DEF 14A 1 d92487ddef14a.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:
   

 


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Teledyne Technologies Incorporated

1049 Camino Dos Rios

Thousand Oaks, CA 91360

   LOGO

 

 

March 12, 2021

Dear Stockholder:

We are pleased to invite you to attend the 2021 Annual Meeting of Stockholders of Teledyne Technologies Incorporated (the “Company”) to be held virtually on Wednesday, April 28, 2021 at 9:00 a.m. Pacific Time. You will be able to attend and participate in the annual meeting online, vote your shares electronically and submit your questions during the meeting by visiting: www.meetingcenter.io/289456985 on the meeting date and at the time described in the accompanying Proxy Statement. The password for the meeting is TDY2021. There is no physical location for the annual meeting.

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

We know that you may be unable to attend the virtual Annual Meeting. 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.

Thank you for your investment in our Company. We look forward to your attendance virtually at the 2021 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 28, 2021

Time: 9:00 a.m. Pacific time

    

 

Meeting Access:

Virtual Stockholder Meeting

 

    

 

Record Date:

March 3, 2021

  

 

Agenda

Stockholders will be asked to vote upon the following proposals at the Annual Meeting:

 

1)

To elect the three Class I director nominees identified in the accompanying Proxy Statement for a three-year term;

 

2)

To ratify the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for the fiscal year 2021;

 

3)

To vote, on a non-binding, advisory basis, to approve the Company’s 2020 executive compensation; and

 

4)

To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

 

 

The 2021 Proxy Statement and the 2020 Annual Report to Stockholders are available at www.envisionreports.com/TDY

To access the virtual Annual Meeting, go to www.meetingcenter.io/289456985 before the scheduled start time. Online access to the meeting will begin at 8:45 a.m. Pacific. Teledyne’s proxy materials are currently available at www.envisionreports.com/TDY.

Attending the Virtual Meeting as a Stockholder of Record

If you were a holder of record of common stock of Teledyne at the close of business on March 3, 2021 (the “Record Date”) (i.e., you held your shares in your own name as reflected in the records of our transfer agent, Computershare), you can attend the meeting by accessing www.meetingcenter.io/289456985 and entering the 15-digit control number on the Proxy Card or Notice of Availability of Proxy Materials you previously received. The meeting password is TDY2021.

Registering to Attend the Annual Meeting as a Beneficial Owner

If you were a beneficial holder of record of common stock of Teledyne as of the Record Date (i.e. you hold your shares in “street name” through an intermediary, such as a bank or broker), you must register in advance to virtually attend the Annual Meeting. To register, you must obtain a legal proxy, executed in your favor, from the holder of record and submit proof of your legal proxy reflecting the number of shares of Teledyne common stock you held as of the Record Date, along with your name and email address, to Computershare. Please forward the email from your broker, or attach an image of your legal proxy to legalproxy@computershare.com. Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m. Eastern, on April 23, 2021. You will then receive a confirmation of your registration, with a control number, by email from Computershare. At the time of the meeting, go to www.meetingcenter.io/289456985 and enter your control number and the meeting password TDY2021.

Asking Questions

If you are attending the meeting as a stockholder of record or registered beneficial owner, questions can be submitted by accessing the meeting center at www.meetingcenter.io/289456985, entering your control number and meeting password TDY2021, and clicking on the message icon in the upper right hand corner of the page. To return to the main page, click the “i” icon at the top of the screen. Questions will be answered after the meeting by following up directly with stockholder of record or registered beneficial owner.


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Voting Shares

If you have not already voted your shares in advance, you will be able to vote your shares electronically during the Annual Meeting by clicking on the “Cast Your Vote” link on the Meeting Center site. Whether or not you plan to attend the Annual Meeting, we urge you to vote and submit your proxy in advance of the meeting by one of the methods described in the proxy materials for the Annual Meeting.

Attending the Annual Meeting as a Guest

If you would like to enter the meeting as a guest in listen-only mode, click on the “I am a Guest” button after entering the meeting center at www.meetingcenter.io/289456985 and enter the information requested on the following screen. Please note you will not have the ability to ask questions or vote during the meeting if you participate as a guest.

Only holders of Teledyne common stock as of the close of business on the Record Date or their authorized representatives by proxy may attend the Annual Meeting. Please see the questions and answers section of the accompanying Proxy Statement for more information about attending the Annual Meeting. For information about the Company, please visit our website at www.teledyne.com.

By Order of the Board of Directors,

 

 

LOGO

Melanie S. Cibik

Senior Vice President, General Counsel, Chief Compliance Officer

and Secretary

March 12, 2021

Your vote is important:

Whether or not you plan to virtually attend the Annual Meeting, please vote as soon as possible by one of the methods described in the proxy materials for the Annual Meeting to ensure that your shares are represented and voted at the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting Stockholders to be Held on April 28, 2021. The Notice of Annual Meeting, Proxy Statement and 2020 Annual Report are available at: www.envisionreports.com/tdy


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Proxy Statement

 

   

 

Page

 

 

 

 

Board Composition and Practices

 

 

 

 

 

 

8

 

 

 

 

 

Executive Officers

 

 

 

 

 

 

10

 

 

 

 

 

Item  1 on Proxy Card — Election of Directors

 

 

 

 

 

 

12

 

 

 

 

 

Corporate Governance

 

 

 

 

 

 

23

 

 

 

 

 

Committees of Our Board of Directors

 

 

 

 

 

 

28

 

 

 

 

 

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

 

 

 

 

 

 

33

 

 

 

 

 

Fees Billed by Independent Registered Public Accounting Firm

 

 

 

 

 

 

33

 

 

 

 

 

Guidelines Regarding External Auditing Firms

 

 

 

 

 

 

34

 

 

 

 

 

Audit Committee Report

 

 

 

 

 

 

36

 

 

 

 

 

