Pacific Time), at the Company’s offices at 1049 Camino Dos Rios, Thousand Oaks, California 91360. For your convenience, we are offering a live webcast of the Annual Meeting on our Internet website, www.teledyne.com.

This booklet includes the Notice of Meeting as well as the Company’s Proxy Statement.

Teledyne is monitoring the emerging public health impact of the coronavirus outbreak (COVID-19). The health and well-being of our employees and stockholders are paramount. If public health developments warrant, we may need to change the location of the Annual Meeting or switch to a virtual meeting format. Any such change will be announced via press release and the filing of additional proxy materials with the Securities and Exchange Commission.

We are following the Securities and Exchange Commission rule that permits us to furnish proxy materials to our stockholders via the Internet. We believe electronic delivery of our proxy materials will help us reduce the environmental impact and costs of printing and distributing paper copies and improve the speed and efficiency by which our stockholders can access these materials. As a result, we are mailing a short Notice of Internet Availability of Proxy Materials (the “Notice”) to most of our stockholders instead of a paper copy of our full proxy materials. The Notice contains instructions on how to cast your vote online and how to electronically access our proxy materials, including the Notice of Annual Meeting, Proxy Statement, 2019 Annual Report and a proxy card. The Notice also contains instructions on how to request a paper copy of our proxy materials. All stockholders who do not receive the Notice will receive a paper copy of the proxy materials. If you receive a paper copy of our proxy materials, you may cast your vote by completing the enclosed proxy card and returning it in the enclosed self-addressed, postage-paid envelope, or by utilizing the telephone or Internet voting mechanisms noted on the proxy card.

We know that many of you are unable to attend the Annual Meeting in person. The proxies that we solicit give you the opportunity to vote on all matters that are scheduled to come before the Annual Meeting. Whether or not you plan to attend, you can be sure that your shares are represented by promptly voting and submitting your proxy by phone or by Internet as described in the following materials, or if you request that proxy materials be mailed to you, by completing, signing, dating, and returning your proxy card enclosed with those materials in the postage-paid envelope provided to you.

If you are a stockholder of record and plan to attend the meeting, please indicate so if voting electronically when prompted or write “WILL ATTEND” in the comment box on your proxy card if voting by mail so that you will be included on our admittance list for the meeting.

Thank you for your investment in our Company. We look forward to seeing you at the 2020 Annual Meeting.

Sincerely,

 

LOGO

Robert Mehrabian

Executive Chairman


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LOGO

 

Teledyne Technologies Incorporated

Notice of Annual Meeting of Stockholders

 

 

Meeting Date: April 22, 2020

Time: 9:00 a.m. Pacific time

    

 

Place:

Teledyne Technologies Incorporated*

1049 Camino Dos Rios

Thousand Oaks, California 91360

 

    

 

Record Date:

March 2, 2020

  

 

Agenda

 

1)

Election of a class of three directors for a three-year term;

 

2)

Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for fiscal year 2020;

 

3)

Approval of a non-binding advisory resolution on the Company’s executive compensation (commonly referred to as a “say on pay” resolution); and

 

4)

Transaction of any other business properly brought before the meeting.

 

 

Stockholder List

A list of stockholders entitled to vote will be available during business hours for 10 days prior to the meeting at the Company’s executive offices, 1049 Camino Dos Rios, Thousand Oaks, California 91360, for examination by any stockholder for any legally valid purpose.

Admission to the Meeting

Teledyne’s stockholders or their authorized representatives by proxy may attend the meeting. If you are a stockholder of record and you plan to attend the meeting, please indicate so if voting electronically when prompted or write “WILL ATTEND” in the comment box on your proxy card if voting by mail so that you will be included on our admittance list for the meeting. If your shares are held through an intermediary, such as a broker or a bank, you should present proof of your ownership at the meeting. Proof of ownership could include a proxy from your bank or broker or a copy of your account statement.

By Order of the Board of Directors,

 

LOGO

Melanie S. Cibik

Senior Vice President, General Counsel, Chief Compliance Officer

and Secretary

March 10, 2020

Your Vote Is Important:

Whether or not you plan to attend the Annual Meeting, please promptly submit your proxy electronically over the Internet or by telephone, or if you receive a paper proxy card, please fill in, sign and promptly return your proxy card in the enclosed postage-paid envelope.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting Stockholders to be Held on Wednesday, April 22, 2020. Our Proxy Statement and 2019 Annual Report on Form 10-K are available at: www.envisionreports.com/tdy.

 

  *

Special COVID-19 Note: Teledyne is monitoring the emerging public health impact of the coronavirus outbreak (COVID-19). The health and well-being of our employees and stockholders are paramount. If public health developments warrant, we may need to change the location of the Annual Meeting or switch to a virtual meeting format. Any such change will be announced via press release and the filing of additional proxy materials with the Securities and Exchange Commission.

 


Table of Contents

 

 

Proxy Statement

 

   

 

Page

 

 

 

 

Voting Procedures

 

 

 

 

 

 

1

 

 

 

 

 

Board Composition and Practices

 

 

 

 

 

 

 

3

 

 

 

 

Corporate Governance

 

   

 

5

 

 

 

 

Item  1 on Proxy Card — Election of Directors

 

 

 

 

 

 

9

 

 

 

 

 

Committees of Our Board of Directors

 

 

 

 

 

 

 

18

 

 

 

 

 

 

 

Item  2 on Proxy Card — Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm

 

 

 

 

 

 

 

23

 

 

 

 

 

Fees Billed by Independent Registered Public Accounting Firm

 

 

 

 

 

 

23

 

 

 

 

 

Guidelines Regarding External Auditing Firms

 

 

 

 

 

 

24

 

 

 

 

 

Audit Committee Report

 

 

 

 

 

 

 

26

 

 

 

 

 

 

 

Item  3 on Proxy Card — Advisory Resolution on Executive Compensation

 

 

 

 

 

 

27

 

 

 

 

 

Other Business

 

 

 

 

 

 

 

28

 

 

 

 

 

 

 

Stock Ownership Information

 

 

 

 

 

 

 

28

 

 

 

 

 

 

 

Five Percent Owners of Common Stock

 

 

 

 

 

 

 

28

 

 

 

 

 

 

 

Stock Ownership of Management

 

 

 

 

 

 

 

29

 

 

 

 

 

 

 

Executive and Director Compensation

 

 

 

 

 

 

 

31

 

 

 

 

 

 

 

Compensation Discussion and Analysis

 

 

 

 

 

 

 

31

 

 

 

 

 

 

 

Personnel and Compensation Committee Report

 

 

 

 

 

 

 

51

 

 

 

 

 

 

 

Compensation Committee Interlocks and Insider Participation

 

   

 

51

 

 

 

 

Summary Compensation Table

 

 

   

 

 

52

 

 

 

 

 

 

Grants of Plan-Based Awards

 

 

 

 

 

 

 

54

 

 

 

 

 

 

 

Outstanding Equity Awards at Fiscal Year-End

 

 

 

 

 

 

 

55

 

 

 

 

 

 

 

Option Exercises and Stock Vested

 

 

 

 

 

 

 

57

 

 

 

 

 

 

 

Pension Benefits

 

 

   

 

 

58

 

 

 

 

 

 

Nonqualified Deferred Compensation

 

 

 

 

 

 

 

60

 

 

 

 

 

 

 

Director Compensation

 

 

   

 

 

61

 

 

 

 

 

 

Potential Payments Upon Termination or a Change in Control

 

   

 

 

63

 

 

 

 

 

 

2019 Median Employee to CEO Pay Ratio

 

 

   

 

 

68

 

 

 

 

 

 

Certain Transactions

 

 

 

 

 

 

 

69

 

 

 

 

 

 

 

Other Information

 

 

   

 

 

70

 

 

 

 

 

 

Annual Report on Form 10-K

 

 

 

 

 

 

 

70

 

 

 

 

 

 

 

2021 Annual Meeting and Stockholder Proposals

 

 

 

 

 

 

 

70

 

 

 

 

 

 

 

Proxy Solicitation

 

 

 

 

 

 

 

70

 

 

 

 

 

 

 

Householding of Proxy Materials

 

 

 

 

 

 

 

70

 

 

 

 

 

 

 

Electronic Access to Proxy Materials and Annual Report

 

 

 

 

 

 

71

 

 

 

 

 

 

DEFINED TERMS

In this Proxy Statement, Teledyne Technologies Incorporated is sometimes referred to as the “Company” or “Teledyne”.

 

 

    TELEDYNE TECHNOLOGIES INCORPORATED  |  2020 Proxy Statement


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Proxy Statement

for 2020 Annual Meeting of Stockholders

 

Pursuant to the rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), the Company is furnishing proxy materials to its stockholders primarily via the Internet, rather than mailing paper copies of these materials to each stockholder. This is known as the “notice and access” method of delivery. The Company believes this process will help it reduce the environmental impact and costs of printing and distributing paper copies and improve the speed and efficiency by which the Company’s stockholders can access these materials. On or about March 13, 2020, the Company will mail to each stockholder (other than those stockholders who previously had requested paper delivery of proxy materials) a Notice of Internet Availability of Proxy Materials containing instructions on how to access and review the proxy materials, including this Proxy Statement and the Company’s 2019 Annual Report on Form 10-K filed with the SEC, on the Internet and how to access a proxy card to vote on the Internet or by telephone. The Notice of Internet Availability of Proxy Materials also contains instructions on how to request a paper copy of the proxy materials. If you received a Notice of Internet Availability of Proxy Materials by mail, you will not receive a paper copy of the proxy materials unless you request one. If you would like to receive a paper copy of the proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. The Company may at its discretion voluntarily choose to mail or deliver a paper copy of the proxy materials, including this Proxy Statement and the Company’s 2019 Annual Report on Form 10-K filed with the SEC, to one or more stockholders.

We are offering a live webcast of the Annual Meeting on our Internet website, www.teledyne.com. The webcast of the Annual Meeting will consist of live sound and real-time access to printed material. To access the webcast of the Annual Meeting, a stockholder should log on to www.teledyne.com on Wednesday, April 22, 2020 shortly before 9:00 a.m. (Pacific Time) and follow the instructions provided under the “Investors” section of the website. Stockholders will not be permitted to vote via the Internet during the Annual Meeting nor will they be able to submit questions via the webcast during the questions and answers session.

Voting Procedures

Who May Vote

If you were a stockholder at the close of business on March 2, 2020, you may vote at the Annual Meeting. On that day, there were 36,643,877 shares of our common stock outstanding.

Each share is entitled to one vote. In order to vote, you must either designate a proxy to vote on your behalf or attend the meeting and vote your shares in person. Our Board of Directors requests your proxy so that your shares will count toward determination of the presence of a quorum and your shares can be voted at the meeting.

Methods of Voting

Stockholders of record can vote in person, by Internet, by telephone or by mail, as described below. If you are a beneficial stockholder, please refer to the information forwarded by your broker, bank or other holder of record to see what options are available to you. Stockholders of record may cast their vote by:

 

(1)

Attending and voting in person at the Annual Meeting (except for shares held in the employee benefit plan);

 

(2)

Accessing the Internet website specified in the Notice of Internet Availability of Proxy Materials and following the instructions provided on the website (or if printed copies of the proxy materials were requested, as specified in the printed proxy card);

 

(3)

Calling the telephone number specified in the Notice of Internet Availability of Proxy Materials and voting by following the instructions provided on the phone line (or if copies of the proxy materials were requested, as specified in the printed proxy card); or

 

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Voting Procedures (continued)

 

 

 

(4)

Requesting a printed proxy card and completing, signing, dating and promptly mailing the proxy card in the envelope provided.

If you sign and return your proxy card, but do not make specific selections, your proxy will vote your shares as recommended by the Board.

Revoking Your Proxy

You may change your mind and stockholders of record may revoke a proxy at any time before it is voted at the meeting by:

 

1)

sending a written notice to the Secretary for receipt prior to the meeting that you revoke your proxy;

 

2)

transmitting a proxy dated later than your prior proxy either by mail, telephone or Internet; or

 

3)

attending the Annual Meeting and voting in person or by proxy (except for shares held in the employee benefit plan).

If you are a beneficial stockholder, please refer to the information forwarded by your broker, bank or other holder of record to determine what options are available to you.

Voting By Employee Benefit Plan Participants

Participants who hold common stock in the Teledyne Technologies Incorporated 401(k) Plan may instruct the plan trustee on how to vote the shares of common stock allocated to their accounts. You may either (1) sign and return the voting instruction card provided by the plan or (2) transmit your instructions by telephone or Internet. If you do not transmit instructions by 11:59 p.m. (Eastern Time), on April 17, 2020, your shares will not be voted by the plan trustee, except as otherwise required by law.

Voting Shares Held By Brokers, Banks and Other Nominees

Votes will be counted by the inspector of election appointed for the meeting, who will separately count “For” and “Withhold” and, with respect to any proposals other than the election of directors, “Against” votes, abstentions and broker non-votes. The inspector of election will also separately count the votes for the options included in the advisory vote on the frequency of say on pay. A “broker non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner, despite voting on at least one other proposal for which it does have discretionary authority or for which it has received instructions. Pursuant to our Amended and Restated Bylaws, abstentions shall not count as votes “cast”; consequently, abstentions will have no effect on any proposal. With respect to each proposal, broker non-votes have no effect and will not be counted towards the vote total for any proposal, including the election of directors and say on pay. With respect to each proposal, abstentions and broker non-votes will be included in determining the presence of a quorum.

If your shares are held by your broker, bank or other agent as your nominee (that is, in “street name”), you will need to obtain voting instructions from the institution that holds your shares regarding how to instruct your broker, bank or other agent to vote your shares. If you do not give instructions to your broker, bank or other agent, they can vote your shares with respect to “discretionary” items, but not with respect to “non-discretionary” items. Discretionary items are proposals considered routine under the rules of the New York Stock Exchange (“NYSE”) on which your broker, bank or other agent may vote shares held in street name in the absence of your voting instructions. The only item that is considered routine under the rules of the NYSE to be considered at this year’s Annual Meeting is the ratification of the selection of our independent auditors (Item 2). On non-discretionary items for which you do not give instructions to your broker, bank or other agent, the shares will be treated as broker non-votes.

Confidential Voting Policy

We maintain a policy of keeping stockholder votes confidential. Your vote will not be disclosed either within the Company or to third parties except as necessary to meet applicable legal requirements, to allow for the tabulation and calculation of votes, and to facilitate a successful proxy solicitation.

 

2    TELEDYNE TECHNOLOGIES INCORPORATED  |  2020 Proxy Statement


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Board Composition and Practices

 

Information and Meetings

The Board of Directors directs the management of the business and affairs of the Company as provided in our Amended and Restated Bylaws and pursuant to the laws of the State of Delaware. Except for Dr. Robert Mehrabian, our Executive Chairman, the Board is not involved in day-to-day operations. Members of the Board keep informed about our business through discussions with the senior management and other officers and managers of the Company and its subsidiaries, by reviewing information provided to them, and by participating in Board and committee meetings.

We encourage, but do not require, that all our directors attend all meetings of the Board of Directors, all committee meetings on which the directors serve and the annual stockholders meeting. In 2019, the Board of Directors held eight meetings. During 2019, all directors attended at least 75% of the aggregate number of meetings of the Board and Board committees of which they were members. All the current directors attended the 2019 Annual Meeting of Stockholders, except for Mr. Dahlberg, who was battling influenza, and Ms. Cade, who was appointed to our Board after the date of the 2019 Annual Meeting.

Number of Directors

The Board of Directors determines the number of directors, which under our Amended and Restated By-laws must consist of not less than four members and not more than 12 members. The Board has currently fixed the number at 11 members.

Director Terms

The directors are divided into three classes and the directors in each class serve for a three-year term. The term of one class of directors expires each year at the Annual Meeting of Stockholders. The Board may fill a vacancy by electing a new director to the same class as the director being replaced. The Board may also create a new director position in any class and elect a director to hold the newly created position until the term of the class expires.

Directors’ Retirement Policy

On June 1, 2000, we adopted a retirement policy for directors. This policy, as amended, generally requires directors to retire at the Annual Meeting following their 75th birthday. This policy also requires a director to offer to tender his or her resignation if such director has a change in professional status. Mr. Crocker, who is 81, Dr. Mehrabian, who is 78 and Mr. Smith, who is 76, were granted waivers through the 2022 Annual Meeting. Admiral Miller, who is 77, and Dr. von Schack, who is 75, were granted a waiver through the 2021 Annual Meeting. Kenneth C. Dahlberg, who is 75, was granted a waiver to permit him to stand for election at the 2020 Annual Meeting of Stockholders and, if elected at such meeting, to continue to serve as a director at least through the remainder of his term expiring at the 2023 Annual Meeting of Stockholders. The Board believes each such director continues to contribute to the effectiveness of our Board.

Board Structure

The Board of Directors currently consists of 11 directors, ten of whom are considered independent under existing rules of the NYSE and the SEC. The Chairman of the Board, who is also our Executive Chairman and our former President and Chief Executive Officer, is not considered an independent director. The Executive Chairman presides at meetings of stockholders and Board meetings. The Board has formally designated Michael Smith, one of our independent directors, to serve as the lead director. The lead director presides in those executive sessions where the non-management or independent directors meet without the Executive Chairman and the Chief Executive Officer. In addition, the Board’s three standing committees consist solely of independent directors.

 

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Board Composition and Practices (continued)

 

 

 

The Board believes that its current leadership structure effectively allocates authority, responsibility and oversight between management and the independent members of the Board, thus ensuring the Board’s ability to carry out its roles and responsibilities on behalf of the Company’s stockholders. Prior to April 24, 2018, Robert Mehrabian was our Chairman, President and Chief Executive Officer. On April 24, 2018, Aldo Pichelli, our then Chief Operating Officer, assumed the position of President and Chief Operating Officer, with Dr. Mehrabian continuing as Chairman and Chief Executive Officer. On January 1, 2019, Mr. Pichelli assumed the position of President and Chief Executive Officer, with Dr. Mehrabian continuing as Executive Chairman. Mr. Pichelli does not serve as a director of the Corporation. The Board made the decision to separate the roles of the Executive Chairman and the Chief Executive Officer in 2019 to further succession planning and also to allow the Executive Chairman to focus his efforts on mergers and acquisitions and on ongoing margin enhancement initiatives.

The functions of the Board are carried out by the full Board, and when delegated, by the Board committees. Each director is a full and equal participant in the major strategic and policy decisions of our Company and the Chairman has no greater or lesser vote on matters considered by the Board. Our non-management directors meet in executive session without management (including the Executive Chairman and President and Chief Executive Officer) on a regularly scheduled basis, with the lead director presiding in such sessions.

 

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Corporate Governance

 

Director Independence

In April 2019, our Nominating and Governance Committee assessed, and our Board determined, the independence of each director in accordance with applicable NYSE and SEC rules, as then in effect, with the exception of Ms. Cade, for whom such assessment and determination took place in July 2019. To comply with such rules, our Nominating and Governance Committee considered various relationship categories including: whether the director is an employee, amount of stock ownership, and commercial, industrial, banking, consulting, legal, accounting or auditing, charitable and familial relationships, as well as a range of individual circumstances (including social friendships between certain members of the Board). See “Certain Transactions” at page 69. The Nominating and Governance Committee, followed by the Board, determined that each member of our Board of Directors did not have any material relationships with us and was thus independent, except for Dr. Mehrabian, our Executive Chairman. Our management, after reviewing director questionnaires, reported to our Board in February 2020 that information on which the Board based its independence assessment in 2019 had not materially changed. The independent directors by name are: Roxanne S. Austin, Denise R. Cade, Charles Crocker, Kenneth C. Dahlberg, Simon M. Lorne, Robert A. Malone, Paul D. Miller, Jane C. Sherburne, Michael T. Smith and Wesley W. von Schack.

The Nominating and Governance Committee, followed by the Board, also determined that each member of our Personnel and Compensation Committee is a “non-employee director” within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

All of the Board’s standing committees consist only of independent directors.

Corporate Governance and Ethics Guidelines

Our Board of Directors has adopted many “best practices” in corporate governance, including separate standing committees of the Board for each of audit, nominating and governance and personnel and compensation matters, charters for each of the committees, and corporate ethics and compliance guidelines.

Our ethics and compliance guidelines for employees are contained in the Global Code of Ethical Business Conduct. These guidelines apply to all our employees, including our principal executive, financial and accounting officers. Our employees receive annual ethics training and questionnaires are distributed annually to various personnel to confirm compliance with these guidelines. We also have a specialized code of ethics for financial executives that supplements the employee guidelines. In addition, we have ethics and compliance guidelines for our third-party service providers.

Our Board of Directors has adopted a code of business conduct and ethics for directors. This code is intended to provide guidance to directors to help them recognize and deal with ethical issues, including conflicts of interest, corporate opportunities, fair dealing, compliance with law and proper use of the Company’s assets. It also provides mechanisms to report possible unethical conduct.

Our Board of Directors has adopted Corporate Governance Guidelines. These Corporate Governance Guidelines were initially developed by our Nominating and Governance Committee and are reviewed at least annually by such Committee. These Corporate Governance Guidelines incorporate practices and policies under which our Board has operated since its inception, in addition to many of the requirements of the SEC and the NYSE. Some of the principal subjects covered by the Corporate Governance Guidelines include:

 

   

Director qualification standards.

   

Director responsibilities.

   

Director access to management and independent advisors.

   

Director compensation.

   

Director orientation and continuing education.

 

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Corporate Governance (continued)

 

 

 

   

Management succession.

   

Annual performance evaluation of the Board and its Committees.

   

Director retirement and resignations.

   

Role of the lead director.

   

Leadership development.