Item  3 on Proxy Card — Advisory Resolution on Executive Compensation

 

 

 

 

 

 

38

 

 

 

 

 

Other Business

 

 

 

 

 

 

40

 

 

 

 

 

Stock Ownership Information

 

 

 

 

 

 

40

 

 

 

 

 

Five Percent Owners of Common Stock

 

 

 

 

 

 

 

40

 

 

 

 

 

 

 

Stock Ownership of Management

 

 

 

 

 

 

 

41

 

 

 

 

 

 

 

Securities Authorized for Issuance under Equity Compensation Plans as of January 3, 2021

 

 

 

 

 

 

 

43

 

 

 

 

 

 

 

Executive and Director Compensation

 

 

 

 

 

 

44

 

 

 

 

 

Compensation Discussion and Analysis

 

 

 

 

 

 

 

44

 

 

 

 

 

 

 

Personnel and Compensation Committee Report

 

 

 

 

 

 

66

 

 

 

 

 

Summary Compensation Table

 

 

 

 

 

 

67

 

 

 

 

 

Grants of Plan-Based Awards

 

 

 

 

 

 

69

 

 

 

 

 

Outstanding Equity Awards at Fiscal Year-End

 

 

 

 

 

 

70

 

 

 

 

 

Option Exercises and Stock Vested

 

 

 

 

 

 

72

 

 

 

 

 

Pension Benefits

 

 

 

 

 

 

73

 

 

 

 

 

Nonqualified Deferred Compensation

 

 

 

 

 

 

75

 

 

 

 

 

Potential Payments Upon Termination or a Change in Control

 

 

 

 

 

 

78

 

 

 

 

 

2020 Median Employee to CEO Pay Ratio

 

 

 

 

 

 

83

 

 

 

 

 

Certain Transactions

 

 

 

 

 

 

83

 

 

 

 

 

Other Information

 

 

 

 

 

 

89

 

 

 

 

 

Annual Report on Form 10-K

 

 

 

 

 

 

 

89

 

 

 

 

 

 

 

2022 Annual Meeting and Stockholder Proposals

 

 

 

 

 

 

 

89

 

 

 

 

 

 

 

Householding of Proxy Materials

 

 

 

 

 

 

 

89

 

 

 

 

 

 

 

Electronic Access to Proxy Materials and Annual Report

 

 

 

 

 

 

90

 

 

 

 

 

 

DEFINED TERMS

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

 

 

    TELEDYNE TECHNOLOGIES INCORPORATED  |  2021 Proxy Statement


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Notice of Internet Availability

Pursuant to rules adopted by the U.S. Securities and Exchange Commission (the “SEC”), we have elected to furnish our Proxy Statement and Company’s Annual Report on Form 10-K for the year ended January 3, 2021 (the “2020 Annual Report”) to certain of our stockholders over the Internet, which allows us to reduce costs associated with the Annual Meeting and helps to reduce the environmental impact and costs of printing and distributing paper copies of proxy materials. On or about March 12, 2021, 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 2020 Annual Report on Form 10-K online (the “eProxy Notice”). The eProxy Notice also contains instructions on how to request a paper copy of the Proxy Statement and 2020 Annual Report. All other stockholders will receive printed copies of the Proxy Statement and the 2020 Annual Report, which will be mailed to such stockholders on or about March 12, 2021.

Cautionary Statements

Disclosures in this Proxy Statement may contain certain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). Statements that do not relate strictly to historical or current facts are forward-looking and usually identified by the use of words such as “anticipate,” “estimate,” “approximate,” “expect,” “intend,” “plan,” “believe” and other words of similar meaning in connection with any discussion of future operating or financial matters. Without limiting the generality of the foregoing, forward-looking statements contained in this Proxy Statement include the matters discussed regarding the expectation of performance under compensation plans, anticipated financial and operational performance of the Company. The forward-looking statements contained in this Proxy Statement involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company has based these forward-looking statements on current expectations and assumptions about future events, taking into account all information currently known to the Company. Although the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks and uncertainties, many of which are difficult to predict and are beyond the Company’s control. The risks and uncertainties that may affect the operations, performance, and results of the Company’s business and forward-looking statements include, but are not limited to, those set forth in Item 1A, “Risk Factors” in the 2020 Annual Report, and in the other documents the Company files from time to time with the SEC.

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company does not intend to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

Incorporation by Reference

Neither the Personnel and Compensation Committee Report nor the Audit Committee Report shall be deemed soliciting material or filed with the SEC and neither of them shall be deemed incorporated by reference into any prior or future filings made by us under the Securities Act or the Exchange Act, except to the extent that we specifically incorporate such information by reference. In addition, this document includes several website addresses. These website addresses are intended to provide inactive, textual references only. The information on these websites is not part of this Proxy Statement.

 

TELEDYNE TECHNOLOGIES INCORPORATED  |  2021 Proxy Statement     1


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2021 Proxy Statement Summary

 

This summary highlights information about the Company and the upcoming Annual Meeting. As it is only a summary, please review the complete Proxy Statement and the Company’s 2020 Annual Report before you vote. References to “Teledyne,” “the Company,” “we,” “us” or “our” refer to Teledyne Technologies Incorporated.

2021 Annual Meeting of Stockholders

 

Time and Date:

  

9:00 a.m., Pacific Time, April 28, 2021

Virtual Meeting Link:

  

www.meetingcenter.io/289456985

Password:

  

TDY2021

Record Date and Voting:

  

Stockholders as of the record date, March 3, 2021, are entitled to vote. Each share of common stock is entitled to one vote for each director nominee and one vote for each of the other proposals to be voted on.

How to Cast Your Vote

Your vote is important. Please carefully review the proxy materials and vote using one of the following advance voting methods. The deadline for voting by telephone is 11:59 p.m. Eastern time on April 27, 2021. If you vote by mail, your proxy card must be received before the Annual Meeting. If you hold shares in the Teledyne Technologies Incorporated 401(k) Plan, your voting instructions must be received by 11:59 p.m. Eastern time on April 23, 2021.

 

 

Registered Stockholders

 

If you hold shares through our transfer agent, Computershare, please use one of the following options:

     
LOGO   LOGO   LOGO
     

Visit www.envisionreports.com/tdy

 

Call 1-866-641-4276 or the number on your proxy card

 

Sign, date and return your proxy card by mail

 

Beneficial Owners

 

If you hold shares through your bank or brokerage account, please vote by returning the voting instruction card, or by following the instructions for voting via telephone or the Internet, as provided by the bank, broker, or other organization. If you own shares in different accounts or in more than one name, you may receive different voting instructions for each type of ownership. Please vote all of your shares.

If you are a stockholder of record or a beneficial owner who has a legal proxy to vote the shares, you may choose to vote online at the Annual Meeting. Even if you plan to attend the virtual Annual Meeting, please cast your vote as soon as possible. See the “Questions and Answers About the Meeting and Voting” section for more details.

 

2     TELEDYNE TECHNOLOGIES INCORPORATED  |  2021 Proxy Statement


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2021 Proxy Statement Summary (continued)

 

 

 

Voting Matters and Board Recommendations

 

 

 

 

Board’s Voting

Recommendation

  

Page Reference

(for more detail)

ITEM 1.

  

Election of three Class I directors for a three-year term expiring at the 2024 Annual Meeting

 

FOR each director nominee

   12

ITEM 2.

  

Ratification of the appointment of Deloitte & Touche LLP as the Company’s independent registered public accounting firm for fiscal year 2021

 

FOR

   33

ITEM 3.

  

Approval of a non-binding advisory resolution on the Company’s executive compensation (“say on pay”)

 

FOR

   38

In addition, stockholders will transact such other business as may properly come before the meeting and at any adjournments or postponements of the meeting.

Snapshot of 2021 Director Nominees

We believe that all of our Class I directors, who are being nominated for re-election at the Annual Meeting, and highly-qualified and are vital members of a well-rounded, experienced Board. All director nominees possess high integrity, innovative thinking, a proven record of success, knowledge of corporate governance requirements and practices, and commitment to sustainability and social issues.

 

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2021 Proxy Statement Summary (continued)

 

 

 

The following table provides summary information about each director nominee standing for election to the Board for a three-year term expiring at the 2024 Annual Meeting. As further described below, our director nominees represent a diverse range of backgrounds and overall experience.

 

Nominee

       Age     Independent   

Director  

Since  

 

Committee

Memberships

LOGO

 

 

Denise R. Cade

 

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

 

  58     Yes    2019    

•  Audit Committee

 

•  Nominating and Governance Committee

LOGO

 

 

Simon M. Lorne

 

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

 

  75     Yes    2004    

•  Audit Committee (Chair)

 

•  Nominating and Governance Committee

LOGO

 

 

Wesley W. von Schack

 

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

 

  76     Yes    2006    

•  Nominating and Governance Committee

 

•  Personnel and Compensation Committee

Diversity

The board regularly assesses the diversity of its members and nominees as part of its annual evaluation process. We believe that our 11 directors represent a diverse and broad range of attributes, qualifications, experiences, and skills to provide an effective mix of viewpoints and knowledge.

 

   

    4    

    

Female directors, representing over a third of our board

   
13     

Director nominees are female and ethnically diverse

Director nominees are selected on the basis of, among other criteria, experience, knowledge, skills, expertise, integrity, diversity, ability to make independent analytical inquiries, understanding of, or familiarity with, the Company’s business products or markets or similar business products or markets and willingness to devote adequate time and effort to Board responsibilities. 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 Nominating and Governance 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

 

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2021 Proxy Statement Summary (continued)

 

 

 

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.

Governance Highlights

We are committed to good corporate governance, which promotes the long-term interests of stockholders, strengthens Board and management accountability and helps build public trust in the Company. Our corporate governance practices, highlighted below, are described in greater detail in the “Corporate Governance” section of this Proxy Statement.

 

Board Practices

Board Independence

  

 10 out of 11 current Board members are independent.

 

 Lead independent director.

Board Leadership

  

 The Executive Chairman presides at meetings of stockholders and Board meetings.

 

 The lead independent director presides during the Board’s executive sessions.

Board Composition and Diversity

  

 Our current directors have a diverse mix of skills, experience, and backgrounds, as specifically described under “Item 1 Election of Directors.”

 

 All director nominees exhibit certain key characteristics and skills, including high integrity, financial literacy, leadership experience, and business acumen, as further described under “Minimum Qualifications for Director Nominees and Board Member Attributes.”

 

 Four out of our 11 directors are women, and one director is ethnically diverse.

Board Committees

  

 Fully independent Audit, Personnel and Compensation, and Nominating and Governance Committees.

 

 Each committee has a written charter available on our website.

Board Accountability

  

 Simple majority voting in uncontested director elections.

 

 If not elected, a director must tender his or her resignation to the Board for its consideration.

 

 Annual “say-on-pay” vote.

 

 Annual stockholder ratification of the Audit Committee’s selection of the independent auditor.

 

 One share, one vote.

 

 No poison pill.

Board Engagement

  

 Attendance:

 

•   Directors’ attendance at annual meetings of stockholders is expected absent good reason (due to COVID-19, all directors participated in the 2020 Annual Meeting of Stockholders virtually).

 

•   In 2020, all directors attended at least 75% of the aggregate number of meetings of the Board and Board committees of which they were members.

 

 Our independent directors meet in regularly scheduled executive sessions without management present

 

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2021 Proxy Statement Summary (continued)

 

 

 

Board Effectiveness

Board Evaluation and Assessments

  

 Annual Board and Board committee self-evaluation process.