Copies of our Corporate Governance Guidelines, Global Code of Ethical Business Conduct, Code of Ethics for Financial Professionals, Directors’ Code of Business Conduct and Ethics, Ethics Code of Conduct for Service Providers, Corporate Governance Guidelines and Committee charters are available on our website at www.teledyne.com under “About Us” — “Corporate Information” and under “About Us” — “Corporate Responsibility.” We intend to post any amendments to these documents and any waivers of the provisions thereof related to directors or executive officers on our website. If at any time you would like to receive a paper copy of these documents free-of-charge, please write to Melanie S. Cibik, Senior Vice President, General Counsel, Chief Compliance Officer and Secretary, Teledyne Technologies Incorporated, 1049 Camino Dos Rios, Thousand Oaks, California 91360.

Risk Management Oversight

The risk oversight function of the Board of Directors is carried out by both the Board and the Audit Committee. As provided in its charter, the Audit Committee meets periodically with management to discuss the Company’s major financial and operating risk exposures and the steps, guidelines and policies taken or implemented relating to risk assessment and risk management. Matters of strategic risk are considered by the Board as a whole. At each regularly scheduled meeting of the Audit Committee, our Vice President, Business Risk Assurance reports directly to the Audit Committee on the activities of the Company’s internal audit function. Management also reports to the Audit Committee on legal, finance, accounting and compliance matters at least quarterly and on tax, pension and information technology and cyber security matters periodically. The Board is provided with reports on legal matters at periodically scheduled meetings and on other matters related to risk oversight on an as needed basis. In addition, the Audit Committee reviews with management the “risk factors” that appear in our Annual Report on Form 10-K prior to its filing.

We have an Enterprise Risk Management Committee, consisting of executive officers and other employees, to identify significant company risks and determine whether we have appropriate risk management policies, practices and procedures in place. Our Senior Vice President, Strategic Sourcing, Tax and Treasurer, periodically reports to the Audit Committee and the Board of Directors on the progress and results of the actions taken by this committee.

Hedging Policy

Our insider trading policy prohibits short sales of our stock, buying or selling put or call options on our stock, holding our stock in a margin account or pledging our stock as collateral for a loan, or entering into hedging or monetization transactions with respect to our stock, in each case without prior advance approval from our Senior Vice President, General Counsel, Chief Compliance Officer and Secretary. The forgoing prohibitions apply to our directors, executive officers and any employee who participates in our stock option program.

Board Evaluation Process

Every year the Board and each standing committee of the Board assesses its performance. The evaluation process is overseen by the Nominating and Governance Committee and involves separate interviews of each director by internal counsel to solicit feedback on several issues, including:

 

   

Board and committee effectiveness, size, composition and frequency of meetings;

   

director access to management and the sufficiency and timeliness of information provided by management;

   

sufficiency of processes for risk oversight;

   

whether directors possess appropriate experience and backgrounds; and

   

whether each director contributes to the effectiveness of the Board.

 

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Table of Contents

 

 

Corporate Governance (continued)

 

 

 

The results are summarized by the Senior Vice President, General Counsel, Chief Compliance Officer and Secretary and discussed by the Board and each committee in executive session. In addition to providing an opportunity for directors to discuss a wide range of governance-related topics, the evaluation process is used by the Board and each committee to identify opportunities for improvement, make changes to the committee charters, processes and policies, and is linked to our Board’s succession planning activities.

Risks Related to Compensation Policies and Practices

The Company and the Personnel and Compensation Committee have undertaken a process to determine whether the Company’s overall compensation program for employees creates incentives for employees to take excessive or unreasonable risks that could materially harm the Company. As part of this process, the Company received input and analysis from its independent compensation consultant, Exequity LLP, and management prepared a framework of potential risk and evaluated the Company’s compensation policies in the context of this framework. The results of this evaluation were reviewed by and discussed with the Personnel and Compensation Committee.

We believe that several features of our compensation policies for management employees appropriately mitigate such risks, including a balanced mix of long- and short-term compensation incentives, the use of incentive award plans with capped payouts, the use of a diverse mix of performance measures in our incentive award plans and our stock ownership requirements for key officers. In addition, we use our annual business plan as a baseline for our Annual Incentive Plan targets, which the Personnel and Compensation Committee regards as setting an appropriate level of risk taking for the Company. We also believe the Company’s internal legal and financial controls appropriately mitigate the probability and potential impact of an individual employee committing the Company to a harmful long-term business transaction in exchange for short-term compensation benefits. In light of these features of our compensation program and these additional controls, our management and our Personnel and Compensation Committee have concluded that the risks arising from our employee compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

Sarbanes-Oxley Disclosure Committee

We have a Sarbanes-Oxley Disclosure Committee. Current members include: Carl Adams, Vice President, Business Risk Assurance; Cynthia Belak, Vice President and Controller; Stephen F. Blackwood, Senior Vice President, Strategic Sourcing, Tax and Treasurer; Melanie S. Cibik, Senior Vice President, General Counsel, Chief Compliance Officer and Secretary; Michael C. Lee, Director, Global Income Tax Reporting; Brian A. Levan, Senior Director of Financial Reporting and Assistant Controller; Susan L. Main, Senior Vice President and Chief Financial Officer; S. Paul Sassalos, Associate Vice President, Associate General Counsel and Assistant Secretary; Duncan Forsythe, Associate Vice President, Taxation and Associate Treasurer; Jason VanWees, Executive Vice President, and Tyler Vernon, Senior Director SEC/US GAAP Compliance and External Reporting. Among its tasks, the Sarbanes-Oxley Disclosure Committee discusses and reviews disclosure issues to help us fulfill our disclosure obligations on a timely basis in accordance with SEC rules and regulations and is intended to be used as an additional resource for employees to raise questions regarding accounting, auditing, internal controls and disclosure matters.

Communications with the Board

Our Corporate Governance Guidelines provide that any interested parties desiring to communicate with our non-management directors, including our lead director, may contact them through our Secretary, Melanie S. Cibik, whose address is: Teledyne Technologies Incorporated, 1049 Camino Dos Rios, Thousand Oaks, California 91360. The Secretary will review each communication received and decide as to whether the communication, or a summary thereof, will be forwarded to the Nominating and Governance Committee or other appropriate Board committee or member.

Stockholder Engagement

We regularly engage with our stockholders to understand their perspectives on Teledyne, including our strategies, financial performance, management and executive compensation. As part of this program, senior

 

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Table of Contents

 

 

Corporate Governance (continued)

 

 

 

management regularly meets with institutional investors. During fiscal year 2019, senior management met with many institutional investors, including the majority of our top 25 investors with actively managed funds, through investor conferences, in-person meetings and telephone conferences.

Corporate Responsibility

Teledyne continuously operates within our Global Code of Ethical Business Conduct. We firmly believe that improvement is possible only if we measure our performance and constantly raise our standards through ethically-oriented practices, including our contributions and commitment to having a positive measurable impact on humanity. Our Global Code of Ethical Business Conduct and other policies and information related to corporate social responsibility can be found at www.teledyne.com under “About Us” — “Corporate Responsibility.”

Sustainability and Climate Change

While we remain committed to consistent financial performance, our businesses continue to also focus on developing solutions to address sustainability and climate challenges facing humanity today.

Our broad range of precision measurement technologies for environmental monitoring and climate research are unique in the world. Our sensors and instruments are deployed everywhere, from pole to pole, in space, on aircraft and drones, on land, on the sea surface, in the water column, and on the seafloor. They operate around the clock, measuring greenhouse gases from space, precisely monitoring air and water quality throughout the world, and are continuously profiling all of Earth’s oceans.

Applications of our instruments provide scientists information that spans time from the origin of the universe to providing real-time data on air pollution and dangerous storms, such as time-critical warning of hurricanes and tsunamis.

Environment

Ninety percent of the world’s population is exposed to air pollution above acceptable limits. Teledyne is a global leader in breakthrough design, production and distribution of sophisticated air quality instruments that measure hazardous gases and particulate matter in real-time.

 

   

We provide sophisticated water samplers and flowmeters to monitor wastewater, irrigation flow, storm water, industrial discharge, construction site run-off and municipal wastewater collection, treatment and reuse.

   

Every second of every day our hazardous gas detection monitors are making industrial workplaces safer around the world.

   

We build precision air quality instruments that measure common air pollutants and particulate matter (NOx, SO2 ozone, PM10 and PM2.5) that are considered hazardous to human health and the environment. Our instruments enable government agencies around the world to detect and monitor the quality of the air we breathe in real-time to assess their compliance with air quality regulations and ultimately reduce air pollution.

Ocean

The ocean covers over 70% of the Earth’s surface, holds 97% of its water, produces more than half the world’s oxygen, and stores 50 times more carbon dioxide than Earth’s atmosphere. Changes in the ocean affect weather patterns, climate, and food security. Despite the vital importance of the ocean, more than 80% of our ocean is unmapped and unexplored.

 

   

Our floats, gliders and instruments assist climate research by providing access to accurate data, including subsurface temperatures and velocities of currents throughout the world’s oceans. On a shorter timescale, scientists are employing our instruments to provide essential inputs for computer models of dangerous storms, providing real-time information to help save lives.

   

Teledyne works with maritime agencies around the world, preserving free and safe navigation of the world’s oceans.

 

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Corporate Governance (continued)

 

 

 

Space

Teledyne’s contributions to space exploration through our visible and infrared sensors have advanced our scientific understanding of the formation and evolution of the Universe, solar system, planets and moons and how humankind’s actions affect Earth’s climate, atmosphere, oceans and land.

Business Ethics

 

   

We operate within a Code of Ethical Business Conduct with four key pillars: Integrity, Respect, Responsibility and Citizenship. Teledyne has a zero-tolerance policy when it comes to violating the Code.

   

Our board of directors and its committees regularly review matters related to compliance with environmental laws and the health and safety of employees. We continually evaluate our policies and practices and monitor our efforts in areas of legal and social responsibility, diversity and sustainability.

   

We have made progress in our efforts to promote diversity and inclusion. Today, approximately one-third of our executive management team, as well as our board of directors, are women.

Community

 

   

We invest in projects to develop and secure tomorrow’s long-term energy sources.

   

Teledyne businesses around the world support local charities and participate in volunteer opportunities to help those in need.

   

Teledyne’s products enhance the reliability and safety of global transportation and protect the security of our nation, our military and our allies.

   

We partner with local universities to provide mentor and internship programs, especially for Science, Technology, Engineering and Math (STEM) students.

Anti-Corruption

Teledyne Technologies maintains an anti-corruption program with core elements of an effective compliance program, including tone at the top, risk assessment, written policies and procedures, effective training and education, effective lines of communication, internal monitoring and auditing, and enforcement. The program and its requirements apply to Teledyne employees and to third parties who act on Teledyne’s behalf.

Ethics Help Line

We have a confidential Ethics Help Line, where questions or concerns about us can be raised confidentially and anonymously. The Ethics Help line is available to all our employees, as well as concerned individuals outside the Company. The toll-free help line number is 1-877-666-6968. International dialing instructions are available at www.teledyne.ethicspoint.com. Issues can also be reported via that website. The receipt of material concerns about our accounting, internal controls and auditing matters will be reported to the Audit Committee.

Item 1 on Proxy Card — Election of Directors

The Board of Directors has nominated for election this year the class of three incumbent directors whose terms expire at the 2020 Annual Meeting. The three-year term of the class of directors nominated and elected this year will expire at the 2023 Annual Meeting. So long as the number of nominees does not exceed the number of nominees to be elected (which is three nominees in the case of the 2020 Annual Meeting), each nominee will be elected if the nominee receives the vote of the majority of the votes cast with respect to such director. A majority of the votes cast means that the number of shares voted “for” a nominee must exceed the number of votes withheld from that nominee. The Board has adopted a policy whereby all director nominees must submit a contingent resignation in writing to the Chairman of the Nominating and Governance Committee. The resignation becomes effective only if the director is not elected by a majority of votes cast and the Board accepts the resignation. The Nominating and Governance Committee or another committee appointed by the

 

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Item 1 on Proxy Card — Election of Directors (continued)

 

 

 

Board will recommend to the Board whether to accept or reject the resignation or whether other action should be taken. The Board will act on such committee’s recommendation and publicly disclose its decision and the rationale behind it within 90 days following the date of the certification of the election results. The director who was not elected by a majority of votes cast will not participate in the Board’s decision with respect to such resignation. If the number of nominees exceeds the number of directors to be elected, the nominees who receive the highest number of votes cast will be elected.

Unless otherwise instructed, the individuals named as proxies in the proxy card will vote each proxy received by them for the election of the three named nominees. You may withhold authority for the proxies to vote your shares on any or all of the nominees by following the instructions on your proxy card. If a nominee becomes unable to serve, the proxies will vote for a Board-designated substitute or the Board may reduce the number of directors. The Board has no reason to believe that any nominee will be unable to serve.

The following chart provides self-identified demographic information about our independent directors:

 

   

Independent Directors

 
 

 

  Austin  

 

 

 

  Cade  

 

 

 

  Crocker  

 

 

 

  Dahlberg  

 

 

 

  Lorne  

 

 

 

  Malone  

 

 

 

  Miller  

 

 

 

  Sherburne  

 

 

 

  Smith  

 

 

 

  Von Schack  

 

Board Tenure

                                                           

Years

 

 

13

 

 

 

<1

 

 

 

18

 

 

 

14

 

 

 

15

 

 

 

4

 

 

 

18

 

 

 

5

 

 

 

19

 

 

 

13

 

Age

                                                           

Years Old

 

 

59

 

 

 

57

 

 

 

81

 

 

 

75

 

 

 

74

 

 

 

68

 

 

 

78

 

 

 

69

 

 

 

76

 

 

 

75

 

Diversity(a)

                                                           
 

 

X

 

 

 

X

 

           

 

X

 

   

Nationality

                                                           
 

 

US

 

 

 

US

 

 

 

US

 

 

 

US

 

 

 

US

 

 

 

US

 

 

 

US

 

 

 

US

 

 

 

US

 

 

 

US

 

Current

Public Company

Directorships

                                                           

Number (including Teledyne)

 

 

5(b)

 

 

 

1

 

 

 

1

 

 

 

2

 

 

 

1

 

 

 

3

 

 

 

1

 

 

 

1(c)

 

 

 

4

 

 

 

3

 

Experience

                                                           

CEO/C-Suite

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

Financial and Accounting

 

 

X

 

       

 

X

 

         

Legal and

Compliance

   

 

X

 

     

 

X

 

     

 

X

 

   

Governance

 

 

X

 

 

 

X

 

     

 

X

 

 

 

X

 

   

 

X

 

 

 

X

 

 

 

X

 

Banking

           

 

X

 

   

 

X

 

   

 

X

 

Government,

Defense or

Military

 

 

X

 

     

 

X

 

 

 

X

 

   

 

X

 

 

 

X

 

 

 

X

 

 

Energy

           

 

X

 

       

 

X

 

Information Technology and

Cybersecurity

 

 

X

 

     

 

X

 

         

 

X

 

 

Other Industry

 

 

X

 

 

 

X

 

 

 

X

 

 

 

X

 

         

 

X

 

 

 

X

 

         

 

X

 

 

 

X

 

 

(a)

Self-identifies as having diverse characteristics (race, gender, ethnicity, sexual orientation or cultural background).

(b)

Ms. Austin has notified Target Corporation that she has elected not to stand for re-election and will step down from its board in June 2020, which will bring the total number of public company boards on which she serves as a director to four.

(c)

In addition to Teledyne, Ms. Sherburne serves as a director of two indirect, wholly-owned subsidiaries of HSBC Holdings plc which have a class of non-equity securities registered under the Securities Exchange Act of 1934, as amended.

Additional background information about the nominees and continuing directors follows, including the specific experiences, qualifications, attributes and skills that the Board believes qualifies each of the below named individuals to serve as a director of the Company, considering the Company’s business and structure.

 

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Item 1 on Proxy Card — Election of Directors (continued)

 

 

 

Nominees — For Terms Expiring at 2023 Annual Meeting (Class III)

 

 

         
 

 

LOGO

 

Roxanne S. Austin

     

 

President of Austin Investment Advisors and Former President and Chief Operating Officer of DIRECTV, Inc.

 

Director since 2006

 

Age: 59

     

Roxanne S. Austin is the President of Austin Investment Advisors, a private investment and consulting firm, and chairs the US Mid-Market Investment Advisory Committee for EQT Partners. Ms. Austin has also served as the President and Chief Executive Officer of Move Networks, Inc., a provider of Internet television services and as President and Chief Operating Officer of DIRECTV, Inc. She previously served as Executive Vice President and Chief Financial Officer of Hughes Electronics Corporation (Hughes) and as a member of its executive committee. Prior thereto, she held various senior financial positions with Hughes. Prior to joining Hughes, Ms. Austin was a partner at the accounting firm Deloitte & Touche LLP. Ms. Austin is also a director of Target Corporation (having served as the retailer’s interim Board chairwoman during part of 2014), Abbott Laboratories, which discovers, developments, manufactures, and sells health care products, AbbVie, Inc., research-based biopharmaceutical company, and Crowdstrike, a provider of cybersecurity technology. Ms. Austin has notified Target Corporation that she has elected not to stand for re-election and will step down from its board in June 2020. From 2008 to 2016 she also served as a director of Telefonaktiebolaget LM Ericsson. Ms. Austin is a member of our Personnel and Compensation Committee and our Nominating and Governance Committee.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Ms. Austin should serve as a director: her professional background and experience, current and previously held senior-executive level positions, her service on other public and private company boards, Teledyne board experience, board attendance and participation, and her extensive experience in electronics, communications, aerospace, defense and related industries and specialized expertise in public company accounting and mergers and acquisitions and more recently cybersecurity.

       
         
 

 

LOGO

 

Kenneth C. Dahlberg

     

 

Retired Chairman of the Board and Former Chief Executive Officer of Science Applications International Corporation (SAIC)

 

Director since 2006

 

Age: 75

 

     

Kenneth C. Dahlberg served as Chief Executive Officer of Science Applications International Corporation (SAIC), a research and engineering firm specializing in information systems and technology, from November 2003 through September 2009, and served as Chairman of the Board of Directors of SAIC from July 2004 until his retirement in June 2010. Prior to joining SAIC, Mr. Dahlberg served as Executive Vice President of General Dynamics where he was responsible for its Information Systems and Technology Group and prior to that served as President and Chief Operating Officer of Raytheon Systems. Mr. Dahlberg is also a director of Parsons Corp., an engineering, construction, technical and management services firm. From 2011 through May 2017, Mr. Dahlberg was a director of Motorola Solutions, Inc., a provider of mission critical communication products and services. Mr. Dahlberg is a member of our Personnel and Compensation Committee and our Audit Committee.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Dahlberg should serve as a director: his professional background and experience, previously held senior-executive level positions, his service on other public company boards, his Teledyne board experience, board attendance and participation, his extensive experience with companies in the defense industry and his background and experience in design engineering, production, system development and services.

 

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Item 1 on Proxy Card — Election of Directors (continued)

 

 

 

       
         
 

 

LOGO

 

Robert A. Malone

     

 

Executive Chairman, President and Chief Executive Officer of First Sonora Bancshares, Inc. and Retired Chairman of the Board and President, BP America, Inc.

 

Director since 2015

 

Age: 68

 

     

Robert A. Malone has been the Executive Chairman, President and Chief Executive Officer of First Sonora Bancshares, Inc., a privately-held community bank, since 2014. Mr. Malone is also the Chairman, President and Chief Executive Officer of The First National Bank of Sonora, Texas (d/b/a Sonora Bank), a community bank owned by First Sonora Bancshares, Inc., since 2014. He joined First Sonora Bancshares and Sonora Bank in 2009 as President and Chief Executive Officer. Mr. Malone was an Executive Vice President of BP plc, an integrated oil and gas company, and was Chairman of the Board and President, BP America Inc. from 2006 to 2009. Mr. Malone has been a director of Halliburton Company, a provider products and services to the energy industry, since 2009 and its Lead Director since 2018, a director of Peabody Energy Corporation, a coal mining company, since 2009, and its Non-Executive Chairman of the Board since 2016 and a director of BP Midstream Partners GP LLC, the general partner of BP Midstream LP, an owner and operator of oil and natural gas pipelines, since 2017. Mr. Malone is a member of our Audit Committee and our Personnel and Compensation Committee.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Malone should serve as a director: his professional background and experience, previously held senior-executive level positions, his service on other public company boards and his extensive experience with companies in the oil and gas industry and in banking and his expertise in compliance with safety regulations.

The Board of Directors Recommends

a Vote FOR the Election of the Nominees.

 

12    TELEDYNE TECHNOLOGIES INCORPORATED  |  2020 Proxy Statement


Table of Contents

 

 

Item 1 on Proxy Card — Election of Directors (continued)

 

 

 

Continuing Directors — Terms Expiring at the 2021 Annual Meeting (Class I)

 

 

         
 

 

LOGO

 

Simon M. Lorne

     

 

Vice Chairman and Chief Legal Officer of Millennium Management LLC and Former General Counsel, U.S. Securities and Exchange Commission

 

Director since 2004

 

Age: 74

 

     

Simon M. Lorne is the Vice Chairman and Chief Legal Officer of Millennium Management LLC, a hedge fund management company. From March 1999 to March 2004, prior to the time he became a Teledyne director, Mr. Lorne was a partner with Munger Tolles & Olson, LLP, a law firm whose services Teledyne has used from time to time. Mr. Lorne has also previously served as a Managing Director, with responsibility for Legal Compliance and Internal Audit of Citigroup/Salomon Brothers and as the General Counsel at the SEC in Washington, D.C. Since September 2016, Mr. Lorne has been Chairman of the Alternative Investment Management Association, a London-based association of investment managers. From 2011 to 2018, Mr. Lorne served on the Advisory Council of the Public Company Accounting Oversight Board. Mr. Lorne is the Chair of our Audit Committee and a member of our Nominating and Governance Committee.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Lorne should serve as a director: his professional background and experience, current and previously held senior-executive level positions, senior level experience at a government regulator, his service on other public and private company boards, his Teledyne board experience, board attendance and participation, and his specialized expertise in finance, mergers and acquisitions, securities laws and corporate governance.