 

 Annual Board assessment of corporate governance best practices.

Stockholder Access to Directors

  

 Stockholders may contact our Board as a whole, individual directors (including the lead independent director), or management by email or regular mail.

Board Oversight of Risk

  

 Full Board is responsible for risk oversight and the Board committees oversee certain key risks.

 

 The Board oversees management in its assessment and mitigation of risks, and in taking appropriate risks.

Succession Planning

  

 The Board actively monitors our management succession and development plans.

 

 At least annually, the Personnel and Compensation Committee, together with the Chief Executive Officer and the Executive Chairman, will report to the Board on succession planning, including plans for interim succession for the Chief Executive Officer in the event of an unexpected occurrence.

Diversity and Inclusion Initiatives

  

 Management regularly updates the Nominating and Governance Committee on social responsibility and diversity matters.

 

 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.

 

 We have an Equality, Diversity and Inclusion Committee led by Teledyne’s Senior Vice President, General Counsel, Chief Compliance Officer and Secretary.

Alignment with Stockholder Interests

Clawback and Anti-Hedging and Pledging Policies

  

 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.

 

 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.

Stock Ownership

  

 Robust stock ownership guidelines:

 

•   The Chief Executive Officer must retain equity equal in value to five times his base salary.

 

•   Each of the other named executive officers must retain equity equal in value to three times their base salaries.

 

•   Each of our directors must retain equity equal in value to four times the annual director retainer (and starting in 2021, this amount is increased to five times).

Corporate Responsibility

  

 We are committed to acting as a good corporate citizen and operating sustainably.

 

 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 “Who We Are” — “Corporate Governance.”

 

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2021 Proxy Statement Summary (continued)

 

 

 

Corporate Responsibility

Corporate responsibility is part of our overall culture. Our four Core Values – Integrity, Respect, Responsibility, and Citizenship – guide the decisions we make as an organization.

 

Integrity   Respect   Responsibility   Citizenship

We conduct our business in accordance with all applicable laws and regulations and with the highest standards of ethics and honesty. We expect the same from our business partners and from those who represent the Teledyne brand.

 

We treat our colleagues with respect and dignity, and we will maintain a safe, fair and inclusive work environment. Teledyne takes pride in its diverse workforce and recognizes that its continuing success depends on the contributions of all its employees. We expect our employees to treat each other with dignity, respect and fairness. Our goal is to maintain a safe and hospitable work environment in which every employee is encouraged to contribute to the success of the Company.

 

We strive to grow and to protect Teledyne’s value by acting in the best interests of the Company and its stockholders, without compromising our core values. We are committed to two overarching objectives: growing the value of the Company and protecting that value. Those goals should be pursued by always acting in the best interests of the Company and by following the principles set forth in our Global Code of Ethical Conduct.

 

We conduct our business in a manner consistent with the well-being of the communities in which we work and of those who buy and use our products. We strive to make positive contributions to those communities and to sell high-quality products to our customers. We recognize the importance of the environment and natural resources and encourage our employees to embrace our responsibility to society when using and planning the use of natural resources.

 

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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 (“Bylaws”) and pursuant to the Delaware General Corporation Law (“DGCL”). Members of the Board stay 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 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 for all committees on which the directors serve and the annual stockholders meeting. In 2020, the Board held eight meetings and acted by written consent twice. During 2020, all directors attended at least 75% of the aggregate number of meetings of the Board and Board committees of which they were members. Due to COVID-19, all the current directors attended virtually the 2020 Annual Meeting of Stockholders.

Number of Directors

The Board of Directors determines the number of directors, which under our 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. Upon Ms. Austin’s retirement at the 2021 Annual Meeting, the number has been fixed at ten 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 79, and Mr. Smith, who is 77, were granted waivers through the 2022 Annual Meeting. Mr. Dahlberg, who is 76, was granted a waiver through the 2023 Annual Meeting of Stockholders. Dr. von Schack, who will be 77 on the date of the Annual Meeting, and Mr. Lorne, who is 75, were each granted a waiver to permit him to stand for election at the 2021 Annual Meeting and, if elected at such meeting, to continue to serve as a director at least through the remainder of his term expiring at the 2024 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. Ms. Austin, who has served as a director since 2006, has notified the Company of her intent to cease being a member of the Board at the 2021 Annual Meeting. Following the 2021 Annual Meeting, the size of the Board will be reduced to 10. The Board thanks Ms. Austin for her service to the Company and its stockholders.

The Chairman of the Board, Dr. Mehrabian, is also our Executive Chairman and our former President and Chief Executive Officer, and therefore is not considered an independent director. The Executive Chairman presides at meetings of stockholders and Board meetings. The Board has formally designated Michael Smith,

 

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Board Composition and Practices (continued)

 

 

 

one of our independent directors, to serve as the lead director. 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. In addition, the Board’s three standing committees consist solely of independent directors.

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 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.

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.

 

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Executive Officers

 

The following table sets forth information regarding our executive officers who are required to file reports under Section 16 of the Exchange Act. Biographical information for Robert Mehrabian, our Executive Chairman of the Board, is included with the director biographies. The biographies for our other executive officers are below.

 

Executive Officers

   Age      Principal Occupations Last 5 Years

Aldo Pichelli

 

President and Chief Executive Officer

   69     

Mr. Pichelli has been the President and Chief Executive Officer since January 1, 2019 and Chief Operating Officer of Teledyne since October 2015. Prior to his promotion to Chief Operating Officer, Mr. Pichelli had been an Executive Vice President of Teledyne having responsibility for the Instrumentation and Aerospace and Defense Electronics segments since July 2013.

Jason VanWees

 

Executive Vice President

   49     

Mr. VanWees has been Executive Vice President since January 1, 2019. Prior to his promotion he was Senior Vice President, Strategy and Mergers & Acquisitions for more than five years.

Stephen F. Blackwood

 

Senior Vice President and Treasurer

   58     

Mr. Blackwood has been Senior Vice President and Treasurer since January 1, 2019. Prior to his promotion as Senior Vice President, he was Vice President and Treasurer of Teledyne for more than five years.

Melanie S. Cibik

 

Senior Vice President, General Counsel, Chief Compliance Officer and Secretary

   61     

Miss Cibik has been Senior Vice President, General Counsel and Secretary since September 2012 and Chief Compliance Officer since August 2016. From August 2019 to June 1, 2020, Miss Cibik was a director of OPUS Bank.

Susan L. Main

 

Senior Vice President and Chief Financial Officer

   62     

Ms. Main has been Senior Vice President and Chief Financial Officer of Teledyne since November 2012. Since October 2018, Ms Main has been a director of Garrett Motion Inc., a technology provider to vehicles, and since July 2017, Ms. Main has been a director of Ashland Global Holdings, Inc., a specialty chemical company.

Cynthia Belak

 

Vice President and Controller

   64     

Ms. Belak has been Vice President and Controller of Teledyne since May 2015. Prior to her promotion, Ms. Belak had been Vice President, Business Risk Assurance of Teledyne since January 2012.

 

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Executive Officers (continued)

 

 

 

Executive Officers

   Age      Principal Occupations Last 5 Years

George C. Bobb III

 

Vice President of Teledyne and President — Aerospace and Defense Electronics

   46     

Mr. Bobb has been Vice President of Teledyne for more than five years. Since July 29, 2019, he has been the President of the Aerospace and Defense Electronics segment. Prior to that, he had been President — Teledyne Aerospace Electronics since August 2017. He has been President of Teledyne Controls LLC since April 2018. From January 2017 until April 2018 he was President of Teledyne Scientific & Imaging LLC. He was Vice President-Contracts, Information Technology and Selected Operations and Deputy General Counsel for Litigation of Teledyne from August 2016 to August 2017. Prior to that he was Chief Compliance Officer, Vice President-Information Technology and Deputy General Counsel for Litigation of Teledyne.

Edwin Roks

 

Vice President of Teledyne and Group President — Teledyne Digital Imaging — Teledyne DALSA and Teledyne e2v

   56     

Dr. Roks has been a Vice President of Teledyne since January 2014 and Group President — Teledyne Digital Imaging, Teledyne DALSA and Teledyne e2v, since March 2017. Dr. Roks has been President of Teledyne DALSA, Inc. since October 2015. From January 2014 to October 2015, Dr. Roks had been the Chief Technology Officer of Teledyne. Prior to that since April 2010, Dr. Roks served as Executive Vice President and General Manager of the professional imaging division of Teledyne DALSA, Inc. (formerly known as DALSA Corporation).

 

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Item 1 on Proxy Card — Election of Directors

 

The Board, upon the recommendation of the Nominating and Governance Committee, has nominated the following Class I directors: Denise R. Cade, Simon M. Lorne, and Wesley W. von Schack, for election at this year’s Annual Meeting, to hold office for three-year terms until the 2024 Annual Meeting. All of the nominees currently serve as directors on the Board. Mr. Lorne and Dr. von Schack were elected to the Board by the Company’s stockholders at the 2018 Annual Meeting. Ms. Cade was appointed to the Board on July 23, 2019. Each director nominee has agreed to be named in this Proxy Statement.

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.

Majority Voting for Directors

Our Bylaws provide a majority voting standard for election of directors in uncontested elections. Each director will be elected by the affirmative vote of a majority of the votes cast, meaning that the number of votes cast “FOR” a director nominee exceeds fifty percent (50%) of the number of votes cast with respect to that director’s election. 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 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.

Director Nominees

The Board has affirmatively determined that each of the nominees qualifies for election under the Company’s criteria for evaluation of directors (see “Director Qualifications, Skills, and Attributes”). The following pages include biographical information about each of our directors (including the director nominees) and their specific experiences, qualifications, skills, and attributes that have led the Board and the Nominating and Governance Committee to conclude that they should serve as directors on the Board. In addition, the Board has determined that each non-employee director nominee qualifies as an independent director under the applicable NYSE listing standards.

 

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

 

 

 

Director Qualification, Skills, and Attributes

Our directors have substantial leadership, management, and industry experience and expertise in various fields. Four of our 11 directors self-identify as having diverse characteristics (race, gender, ethnicity, sexual orientation or cultural background). This diversity of experience and background of our directors, illustrated in the skills matrix and director nominees’ biographies that follow, is brought to bear in Board deliberations, during which multiple perspectives are considered in developing dynamic solutions to achieve our strategic priorities to reduce complexity, drive returns, and advance sustainably.

Because the skills matrix below is a summary, it does not include all of the qualifications, skills, attributes, experiences, and diversity that each director offers.

 

Attributes, Experience and Skills

  LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO     LOGO  

Age

  60    58    82    76    53    75    69    79    70    77    76 

Diversity(a)

         

 

 

 

     

 

 

 

 

 

     

 

 

 

CEO/C-Suite

                                           

Financial and Accounting

     

 

 

 

 

 

 

 

     

 

 

 

 

 

 

 

 

 

Legal and Compliance

 

 

     

 

 

 

 

 

     

 

 

 

     

 

 

 

Governance

         

 

 

 

 

 

         

 

           

Banking

 

 

 

 

 

 

 

 

 

 

 

 

     

 

     

 

   

Government, Defense or Military

     

 

 

 

     

 

     

 

             

 

Energy

 

 

 

 

 

 

 

 

 

 

 

 

     

 

 

 

 

 

   

Information and Cybersecurity

         

 

     

 

 

 

 

 

 

 

     

 

 

 

Other Industry

                       

 

           

 

       

 

(a)

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

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.