       
         

 

 

 

 

 

 

 

 

 

 

LOGO

 

Paul D. Miller

     

 

Retired Chairman and CEO of Alliant Techsystems, Inc. (ATK) and Commander-in-Chief, U.S. Atlantic Command and NATO Supreme Allied Commander — Atlantic (Retired)

 

Director since 2001

 

Age: 78

 

    

   

Paul D. Miller was the Chairman of the Board of Alliant Techsystems, Inc. (ATK), an advanced weapon and space systems company, from January 1999 until April 2005 and served as Chief Executive Officer of ATK from January 1999 until October 2004. Prior to retirement from the U.S. Navy in 1994, Admiral Miller served as Commander-in-Chief, U.S. Atlantic Command and NATO Supreme Allied Commander — Atlantic. He served as a director of Huntington Ingalls Industries, Inc., a shipbuilding company from 2012 to April 2017. From 2001 to 2016 he served as a director of Donaldson Company, Inc., a manufacturer of filtration systems. Admiral Miller is a member of our Audit Committee and our Nominating and Governance Committee.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Admiral Miller should serve as a director: his executive, professional and military background and experience, current and previously held senior-executive level positions, his service on other public and private company boards, Teledyne board experience, board attendance and participation, his extensive experience with and leadership positions in the defense community, his knowledge of finance, manufacturing, human resources, corporate governance and audit functions and his extensive understanding of strategic planning, tactical business decision making and risk management.

 

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Item 1 on Proxy Card — Election of Directors (continued)

 

 

 

       
         
 

 

LOGO

 

Wesley W. von Schack

     

 

Chairman of AEGIS Insurance Services and Former Chairman, President and Chief Executive Officer of Energy East Corporation

 

Director since 2006

 

Age: 75

     

Wesley W. von Schack is the Chairman of AEGIS Insurance Services, a property and casualty mutual insurance company, a position he has held since 2007. He serves as the lead director of Edward Lifesciences Corporation, a company engaged in the science of heart valves and hemodynamic monitoring. Dr. von Schack served as Chairman, President and Chief Executive Officer of Energy East Corporation, a diversified energy services company, from 1996 to September 2009. Dr. von Schack served as a director of The Bank of New York Mellon Corporation from 2007 through April 2016 and Mellon Financial Corporation from 1989 to 2007. Dr. von Schack is director emeritus of the Gettysburg Foundation, and is a member of the President’s Council — Peconic Land Trust. Dr. von Schack is a member of our Nominating and Governance Committee and our Personnel and Compensation Committee.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Dr. von Schack should serve as a director: his professional background and experience, previously held senior-executive level positions, his service on other private and public company boards, his leadership positions at private foundations, his Teledyne board experience, board attendance and participation, and his extensive experience with companies in the energy, banking, financial asset management sectors and in regulated industries.

       
         
 

 

LOGO

 

Denise R. Cade

     

 

Senior Vice President, General Counsel and Corporate Secretary of IDEX Corporation

 

Director since 2019

 

Age: 57

     

Denise R. Cade has been the Senior Vice President, General Counsel and Corporate Secretary of IDEX Corporation, a manufacturer of fluidic systems and specialty engineered products, since October 2015. From March 2011 until October 2015, she served as Senior Vice President, General Counsel, Corporate Secretary and Chief Compliance Officer at SunCoke Energy, Inc., a supplier of high-quality coke used in the blast furnace production of steel, and its controlled company SunCoke Energy Partners, LLP, where she also served on the Board of Directors. Prior to joining SunCoke Energy, Ms. Cade held several positions at PPG Industries, Inc., a global supplier of paints, coatings and specialty materials, including Assistant General Counsel and Corporate Secretary, Chief Securities and Finance Counsel, Chief M&A Counsel, and General Counsel of the Glass and Fiberglass Division. Prior to joining PPG, Ms. Cade was a partner at Shaw Pittman, LLP, a law firm. Ms. Cade is a member of our Audit Committee and Nominating and Governance Committee.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Ms. Cade should serve as a director: her professional background and experience, current and previously held senior-executive level positions, her service on other company boards, and her legal, merger and acquisitions, capital markets, financing, compliance and corporate governance experience at public companies with significant operations across multiple technologies and industries.

 

14    TELEDYNE TECHNOLOGIES INCORPORATED  |  2020 Proxy Statement


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Item 1 on Proxy Card — Election of Directors (continued)

 

 

 

Continuing Directors — Terms Expiring at the 2022 Annual Meeting (Class II)

 

 

         
 

 

LOGO

 

Charles Crocker

     

 

Chairman and Chief Executive Officer, Crocker Capital and Retired Chairman and Chief Executive Officer of BEI Technologies, Inc.

 

Director since 2001

 

Age: 81

     

Charles Crocker is the Chairman and Chief Executive Officer of Crocker Capital, a private investment company. Mr. Crocker was the Chief Executive Officer of the Custom Sensors and Technologies Division of Schneider Electric until January 2006. Mr. Crocker was the Chairman and Chief Executive Officer of BEI Technologies, Inc., a diversified technology company, from March 2000 until October 2005, when it was acquired by Schneider Electric. Mr. Crocker served as Chairman, President and Chief Executive Officer of BEI Electronics from October 1995 to September 1997, at which time he became Chairman, President and Chief Executive Officer of BEI Technologies, Inc. From 2014 until 2018, he served as a director of Imageware Systems, Inc., from 2003 until 2014, he served as a director of Franklin Resources, Inc., and from 2010 until August 2012, he served as a director of ConMed Healthcare Management, Inc. Mr. Crocker has been Chairman of the Board of Children’s Hospital in San Francisco, Chairman of the Hamlin School’s Board of Trustees and President of the Foundation of the Fine Arts Museums of San Francisco. Mr. Crocker is the Chair of our Personnel and Compensation Committee and a member of our Nominating and Governance Committee.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Crocker should serve as a director: his professional background and experience, current and previously held senior-executive level positions, his service on other public and private company boards, his Teledyne board experience, board attendance and participation, and his extensive experience with technology companies serving both the commercial and defense sectors.

       
         
 

 

LOGO

 

Robert Mehrabian

     

 

Executive Chairman of the Company

 

Director since 1999

 

Age: 78

     

Robert Mehrabian is the Executive Chairman of Teledyne Technologies Incorporated. He has been Executive Chairman since January 1, 2019. Prior to January 1, 2019, he was Teledyne’s Chairman, President and Chief Executive Officer since 2000 (and was President and Chief Executive Officer since Teledyne’s formation in 1999). Prior to the spin-off of the Company by Allegheny Technologies Incorporated (ATI) in November 1999, Dr. Mehrabian was the President and Chief Executive Officer of ATI’s Aerospace and Electronics segment since July 1999 and had served ATI in various senior executive capacities since July 1997. Before joining ATI, Dr. Mehrabian served as President of Carnegie Mellon University. From 1992 until April 2014, he served as a director of PPG Industries, Inc. Dr. Mehrabian served as a director of Mellon Financial Corporation from 1994 to 2007 and served as director of its successor The Bank of New York Mellon Corporation until April 2011. He is a member of The National Academy of Engineering.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Dr. Mehrabian should serve as a director: his leadership skills acquired while serving as the Company’s Chairman, Chief Executive Officer and President, previously held senior-executive level positions at public companies and at academic institutions, his service on public company boards, and his extensive knowledge and understanding of the Company’s business, operations, technology, products and services.

 

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Item 1 on Proxy Card — Election of Directors (continued)

 

 

 

       
         
 

 

LOGO

 

Jane C. Sherburne

     

 

Principal of Sherburne PLLC and Former Senior Executive Vice President, General Counsel and Corporate Secretary of The Bank of New York Mellon Corporation

 

Director since 2014

 

Age: 69

     

Jane C. Sherburne is currently principal of Sherburne PLLC, a legal consulting firm providing strategic advice in crisis environments and in connection with regulatory policy developments. From May 2010 to July 2014, Ms. Sherburne served as Senior Executive Vice President, General Counsel and Corporate Secretary of The Bank of New York Mellon Corporation. Ms. Sherburne served as Senior Executive Vice President, General Counsel and Corporate Secretary of Wachovia Corporation from June 2008 to January 2009, during which time Wachovia merged with Wells Fargo & Company. From December 2006 to June 2008, Ms. Sherburne was General Counsel of Citigroup Inc.‘s Global Consumer Business. From July 2001 to December 2006, Ms. Sherburne was Deputy General Counsel of Citigroup, Inc. Until July 2001, Ms. Sherburne was a litigation partner at the Washington, D.C. law firm of Wilmer, Cutler & Pickering, having joined the firm in 1984. Ms. Sherburne interrupted her private practice from 1994 to 1997 to serve as Special Counsel to the President in the Clinton White House. Ms. Sherburne serves as an independent director on the boards of HSBC USA, HSBC Bank USA, HSBC Finance Corporation and HSBC North America, all of which are indirect wholly-owned subsidiaries of HSBC Holdings plc, a global banking and financial services organization, and on the advisory board of Perella Weinberg Partners, a global advisory and asset management firm. Ms. Sherburne is Chair of the Board of the National Women’s Law Center, Chair of the Board of Negotiation Strategies Institute, a Trustee of the New York City Bar Fund, a member of the Executive Committee of the Lawyers’ Committee for Civil Rights Under Law, a member of the Committee for Economic Development, and a member of the American Law Institute. She also serves on the Council of the Administrative Conference of the United States, to which she was appointed by President Obama in July 2010. Ms. Sherburne is a member of our Audit Committee and our Personnel and Compensation Committee.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Ms. Sherburne should serve as a director: her professional background and experience, current and previously held senior-executive level positions, senior level experience in positions in the federal government, and her extensive experience in policy, compliance, corporate governance and government matters and in regulated industries.

 

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Item 1 on Proxy Card — Election of Directors (continued)

 

 

 

       
         
 

 

LOGO

 

Michael T. Smith

     

 

Retired Chairman of the Board and Chief Executive Officer of Hughes Electronics Corporation

 

Director since 2001

 

Age: 76

     

Michael T. Smith is the retired Chairman of the Board and Chief Executive Officer of Hughes Electronics Corporation, having held such positions from October 1997 until May 2001. Mr. Smith is also a director of FLIR Systems, Inc., which produces infrared cameras, thermal imaging software and temperature measurement devices, WABCO Holdings, Inc., which provides electronic and electromechanical products for the automotive industry, and Zero Gravity Solutions, Inc., an agricultural biotechnology company. Mr. Smith was a director of Ingram Micro Corporation, a technology sales, marketing and logistics company, from 2001 until June 2014, Alliant Techsystems, Inc. (ATK), an advanced weapon and space systems company, from 1997 to 2009, and Anteon International Corporation, an information technology and systems engineering solutions company, from 2005 to 2006. Mr. Smith is a member of the Council of Chief Executives and the former chairman of the Aerospace Industries Association, an industry trade organization, and is a charter member of the Electronic Industries Foundation Leadership Council. Mr. Smith is the Chair of our Nominating and Governance Committee and a member of our Audit Committee. Mr. Smith is also our Lead Director.

 

The following experience, qualifications, attributes and/or skills led the Board to conclude that Mr. Smith should serve as a director: his professional background and experience, previously held senior-executive level positions, his service on other public and private company boards, Teledyne board experience, board attendance and participation, and his extensive experience with companies in the aerospace, defense, engineering, communications and manufacturing sectors.

 

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Committees of Our Board of Directors

 

Our Board of Directors has established an Audit Committee, a Nominating and Governance Committee and a Personnel and Compensation Committee. From time to time, our Board of Directors may establish other committees. Each of the Audit Committee, Nominating and Governance Committee and Personnel and Compensation Committee has a written charter that can be accessed on our website at www.teledyne.com under “Corporate Information — Governance”.

Audit Committee

The members of the Audit Committee are:

      Simon M. Lorne, Chair

      Denise R. Cade (since July 23, 2019)

      Kenneth C. Dahlberg

      Robert A. Malone

      Paul D. Miller

      Jane C. Sherburne

      Michael T. Smith

The Audit Committee held six meetings in 2019.

The primary purpose of the Audit Committee is to assist the Board’s oversight of the integrity of our financial statements, our compliance with legal and regulatory requirements, the qualification and the independence of our independent auditor, and the performance of our internal audit function and independent auditor. As provided in its charter, the Audit Committee is directly responsible for the appointment, retention, compensation, oversight, evaluation and termination of our independent auditor (including resolving disagreements between management and the independent auditor regarding financial reporting). The Audit Committee has been designated as the “qualified legal compliance committee.” In carrying out its responsibilities, the Audit Committee undertakes to do many things, including:

 

 

Retain and approve the terms of the engagement and fees to be paid to the independent auditor.

 

Evaluate the performance of the independent auditor.

 

Receive written periodic reports from the independent auditor delineating all relationships between the independent auditor and us.

 

Review with the independent auditor any problems or difficulties the independent auditor may have encountered, and any management letter provided by the independent auditor and our response to that letter.

 

Review our annual audited financial statements and the report thereon and quarterly unaudited financial statements with the independent auditor and management prior to publication of such statements.

 

Discuss with management the earnings press releases (including the type of information and presentation of information).

 

Review, approve and discuss with management and the senior internal auditing executive the scope of the internal audit plan and any material changes thereto, and responsibilities, budget and staffing of the internal audit function.

 

Review major issues regarding accounting principles and financial statement presentations and judgments made in connection with the preparation of our financial statements.

 

Meet at least quarterly with the senior internal auditing executive to discuss internal audits and findings and management’s response.

 

Meet periodically with management to review our financial risk exposures and the steps management has taken to monitor and control such exposures.

 

Meet periodically or on an as need basis with management to review financings, stock repurchases, significant tax matters, investment strategies, hedging strategies and certain information technology-related matters.

 

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Committees of Our Board of Directors (continued)

 

 

 

 

Review legal matters that may have a material impact on the financial statements, our compliance policies and any material reports or inquiries received from regulators or governmental agencies with our Senior Vice President, General Counsel, Chief Compliance Officer and Secretary, including those matters related to compliance with environmental laws and the health and safety of employees.

The charter of the Audit Committee was last amended and restated on December 17, 2019. (The charter is available on the Corporate Governance Web Page: http://www.teledyne.com/about-us/corporate-information). The Audit Committee charter provides that our senior internal auditing executive reports directly and separately to the Chair of the Audit Committee and the Executive Chairman. As required by the charter, our Audit Committee also has established procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters. See “Corporate Governance — Sarbanes-Oxley Disclosure Committee” at page 7.

The Audit Committee meets the size, independence and financial sophistication and expertise requirements of the NYSE, including the enhanced independence requirements for Audit Committee members under Exchange Act Rule 10A- 3. The Board of Directors has determined that Simon M. Lorne is an “audit committee financial expert” within the meaning of the SEC regulations and all of the members are “independent” and “financially literate” under the NYSE listing standards. Our Corporate Governance Guidelines provide that no director may serve as a member of the Audit Committee if such director serves on the audit committees of more than two other public companies unless the Board determines that such simultaneous service would not impair the ability of such director to effectively serve on the Audit Committee. Any such determination must be disclosed in the annual Proxy Statement. None of our Audit Committee members serve on more than two other audit committees of public companies. Besides our Audit Committee, Mr. Smith simultaneously serves on the audit committee of two other public companies and Mr. Malone simultaneously serves on the audit committee of one other public company.

The report of the Audit Committee is included under “Item 2 on Proxy Card — Ratification of Appointment of Independent Registered Public Accounting Firm” at page 23.

Nominating and Governance Committee

The members of the Nominating and Governance Committee are:

      Michael T. Smith, Chair

      Denise R. Cade (since July 23, 2019)

      Roxanne S. Austin

      Charles Crocker

      Simon M. Lorne

      Paul D. Miller

      Wesley W. von Schack

The Nominating and Governance Committee held four meetings in 2019.

The Nominating and Governance Committee undertakes to:

 

 

Identify individuals qualified to become members of the Board of Directors and to make recommendations to the Board of Directors with respect to candidates for nomination for election at the next Annual Meeting of stockholders or at such other times when candidates surface or are proposed and, in connection therewith, consider suggestions submitted by our stockholders.

 

Develop and recommend to the Board of Directors corporate governance guidelines.

 

Determine and make recommendations to the Board of Directors with respect to the criteria to be used for selecting new members of the Board of Directors.

 

Oversee the annual process of evaluation of the performance of our Board of Directors and committees.

 

Make recommendations to the Board of Directors concerning the membership of committees of the Board and the chairpersons of the respective committees.

 

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Committees of Our Board of Directors (continued)

 

 

 

 

Make recommendations to the Board of Directors with respect to the remuneration paid and benefits provided to members of the Board in connection with their service on the Board or on its committees.

 

Administer our formal compensation programs for directors, including the Administrative Rules of the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan Related to Non-Employee Director Restricted Stock Unit Awards and Fees.

 

Make recommendations to the Board of Directors concerning the composition, organization and operations of the Board of Directors and its committees, including the orientation of new members and the flow of information.

 

Evaluate Board and committee tenure policies, as well as policies covering the retirement or resignation of incumbent directors.

 

Review and evaluate our policies and practices and monitor our efforts in areas of legal and social responsibility, diversity and sustainability, and when appropriate report and make recommendations to the Board of Directors with respect to such policies and procedures and efforts.

 

Identify and report to the Board of Directors current and emerging trends with respect to political, social, diversity, sustainability, and public policy issues that may affect the business operations, performance or public image of the corporation.

 

Review with the Company’s General Counsel policies, notices, reports or inquires related to compliance with environmental laws, the health and safety of employees and climate change.

 

Evaluate proposals of stockholders intended to be presented at stockholder meetings.

 

Make recommendations to the Board of Directors as to whether to accept or reject a director resignation, or take other action, where a director fails to receive a majority vote as specified under our Amended and Restated Bylaws and Corporate Governance Guidelines.

The charter of the Nominating and Governance Committee was last amended and restated on December 18, 2019. The members of the Nominating and Governance Committee are “independent” under the NYSE listing standards. (The charter is available on the Corporate Governance Web Page: http://www.teledyne.com/about-us/corporate-information).

The Nominating and Governance Committee will consider stockholder recommendations for nominees for director. Any stockholders interested in recommending a nominee should follow the procedures outlined in “Other Information — 2021 Annual Meeting and Stockholder Proposals” at page 70. Stockholder recommendations for nominees will be given the same consideration as nominees for director from other sources.

The Nominating and Governance Committee utilizes a variety of methods for identifying and evaluating all nominees for directors. The Committee periodically assesses the appropriate size of the Board and whether vacancies on the Board are expected due to retirement, change in professional status or otherwise. Candidates may come to the attention of the Committee through current Board members, members of our management, stockholders and other persons. The Committee to date has not engaged a professional search firm. Candidates are evaluated at meetings of the Committee and may be considered at any point during the year.

As stated in the Corporate Governance Guidelines, nominees for director are to be selected based on, among other criteria, experience, knowledge, skills, expertise, integrity, diversity, ability to make analytical inquiries, understanding of or familiarity with our business, products or markets or similar business, products or markets, and willingness to devote adequate time and effort to Board responsibilities. The Committee may establish additional criteria and is responsible for assessing the appropriate balance of criteria required of Board members. Although we do not have a written policy with respect to Board diversity, the Nominating and Governance Committee and the Board believe that a diverse board leads to improved Company performance by encouraging new ideas, expanding the knowledge base available to management and fostering a boardroom culture that promotes innovation and vigorous deliberation. Consequently, when evaluating potential nominees, the Committee considers individual characteristics that may bring diversity to the Board, including gender, race, national origin, age, professional background, unique skill sets and areas of expertise. As part of its charter mandate, the Nominating and Governance Committee monitors our efforts in areas of diversity and keeps abreast of current and emerging trends with respect to diversity issues that may affect our business operations, performance or public image.

 

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Committees of Our Board of Directors (continued)

 

 

 

Personnel and Compensation Committee

The members of the Personnel and Compensation Committee are:

      Charles Crocker, Chair

      Roxanne S. Austin

      Kenneth C. Dahlberg

      Robert A. Malone

      Jane C. Sherburne

      Wesley W. von Schack

The Personnel and Compensation Committee held five meetings in 2019.

The Personnel and Compensation Committee’s principal authority and responsibilities include:

 

 

Make recommendations to the Board of Directors concerning executive management organization matters generally.

 

In the area of compensation and benefits, make recommendations to the Board of Directors concerning employees who are also directors, review and approve the corporate goals and objectives relevant to the Executive Chairman and Chief Executive Officer and other executive officer compensation, evaluate Executive Chairman, Chief Executive Officer and other executive officer performance in light of those goals and objectives, and determine and approve all compensation of the Executive Chairman and Chief Executive Officer and other executive officers based on this evaluation.

 

Periodically, and when appropriate, review and approve the following as they affect the Executive Chairman, Chief Executive Officer and executive officers: (a) any employment agreements and severance arrangements; (b) any change-in-control agreements and change-in-control provisions affecting any elements of compensation and benefits; and (c) any special or supplemental compensation and benefits for the Executive Chairman, the Chief Executive Officer and executive officers and individuals who formerly served as Chief Executive Officer and executive officers, including supplemental retirement benefits and the perquisites provided to them during and after employment.