Background information about the director nominees, including the business experience, individual skills, and qualifications that each director contributes to the Board’s effectiveness as a whole, are described on the following pages.

 

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

 

 

 

Nominees — For Terms Expiring at the 2024 Annual Meeting (Class I)

 

 

         
 

 

LOGO

 

Denise R. Cade

     

 

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

 

Director since 2019

 

Age: 58

     

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 Industries, Ms. Cade was a partner at Shaw Pittman, LLP, a law firm. In 2019, Ms. Cade was named to The Legal 500 GC Powerlist that consists of the most influential in-house lawyers in business, and was named one of the Most Powerful Women in Corporate America by Black Enterprise magazine. 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, cybersecurity and corporate governance experience at public companies with significant operations across multiple technologies and industries.

       
         
 

 

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: 75

 

     

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. From 2016 through 2020, Mr. Lorne was 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.

 

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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: 76

 

     

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 served as a director of Edward Lifesciences Corporation, a company engaged in the science of heart valves and hemodynamic monitoring, from 2010 to May 2020. 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.

The Board of Directors Recommends

a Vote FOR the Election of the Nominees.

 

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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: 82

 

     

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.

 

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

 

 

 

       
         

 

 

 

 

 

 

 

 

 

 

LOGO

 

Robert Mehrabian

     

 

Executive Chairman of the Company

 

Director since 1999

 

Age: 79

 

    

   

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: 70

     

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: 77

     

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, and Zero Gravity Solutions, Inc., an agricultural biotechnology company. Mr. Smith was a director of WABCO Holdings, a supplier to the automotive industry, from 2009 until 2020, 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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Item 1 on Proxy Card — Election of Directors (continued)

 

 

 

Continuing Directors — Terms Expiring at 2023 Annual Meeting (Class III)

 

 

         
 

 

LOGO

 

Kenneth C. Dahlberg

     

 

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

 

Director since 2006

 

Age: 76

     

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 was also a director of Parsons Corp., an engineering, construction, technical and management services firm from 2011 until April 2020. 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.

       
         
 

 

LOGO

 

Michelle A. Kumbier

     

 

Former Chief Operating Officer of Harley-Davidson Motor Company

 

Director since 2020

 

Age: 53

     

Michelle A. Kumbier is the former Chief Operating Officer of Harley-Davidson Motor Company from October 2017 to April 2020. Ms. Kumbier had previously served as Harley-Davidson’s Senior Vice President, Motor Company Product and Operations from May 2015 to October 2017, as its Senior Vice President of Motorcycle Operations from September 2012 to April 2015, and as its Senior Vice President, Product Development from November 2010 to August 2012. Prior to joining Harley-Davidson in 1997, Ms. Kumbier began her career at Kohler Company in 1986, where she held a variety of positions in both the plumbing products and engines divisions. Ms. Kumbier is also a member of the Board of Directors of Abbott Laboratories since 2018. Ms. Kumbier 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. Kumbier should serve as a director: her professional background and experience and her senior level experience in the management of a multinational public manufacturing company, including significant operations, product development, supply chain optimization, business development and strategic planning experience.

 

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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: 69

     

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.

 

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

 

 

 

Director Retiring at the 2021 Annual Meeting

 

 

         
 

 

LOGO

 

Roxanne S. Austin

     

 

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

 

Director since 2006

 

Age: 60

     

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 a director of Abbott Laboratories, a health care products provider, AbbVie, Inc., a research based pharmaceutical company, Crowdstrike, a cybersecurity technology provider, and Verizon Communications, Inc., a telecommunications provider. Ms. Austin had been a director of Target Corporation (having served as the retailer’s interim Board chairwoman during part of 2014). 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. Ms. Austin has notified the Company of her intent to cease being a member of our Board at the Annual Meeting.

 

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.

 

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Corporate Governance

 

Director Independence

In April 2020, 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. Kumbier, for whom such assessment and determination took place in October 2020. 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 83. 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 2021 that information on which the Board based its independence assessment in 2020 had not materially changed. The independent directors by name are: Roxanne S. Austin, Denise R. Cade, Charles Crocker, Kenneth C. Dahlberg, Michelle A. Kumbier, Simon M. Lorne, Robert A. Malone, 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 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.

   

Management succession.

 

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Corporate Governance (continued)

 

 

 

   

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 “Who We Are” — “Corporate Governance”. 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 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 foregoing 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.

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

 

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Corporate Governance (continued)

 

 

 

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.

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 management regularly meets with institutional investors. During fiscal year 2020, senior management met with many institutional investors, including the majority of our top 25 investors with actively managed funds, through virtual investor conferences, virtual 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 “Who We Are” — “Corporate Governance.”

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.

 

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Corporate Governance (continued)

 

 

 

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

Teledyne is a global leader in breakthrough design, production and distribution of sophisticated water and air quality instruments.

 

   

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.

   

Our automated samplers and flow monitoring instruments are being deployed in waste handling systems worldwide for the detection of genetic material of the virus that causes COVID-19 as an early indication of community spread.

   

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.

   

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.

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.

 

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Corporate Governance (continued)

 

 

 

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 the 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.

 

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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 “Who We Are — Corporate Governance.”

Audit Committee

The members of the Audit Committee are:

      Simon M. Lorne, Chair

      Denise R. Cade

      Kenneth C. Dahlberg

      Michelle A. Kumbier

      Robert A. Malone

      Jane C. Sherburne

      Michael T. Smith

The Audit Committee held six meetings in 2020.

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:https://www.teledyne.com/who-we-are/corporate-governance). 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.

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 36.

Nominating and Governance Committee

The members of the Nominating and Governance Committee are:

      Michael T. Smith, Chair

      Denise R. Cade

      Roxanne S. Austin

      Charles Crocker

      Simon M. Lorne

The Nominating and Governance Committee held four meetings in 2020.

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.

 

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.