 

Oversee the Company’s compliance with the requirement under the NYSE rules that, with limited exceptions, require stockholder approval for equity compensation plans.

 

Subject to such stockholder approval, or as otherwise required by applicable law, establish, amend and, where appropriate, terminate incentive compensation plans, equity-based plans, benefit plans, and other bonus arrangements for the Company; and pursuant to the terms of such plans, as may at the time be in effect, administer such plans and make appropriate interpretations and determinations and take such actions as shall be necessary or desirable thereunder, including approval of awards granted pursuant to such plans and repurchase of securities from terminated employees.

 

Make recommendations to the Board of Directors concerning policy and procedures relating to employee benefits and employee benefit plans, including incentive compensation plans and equity-based plans and applicable clawback provisions.

 

Oversee our formal incentive compensation programs, including equity-based plans.

 

Make recommendations to the Board of Directors concerning matters relating to stockholder votes on executive compensation and the frequency of those votes.

While reviewed annually, the charter of the Personnel and Compensation Committee was last amended and restated on December 18, 2018. (The charter is available on the Corporate Governance Web Page: http://www.teledyne.com/about-us/corporate-information). The members of the Personnel and Compensation Committee are “independent” under the NYSE listing standards.

Our Executive Chairman and Chief Executive Officer work with the Personnel and Compensation Committee Chair, our Senior Vice President, General Counsel, Chief Compliance Officer and Secretary and our Vice President of Human Resources in establishing the agenda for the Committee and together make compensation recommendations for the named executives (other than themselves). The Personnel and Compensation Committee’s Chair reports the committee’s recommendations on executive compensation to the Board. The

 

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Committees of Our Board of Directors (continued)

 

 

 

Personnel and Compensation Committee has the authority, under its charter, to obtain advice and assistance from internal or external legal, accounting or other advisors. The Personnel and Compensation Committee has the sole authority and resources to retain and terminate any compensation consultant to be used to assist in the evaluation of the Executive Chairman’s, the Chief Executive Officer’s or other executive officers’ compensation and has sole authority to approve the consultant’s fees and other retention terms. As discussed below under “Compensation Discussion and Analysis,” the Committee retained Exequity LLP to assist the Committee in fulfilling its responsibilities in 2019. The Personnel and Compensation Committee may delegate its responsibility to control and manage the plan assets of our employee benefit plans. In addition, under the terms of our stock incentive plans, the Personnel and Compensation Committee may delegate certain powers and authority under the stock incentive plan as it deems appropriate to a subcommittee and/or designated officers and, as discussed below under “Compensation Discussion and Analysis,” the Personnel and Compensation Committee has made a limited delegation of authority to our Executive Chairman to grant stock options pursuant to this authority.

The report of the Personnel and Compensation Committee is included under “Executive and Director Compensation” at page 51.

 

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Item 2 on Proxy Card — Ratification of Appointment of

Deloitte & Touche LLP as the Company’s Independent

Registered Public Accounting Firm

 

The Audit Committee has appointed Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2020. Deloitte & Touche LLP has served as our independent registered public accounting firm effective May 1, 2015. The Audit Committee believes that Deloitte & Touche LLP is knowledgeable about our operations and accounting practices and is well qualified to act in the capacity of independent registered public accounting firm. The appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal 2020 is subject to the continued approval of the Audit Committee.

Although the appointment of an independent registered public accounting firm is not required to be approved by the stockholders, the Audit Committee and the Board of Directors believe that stockholders should participate in such selection through ratification. The proposal to ratify the Audit Committee’s appointment of Deloitte & Touche LLP will be approved by the stockholders if it receives the affirmative vote of a majority of the shares cast on the proposal by holders present in person or represented by proxy at the meeting. Unless otherwise instructed, the individuals named as proxies in the proxy card will vote each proxy received by them in favor of ratifying the selection of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2020. If you specifically abstain from voting on the proposal, your shares will not affect the outcome of the vote. Broker non-votes, if any, are included in determining the presence of a quorum at the Annual Meeting but will not be counted as being entitled to vote on the proposal and will not affect the outcome of the vote. If the stockholders do not ratify the selection of Deloitte & Touche LLP, the Audit Committee will reconsider the appointment of Deloitte & Touche LLP as an independent registered public accounting firm. Notwithstanding the ratification of Deloitte & Touche LLP as our independent auditors, the Audit Committee, in its discretion, may direct the appointment of new independent auditors at any time during the year if the Audit Committee believes that such a change would be in the best interests of Teledyne and its stockholders. It is expected that representatives of Deloitte & Touche LLP will be present at the meeting and will have an opportunity to make a statement and respond to appropriate questions.

The Board of Directors Recommends

a Vote FOR Ratification of the Appointment

of Deloitte & Touche LLP as the

Company’s Independent Registered Public Accounting Firm.

Fees Billed by Independent Registered Public Accounting Firm

The following table sets forth fees billed by Deloitte & Touche LLP for professional services rendered for the 2019 fiscal year and for the 2018 fiscal year (in thousands).

 

    

 

2019

 

    

 

2018

 

 

Total Audit Fees(1)

 

  

$

 

4,040.3

 

 

 

  

$

 

4,966.2

 

 

 

Total Audit-Related Fees(2)

 

  

 

 

24.2

 

 

 

  

 

 

25.9

 

 

 

Tax Fees(3)

 

  

 

 

1,445.2

 

 

 

  

 

 

1,273.9

 

 

 

All Other Fees

 

  

 

 

 

 

 

  

 

 

 

 

 

Total

  

$

5,509.7

 

  

$

6,266.0

 

                   

 

(1)

Aggregate fees billed for professional services rendered for the audit of our annual financial statements and internal control pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, for statutory audits of certain subsidiaries, for the reviews of financial statements included in our quarterly reports on Form 10-Q and accounting

 

consultations on matters reflected in the financial statements.

 

(2)

Fees primarily related to environmental financial assurances services.

(3)

Tax fees related to U.S. Federal and State tax compliance services and tax advisory services for our foreign subsidiaries.

 

 

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Item 2 on Proxy Card — Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm (continued)

 

 

 

Guidelines Regarding External Auditing Firms

Our Audit Committee has adopted guidelines relating to the rendering of services by external auditors. The principal terms are as follows:

Pre-Approval of Audit Services.    The guidelines require the approval of the Audit Committee prior to retaining any firm to perform any Audit Services. “Audit Services” include the services necessary to audit our consolidated financial statements for a specified fiscal year and the following audit and audit-related services: (a) Statement on Auditing Standards No. 71 quarterly review services; (b) regulatory and employee benefit plan financial statement audits; and (c) compliance and statutory attestation services for our subsidiaries. Subject to limited exceptions, the policies further provide that the Audit Committee must pre-approve the engagement of our independent registered public accounting firm to provide any services other than Audit Services. The Chair of the Audit Committee may, however, pre-approve the engagement of our independent registered public accounting firm for such non-audit services to the extent the fee is reasonably expected to be less than $150,000. Pre-approval will not be required for de minimis services if (i) the costs of such services in the aggregate are less than $150,000 or 5% of the total fees of our independent registered public accounting firm, whichever is lesser during such fiscal year, (ii) such services were not recognized by us at the time of the engagement to be non-audit services; and (iii) such services are promptly and subsequently approved by the Audit Committee or the Chair of the Audit Committee (if reasonably expected to be less than $150,000 or 5% of the total fees of our independent registered public accounting firm, whichever is lesser) prior to completion of the audit.

Executive Relationship Limitation.    The guidelines provide that no firm shall perform for us any Audit Service if the Company’s Chief Executive Officer, Chief Financial Officer, Controller, or Chief Accounting Officer, or any person serving in an equivalent position for the Company, was employed by that firm and participated in any capacity in the Company’s audit during the one-year period preceding the date of the initiation of the audit.

Non-Audit Services Limitations.    If the fee for any non-audit services is reasonably expected to be $350,000 or more, we must seek at least one competing bid from another firm prior to engaging our independent registered public accounting firm, unless there are exceptional circumstances or if it relates to the public offering of our securities. Management will determine whether awarding the assignment to our independent registered public accounting firm would be advantageous to us because our independent registered public accounting firm could utilize its deeper knowledge of the Company to do a more efficient and effective job than another provider of services or could perform the services for a lower fee. While price will be a factor in evaluating competing proposals, professional competence, client service and experience in handling similar matters are also key factors. Prior to retaining our independent registered public accounting firm to perform services other than Audit Services, management will consider whether such retention could impair our independent registered public accounting firm’s independence.

The guidelines prohibit us from engaging our independent registered public accounting firm to perform any of the following non-audit services or other services that the Public Company Accounting Oversight Board determines by regulation to be prohibited: bookkeeping or other services related to accounting records or financial statements; financial information systems design and implementation; appraisal or valuation services, fairness opinions, or contribution-in-kind reports; actuarial services; internal auditing outsourcing services; management functions or human resources; broker or dealer, investment advisor, or investment banking services; individual tax services to executives roles that involve financial reporting responsibility; or legal services and expert services unrelated to the audit.

Hiring Limitation.    To avoid appearances of conflicts of interest, we will not hire before a one-year cooling-off period into either a finance function or an audit function personnel of our independent registered public accounting firm who are at the level of partner, principal or manager if such person worked on the audit of our consolidated financial statements during the fiscal year just ended or if such person is working on the audit of our consolidated financial statements for the current fiscal year.

 

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Item 2 on Proxy Card — Ratification of Appointment of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm (continued)

 

 

 

Audit Partner Rotation.    The guidelines provide that neither the lead or coordinating partner of our independent registered public accounting firm having primary responsibility for our audit, nor the partner responsible for reviewing our audit, shall perform Audit Services for the Company for more than five consecutive fiscal years. An audit director can perform Audit Services for up to seven consecutive fiscal years.

On a quarterly basis in executive session, our independent registered public accounting firm reviews with the Audit Committee all audit, non-audit and tax services it provides to us. For 2019, all audit and non-audit services rendered by our independent registered public accounting firm were pre-approved in accordance with our policies.

In making its recommendation to ratify the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 2019 fiscal year, the Audit Committee considered whether the provision of non-audit services by Deloitte & Touche LLP is compatible with maintaining Deloitte & Touche LLP’s independence.

 

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Audit Committee Report

 

The following report of the Audit Committee is included in accordance with SEC rules and regulations. It does not constitute “soliciting material,” is not deemed “filed” with the SEC and is not incorporated by reference into any of our filings under the Exchange Act.

Report of the Audit Committee

The following is the report of the Audit Committee with respect to the audited financial statements for the fiscal year ended December 29, 2019 (the “Financial Statements”) of Teledyne Technologies Incorporated and its consolidated subsidiaries (the “Company”).

The responsibilities of the Audit Committee are set forth in the Audit Committee Charter, as amended and restated as of December 17, 2019, which has been adopted by the Board of Directors. The Audit Committee is comprised of six directors. The Company’s Board of Directors has determined that each of the members of the Audit Committee is independent in accordance with the applicable rules of the New York Stock Exchange. The Board of Directors has also determined that at least one director has “financial management expertise” under New York Stock Exchange listing standards and that Simon M. Lorne is an “audit committee financial expert” within the meaning of the Securities and Exchange Commission regulations.

Management is responsible for the preparation, presentation and integrity of the Company’s financial statements, the Company’s internal controls and financial reporting process and the procedures designed to assure compliance with accounting standards and applicable laws and regulations. Deloitte & Touche LLP (“Deloitte & Touche”), the Company’s independent registered public accounting firm, is responsible for performing an independent audit of the Company’s Financial Statements and expressing an opinion as to their conformity with generally accepted accounting principles. The Audit Committee reviewed and discussed the Company’s Financial Statements with management and Deloitte & Touche and discussed with Deloitte & Touche the matters required to be discussed by the Public Company Accounting Oversight Board and the Securities and Exchange Commission. The Audit Committee has received written disclosures and the letter from Deloitte & Touche required by applicable requirements of the Public Company Accounting Oversight Board regarding Deloitte & Touche’s communication with the Audit Committee concerning independence and has discussed with Deloitte & Touche its independence.

The members of the Audit Committee are not professionally engaged in the practice of auditing or accounting and are not, and do not represent themselves to be, performing the functions of auditors or accountants. Members of the Audit Committee may rely without independent verification on the information provided to them and on the representations made by management and Deloitte & Touche. Accordingly, the Audit Committee’s oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles, or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee’s considerations and discussions referred to above do not assure that the audit of the Company’s financial statements has been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles or that the Company’s auditors are in fact “independent”.

Based on these reviews and discussions, the Audit Committee recommended to the Board of Directors that the Financial Statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 29, 2019, for filing with the Securities and Exchange Commission.

Submitted by the Audit Committee of the Board of Directors:

      Simon M. Lorne, Chair

      Denise R. Cade

      Kenneth C. Dahlberg

      Robert A. Malone

      Paul D. Miller

      Jane C. Sherburne

      Michael T. Smith

February 18, 2020

 

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Item 3 on Proxy Card — Advisory Resolution on

Executive Compensation

 

In accordance with Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which was added under the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are asking stockholders to approve on an advisory basis a resolution on the Company’s executive compensation as reported in this Proxy Statement. As described below in the “Compensation Discussion and Analysis” section of this Proxy Statement, our executive compensation program is designed to attract and retain high quality executives and to align the interest of management with the interests of stockholders by rewarding both short- and long-term performance.

2019 was another record year for Teledyne. Highlights included:

 

   

Record sales were over $3.16 billion and increased 9% compared with 2018;

   

Record GAAP earnings per diluted share were $10.73, an increase of 19.1% compared with 2018;

   

Record GAAP operating margin was 15.5% an increase of 119 basis points from 2018; and

   

Record cash provided by operating activities of $482.1 million.

We urge stockholders to read the “Compensation Discussion and Analysis” below, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives, as well as the Summary Compensation Table and related compensation tables and narratives which provide detailed information on the compensation of our named executives. The Personnel and Compensation Committee believes that the policies and procedures articulated in the “Compensation Discussion and Analysis” are effective in achieving our goals and that the compensation of our named executives reported in this Proxy Statement has supported and contributed to the Company’s success.

We are asking stockholders to approve the following advisory resolution at the 2020 Annual Meeting:

RESOLVED, that the compensation paid to the Company’s named executives during 2019, as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the Summary Compensation Table and the related compensation tables and narrative in the Proxy Statement for the Company’s 2020 Annual Meeting of Stockholders, is hereby APPROVED, on an advisory basis.

This advisory resolution, commonly referred to as a “say on pay” resolution, is not binding on the Board of Directors or the Company. Although non-binding, the Board and the Personnel and Compensation Committee will carefully review and consider the voting results when evaluating our executive compensation program.

The proposal to adopt the advisory resolution set forth above will be approved by the stockholders if it receives the affirmative vote of a majority of the shares cast by those holders present in person or represented by proxy at the meeting. If you sign and return your proxy card, your shares will be voted (unless you indicate to the contrary) to approve the advisory resolution. If you specifically abstain from voting on the proposal, your shares will not affect the outcome of the vote.

Following the 2017 Annual Meeting of Stockholders, our Board of Directors voted to hold a vote on this advisory “say on pay” resolution on an annual basis. Therefore, we currently expect our next say on pay proposal (after the vote on this Item 3) will be held at our next annual meeting in 2021, although the Board of Directors may decide to modify this practice.

The Board of Directors Recommends

a Vote FOR Approval of the Advisory Resolution

on Executive Compensation.

 

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Other Business

 

We know of no business that may be presented for consideration at the meeting other than the three action items indicated in the Notice of Annual Meeting. If other matters are properly presented at the meeting, including a proposal to adjourn or postpone the meeting, the persons designated as proxies in your proxy card may vote at their discretion.

Following adjournment of the formal business meeting, Dr. Robert Mehrabian, Executive Chairman, and Aldo Pichelli, President and Chief Executive Officer, will address the meeting and will hold a general discussion period during which the stockholders will have an opportunity to ask questions about our Company and businesses.

Stock Ownership Information

Five Percent Owners of Common Stock

The following table sets forth the number of shares of our common stock owned beneficially by each person or entity known to us to own beneficially more than five percent of our outstanding common stock. As of February 15, 2020, we had received notice that the individuals and entities listed in the following table are beneficial owners of five percent or more of our common stock. In general, “beneficial ownership” includes those shares that a person or entity has the power to vote or transfer, and options to acquire common stock that are exercisable currently or within 60 days. As of, February 15, 2020, we had 36,630,022 shares outstanding.

 

 

Name and Address of Beneficial Owner

  

 

Amount and
Nature of
Beneficial
Ownership

  

 

Percent    

of Class    

 

BlackRock, Inc.

         

55 East 52nd Street,

New York, NY 10022

 

       5,487,426 (1)         15.0 %     

The Vanguard Group, Inc.

         

100 Vanguard Blvd

Malvern, PA 19355

       3,341,461 (2)         9.1 %     

 

1.

Based on an amendment to Schedule 13G filed with the SEC by BlackRock, Inc. on February 4, 2020, reporting that it has sole voting power with respect to 4,997,171 shares, and sole dispositive power with respect to 5,487,426 shares.

 

2.

Based on an amendment to Schedule 13G filed with the SEC by The Vanguard Group, Inc. on

 

February 12, 2020, reporting sole voting power with respect to 27,154 shares, shared voting power with respect to 6,459 shares, shared dispositive power with respect to 27,731 shares and sole dispositive power with respect to 3,341,461 shares.

 

 

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Stock Ownership Information (continued)

 

 

 

Stock Ownership of Management

The following table shows, as of February 15, 2020, the number of shares of common stock beneficially owned by (i) our directors and executive officers named in the executive compensation tables, and (ii) our directors and Section 16 statutory officers as a group, including shares as to which a right to acquire ownership exists (for example, through the exercise of stock options) within the meaning of Rule 13d-3(d)(1) under the Exchange Act. Certain shares beneficially owned by our officers and directors may be held in accounts with third party brokerage firms.

 

Beneficial Owner

   Number of
Shares
 

    Percent of    

Class

Aldo Pichelli

       198,224 (1)       

Robert Mehrabian

       353,255 (2)       

Susan L. Main

       74,008 (3)       

Jason VanWees

       78,240 (4)       

Edwin Roks

       32,348 (5)       

Melanie S. Cibik

       61,902 (6)       

Roxanne S. Austin

       24,026 (7)       

Denise R. Cade

       (8)       

Charles Crocker

       60,056 (9)       

Kenneth C. Dahlberg

       36,833 (10)       

Simon M. Lorne

       73,062 (11)       

Robert A. Malone

       3,048 (12)       

Paul D. Miller

       30,745 (13)       

Jane C. Sherburne

       5,625 (14)       

Michael T. Smith

       54,471 (15)       

Wesley W. von Schack

       13,926 (16)       

All directors and executives as a group (19 persons)

       1,175,290 (17)        3.15

 

*

Less than one percent.

 

1.

The amount includes 80,119 shares held by the Pichelli Living Trust, of which Mr. Pichelli and his wife are trustees. The amount also includes 7,931 shares of unvested restricted stock subject to forfeiture and 109,222 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020. Also includes 952 shares acquired under Teledyne’s Employee Stock Purchase Plan based on information received as of January 10, 2020.

 

2.

The amount includes 143,366 shares held by The Mehrabian Living Trust, of which Dr. Mehrabian and his wife are trustees. The amount also includes 12,639 shares of unvested restricted stock subject to forfeiture and 197,250 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020.

3.

The amount also includes 2,720 shares of unvested restricted stock subject to forfeiture, and 36,676 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020. Includes 1,300 shares acquired under Teledyne’s Employee Stock Purchase Plan based on information received as of January 10, 2020. Also includes 1,000 shares held jointly by Ms. Main’s spouse.

 

4.

The amount includes 2,158 shares of unvested restricted stock subject to forfeiture and 44,676 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020. Also includes 463 shares acquired under Teledyne’s Employee Stock Purchase Plan and 2,778 shares held in Teledyne’s 401(k) plan based on information received as of January 10, 2020.

 

 

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Stock Ownership Information (continued)

 

 

 

5.

The amount includes 27,342 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020. Also includes 52 shares acquired under Teledyne’s Employee Stock Purchase Plan and 416 shares held in Teledyne’s 401(k) plan based on information received as of January 10, 2020. Does not include 1,679 unvested Restricted Stock Units subject to forfeiture.

 

6.

The amount includes 2,149 shares of unvested restricted stock subject to forfeiture and 36,676 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020. Also includes 425 shares acquired under Teledyne’s Employee Stock Purchase Plan and 135 shares held in Teledyne’s 401(k) plan based on information received as of January 10, 2020.

 

7.

The amount includes 2,000 shares held by the Thomas and Roxanne Austin Trust, 16,000 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020 and 2,389 vested Restricted Stock Units. Does not include 440 unvested Restricted Stock Units.

 

8.

Ms Cade holds 195 unvested Restricted Stock Units.

 

9.

The amount includes 13,513 shares held by The Crocker Revocable Trust, Charles Crocker, Trustee, 16,000 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020 and 586 vested Restricted Stock Units. Does not include 440 unvested Restricted Stock Units.

 

10.

The amount includes 24,289 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020. Does not include 440 unvested Restricted Stock Units.

 

11.

The amount includes 42,479 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020 and 568 Restricted Stock Units. Does not include 440 unvested Restricted Stock Units.

12.

Does not include 440 unvested Restricted Stock Units.

 

13.

The amount includes 21,270 shares held by the Paul D. Miller Revocable Trust and 9,475 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020. Does not include 440 unvested Restricted Stock Units.

 

14.

The amount includes 2,000 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020. Does not include 440 unvested Restricted Stock Units.

 

15.

The amount includes 18,247 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020. The amount also includes 200 shares owned by Mr. Smith’s wife, beneficial ownership of which is disclaimed. Does not include 440 unvested Restricted Stock Units.

 

16.

The amount includes 9,394 shares held by The von Schack revocable Trust and The Wesley von Schack Revocable Trust, 2,000 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020, and 1,387 vested Restricted Stock Units. Does not include 440 unvested Restricted Stock Units.

 

17.

This amount includes an aggregate of 635,959 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2020, 32,706 shares of restricted stock and 4,717 vested Restricted Stock Units. Does not include 5,834 unvested Restricted Stock Units. This amount also includes 200 shares owned by Mr. Smith’s wife of which beneficial ownership is disclaimed. Includes 271,916 shares held jointly and in trusts. This amount includes shares beneficially held by three Section 16 executive officers not listed on the table since they are not named executives.

 

 

Phantom Shares.    Prior to January 1, 2015, non-employee directors could elect to defer payment of up to 75% of their annual retainer fees and committee chair fees and 100% of their meeting fees under the Teledyne Technologies Incorporated Executive Deferred Compensation Plan (Deferred Compensation Plan). Non-employee directors could elect to have their deferred monies treated as though they are invested in our common stock (Teledyne Common Stock Phantom Fund). Deferrals to the Teledyne Common Stock Phantom Fund mirrored actual purchases of stock, but no actual stock is issued, and the award is settled in cash. There are no voting or other stockholder rights associated with the Teledyne Common Stock Phantom Fund. As of February 15, 2020, the following directors had the following number of phantom shares of common stock under the Deferred Compensation Plan: Charles Crocker — 451 phantom shares; Simon M. Lorne — 1,049 phantom shares; Paul D. Miller — 3,607 phantom shares; and Michael T. Smith — 781 phantom shares.

 

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Executive and Director Compensation

 

Compensation Discussion and Analysis

Executive Summary and 2019 Overview

Our Compensation Objectives and Programs:

Our objective with respect to executive compensation is to attract and retain executives of the highest quality and to align the interests of management with the interests of stockholders by rewarding both short- and long-term performance. The key components of our executive compensation program are reviewed annually for appropriateness and include a balanced mix of short- and long-term compensation and cash and equity compensation.

Our executive compensation program is performance-oriented and based on a mix of multiple metrics, financial targets and performance periods. Short-term cash compensation consists of competitive base salaries and short-term bonuses under the Annual Incentive Plan (AIP). The AIP is our annual performance-based cash bonus program that is designed to principally reward year-over-year profitable growth. Long-term compensation consists of stock options, performance-based restricted stock awards and a performance share program (PSP). Stock options vest over a three-year period and are intended to align executive compensation with absolute stock price appreciation. Performance-based restricted stock awards are intended to align executive compensation with total shareholder return relative to the Russell 1000 Index over a three-year performance period. The PSP is designed to reward executives for achieving profitable long-term growth and total shareholder return relative to the Russell 1000 Index over a three-year performance period. In addition, the PSP serves to reinforce long-term executive retention since payments under the PSP are subject to further service-based vesting requirements and made in three annual installments following the completion of the three-year performance cycle.

Compensation for senior executives at Teledyne is determined by the Personnel and Compensation Committee. The Personnel and Compensation Committee sets target amounts for overall compensation and specific compensation components and determines the mix of short- and long-term compensation in part by benchmarking Teledyne’s pay against compensation at peer group companies. The Personnel and Compensation Committee also receives advice and assistance in setting compensation from an independent compensation consultant.

At the Company’s 2019 Annual Meeting of Stockholders held on April 24, 2019, the non-binding advisory vote on executive compensation passed with an approval rate of over 98% of the votes cast. The Personnel and Compensation Committee believes this level of stockholder support reflects a strong endorsement of our executive compensation policies and philosophy and as a result did not change its approach to executive compensation in 2019. The Personnel and Compensation Committee will continue to consider the outcome of the Company’s “say on pay” votes when making future compensation decisions for the named executives.

Highlights of 2019 Performance:

2019 was another record year for Teledyne. Highlights included:

 

   

Record sales were over $3.16 billion and increased 9% compared with 2018;

   

Record GAAP earnings per diluted share were $10.73, an increase of 19.1% compared with 2018;

   

Record GAAP operating margin was 15.5% an increase of 119 basis points from 2018; and

   

Record cash provided by operating activities of $482.1 million.

Teledyne’s stock price increased 71.5% in fiscal 2019, compared to a total shareholder return of 26.5% for the Russell 2000 Index and 32.9% for the Russell 1000 Index. The graph below shows Teledyne’s cumulative total stockholder return (i.e. price change plus reinvestment of dividends) on our common stock for the five fiscal years ending December 29, 2019, as compared to the Standard & Poor’s 500 Composite Index, the

 

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Compensation Discussion and Analysis (continued)

 

 

 

Russell 2000 Index, the Standard & Poor’s 1500 Industrials and the Russell 1000 Index. The graph assumes $100 was invested on December 26, 2014. In accordance with the rules of the SEC, this presentation is not incorporated by reference into any of our registration statements under the Securities Act of 1933.

 

LOGO

Summary of 2019 Executive Compensation:

Teledyne’s named executives for 2019 are:

 

 

Aldo Pichelli, President and Chief Executive Officer;

 

Robert Mehrabian, Executive Chairman and our former Chairman and Chief Executive Officer;

 

Susan L. Main, Senior Vice President and Chief Financial Officer;

 

Jason VanWees, Executive Vice President;

 

Edwin Roks, Vice President and Group President, Digital Imaging — Teledyne DALSA and Teledyne e2v; and

 

Melanie S. Cibik, Senior Vice President, General Counsel, Chief Compliance Officer and Secretary.

On October 23, 2018, the Board of Directors of Teledyne named Dr. Mehrabian, the then-current Chairman and Chief Executive Officer of Teledyne, as Executive Chairman, and Mr. Pichelli, the then-current President and Chief Operating Officer of Teledyne, as President and Chief Executive Officer, in each case effective January 1, 2019. Dr. Mehrabian’s employment contract then in effect was amended and restated and, in connection with this amendment and restatement, his term was extended through December 31, 2023. In addition, the Company and Mr. Pichelli entered into an employment agreement that provides for a three-year term which began on January 1, 2019 and ends on December 31, 2021.

With input from its independent compensation consultant, the Personnel and Compensation Committee set target total cash compensation for each of Dr. Mehrabian and Mr. Pichelli below the market median for total cash compensation for chief executive officers, starting in 2020. Dr. Mehrabian’s previous employment agreement would have expired on December 31, 2019. The amended employment agreement with Dr. Mehrabian provides him with the same compensation through December 31, 2019 as was provided in his prior agreement, and contemplates lower overall total compensation for Dr. Mehrabian beginning in 2020, subject to the ability of the Personnel and Compensation Committee to provide for higher compensation in its discretion.

 

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Compensation Discussion and Analysis (continued)

 

 

 

Base Salaries:

Base salaries are generally reviewed and set by the Personnel and Compensation Committee in October of each year. In connection with his appointment as Executive Chairman and pursuant to his employment agreement, Dr. Mehrabian’s base salary remained unchanged in 2019. In connection with his promotion to President and Chief Executive Officer and pursuant to his employment agreement, Mr. Pichelli’s base salary increased 40% in 2019. Also in connection with his promotion to Executive Vice President, Mr. VanWees’ base salary increased by 11% in 2019. Dr. Roks received a 14% increase in base salary in 2019 in recognition of the growth in the Digital Imaging segment and his increased responsibilities. The base salaries of Ms. Main and Miss Cibik both increased by 3% in 2019.

Annual Incentives:

On average, actual payouts of the 2019 AIP awards for the named executives were 3% lower than 2018 payout amounts for named executives (and 17% lower when excluding the two named executives who received promotions effective in 2019), and the corporate performance component of the plan was earned at 117.8% of the 2019 target. Mr. Pichell’s payout of his 2019 AIP award was 23% higher than the payout for his 2018 AIP award due to his promotion to President and Chief Executive Officer, which resulted in a higher base salary and AIP target percentage. Dr. Mehrabian’s payout of his 2019 AIP award was 14% lower than the payout for his 2018 AIP award. The lower payouts in general, despite the record results for 2019, reflected the challenges in outperforming the higher AIP targets set by the Personnel and Compensation Committee for 2019, including the performance of one component of the award, managed working capital, being weighted at zero percent achieved.

Long-Term Incentives:

Awards Issued

In January 2019, the Personnel and Compensation Committee approved the grant of performance-based restricted stock at levels consistent with prior award levels.

The Personnel and Compensation Committee also approved the grant of stock options in January 2019 at levels consistent with prior awards.

Awards Earned

During the three-year period ended December 31, 2019, Teledyne’s stock price growth was 229.7% of the growth in the Russell 2000 Index for the same period. As a result, on the third anniversary of the date of grant, January 24, 2020, participants in Teledyne’s performance-based restricted stock program vested in 100% of their 2017 restricted stock awards, as the stock price growth target over the three-year performance period ended December 31, 2019 was satisfied. In addition, restrictions on 100% of the January 26, 2016 award lapsed on January 26, 2019, since the performance of our stock price was 175.8% of that of the Russell 2000 for the three-year period ended December 31, 2018.

On December 20, 2019, the final tranche of Dr. Mehrabian’s restricted stock unit award granted on December 16, 2016, consisting of 5,348 restricted stock units, vested.

Commitment to Best Practices:

The Personnel and Compensation Committee periodically reviews its compensation policies and practices considering best practices and makes appropriate adjustments when necessary.

Teledyne seeks to develop pay programs that are reflective of good corporate governance. Among other things:

 

   

we do not guarantee bonuses, or equity awards, outside of certain negotiated, one-time new hire situations (no such situations existed for named executives in 2019);

   

we do not exercise discretionary upward adjustment to incentive awards for individuals who were named executives as of the grant date of such award;

 

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Compensation Discussion and Analysis (continued)

 

 

 

   

base salaries and other components of compensation are informed by external market conditions, including peer group data provided by independent compensation consultants, and are approved by the Personnel and Compensation Committee, which consists entirely of independent directors;

   

performance incentive awards are capped and there will be no payout if minimum performance goals are not achieved;

   

executive perquisites that are generally not available to other employees are minimal — and in the case of our Executive Chairman and our President and Chief Executive Officer limited to a car allowance;

   

we have never re-priced stock options;

   

our insider trading policy prohibits the pledging or hedging of company stock by directors and executive officers;

   

we have stock ownership guidelines for key executive officers and directors; and

   

we have a formal policy related to the “clawback” of incentive compensation in the event of a material financial misstatement or in the event of fraud or criminal misconduct.

Personnel and Compensation Committee

The Personnel and Compensation Committee reviews and administers the compensation for the Chief Executive Officer and Executive Chairman and other members of senior management, including the named executives. In the case of the Chief Executive Officer and the Executive Chairman, the compensation determination made by the Personnel and Compensation Committee is reviewed by the entire Board. The Personnel and Compensation Committee is composed exclusively of non-employee, independent directors that meet the approval requirements of 162(m) of the Internal Revenue Code and Section 16 of the Securities Exchange Act of 1934. The Personnel and Compensation Committee retained the compensation consultant Exequity LLP to assist the Personnel and Compensation Committee in fulfilling its responsibilities in 2019. The services that Exequity LLP performed for Teledyne were related to executive and director compensation and were primarily in support of decision-making by the Personnel and Compensation Committee and, in the case of director compensation, the Nominating and Governance Committee. No other services were provided by Exequity LLP for the Company. In January 2019 and again in January 2020, the Personnel and Compensation Committee conducted a conflict of interest assessment of Exequity LLP, and no conflicts of interest were identified resulting from retaining Exequity LLP. In reaching these conclusions the Personnel and Compensation Committee considered factors set forth in applicable rules promulgated by the SEC.

The Personnel and Compensation Committee has a written charter that delineates its responsibilities, a full copy of which is posted on our website at www.teledyne.com under “Corporate Information — Governance”. Among other duties, the charter states that the Personnel and Compensation Committee shall review and approve the corporate goals and objectives relevant to the Chief Executive Officer and the Executive Chairman and other executive officer compensation, evaluate the Chief Executive Officer’s and the Executive Chairman’s and other executive officers’ performance in light of those goals and objectives, and determine and approve all compensation of the Chief Executive Officer and the Executive Chairman and other executive officers based on this evaluation. In determining the long-term incentive component of the Chief Executive Officer’s and the Executive Chairman’s compensation, the Personnel and Compensation Committee considers corporate performance and shareholder return relative to the Russell 1000 Index, the value of similar incentive awards to Chief Executive Officers at comparable companies and the awards granted to the Chief Executive Officer and the Executive Chairman in past years. The charter also states that the Personnel and Compensation Committee will review and approve any employment agreements and severance arrangements, any change-in-control agreements and change-in-control provisions affecting any elements of compensation and benefits, and any special or supplemental compensation and benefits for the Chief Executive Officer and the Executive Chairman and executive officers, including supplemental retirement benefits and the perquisites provided to them during and after employment.

Our Chief Executive Officer and our Executive Chairman work with the Personnel and Compensation Committee Chair, our Senior Vice President, General Counsel, Chief Compliance Officer and Secretary and the Vice President of Human Resources in establishing the agenda for the Personnel and Compensation Committee and makes compensation recommendations for the named executives (other than himself).

 

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Compensation Discussion and Analysis (continued)

 

 

 

Peer Group Comparisons

Our peer group that we use for comparative purposes is intended to be representative of companies of similar size to us in the industries in which we compete, specifically instrumentation, digital imaging, aerospace and defense electronics and systems engineering. Such peer group is not used for the purposes of the performance graph included in the “Executive Summary and 2019 Overview” section above and in our Annual Report. To provide benchmark data for those jobs not matched to positions in the peer group, data from other published survey sources was used as additional reference, including the Aon Hewitt Total Compensation Survey.

The peer group used to provide benchmark information for 2019 pay decisions was comprised of the following companies:

 

Actuant Corporation

Ametek Inc.

Bruker Corporation

CACI International, Inc.

Crane Co.

Curtiss-Wright Corporation

Esterline Technologies Corporation

Flir Systems, Inc.

  

IDEX Corporation

ITT Corporation

MOOG, Inc.

PerkinElmer, Inc.

Teradyne Inc.

Woodward, Inc.

Xylem, Inc.

The Personnel and Compensation Committee reviews the peer group on an annual basis, with assistance from its independent compensation consultant. In 2019 we removed Esterline Technologies Corporation after it had been acquired by a third party and Actuant Corporation, which was an outlier in terms of market capitalization and revenue, and added Trimble, Inc., and National Instruments Corporation. The peer group as modified by the changes made in 2019 was referenced in determining 2020 executive compensation.

At the time our peer group was reviewed by the Personnel and Compensation Committee in 2019, our peer group contained companies having median annual revenues and market capitalizations of $2.7 billion and $6.6 billion, respectively. In 2019, Teledyne’s annual revenues were approximately $3.16 billion and its market capitalization as of end of 2019 was approximately $12.6 billion. In assessing executive compensation, the Personnel and Compensation Committee also reviews data collected from a broader industry group consisting of 112 companies to understand what an executive with comparable responsibility to a Teledyne executive would earn in the broader industry. The companies in the general industry group have annual revenues of between $1.6 billion and $6.0 billion and the general industry group excludes financial organizations.

Determining the Amount and Mix of Compensation

Our compensation program is designed to balance our need to provide our executives with incentives to achieve our short-term and long-term performance goals with the need to pay competitive base salaries. In October of each year the Personnel and Compensation Committee, with assistance from Exequity LLP, reviews and compares each named executive’s pay to various market data points for that named executive’s position. The Personnel and Compensation Committee is guided by market benchmark information in setting compensation levels and determining the mix of cash and non-cash compensation. It typically aims to set pay at the 50th percentile, but this positioning may vary when appropriate based on an executive’s experience, tenure, criticality of role, and variance in pay from standard benchmarks. The Personnel and Compensation Committee will consider the amount of prior salary increases, stock option grants and performance-based restricted stock grants as a factor in determining compensation for the current period.

The table below shows the competitive position of compensation in 2019 for each of our named executives. It reflects targeted total compensation in terms of percentage deviation from the peer group and general industry median for each of our named executives as presented to the Personnel and Compensation Committee in October 2019. For purposes of this review, the Personnel and Compensation Committee considers an

 

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Compensation Discussion and Analysis (continued)

 

 

 

executive’s total targeted annual compensation to be the sum of current year base salary, target bonus levels, the aggregate fair value of stock options granted during the fiscal year, the grant date fair value of performance-based restricted stock granted during the fiscal year and the target value of triennial PSP awards, annualized over three years. The analysis seeks to identify market levels of typical annual pay opportunity associated with normal pay programs. A consistent approach to quantifying pay opportunity is applied to peer companies and Teledyne to ensure accurate and meaningful comparisons. For purposes of this review, Dr. Mehrabian, as Executive Chairman, was benchmarked against chief executive officer positions.

 

     Peer Group Median    General Industry Median    

 Aldo Pichelli

  

-35%

  

-38%

 Robert Mehrabian

  

  -2%

  

  -7%

 Susan L Main

  

  -6%

  

  -6%

 Jason VanWees

  

  +5%

  

  -5%

 Edwin Roks

  

  +7%

  

+19%

 Melanie S. Cibik

  

+14%

  

+13%

The following table shows the allocation of 2019 compensation between base salary, estimated target bonus and estimated long-term compensation for Dr. Mehrabian, our Executive Chairman and Mr. Pichelli, our President and Chief Executive Officer, in 2019, and all other named executives as a group. It emphasizes our focus on variable, rather than fixed pay.

 

     Robert Mehrabian    Aldo Pichelli    Other Named Executives    

Base salary

  

16%

  

20%

  

24%

Estimated target bonus

  

20%

  

22%

  

17%

Estimated long-term compensation

  

64%

  

58%

  

59%

Base Salary

Base salary for all management positions generally will be targeted at the industry/market median for comparable positions unless there are sound reasons, such as competitive factors for a particular executive’s skill set, for varying significantly from industry medians. The Personnel and Compensation Committee’s judgment will always be the guiding factor in base salary determinations, as well as any other compensation issue. The principal factors considered in decisions to adjust base salary are changes in compensation in our general industry and at our peer companies, our recent and projected financial performance, individual performance measured against pre-established goals and objectives, criticality of the executive’s role, level of experience and market demand.

Base salaries are reviewed by the Personnel and Compensation Committee in October of each year and general merit increases, if any, take effect in the first pay cycle of the following year. Base salaries are also reviewed at the time of a promotion or other changes in responsibilities. Base salaries are generally reviewed and set by the Personnel and Compensation Committee in October of each year. In connection with his appointment as Executive Chairman and pursuant to his employment agreement, Dr. Mehrabian’s base salary remained unchanged in 2019. In connection with his promotion to President and Chief Executive Officer and pursuant to his employment agreement, Mr. Pichelli’s base salary increased 40% in 2019. Also in connection with his promotion to Executive Vice President, Mr. VanWees’ base salary increased by 11% in 2019. Dr. Roks received a 14% increase in base salary in 2019 in recognition of the growth in the Digital Imaging segment and his increased responsibilities. The base salaries of Ms. Main and Miss Cibik increased by 3% in 2019.

 

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Short-Term Incentives

AIP awards are cash bonuses based on the achievement of pre-defined performance measures, with up to 200% of the target award paid in the case of significant over-achievement and no bonus paid if operating performance is below 75% of target. The majority of the awards are based on our achievement of financial performance goals, with a smaller portion tied to the achievement of pre-established individual goals.

The AIP award is expressed as a percentage of the participant’s base salary as of the end of the plan year. The following schedule shows the award guidelines for the 2019 awards for named executives as a percentage of 2019 base salary:

 

    

 

AIP Award as a Percent of Salary

   

Participants

  

 

Target

   Maximum    Actual    

Aldo Pichelli

  

110%

  

220%

  

140%

 

Robert Mehrabian

  

120%

  

240%

  

153%

 

Susan L. Main

  

  75%

  

150%

  

  96%

 

Jason VanWees

  

  75%

  

150%

  

100%

 

Edwin Roks

  

  70%

  

140%

  

  85%

 

Melanie S. Cibik

  

  60%

  

120%

  

  77%

   

The target and maximum percentages were the same as in 2018, except, pursuant to his employment agreement, Mr. Pichelli’s target increased from 100% to 110% and his maximum from 200% to 220%, and Mr. VanWees’ target increased from 60% to 75% and his maximum from 120% to 150%.

The AIP award is tied to the achievement of predetermined levels of income before taxes, revenue, managed working capital as a percentage of sales (MWC) and the achievement of specific individual performance goals. We chose income before taxes, revenue and MWC as the components of the award because we believe these measures are key objective indicators of our year-over-year financial performance. The use of revenue and income before taxes is designed to encourage profitable growth, while the use of MWC is designed to promote operational efficiency. (A lower MWC percentage represents greater operational efficiency than a higher one.) For segment executives, earnings before interest and taxes is used in place of income before taxes. Dr. Roks is our only named executive who is a segment executive.