 

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Committees of Our Board of Directors (continued)

 

 

 

 

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: https://www.teledyne.com/who-we-are/corporate-governance).

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 — 2022 Annual Meeting and Stockholder Proposals” at page 89. 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.

 

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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

      Michelle A. Kumbier

      Robert A. Malone

      Jane C. Sherburne

      Wesley W. von Schack

The Personnel and Compensation Committee held five meetings in 2020.

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: https://www.teledyne.com/who-we-are/corporate-governance). 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

 

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Committees of Our Board of Directors (continued)

 

 

 

Committee’s Chair reports the committee’s recommendations on executive compensation to the Board. The 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 2020. 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 66.

 

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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 2021. 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 2021 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 2021. If you specifically abstain from voting on the proposal, your shares 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 2020 fiscal year and for the 2019 fiscal year (in thousands).

 

 

 

   2020      2019  

Total Audit Fees(1)

   $ 4,346.6      $ 4,040.3  

Total Audit-Related Fees(2)

     14.0        24.2  

Tax Fees(3)

     1,325.7        1,445.2

All Other Fees

             

Total

   $ 5,686.3      $ 5,509.7  
   

 

(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 2020, 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 2020 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 January 3, 2021 (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 seven 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 January 3, 2021, for filing with the Securities and Exchange Commission.

 

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Audit Committee Report (continued)

 

 

 

Submitted by the Audit Committee of the Board of Directors:

      Simon M. Lorne, Chair

      Denise R. Cade

      Kenneth C. Dahlberg

      Michelle A. Kumbier

      Robert A. Malone

      Jane C. Sherburne

      Michael T. Smith

February 23, 2021

 

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Item 3 on Proxy Card — Advisory Resolution on

Executive Compensation

 

In accordance with Section 14A of 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.

Our balanced portfolio of technologies and the operational improvement initiatives we first started in 2019 helped us successfully navigate a tumultuous 2020. Financial highlights included:

 

 

$3.09 billion

In reported sales

 

      

 

2.4% decrease

In reported sales compared with 2019

 

 

$10.62

GAAP diluted earnings per share

      

 

1.0% decrease

In GAAP diluted earnings per share

compared with 2019

 

 

15.6%

GAAP operating margin, flat

compared with 2019

 

      

 

$618.9 million

Cash provided by operating activities

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 2021 Annual Meeting:

RESOLVED, that the compensation paid to the Company’s named executives during 2020, 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 2021 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.

 

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Item 3 on Proxy Card — Advisory Resolution on Executive Compensation (continued)

 

 

 

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 2022, 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, stockholders will have an opportunity to submit questions about our Company and businesses. Questions will be answered after the meeting by following up directly with the stockholder of record or the registered beneficial owner.

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, 2021, 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, 2021, we had 37,000,446 shares outstanding.

 

 

Name and Address of Beneficial Owner

 

Amount and     
Nature of     
Beneficial     
Ownership     

 

Percent     

of Class     

T. Rowe Price Associates, Inc.

100 E. Pratt Street

Baltimore, MD 21202

  5,197,466 (1)         14.0 %     

The Vanguard Group, Inc.

100 Vanguard Blvd

Malvern, PA 19355

  3,856,191 (2)         10.4 %     

BlackRock, Inc.

55 East 52nd Street,

New York, NY 10022

  3,356,246 (3)         9.07 %     

 

1.

Based on an amendment to Schedule 13G filed with the SEC by T. Rowe Price Associates, Inc. on February 16, 2021, reporting that it has sole voting power with respect to 1,833,669 shares, and sole dispositive power with respect to 5,197,466 shares.

 

2.

Based on an amendment to Schedule 13G filed with the SEC by The Vanguard Group, Inc. on February 10, 2021, reporting shared voting power with respect to 58,383 shares, shared dispositive

 

power with respect to 161,011 shares and sole dispositive power with respect to 3,695,180 shares.

 

3.

Based on an amendment to Schedule 13G filed with the SEC by BlackRock, Inc. on February 1, 2021, reporting that it has sole voting power with respect to 2,932,727 shares, and sole dispositive power with respect to 3,356,246 shares.

 

 

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Stock Ownership Information (continued)

 

 

 

Stock Ownership of Management

The following table shows, as of February 15, 2021, 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

  208,766 (1)    *

Robert Mehrabian

  375,823 (2)    1.01 %

Susan L. Main

  75,515 (3)    *

Jason VanWees

  80,203 (4)    *

Melanie S. Cibik

  61,369 (5)    *

Roxanne S. Austin

  14,952 (6)    *

Denise R. Cade

  195 (7)    *

Charles Crocker

  56,496 (8)    *

Kenneth C. Dahlberg

  30,234 (9)    *

Michelle A. Kumbier

  (10)    *

Simon M. Lorne

  73,502 (11)    *

Robert A. Malone

  3,488 (12)    *

Jane C. Sherburne

  6,065 (13)    *

Michael T. Smith

  54,911 (14)    *

Wesley W. von Schack

  12,366 (15)    *

All directors and executives as a group (19 persons)

  1,166,272 (16)    3.1 %

 

*

Less than one percent.

 

1.

The amount includes 83,938 shares held by the Pichelli Living Trust, of which Mr. Pichelli and his wife are trustees. The amount also includes 8,195 shares of unvested restricted stock subject to forfeiture and 115,663 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021. Also includes 970 shares acquired under Teledyne’s Employee Stock Purchase Plan based on information received as of January 22, 2021.

 

2.

The amount includes 159,374 shares held by The Mehrabian Living Trust, of which Dr. Mehrabian and his wife are trustees. The amount also includes 9,676 shares of unvested restricted stock subject to forfeiture and 206,773 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021.

3.