The AIP components are weighted as follows for corporate executives:

 

 

Award Component

        

 

Weighting    

Income before taxes

    

  40% 

Revenue

    

  25% 

MWC

    

  15% 

Individual Performance Objectives

    

  20% 

Total

    

100% 

              

AIP awards for corporate executives are based on overall corporate results. For segment executives, such as Dr. Roks, the award is based on a combination of corporate and segment results (which in the case of Dr. Roks’ award is based on combined results for the Teledyne DALSA and Teledyne e2v groups). Dr. Roks is our only named executive who is a segment executive. Each of the performance measures allows for participants to earn between zero and 200% of the target at threshold and maximum performance levels, with the overall weighting emphasizing profitable growth that exceeds our business plan. Income before taxes serves as an absolute threshold for the entire AIP: if income before taxes is below 75% of target, no AIP award will be earned. Both

 

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the income before taxes and revenue components are further weighted so that performance above the target is rewarded proportionally better than performance below the target, as more fully described below:

 

 

Income before taxes

 

 

If actual performance equals or exceeds 120% of target, the component is weighted by multiplying the percentage by 2 (200%). If actual performance is less than 75% of target, the component is given a weighting of 0%. To the extent actual performance falls between 75% and 120% of target, the multiplying factor is adjusted proportionally (a reduction of three percent for each percentage point that actual performance falls below 100% and an increase of five percent for each percentage point that actual performance is above 100%).

 

Revenue

 

 

If actual performance equals or exceeds 120% of target, the component is weighted by multiplying the percentage by 2 (200%). If actual performance is less than 67% of target, the component is given a weighting of 0%. To the extent actual performance falls between 67% and 120% of target, the multiplying factor is adjusted proportionally (a reduction of three percent for each percentage point that actual performance falls below 100% and an increase of five percent for each percentage point that actual performance is above 100%).

 

MWC

 

 

If actual performance is equal to or greater than 105% of target the component is weighted by multiplying the percentage by 2 (200%). If actual performance is equal to or less than 95% of target, the component is given a weighting of 0%. To the extent actual performance falls between 95% and 105% of target, the multiplying factor is adjusted proportionally (a reduction of 20% for each percentage point that actual performance falls below 100% and an increase of 20% for each percentage point that actual performance is above 100%).

 

Individual Performance

Objectives

 

 

Weighted proportionally on a scale of 0% to 200%.

The sum of the components, after being weighted for performance, is then multiplied by the executive’s target AIP award as a percent of base annual salary to arrive at the executive’s performance adjusted AIP percentage. The Personnel and Compensation Committee may make downward (but not upward) discretionary adjustments to this amount for awards granted to individuals who were named executives as of the grant date of such award.

The tables below show income before taxes, revenue and MWC for 2019 as compared to target amounts.

Income before taxes (in millions):

 

     Target      Actual 2019 Results   

2019 Results as a

Percentage of

Target

     

Teledyne (corporate)

   $ 438.9      $495.6    112.9%   

Teledyne DALSA + Teledyne e2v Groups

   $ 165.6      $167.7    101.2%         

 

 

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Revenue (in millions):

 

     Target      Actual 2019 Results   

2019 Results as a

Percentage of

Target

     

Teledyne (corporate)

   $ 3,031.4      $3,201.9    105.6%  

Teledyne DALSA + Teledyne e2v Groups

   $  810.2      $   862.5    106.5%        

MWC:

 

     Target    Actual 2019 Results   

2019 Results as a

Percentage of

Target

     

Teledyne (corporate)

   21.9%    24.2%      89.8%  

Teledyne DALSA + Teledyne e2v Groups

   21.6%    24.9%      84.8%        

For purposes of determining actual income before taxes and revenue for the AIP, we adjust the amounts for inter- company sales and certain one-time events and tax items. Income before taxes excludes interest. Target amounts are derived from our business plan, which is presented to and approved by our Board in January of each year.

The following is an illustration of the AIP award calculation using the example of a hypothetical corporate executive with a salary of $300,000 and a target AIP award of 60%, using actual corporate performance results for 2019:

 

Performance Goal

 

Performance

Goal as % of

AIP Award

   

Actual

Performance as a

% of Target

   

Unweighted

Performance

Outcome

(multiplier)

   

Adjusted

Performance Goal as

a % of AIP Award

      

Income before taxes

    40%        112.9%        164.6%      65.8% [40%*1.646]   

Revenue

    25%        105.6%        128.1%      32.0% [25%*1.281]   

MWC

    15%          89.8%          0.0%        0.0% [0%*0.898]   

Individual Objectives

    20%        100.0%        100.0%      20.0% [20%*1.0]   

Performance Weighing of AIP Award

                          117.8%         

Assuming no discretionary adjustment by the Personnel and Compensation Committee, the hypothetical executive’s performance adjusted AIP award would be 70.7% of salary (60% * 117.8%), or $212,100.

For 2019, aggregate individual performance objectives typically consist of between five and eight goals for each named executive that are weighted in terms of importance. Some of the goals are corporate-level goals shared by all named executives and some goals are specific to individual executives. The goals are qualitative and quantitative in nature. Corporate-level goals included continued implementation of our three-year strategic plan and the achievement of specific revenue, earnings per share targets and managed working capital targets set forth in our business plan. Individual-specific goals for 2019 included continuing the implementation of an enterprise-wide operational effectiveness program to improve operating margins, achieving specified targets for cost reductions, warranty and rework costs and working capital, investor outreach, safety-related initiatives, strategic sourcing initiatives, continued debt reduction, reviewing compliance functions to ensure adequate staffing, training, policies and processes are in place to comply with laws, implementation of our acquisition strategy, ensuring effective internal control procedures, managing outside legal expenses, improving data security, successfully implementing and consolidating financial

 

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planning systems and succession planning. In 2019, achievement of no specific individual performance goal for named executives accounted for more than 10% of a named executive’s actual bonus.

The Personnel and Compensation Committee determined that Mr. Pichelli achieved 150% of his individual performance objectives, based on his leadership as President and Chief Executive Officer in driving operation improvement across all our businesses, as evidenced by margin improvement across the Corporation, and his leadership in integrating two large acquisition that took place in 2019, among other factors, and determined that Dr. Mehrabian achieved 150% of his individual performance objectives, based on his efforts at refreshing Teledyne’s strategy, successfully completing key acquisitions, leadership on Teledyne’s margin enhancement and strategic sourcing initiatives and mentorship of the newly promoted President and Chief Executive Officer, among other factors. Based on recommendations by the Executive Chairman and the President and Chief Executive Officer, the Committee determined that: Ms. Main achieved 150% of her individual performance objectives, based on effective compliance leadership, her role in implementing ERP systems across the Corporation and her management of effective internal financial controls, among other factors; Mr. VanWees achieved 175% of his individual performance objectives, based on his successful development of corporate strategy, leading role in identifying and carrying out the acquisition of two large businesses, and his leadership efforts in our margin expansion initiative, among other factors; Dr. Roks achieved 200% of his individual performance objectives, based on his strong leadership in addressing a challenging machine vision market and successful integration of two Digital Imaging acquisitions, among other factors; and Miss Cibik achieved 150% of her individual performance objectives, based on outstanding performance on board-related matters and compliance and overseeing legal work on successfully-completed acquisitions, among other factors.

It is the policy of the Personnel and Compensation Committee not to make discretionary upward adjustments in determining AIP awards for named executives and no such adjustments were made in determining actual 2019 AIP awards.

For 2019, aggregate awards for all employees (including the named executives) were paid from a pool equal to 4.2% of income before taxes before payment of AIP awards, which is less than the 11% limit initially established by the Personnel and Compensation Committee when it approved the 2019 AIP goals. The 11% limit is a cap for the aggregate bonus amounts. It is not a pre-determined amount from which bonuses are to be distributed; instead it serves as a control to ensure that the actual aggregate AIP award is not unreasonable.

Long-Term Incentives

Long-term incentives consist of three components: stock options, a three-year PSP and a performance-based restricted stock award program. We believe that the incentives provided by our stock options, PSP award and performance-based restricted stock award programs are consistent with our compensation goals of employee retention, rewarding executives for long-term performance and rewarding executives for long-term increases in our stock price, both in absolute terms and as compared to the broader market. We believe the three-year vesting or performance period of our long-term incentives is consistent with market practice and our overall compensation objectives.

Stock Options.    Stock options generally are awarded annually to a broad group of key employees who are nominated by management to receive awards and whose awards the Personnel and Compensation Committee approves. In practice, the amount of the award generally depends on the employee’s position. Stock options provide our employees with the opportunity to participate in shareholder value created as a result of stock price appreciation, which furthers our objective of aligning the interests of management with the interests of our stockholders.

All stock options granted are non-qualified stock options, vest at a rate of one-third per year, with full vesting at the end of three years and have a term of ten years. A description of the terms under our incentive plans related to the treatment of stock options upon termination of employment can be found under the heading “Potential Payments Upon Termination or a Change in Control” on page 63 of this Proxy Statement.

 

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In 2019, the Personnel and Compensation Committee awarded stock options covering an aggregate of 390,789 shares of common stock to Teledyne employees, of which options to purchase 85,202 shares of common stock were awarded to named executives. For purposes of the Summary Compensation Table, stock options are valued at grant date fair value calculated in accordance with FASB ASC Topic 718 and the grant date fair value associated with an executive’s stock options as of the end of our 2019 fiscal year is reported in the Option Awards column.

The Personnel and Compensation Committee fixes a value target for each recipient, and then grants an option to purchase shares derived from the economic value of the option on the date of grant. The Personnel and Compensation Committee believes this new methodology allows the Company to more closely track option grants with desired market positioning and manage value and expenses.

The table below represents the number of shares subject to stock options granted to named executives in 2019 as well as the fair value target used to determine the number of awards for each named executive in 2019. For reference, 2018 option grants are also provided.

 

Participants

   2019
Fair Value
Target
     2019
Options
Awarded
   2018
Options
Awarded
(for reference)

Aldo Pichelli

     $   800,000      11,122    15,769

Robert Mehrabian

     $2,422,000      33,672    31,537

Susan L. Main

     $   726,600      10,102    9,461

Jason VanWees

     $   726,600      10,102    9,461

Edwin Roks

     $   726,600      10,102    9,461

Melanie S. Cibik

     $   726,600      10,102    9,461

The Personnel and Compensation Committee determines the size of awards for named executive officers by taking into account recommendations from the Executive Chairman and the President and Chief Executive Officer; however, the size of the award for the Executive Chairman and the Chief Executive Officer was determined at the sole discretion of the Personnel and Compensation Committee (without their recommendation or input). For 2019, the Personnel and Compensation Committee use the employment agreements for the Executive Chairman and the President and Chief Executive Officer (described below) as a guideline in determining the size of their respective stock option awards. In determining the fair value target for the options awarded to the named executives in 2019, the Personnel and Compensation Committee used historical grants as a guideline and considered the market data provided by its independent consultant.

 

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Performance Share Program.    PSP awards are intended to reward executives to the extent we achieve specific pre-established financial performance goals and provide a greater long-term return to shareholders relative to a broader market index. The PSP provides grants of performance share units, which key officers and executives may earn if we meet specified performance objectives over a three-year period. Forty percent of the award is based on the achievement of specified levels of income before taxes, 30% on the achievement of specified levels of revenue and 30% on the achievement of specified levels of return to shareholders relative to an index. For the 2018-2020 cycle, the Russell 1000 Index is the benchmark for the specified return to shareholders component; for the 2015-2017 cycle and previous cycles, the Russell 2000 Index was the benchmark for the specified return to shareholders component. No awards are earned if the three-year aggregate income before taxes is less than 75% of target, unless the Personnel and Compensation Committee determines otherwise. The percentages referred to above are then adjusted to reflect the extent to which actual performance is greater or less than the target. Performance above the target is rewarded proportionally better than performance below the target, as more fully described below:

 

 

Income before taxes

 

 

If actual performance equals or exceeds 120% of the target, the component is weighted by multiplying the percentage by 2 (200%). If actual performance is less than 75% of target, the component is given a weighting of 0%. To the extent actual performance falls between 75% and 120% of target, the multiplying factor is adjusted proportionally (a reduction of three percent for each percentage point that actual performance falls below 100% and an increase of five percent for each percentage point that actual performance is above 100%).

 

 

Revenue

 

 

If actual performance equals or exceeds 120% of the target, the component is weighted by multiplying the percentage by 2 (200%). If actual performance is less than 67% of target, the component is given a weighting of 0%. To the extent actual performance falls between 67% and 120% of target, the multiplying factor is adjusted proportionally (a reduction of three percent for each percentage point that actual performance falls below 100% and an increase of five percent for each percentage point that actual performance is above 100%).

 

 

Return to Shareholders

 

 

If actual performance equals or exceeds 120% of the target, the component is weighted by multiplying the percentage by 2 (200%). If actual performance is less than 67% of target, the component is given a weighting of 0%. To the extent actual performance falls between 67% and 120% of target, the multiplying factor is adjusted proportionally (a reduction of three percent for each percentage point that actual performance falls below 100% and an increase of five percent for each percentage point that actual performance is above 100%).

 

The sum of the components, after being weighted for performance, is then multiplied by the executive’s target PSP opportunity percentage to arrive at the executive’s performance adjusted PSP award, which is expressed as a percentage of base salary. The maximum award is 200% of the executive’s target PSP opportunity percentage. Income before taxes and revenue includes contributions from acquisitions during the performance cycle and may be adjusted to reflect the impact of significant changes in accounting principles, discontinued operations, unusual or extraordinary corporate transactions, events or developments, and unusual tax benefits.

Performance-vested units are then generally subject to an additional service-based vesting condition whereby such units become fully vested in three substantially equal annual installments after the end of the performance cycle, subject to the holder’s continued employment with the Company through the applicable vesting date. A description of the treatment of PSP awards upon termination of employment can be found under the heading “Potential Payments Upon Termination or a Change in Control” beginning on page 63 of this Proxy Statement. Awards are generally paid 50% in cash and 50% in stock, subject to availability of shares.

 

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In January 2018, the Personnel and Compensation Committee established a performance cycle for the three-year period ending on the last day of the 2020 fiscal year. The 2018-2020 performance cycle has the following target performance goals:

 

Performance Goal

   Target

Income before taxes

 

  

Aggregate of $1,179.4 million for three years

 

Revenue

  

Aggregate revenue of $8,833.9 million for three years

 

Return to Shareholders

  

Return on Teledyne stock equal to the return of the Russell 1000 Index over three years

These aforementioned performance targets are used solely for compensation purposes and should not be understood to be management’s expectations or guidance relating to future financial performance.

As of the end of the 2019 fiscal year, there were 44 participants in the 2018-2020 PSP performance cycle. All the named executives participate in the 2018-2020 PSP.

The PSP award is expressed as a percentage of the participant’s base salary as of the date that the award is granted. The percentage may be increased on a prorated basis during the award cycle in the case of promotions. In addition, changes to base salaries during the term of the award are factored into the calculation. The following schedule shows the awards under the 2018-2020 PSP cycle for named executives expressed as a percentage of 2018 base salary (the year in which the PSP cycle was established):

 

    

PSP Award as a  Percent of Base Salary

   

Participants

  

 

Target

   Maximum    

Aldo Pichelli*

   125%    250%  

Robert Mehrabian**

   150%    300%  

Susan L. Main

   125%    250%  

Jason VanWees

   125%    250%  

Melanie S. Cibik

   125%    250%  

Edwin Roks

   100%    200%    

 

*

Per his employment agreement, effective January 1, 2019, Mr. Pichelli participates in the 2018-2020 PSP at a target opportunity equal to 300% of base salary. The applicable percentage for Mr. Pichelli’s current 2018-2020 PSP award will be prorated, with this increased percentage effective as of January 1, 2019. The targeting of 300% reflects the fact that PSP awards are granted every 3 years.

 

**

Per his employment agreement, effective January 1, 2020, Dr. Mehrabian participates in the 2018-2020 PSP at a target opportunity equal to 300% of base salary. The applicable percentage for Dr. Mehrabian’s current 2018-2020 PSP award will be prorated, with this increased percentage effective as of January 1, 2020. The targeting of 300% reflects the fact that PSP awards are granted every 3 years.

Per SEC disclosure rules that require performance-based awards payable in stock to be recognized in the year in which the award is granted, the entire amount of the stock-based portion of the 2018-2020 PSP award is included in the Summary Compensation Table as 2018 compensation under the column headed “Stock Awards,” even though no shares would be issued under this award until after 2020. This is explained in more detail in footnotes 1 and 3 to the Summary Compensation Table. Pursuant to SEC guidance, the cash portion of the performance share award for the 2018-2020 performance cycle, if earned, will be included in the Summary Compensation Table under the Non-Equity Incentive Plan Compensation column in the year in which the performance criteria are met (i.e., 2020 — the last year of the performance cycle).

With respect to the PSP award for the 2015-2017 cycle, the Personnel and Compensation Committee determined in January 2018 that the applicable performance goals were achieved at 101.2% of target

 

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performance. The amount of cash that the named executives received under the 2015-2017 PSP performance cycle in 2019 can be found in footnote 3 to the Summary Compensation Table. The total number of shares each named executive received under the 2015-2017 PSP in 2019 can be found in the Option Exercises and Stock Vested table. The maximum total number of shares each named executive is entitled to receive under the 2015-2017 PSP in 2020 can be found in the Outstanding Equity Awards at Fiscal Year End table under the column headed “Number of Shares or Units of Stock That Have Not Vested.”

Performance-Based Restricted Stock Award Program.    The performance-based restricted stock award program provides for awards of performance-based restricted stock, generally each calendar year, to key employees at an aggregate fair market value equal to a percentage of each recipient’s annual base salary as of the date of the grant, unless otherwise determined by the Personnel and Compensation Committee. The shares of restricted stock are subject to both time-based and performance-based restrictions. In general, the restricted period for each award of performance-based restricted stock extends from the date of the grant to the third anniversary of such date, with the restrictions lapsing in full on the third anniversary. However, unless the Personnel and Compensation Committee determines otherwise, if we fail to meet certain minimum performance goals for a multi-year performance cycle (typically three years) established by the Personnel and Compensation Committee then all of the restricted stock would be forfeited. If we achieve the minimum performance goals but fail to attain an aggregate level of 100% of the targeted performance goals, then a portion of the restricted stock would be forfeited.

The following schedule shows the percent of base salary used to determine the restricted stock awards granted in 2019 and 2018 to named executives. The percentages are determined by historical grant practices, a review of long-term compensation against benchmark peers and the general industry group and internal pay equity consideration and, in the case of Dr. Mehrabian and Mr. Pichelli, the terms of their employment contracts. The size of the restricted stock award granted to Mr. Pichelli in 2019 is larger than his award in 2018 in order to better align his the value of his award with those of other chief executive officers.

 

     Restricted Stock Award as a Percent of Base Salary

Participants

   2019    2018

Aldo Pichelli

   100%    60%

Robert Mehrabian

   100%    100%

Susan L. Main

   45%    45%

Jason VanWees

   45%    30%

Edwin Roks

   30%    30%

Melanie S. Cibik

   45%    30%

The targeted performance goal for 2019 is the price of our common stock as compared to the Russell 1000 Index. For a participant to retain any of the restricted shares, our three-year aggregate return to shareholders (as measured by our stock price) must be more than 35% of the performance of the Russell 1000 Index for the three-year period. If our stock performance is less than 35% of the Russell 1000 Index performance, all restricted shares would be forfeited. If it ranges from 35% to less than 100%, a portion of the restricted shares will be forfeited. If it is 100% or greater, no shares are forfeited and the participant does not receive additional shares.

We believe that benchmarking the performance-based restricted stock performance goals to a broader market index like the Russell 1000 Index aligns the interest of management and stockholders because executives are rewarded only to the extent that our stock price performs relative to the stock prices of companies with similar market capitalizations.

A participant cannot transfer the restricted stock during the restricted period. In addition, during the restricted period, restricted stock generally will be forfeited upon a participant’s termination of employment. A description of the treatment of performance-based restricted stock awards upon termination of employment in cases of death, disability or retirement can be found under the heading “Potential Payments Upon Termination

 

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or a Change in Control” beginning on page 63 of this Proxy Statement. Upon expiration of the restricted period, absent any forfeiture, we will deliver to the recipient certificates for the appropriate number of shares of common stock, as determined by the Personnel and Compensation Committee based on achievement of the specified performance objectives, free of the restrictive legend.

We granted performance-based restricted stock to key employees on January 22, 2019, January 23, 2018, January 24, 2017, and January 26, 2016. Restrictions on 100% of the January 26, 2016 award lapsed on January 26, 2019, since the performance of our stock price was 175.8% of that of the Russell 2000 for the three-year period ended December 31, 2018. Restrictions on 100% of the January 24, 2017 award lapsed on January 24, 2020, since the performance of our stock price was 229.7% of that of the Russell 2000 for the three-year period ended December 31, 2019, and on January 21, 2020 the Personnel and Compensation Committee confirmed release of all restrictions as of January 24, 2020.

For purposes of the Summary Compensation Table, performance-based restricted stock awards are valued at fair value on the date of grant as calculated in accordance with FASB ASC Topic 718 and this value is reported in the Stock Awards column.

The potential payouts under January 22, 2019 restricted stock can be found in the table headed “Grants of Plan-Based Awards” on page 54 of this Proxy Statement. The maximum number of shares that the named executive could retain under the performance-based restricted stock awards granted on January 24, 2017, January 23, 2018 and January 22, 2019, can be found in the table headed “Outstanding Equity Awards at Fiscal Year End” beginning on page 55 of this Proxy Statement.

Stock Ownership Policies

Our Personnel and Compensation Committee believes stock-based compensation is an important element of compensation and, as discussed above, stock-based compensation figures prominently in our mix of compensation. In 2008, our Board adopted stock ownership guidelines that require key executives and non-employee directors to maintain ownership of a specified amount of Teledyne common stock. Key executives are required to own shares of Teledyne common stock equal in market value to the amount set forth below:

 

Position

  

Value of Shares

Owned

 

Executive Chairman and President and Chief Executive Officer

  

 

5 x base salary

 

Executive Vice Presidents, Senior Vice Presidents or Higher

  

 

3 x base salary

 

Segment Presidents or Presidents of Consolidated Business Units (annual revenue >
$100 million)

  

 

2 x base salary

 

Corporate Vice Presidents (Corporate and General Managers) and other Executives

  

 

1 x base salary

 

A key executive, who is defined as a recipient of a performance-based restricted stock or restricted stock unit award, is expected to attain the minimum level of target ownership within a period of five years from the date of hire or promotion and is expected to own continuously sufficient shares to meet the guideline once attained.

In determining the value of common stock, the Nominating and Governance Committee uses the average price of Teledyne common stock during the most recent calendar year. Performance-based restricted stock and restricted stock units and vested in-the-money options are included in the definition of common stock.

Our Nominating and Governance Committee reviews compliance with the stock ownership guidelines annually at its January meeting. As of the end of 2019, all our key executives (including the named executives) and non-employee directors owned sufficient shares to comply with the guidelines. The full text of our stock ownership guidelines is available on our website at www.teledyne.com under “Corporate Information — Governance”.

 

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Compensation Discussion and Analysis (continued)

 

 

 

Change in Control Severance Agreements

Each of our named executives is a party to a change in control severance agreement with us. A description of the terms of the agreements can be found under the heading “Potential Payments upon Termination or a Change in Control” beginning on page 63 of this Proxy Statement. In entering into these agreements, the Personnel and Compensation Committee desired to assure that we would have the continued dedication of certain executives and the availability of their advice and counsel, notwithstanding the possibility of a change in control, and to induce such executives to remain in our employ. The Personnel and Compensation Committee believes that, should the possibility of a change in control arise, it is imperative that we be able to receive and rely upon our executives’ advice, if requested, as to the best interests of our Company and stockholders without the concern that he or she might be distracted by the personal uncertainties and risks created by the possibility of a change in control. The Personnel and Compensation Committee also considered arrangements offered to similarly situated executives of comparable companies.

We chose the specific amounts and triggers contained in the change in control severance agreements because we believe such terms provide reasonable assurances that our executive officers will remain employed with us through an acquisition or change of control event, should one occur, and assist in the assessment of a possible acquisition or change in control event and advise management and the Board as to whether such acquisition or change in control event would be in the best interests of our Company and stockholders. With input from its independent compensation consultant, the Personnel and Compensation Committee last reviewed the terms of the change in control severance agreements against market practices in July 2018.

Employment Agreements with Dr. Mehrabian and Mr. Pichelli.    On October 23, 2018, the Board of Directors of Teledyne named Dr. Mehrabian, the then-current Chairman and Chief Executive Officer of Teledyne, as Executive Chairman, and Mr. Pichelli, the then-current President and Chief Operating Officer of Teledyne, as President and Chief Executive Officer, in each case effective January 1, 2019. Dr. Mehrabian’s employment contract (the “Mehrabian Employment Agreement”) was amended and restated and, in connection with this amendment and restatement, his term was extended through December 31, 2023. The Company and Mr. Pichelli entered into an employment agreement (the “Pichelli Employment Agreement”) that provides for a three-year term which began on January 1, 2019 and ends on December 31, 2021.

With input from its independent compensation consultant, the Personnel and Compensation Committee set target total compensation for each of Dr. Mehrabian and Mr. Pichelli below the market median for total compensation for chief executive officers. The Personnel and Compensation Committee further set long term incentives to provide an equal value mix among the three components of Teledyne’s long-term compensation programs (PSP, Restricted Stock and Stock Options), with each component providing target compensation (on an annualized basis) equal to each executive’s annual base salary (beginning in 2019 for Mr. Pichelli and 2020 for Dr. Mehrabian).

Dr. Mehrabian’s previous employment agreement would have expired on December 31, 2019. The amended employment agreement with Dr. Mehrabian contemplates lower overall total compensation for Dr. Mehrabian beginning in 2020.

The terms of the two employment agreements are set forth below.

The Mehrabian Employment Agreement provides that through December 31, 2018, Teledyne will employ Dr. Mehrabian as Chairman and Chief Executive Officer and that effective January 1, 2019, Teledyne will employ Dr. Mehrabian as Executive Chairman. The Executive Chairman shall have primary responsibility to manage the affairs of the Board and to manage and direct mergers and acquisition activities and strategic planning and margin expansion initiatives of Teledyne. The term of the Mehrabian Employment Agreement continues through December 31, 2023.

The Mehrabian Employment Agreement provides that Dr. Mehrabian’s current annual base salary of $995,000 will continue through December 31, 2019, after which date his base salary will be reduced to $900,000. Such base salary may be increased annually at the discretion of the Personnel and Compensation Committee.

 

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Compensation Discussion and Analysis (continued)

 

 

 

The Mehrabian Employment Agreement further provides for the following, among other things:

 

   

AIP:  Dr. Mehrabian shall participate in the AIP with a target opportunity of 120% of base salary. This is the same as Dr. Mehrabian’s current AIP opportunity.

 

   

PSP:  Through December 31, 2019, Dr. Mehrabian participated in the PSP at the current target opportunity of 150% of base salary. Effective January 1, 2020, Dr. Mehrabian began participating in the PSP at a target opportunity equal to 300% of base salary. The applicable percentage for Dr. Mehrabian’s current 2018-2020 PSP award will be prorated, with this increased percentage effective as of January 1, 2020. The targeting of 300% reflects the fact that PSP awards are granted every 3 years.

 

   

Restricted Stock:  Dr. Mehrabian participates in Teledyne’s restricted stock award program with annual grants of restricted stock equal to at least 100% of Base Salary as of the date of the grant subject to meeting targets set forth in the restricted stock award. This is the same as Dr. Mehrabian’s current restricted stock award opportunity.

 

   

Stock Options:  For 2019, Dr. Mehrabian’s stock option grant had a fair value equal to the amount he received in 2018, and future annual grants, as determined by the Committee, shall have a fair value as of the grant date equal to $900,000. With respect to options granted to Dr. Mehrabian on or after the date of the Mehrabian Employment Agreement, the Mehrabian Employment Agreement provides that in the event of Dr. Mehrabian’s separation of service for any reason other than death, outstanding stock options shall continue to vest and the right of Dr. Mehrabian to exercise vested stock options, when and as vested, shall continue, but in no event may any such vested options be exercised after the expiration of any applicable option period. With respect to options granted to Dr. Mehrabian on or after the date of the Mehrabian Employment Agreement, the Mehrabian Employment Agreement provides that in the event of the death of Dr. Mehrabian, all outstanding options shall vest in full and the right of Dr. Mehrabian’s beneficiary to exercise the stock options shall terminate upon the expiration of twelve months from the date of Dr. Mehrabian’s death, but in no event may such stock options be exercised after the expiration of any applicable option period.

 

   

Supplemental Pension Benefit:  With respect to Dr. Mehrabian’s Non-Qualified Pension Benefit, which provides for payments supplemental to any accrued pension under Teledyne’s qualified pension plan equal to 50% of his base salary for ten years following Dr. Mehrabian’s retirement, the Mehrabian Employment Agreement provides that the base salary rates to be used for calculating the payments shall be the rates in effect for 2018 (which was $995,000).

 

   

Post-Retirement Medical Coverage:  Commencing on Dr. Mehrabian’s separation from service (for any reason) and continuing for the longer to live of Dr. Mehrabian and his spouse, Dr. Mehrabian and his spouse shall be deemed participants in Teledyne’s medical benefit plan offered to all employees of Teledyne and be deemed to be eligible to receive the benefits under the medical plan. Dr. Mehrabian shall be charged for such deemed participation at a rate equal to the monthly rate the medical plan charges former participants and spouses eligible for continuation coverage under COBRA, plus the rate payable by the employer, as each such COBRA rate is adjusted from time to time.

The Pichelli Employment Agreement provides that Teledyne will employ Mr. Pichelli as President and Chief Executive Officer effective January 1, 2019, through December 31, 2021. The Pichelli Employment Agreement also provides that effective January 1, 2019, Mr. Pichelli’s annual base salary shall be $800,000. Such base salary may be increased annually at the discretion of the Personnel and Compensation Committee.

The Pichelli Employment Agreement further provides, among other things, that effective January 1, 2019:

 

   

AIP:  Mr. Pichelli participates in the AIP at an opportunity of 110% of base salary if targets are reached at 100%, or such greater percentage if provided in the AIP for any year.

 

   

PSP:  Mr. Pichelli participates in the PSP at an opportunity equal to 300% of base salary if targets are reached at 100%. The applicable percentage for Mr. Pichelli’s current 2018-2020 PSP award will be prorated, with this increased percentage effective as of January 1, 2019. The targeting of 300% reflects the fact that PSP awards are granted every 3 years.

 

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Compensation Discussion and Analysis (continued)

 

 

 

   

Restricted Stock:  Mr. Pichelli participates in Teledyne’s restricted stock award program with annual grants of restricted stock equal to at least 100% of Base Salary as of the date of the grant subject to meeting targets set forth in the restricted stock award.

 

   

Stock Options:  Mr. Pichelli is eligible to receive future annual grants of options having a fair value of at least $800,000 as of the grant date, or such other higher value as determined by the Committee. With respect to options granted to Mr. Pichelli on or after the date of the Pichelli Employment Agreement, the Pichelli Employment Agreement provides that in the event of Mr. Pichelli’s separation of service for any reason other than death, outstanding stock options shall continue to vest and the right of Mr. Pichelli to exercise vested stock options, when and as vested, shall continue, but in no event may any such vested options be exercised after the expiration of any applicable option period. With respect to options granted to Mr. Pichelli on or after the date of the Pichelli Employment Agreement, the Pichelli Employment Agreement provides that in the event of Mr. Pichelli’s death, all outstanding options shall vest in full and the right of Mr. Pichelli’s beneficiary to exercise the stock options shall terminate upon the expiration of twelve months from the date of Mr. Pichelli’s death, but in no event may such stock options be exercised after the expiration of any applicable option period.

 

   

Benefits:  Mr. Pichelli will continue to be eligible to participate in other employee benefit plans and programs available to executive-level employees, including but not limited to an automobile allowance.

Perquisites and Other Benefits

All our named executives receive car allowances. We provide car allowances in cases where the named executive typically travels for business and for retention of senior executives. The amount of the car allowances provided to the named executives are included in the column head “All Other Compensation” in the Summary Compensation Table.

Deferred Compensation

Our named executives are eligible to participate in our executive deferred compensation plan. The deferred compensation plan is a voluntary, non-tax qualified, unfunded deferred compensation plan available to all members of management and certain other highly-compensated employees for providing deferred compensation, and thus potential tax benefits, to these employees. A description of the terms of the deferred compensation plan can be found under the heading “Nonqualified Deferred Compensation” beginning on page 60 of this Proxy Statement. In addition, the Nonqualified Deferred Compensation Table on page 60 of this Proxy Statement sets forth information about the account balances, contributions and withdrawals of each named executive that participates in the deferred compensation plan.

Pension Plans

Our pension plan was initially established at the time of our spin-off as an independent company. Our domestic defined benefit pension plan covers substantially all U.S. employees hired before January 1, 2004. Effective January 1, 2004, to limit our future obligations under our pension plan, we eliminated the participation of new employees in the pension plan. Effective January 1, 2020, Teledyne divided its domestic defined benefit pension plan. The restructuring involved splitting our domestic defined pension plan into two separate plans, one comprised largely of inactive participants and the other comprised largely of active participants (together, the “Pension Plans”). Of our named executives, Dr. Mehrabian, Mr. Pichelli, Mr. VanWees and Miss Cibik participate in our Pension Plans, with Dr. Mehrabian and Mr. Pichelli participating in the legacy pension plan and Miss Cibik and Mr. VanWees participating in the plan for active participants. The annual benefits payable under the Pension Plans to participating salaried employees retiring at or after age 65 is calculated under a formula which considers the participant’s compensation and years of service. The Internal Revenue Code limits the amounts payable to participants under a qualified pension plan. We have also adopted a pension equalization/benefit restoration plan, which is designed to restore benefits that would be payable under the provisions of the Pension Plans but for the limits imposed by the Internal Revenue Code, to the levels calculated pursuant to the formulas contained in the pension plan provisions or for any monies deferred under our deferred compensation plan. The pension equalization/benefit restoration plan was amended to freeze accruals under that plan effective February 28, 2015. The amounts which may be received by the named executives that participate in the Pension Plans and the pension equalization/benefit restoration plan can be found in the Pension Benefits Table beginning on page 58 of this Proxy Statement.

 

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Compensation Discussion and Analysis (continued)

 

 

 

Dr. Roks, who is employed by Teledyne in The Netherlands, participates in a multi-employer defined contribution plan covering employees of the country’s metal industry on the same basis as other employees of Teledyne DALSA B.V. in The Netherlands.

A description of the terms of our pension plans can be found under the heading “Pension Benefits” beginning on page 58 of this Proxy Statement. In addition, the Pension Benefits Table sets forth information about each named executive’s years of credited service and the actuarial present value of each named executive’s accumulated benefit under our pension plan.

Clawback Policy

In February 2014, our Board approved a “clawback” policy that gives the Board the ability to seek reimbursement from executive officers of bonus, incentive and equity-based awards under the following circumstances:

 

   

the executive’s award was predicated upon the achievement of certain financial results that were subsequently the subject of a material financial restatement and a lower payment, award, or vesting would have occurred based upon the restated financial results; or

 

   

in the Board’s view, the executive officer engaged in fraud or criminal misconduct related to the company or its business.

This clawback policy applies to awards paid or vesting after January 1, 2014. The policy further provides that the Board will not seek to recover awards that are paid or that have vested more than three years prior to the date the applicable restatement is disclosed.

In addition, individual performance objectives for executive officers under our AIP program include compliance with laws and Company policies and procedures. As a result, an executive’s bonus may be adversely affected to the extent a financial restatement or similar event involved a violation of law or Company policy.

Policies Relating to the Timing and Pricing of Stock Option Awards and Stock Awards

Stock Options.    Stock options may be granted under our stockholder approved incentive award plans by the Personnel and Compensation Committee, which is the administrator of these plans. The Personnel and Compensation Committee has delegated authority to our Executive Chairman to grant a specified number of options to employees under the Amended and Restated 2014 Incentive Award Plan. This authority is used to make grants to new hires, upon promotion of certain employees, to retain certain employees, and in connection with acquisitions. Of these shares, 36,884 remained available for grant by our Executive Chairman under this delegated authority as of February 15, 2020.

Stock options are granted to employees by the Personnel and Compensation Committee in January of each year at its regularly scheduled committee meeting. We typically issue our press release containing financial results for the prior fiscal year shortly following this meeting date. Grants by our Executive Chairman under his delegated authority may be made at any time, but primarily have been made to new hires (including new hires resulting from acquisitions) or following the successful completion of special projects. In 2019, 3,900 options were granted to employees by our now Executive Chairman under his delegated authority.

Pursuant to the terms of the Amended and Restated 2014 Incentive Award Plan, the exercise price for stock option grants must equal the fair market value of our common stock, which for purposes of these Plans is defined as the closing sales price of a share of our common stock on the NYSE on the date of grant. New grants made by our Personnel and Compensation Committee have exercise prices equal to the fair market value of our common stock on the effective date of the award, which is the date of the meeting at which the grant was approved by the Personnel and Compensation Committee. Grants made by the Chief Executive Officer have exercise prices equal to the fair market value of our common stock on the date of grant.

Stock Awards.    Performance-based restricted stock awards and the stock portion of PSP awards may be granted under our stockholder-approved incentive award plans by the Personnel and Compensation Committee, which is the administrator of these plans.

 

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Compensation Discussion and Analysis (continued)

 

 

 

Performance-based restricted stock awards are generally granted each year by the Personnel and Compensation Committee at its regularly scheduled meeting in January. For 2019, the number of shares was determined by dividing an amount generally equal in value to a specified percentage of a participating executive’s base salary by the average of the high and low stock prices for 20 trading days preceding the date of grant.

Performance cycles under the PSP are generally established once every three years, at one of the Personnel and Compensation Committee’s regularly scheduled meetings in the first quarter. Under our incentive award plans, the number of shares for the stock portion of the award is determined by dividing one half of the value of the award by an amount equal to the fair market value of a share of our common stock on the NYSE on the date that the performance cycle is established by the Personnel and Compensation Committee.

Non-employee directors are automatically granted an award of restricted stock units in an amount equal to $110,000 divided by the fair market value of our common stock on the NYSE on the date of the respective annual meeting.

Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code (Section 162(m)) generally disallows a tax deduction for annual compensation paid to a chief executive officer and “covered employees” in excess of $1 million.

For tax years beginning after December 31, 2017, the deduction limit has an exception for “qualified performance-based compensation.” However, the 2017 Tax Cuts and Jobs Act (the “Tax Act”) includes changes to Section 162(m), including eliminating the exemption for “qualified performance-based compensation,” effective for tax years beginning after December 31, 2017.

The Tax Act provides for a grandfather provision, pursuant to which remuneration that is provided pursuant to a written binding contract in effect on November 2, 2017, and which has not been modified in any material respect on or after that date, will not be subject to the amendments made to Section 162(m) by the Tax Act. To the extent available, we intend to continue to treat “qualified performance-based compensation” that is grandfathered under the Tax Act as deductible compensation. However, our Personnel and Compensation Committee may determine in any year that it would be in our best interest for awards to be paid under stock incentive plans, or for other compensation to be paid, that would not satisfy the requirements for deductibility under Section 162(m).

 

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Personnel and Compensation Committee Report

 

The following report of the Personnel and Compensation Committee is included in accordance with the rules and regulations of the Securities and Exchange Commission. It is not “soliciting material,” is not deemed “filed” with the Securities and Exchange Commission and is not incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Securities and Exchange Act of 1934, as amended.

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and in Teledyne Technologies Incorporated’s Annual Report on Form 10-K for the year ended December 29, 2019.

Submitted by the Personnel and Compensation Committee of the Board of Directors:

Charles Crocker, Chair

Roxanne S. Austin

Kenneth C. Dahlberg

Robert A. Malone

Jane C. Sherburne

Wesley W. von Schack

February 18, 2020

Compensation Committee Interlocks and Insider Participation

No member of the Personnel and Compensation Committee of our Board of Directors is an officer or employee of the Company. During 2019, no member of the Committee had a current or prior relationship and no officer who was a statutory insider had a relationship to any other company, in each case that must be described under the SEC rules relating to disclosure of executive compensation.

 

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Summary Compensation Table

 

The following Summary Compensation Table sets forth information about compensation earned by: (1) our Chief Executive Officers, (2) our Chief Financial Officer, and (3) the three other most highly compensated executive officers who were required to file reports under Section 16 of the Securities Exchange Act of 1934 for fiscal 2019 (collectively, the “named executives”).

 

Name and Principal Position

 

 

Year

 

 

Salary

 

 

Stock
Awards
(2)

 

 

Option
Awards
(3)

 

 

Non-Equity
Incentive
Plan
Compensation
(4)

 

 

Change in
Pension
Value  and
Nonqualified
Deferred
Compensation
Earnings
(5)

 

 

All Other
Compensation

 

 

Total

 

 

Aldo Pichelli(1)

President and Chief Executive Officer

(Principal Executive Officer)

   

 

 

 

 

 

2019

 

 

   

 

 

$

 

 

800,000

 

 

   

 

 

$

 

 

   771,200

 

 

   

 

 

$

 

 

800,784

 

 

   

 

 

$

 

 

1,125,300

 

 

   

 

 

$

 

 

279,917

 

 

   

 

$

 

41,587

 

(6)

 
   

 

 

$

 

 

3,818,788  

 

 

   

 

 

 

 

 

2018

 

 

   

 

 

$

 

 

576,581

 

 

   

 

 

$

 

 

   693,778

 

 

   

 

 

$

 

 

1,132,057

 

 

   

 

 

$

 

 

912,000

 

 

   

 

 

 

 

 

 

 

   

 

 

$

 

 

37,521

 

 

   

 

 

$

 

 

3,351,937  

 

 

   

 

 

 

 

 

2017

 

 

   

 

 

$

 

 

561,215

 

 

   

 

 

$

 

 

   313,048

 

 

   

 

 

$

 

 

1,211,250

 

 

   

 

 

$

 

 

1,250,369

 

 

   

 

 

$

 

 

91,924

 

 

   

 

 

$

 

 

33,213

 

 

   

 

 

$

 

 

3,461,019  

 

 

 

Robert Mehrabian(1)

Executive Chairman (Principal

Executive Officer)

   

 

 

 

 

 

 

2019

 

 

 

 

   

 

 

$

 

 

993,183

 

 

   

 

 

$

 

 

   959,000

 

 

   

 

 

$

 

 

2,424,384

 

 

   

 

 

$

 

 

1,526,800

 

 

   

 

 

$

 

 

1,915,452

 

 

   

 

 

$

 

 

12,000

 

 

(7)

 
   

 

 

$

 

 

7,830,819  

 

 

   

 

 

 

 

 

2018

 

 

   

 

 

$

 

 

995,000

 

 

   

 

 

$

 

 

1,704,136

 

 

   

 

 

$

 

 

2,264,041

 

 

   

 

 

$

 

 

1,783,500

 

 

   

 

 

$

 

 

622,754

 

 

   

 

 

$

 

 

12,000

 

 

   

 

 

$

 

 

7,381,431  

 

 

   

 

 

 

 

 

2017

 

 

   

 

 

$

 

 

975,385

 

 

   

 

 

$

 

 

906,763

 

 

   

 

 

$

 

 

2,422,500

 

 

   

 

 

$

 

 

2,623,445

 

 

   

 

 

$

 

 

1,267,939

 

 

   

 

 

$

 

 

12,000

 

 

   

 

 

$

 

 

8,208,032  

 

 

 

Susan L. Main

Senior Vice President and

Chief Financial Officer (Principal

Financial Officer)

   

 

 

 

2019

 

   

 

 

$

 

 

469,781

 

 

   

 

 

$

 

 

203,600

 

 

   

 

 

$

 

 

727,344

 

 

   

 

 

$

 

 

450,400

 

 

   

 

 

 

 

 

 

 

   

$

30,212

(6)

 
   

 

 

$

 

 

1,881,337  

 

 

   

 

 

 

 

 

2018

 

 

   

 

 

$

 

 

456,164

 

 

   

 

 

$

 

 

   489,987

 

 

   

 

 

$

 

 

679,205

 

 

   

 

 

$

 

 

510,800

 

 

   

 

 

 

 

 

 

 

   

 

 

$

 

 

29,180

 

 

   

 

 

$

 

 

2,165,336  

 

 

   

 

 

 

 

 

2017

 

 

   

 

 

$

 

 

447,171

 

 

   

 

 

$

 

 

187,073

 

 

   

 

 

$

 

 

726,750

 

 

   

 

 

$

 

 

819,679

 

 

   

 

 

 

 

 

 

 

   

 

 

$

 

 

27,290

 

 

   

 

 

$

 

 

2,207,963  

 

 

 

Jason VanWees(8)

 

Executive Vice President

   

 

 

 

 

 

2019

 

 

   

 

 

$

 

 

440,169

 

 

   

 

 

$

 

 

190,800

 

 

   

 

 

$

 

 

727,344

 

 

   

 

 

$

 

 

438,500

 

 

   

 

 

$

 

 

338,854

 

 

   

 

 

$

 

 

14,196

 

 

(6)

 
   

 

 

$

 

 

2,149,863  

 

 

 

Edwin Roks(9)

Vice President and Group President,

Teledyne Digital Imaging

   

 

 

 

 

 

2019

 

 

   

 

 

$

 

 

433,108

 

 

   

 

 

$

 

 

130,200

 

 

   

 

 

$

 

 

727,344

 

 

   

 

 

$

 

 

379,700

 

 

   

 

 

 

 

 

 

 

   

 

$

 

147,649

 

(10)

 
   

 

 

$

 

 

1,818,001  

 

 

   

 

 

 

 

 

2018

 

 

   

 

 

$

 

 

402,697

 

 

   

 

 

$

 

 

   322,413

 

 

   

 

 

$

 

 

679,205

 

 

   

 

 

$

 

 

533,800

 

 

   

 

 

 

 

 

 

 

   

 

 

$

 

 

85,504

 

 

   

 

 

$

 

 

2,023,619  

 

 

   

 

 

 

 

 

2017

 

 

   

 

 

$

 

 

375,635

 

 

   

 

 

$

 

 

86,843

 

 

   

 

 

$

 

 

726,750

 

 

   

 

 

$

 

 

639,731

 

 

   

 

 

 

 

 

 

 

   

 

 

$

 

 

80,861

 

 

   

 

 

$

 

 

1,909,820  

 

 

 

Melanie S. Cibik

Senior Vice President, General

Counsel, Chief Compliance

Officer and Secretary

   

 

 

 

 

 

2019

 

 

   

 

 

$

 

 

428,865

 

 

   

 

 

$

 

 

186,000

 

 

   

 

 

$

 

 

727,344

 

 

   

 

 

$

 

 

328,900

 

 

   

 

 

$

 

 

427,910

 

 

   

 

$

 

14,196

 

(11)

 
   

 

 

$

 

 

2,113,215  

 

 

   

 

 

 

 

 

2018

 

 

   

 

 

$

 

 

416,441

 

 

   

 

 

$

 

 

   389,886

 

 

   

 

 

$

 

 

679,205

 

 

   

 

 

$

 

 

373,100

 

 

   

 

 

 

 

 

 

 

   

 

 

$

 

 

14,196

 

 

   

 

 

$

 

 

1,872,828  

 

 

   

 

 

 

 

 

2017

 

 

   

 

 

$

 

 

408,158

 

 

   

 

 

$

 

 

113,846

 

 

   

 

 

$

 

 

726,750

 

 

   

 

 

$

 

 

647,396

 

 

   

 

 

$

 

 

224,698

 

 

   

 

 

$

 

 

14,196

 

 

   

 

 

$

 

 

2,135,044  

 

 

 

(1)

On January 1, 2019, Mr. Pichelli became President and Chief Executive Officer (our Principal Executive Officer), with Dr. Mehrabian continuing as Executive Chairman. Dr. Mehrabian was Chairman, President and Chief Executive Officer on December 31, 2019, the first day of our 2019 fiscal year. Consequently, Teledyne had two Principal Executive Officers for fiscal year 2019, with Dr. Mehrabian serving in that role for two days.

(2)

For 2019, represents the aggregate fair value on the date of grant of the named executive’s 2019 restricted stock awards based on the probable outcome of the performance conditions of those awards on the date of grant, which is the target amount, as calculated in accordance with FASB ASC Topic 718. For a discussion of the assumptions considered in the valuation, please see Note 8 (Stockholders’ Equity) to the financial statements in our Annual Report on Form 10-K under the heading “Restricted Stock Award Program.” The maximum value of the restricted stock awards assuming the highest level of performance conditions is achieved, as calculated in accordance with FASB ASC Topic 718, is the same as the probable outcome on the date of grant.

(3)

Represents the aggregate fair value on the date of grant of the named executive’s option grant as calculated in accordance with FASB ASC Topic 718. For a discussion of the assumptions considered in the valuation, please see Note 8 (Stockholders’ Equity) to the financial statements in our Annual Report on Form 10-K.

(4)

For 2019, consists of the Annual Incentive Plan awards for 2019 performance, payment of which was approved by the Personnel and Compensation Committee on January 21, 2020, and paid on February 14, 2020. Pursuant to the proxy disclosure rules of the SEC, cash awards under our performance share program are deemed earned in the last year of the performance cycle, at the time when performance criteria are satisfied, even though they are paid to participants in three annual installments after the end of the performance cycle so long as the participants remain employed by Teledyne or retire. As a result, the amounts listed in this column for 2019 do not include the following cash amounts paid in 2019, representing the second installment payment under the 2015-2017 Performance Share Plan: Mr. Pichelli, $113,323; Dr. Mehrabian, $241,615; Ms. Main, $91,860; Mr. VanWees, $69,948; Dr. Roks: $43,111; and Miss Cibik, $83,366. Participants in the Performance Share Program may elect to pay taxes due with respect to an installment payment with awarded shares, awarded cash or a combination thereof. All but Dr. Roks and Mr. VanWees chose to pay some or all of their taxes by reducing the number of shares to which he or she was entitled. Mr. Pichelli, Dr. Mehrabian, Ms. Main, Mr. VanWees and Miss Cibik were entitled to 1,127 shares, 2,403 shares, 914 shares, 696 shares and 829 shares, respectively. As a result of their elections, shares issuable to Mr. Pichelli, Dr. Mehrabian, Ms. Main, and Miss Cibik were reduced by 860, 1,833, 697 and 633 shares, respectively,

 

 

52    TELEDYNE TECHNOLOGIES INCORPORATED  |  2020 Proxy Statement


Table of Contents

 

 

Summary Compensation Table (continued)

 

 

 

 

and the cash portion of their awards increased by $192,941, $411,234, $156,372 and $142,014 respectively, to pay applicable taxes.

(5)

For 2019, represents the aggregate change in the actuarial present value of the named executive’s accumulated benefit under the Teledyne Technologies Incorporated Pension Plan, the Teledyne Technologies Pension Equalization/Benefit Restoration Plan and, in the case of Dr. Mehrabian, the supplemental pension arrangement contained in his employment agreement, for 2019. In computing these amounts, we used the same assumptions as were used to compute the annual accruals for possible future payments under our pension plans for our 2019 financial statements.

(6)

Represents car allowance, Company contributions pursuant to the Teledyne Technologies Incorporated 401(k) Plan, death benefit under the Teledyne Technologies Incorporated Executive Deferred Compensation Plan and employer matching contributions under the Employee Stock Purchase Plan.

(7)

Represents car allowance.

(8)

Mr. VanWees was not a named executive in 2018 and 2017.

(9)

Dr. Roks was not a named executive in 2017.

(10)

Represents car allowance ($12,286), Company contributions to a defined contribution pension scheme ($70,345), vacation money ($29,785), pension compensation ($48,360) and sale of vacation days back to the Company ($16,658.06). Dr. Roks, who is employed by Teledyne in The Netherlands, participates in his employer’s pension program on the same basis as other employees of Teledyne DALSA B.V. in The Netherlands. The pension scheme is a multi-employer defined contribution plan covering employees of the country’s metal industry.

(11)

Represents car allowance, Company contributions pursuant to the Teledyne Technologies Incorporated 401(k) Plan, and employer matching contributions under the Employee Stock Purchase Plan.

 

 

TELEDYNE TECHNOLOGIES INCORPORATED  |  2020 Proxy Statement    53


Table of Contents

 

 

Grants of Plan-Based Awards

 

The table below sets forth information on grants of plan-based awards to the named executives in fiscal year 2019. All equity grants were made under our Amended and Restated 2014 Incentive Award Plan.

 

Name

 

 

Grant Date

 

 

 

Estimated Future Payouts Under
Non-Equity
Incentive Plan Awards

      Estimated Future Payouts
Under Equity
Incentive Plan Awards
 

All Other
Stock
Awards:
Number of
Shares of
Stock or
Units
#

 

 

All Other
Option
Awards:
Number of
Securities
Underlying
Options
#
(1)

 

 

Grant
Date Fair
Value of
Stock
and Option 

Awards(2)

 

 

Threshold
($)

 

 

Target
($)

 

 

Maximum
($)

 

     

Threshold
(#)

 

 

Target
(#)

 

 

Maximum
(#)

 

 

 

Aldo Pichelli

   

 

 

 

 

 

 

1/22/2019    

 

 

 

 

 

                                   

 

 

 

 

 

 

11,122

 

 

 

 

   

 

 

 

 

 

 

$   800,784

 

 

 

 

 

   

 

 

 

 

1/22/2019(3) 

 

 

 

 

   

 

 

 

 

$  88,000

 

 

 

   

 

 

 

 

$   880,000

 

 

 

   

 

 

 

 

$1,760,000

 

 

 

                           
     

 

 

 

 

1/22/2019(4) 

 

 

 

 

                                             

 

1,350

 

 

   

 

 

 

 

3,856

 

 

 

   

 

 

 

 

3,856

 

 

 

                       

 

 

 

 

$   771,200

 

 

 

Robert Mehrabian

   

 

 

 

 

1/22/2019    

 

 

 

 

                                   

 

 

 

 

33,672

 

 

 

   

 

 

 

 

$2,424,384

 

 

 

   

 

 

 

 

1/22/2019(3) 

 

 

 

 

   

 

 

 

 

$119,400

 

 

 

   

 

 

 

 

$1,194,000

 

 

 

   

 

 

 

 

$2,388,000

 

 

 

                           
     

 

 

 

 

1/22/2019(4) 

 

 

 

 

                                           

 

 

 

 

1,678

 

 

 

   

 

 

 

 

4,795

 

 

 

   

 

 

 

 

4,795

 

 

 

                       

 

 

 

 

$   959,000

 

 

 

 

Susan L. Main

 

   

 

 

 

 

1/22/2019    

 

 

 

 

                                   

 

 

 

 

10,102

 

 

 

   

 

 

 

 

$   727,344

 

 

 

   

 

 

 

 

1/22/2019(3) 

 

 

 

 

   

 

 

 

 

$  35,220

 

 

 

   

 

 

 

 

$   352,200

 

 

 

   

 

 

 

 

$   704,400

 

 

 

                           
     

 

 

 

 

1/22/2019(4) 

 

 

 

 

                                           

 

 

 

 

356

 

 

 

   

 

 

 

 

1,018

 

 

 

   

 

 

 

 

1,018

 

 

 

                       

 

 

 

 

$   203,600

 

 

 

 

Jason VanWees

 

   

 

 

 

 

1/22/2019    

 

 

 

 

                                   

 

 

 

 

10,102

 

 

 

   

 

 

 

 

$   727,344

 

 

 

   

 

 

 

 

1/22/2019(3) 

 

 

 

 

   

 

 

 

 

$  33,000

 

 

 

   

 

 

 

 

$   330,000

 

 

 

   

 

 

 

 

$   660,000

 

 

 

                           
       

 

1/22/2019(4)  

 

 

 

                                           

 

 

 

 

334

 

 

 

   

 

 

 

 

954

 

 

 

   

 

 

 

 

954

 

 

 

                       

 

 

 

 

$   190,800

 

 

 

 

Edwin Roks

 

   

 

 

 

 

1/22/2019    

 

 

 

 

                                   

 

 

 

 

10,102

 

 

 

   

 

 

 

 

$   727,344

 

 

 

   

 

 

 

 

1/22/2019(3) 

 

 

 

 

   

 

 

 

 

$  31,350

 

 

 

   

 

 

 

 

$   313,500

 

 

 

   

 

 

 

 

$   627,000

 

 

 

                           
     

 

 

 

 

1/22/2019(4) 

 

 

 

 

                                           

 

 

 

 

228

 

 

 

   

 

 

 

 

651

 

 

 

   

 

 

 

 

651

 

 

 

                       

 

 

 

 

$   130,200

 

 

 

 

Melanie S. Cibik

 

   

 

 

 

 

1/22/2019    

 

 

 

 

                                   

 

 

 

 

10,102

 

 

 

   

 

 

 

 

$   727,344

 

 

 

   

 

 

 

 

1/22/2019(3) 

 

 

 

 

   

 

 

 

 

$  25,720

 

 

 

   

 

 

 

 

$   257,200

 

 

 

   

 

 

 

 

$   514,400

 

 

 

                           
       

 

1/22/2019(4)  

 

 

 

                                           

 

 

 

 

326

 

 

 

   

 

 

 

 

930

 

 

 

   

 

 

 

 

930

 

 

 

                       

 

 

 

 

$   186,000

 

 

 

 

(1)

All stock options were granted with exercise prices at $217.39, the closing share price on the date of grant.

(2)

Calculated in accordance with FASB ASC Topic 718. For performance-based restricted stock, represents the value at the date of grant based on the probable outcome of the applicable performance conditions. For a discussion of the assumptions considered in determining the grant date fair value, please see Note 8 (Stockholders’ Equity) to the financial statements in our Annual Report on Form 10-K.

(3)

Represents threshold, target and maximum amounts under the Annual Incentive Plan Awards for 2019, established on January 22, 2019. For the actual amounts paid under the 2019 Annual Incentive Plan (which were paid in February 2020), see the amounts listed under the column titled “Non-Equity Incentive Plan Award Compensation” and the related footnote in the Summary Compensation Table on page 52.

(4)

Represents the estimated future payouts under the performance-based restricted stock award granted on January 22, 2019.

 

 

The material terms of our Annual Incentive Plan, stock option awards and performance-based restricted stock award program are described in Compensation Discussion and Analysis.

 

54    TELEDYNE TECHNOLOGIES INCORPORATED  |  2020 Proxy Statement


Table of Contents

 

 

Outstanding Equity Awards at Fiscal Year-End

 

The following table summarizes the outstanding equity awards held by the named executives as of December 29, 2019, the last day of our 2019 fiscal year.

 

    Option Awards       Stock Awards

Name

 

 

Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
(1)

 

 

Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
(1)

 

 

Equity Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)

 

 

Option
Exercise
Price
($)

 

 

Option
Expiration
Date

 

     

Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)

 

 

Market Value
of Shares
or Units of
Stock That
Have Not
Vested
(2)
($)

 

 

Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or
Other Rights
That Have Not
Vested
(#)

 

 

Equity Incentive
Plan Awards:
Market or
Payout Value of
  Unearned Shares,  

Units or

Other Rights
That Have Not
Vested
(2)
($)

 

Aldo Pichelli

      5,000                 $ 64.73       4/25/22           1,127 (3)     $ 391,993       2,736 (4)     $ 951,636
      20,000                 $ 75.13       4/24/23                   1,838 (5)     $ 639,293
      20,000                 $ 94.24       4/23/24                   3,856 (6)     $ 1,341,194
      25,000                 $ 78.40       1/26/26                   9,610 (7)     $ 3,342,550
      16,668       8,332           $ 123.38       1/24/27                    
      5,257       10,512           $ 192.00       1/23/28                    
              11,122           $ 217.39       1/22/29                                                  

Robert Mehrabian

      15,000                 $ 75.13       4/24/23           2,401 (3)     $ 835,116       7,925 (4)     $ 2,756,474
      50,000                 $ 94.24       4/23/24                   5,328 (5)     $ 1,853,185
      50,000                 $ 78.40       1/26/26                   4,795 (6)     $ 1,667,797
      33,334       16,666           $ 123.38       1/24/27                   9,906 (7)     $ 3,445,505
      10,513       21,024           $ 192.00       1/23/28                    
              33,672           $ 217.39       1/22/29                                                  

Susan L. Main

      12,000                 $ 78.40       1/26/26           912 (3)     $ 317,212       1,635 (4)     $ 568,686
      10,000       5,000           $ 123.38       1/24/27                   1,099 (5)     $ 382,254
      3,154       6,307           $ 192.00       1/23/28                   1,018 (6)     $ 354,081
              10,102           $ 217.39       1/22/29                                     2,979 (7)     $ 1,036,156

Jason VanWees

      8,000                 $ 94.24       4/23/24           695 (3)     $ 241,735       951 (4)     $ 330,777
      12,000                 $ 78.40       1/26/26                   639 (5)     $ 222,257
      10,000       5,000           $ 123.38       1/24/27                   954 (6)     $ 331,820
      3,154       6,307           $ 192.00       1/23/28                   2,784 (7)     $ 968,331
              10,102           $ 217.39       1/22/29                                                  

Edwin Roks

      2,666                 $ 78.40       1/26/26           428 (3)     $ 148,867       759 (4)     $ 263,995
      10,000       5,000           $ 123.38       1/24/27                   643 (5)     $ 223,648
      3,154       6,307           $ 192.00       1/23/28                   651 (6)     $ 226,431
              10,102           $ 217.39       1/22/29                                     2,097 (7)     $ 729,379

Melanie S. Cibik

      12,000                 $ 94.24       4/23/24           829 (3)     $ 288,343       995 (4)     $ 346,081
      10,000       5,000           $ 123.38       1/24/27                   669 (5)     $ 232,692
      3,154       6,307           $ 192.00       1/23/28                   930 (6)     $ 323,473
              10,102           $ 217.39       1/22/29                                     2,720 (7)     $ 946,070

 

(1)

Stock option awards vest incrementally at a rate of one-third per year, with full vesting at the third anniversary of the date of grant. Option awards where all or a portion of the award remain unvested at fiscal year-end were granted on January 24, 2017, January 23, 2018 and January 22, 2019.

(2)

Based on a closing share price of $347.82 on December 27, 2019, the last trading day before our fiscal year end.

(3)

Represents remaining installment payment of stock awards under the Performance Share Program for the 2015-2017 performance cycle that will be paid to executives who at the time of the payout are employed

 

 

TELEDYNE TECHNOLOGIES INCORPORATED  |  2020 Proxy Statement    55


Table of Contents

 

 

Outstanding Equity Awards at Fiscal Year-End (continued)

 

 

 

 

by us or who have retired. The third and final installment was paid in February 2020.

(4)

Represents the maximum number of shares that the named executive could retain under the restricted stock award granted on January 24, 2017, if our three-year aggregate return to stockholders (as measured by our stock price) equals 100% or more of the Russell 2000 Index for the three-year performance period.

(5)

Represents the maximum number of shares that the named executive could retain under the restricted stock award granted on January 23, 2018, if our three-year aggregate return to stockholders (as measured by our stock price) equals 100% or more of the Russell 1000 Index for the three-year performance period.

(6)

Represents the maximum number of shares that the named executive could retain under the restricted stock award granted on January 22, 2019, if our three-year aggregate return to stockholders (as measured by our stock price) equals 100% or more of the Russell 1000 Index for the three-year performance period.

(7)

Represents the potential payment of common stock under the 2018-2020 performance cycle of the Performance Share Program if the maximum performance level is achieved during the award period. Awards are paid to executives in three annual installments after the end of the performance cycle so long as they remain employed by Teledyne (with exceptions for retirement, disability and death).

 

 

56    TELEDYNE TECHNOLOGIES INCORPORATED  |  2020 Proxy Statement


Table of Contents

 

 

Option Exercises and Stock Vested

 

The following table sets forth information about stock options exercised by the named executives in fiscal year 2019 and stock awards that vested or were paid in fiscal year 2019 to the named executives.

 

     Option Awards         Stock Awards

Name

   Number of
Shares
Acquired on
Exercise
(#)
   Value
Realized on
Exercise
(1)
($)
        Number of
Shares
Acquired on
Vesting
(#)
  

Value
    Realized on    

Vesting
($)

 

Aldo Pichelli

 

    

 

 

 

 

10,000

 

 

 

    

 

$

 

 

1,872,700

 

 

 

          3,962 (2)       $ 876,632 (4) 
                                    267 (3)       $ 59,076 (5) 

 

Robert Mehrabian

 

    

 

 

 

 

 

 

 

    

 

 

 

 

 

 

 

          11,468 (2)       $ 2,537,410 (4) 
                    570 (3)       $ 126,118 (5) 
                                    5,348 (6)       $ 1,830,513 (7) 

 

Susan L. Main

 

    

 

 

 

 

24,000

 

 

 

    

 

$

 

 

4,795,996

 

 

 

          2,354 (2)       $ 520,846 (4) 
                                    217 (3)       $ 48,013 (5)