The amount also includes 2,187 shares of unvested restricted stock subject to forfeiture, and 37,448 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021. Includes 1,317 shares acquired under Teledyne’s Employee Stock Purchase Plan based on information received as of January 22, 2021. Also includes 1,000 shares held jointly by Ms. Main’s spouse.

 

4.

The amount includes 2,050 shares of unvested restricted stock subject to forfeiture and 43,648 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021. Also includes 480 shares acquired under Teledyne’s Employee Stock Purchase Plan and 2,839 shares held in Teledyne’s 401(k) plan based on information received as of January 22, 2021.

 

 

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Stock Ownership Information (continued)

 

 

 

5.

The amount includes 1,997 shares of unvested restricted stock subject to forfeiture and 35,448 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021. Also includes 443 shares acquired under Teledyne’s Employee Stock Purchase Plan based on information received as of January 22, 2021.

 

6.

The amount includes 4,000 shares held by the Thomas and Roxanne Austin Trust, 8,000 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021 and 2,829 vested Restricted Stock Units. Does not include 353 unvested Restricted Stock Units.

 

7.

The amount does not include 353 unvested Restricted Stock Units.

 

8.

The amount includes 13,513 shares held by The Crocker Revocable Trust, Charles Crocker, Trustee, 12,000 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021 and 568 vested Restricted Stock Units. Does not include 353 unvested Restricted Stock Units.

 

9.

The amount includes 17,299 shares held by the Dahlberg Family Trust, 12,935 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021. Does not include 353 unvested Restricted Stock Units.

 

10.

Ms. Kumbier holds 162 unvested Restricted Stock Units.

 

11.

The amount includes 32,477 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021 and 1,008 Restricted Stock Units. Does not include 353 unvested Restricted Stock Units.

12.

Does not include 353 unvested Restricted Stock Units.

 

13.

The amount includes 2,000 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021. Does not include 353 unvested Restricted Stock Units.

 

14.

The amount includes 14,247 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021. The amount also includes 200 shares owned by Mr. Smith’s wife, beneficial ownership of which is disclaimed. Does not include 353 unvested Restricted Stock Units.

 

15.

The amount includes an aggregate of 9,394 shares held by The von Schack revocable Trust and The Wesley von Schack Revocable Trust and 1,827 vested Restricted Stock Units. Does not include 353 unvested Restricted Stock Units.

 

16.

This amount includes an aggregate of 603,582 shares of our common stock underlying stock options exercisable within 60 days of February 15, 2021, 27,580 shares of restricted stock and 6,427 vested Restricted Stock Units. Does not include 4,737 unvested Restricted Stock Units. This amount also includes 200 shares owned by Mr. Smith’s wife of which beneficial ownership is disclaimed. Includes 290,398 shares held jointly and in trusts. This amount includes shares beneficially held by four 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, 2021, 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; and Michael T. Smith — 1,245 phantom shares.

 

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Stock Ownership Information (continued)

 

 

 

Securities Authorized for Issuance under Equity Compensation Plans as of January 3, 2021

The following table summarizes information about our common stock that may be issued upon the exercise of options, warrant and rights under all of our equity compensation plans, as of January 3, 2021:

 

Plan Category

   Number of Securities
to be Issued upon
Exercise of
Outstanding Options,
Warrants and Rights
(a)
   Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
or Rights
(b)
   Number of     
Securities Remaining     
Available for Future     
Issuance under Equity     
Compensation Plans     
[excluding securities     
reflected in column
(a)]     

Equity compensation plans approved by security holders:

              

Amended and Restated 2008 Incentive Award Plan(1)

       226,445      $ 67.31       

Amended and Restated 2014 Incentive Award Plan(2)

       1,592,702 (3)       $ 184.75 (4)         2,632,634 (5) 
       

Equity compensation plans not approved by security holders:

              

Employee Stock Purchase Plan(6)

                     1,000,000

Total

       1,819,147      $ 170.10        3,632,634

 

(1)

No additional awards may be granted under the Amended and Restated 2008 Incentive Award Plan (2008 Plan). Any shares available under the 2008 Plan on the effective date of the 2014 Plan or that were subject to awards under the 2008 Plan that were forfeited or lapsed following the effective date of the 2014 Plan are automatically transferred to the Amended and Restated 2014 Plan.

 

(2)

On April 26, 2017, the stockholders of Teledyne approved the amendment and restatement of the 2014 Incentive Award Plan, which increased the shares available by 2,500,000.

 

(3)

Does not include (i) 51,123 shares of stock reserved for issuance under the 2018-2020 cycle of our PSP, of which 9,588 shares were issued as part of the first installment payment in February 2021; and (ii) 13,991 shares subject to restricted stock unit awards issued to employees and directors.

 

(4)

Does not include the securities described in footnote (3) above, which do not have an exercise price.

(5)

The number of shares available for future issuance (i) includes shares transferred from the 2008 Plan (see footnote (1) above); and (ii) assumes the issuance of (a) 51,123 shares of stock reserved for issuance under the 2018-2020 cycle of our PSP, of which 9,588 shares were issued as part of the first installment payment in February 2021; and (b) 13,991 shares subject to restricted stock unit awards issued to employees and directors.

 

(6)

We maintain an Employee Stock Purchase Plan (commonly known as The Stock Advantage Plan) for eligible employees. It enables employees to invest in our common stock through automatic, after-tax payroll deductions, within specified limits. We add a 25% matching Company contribution up to $1,196 annually. Our contribution is currently paid in cash and the plan administrator purchases shares of our common stock in the open market. Historically, all shares used to fund the Employee Stock Purchase Plan have been purchased on the open market and no new shares have been issued.

 

 

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Executive and Director Compensation

 

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) provides a detailed description of our executive compensation philosophy and programs, the compensation decisions the Personnel and Compensation Committee (referred to as the “Committee” in this CD&A) has made under those programs, and the factors considered in making those decisions. This CD&A focuses on the compensation of our Named Executive Officers for 2020, who are listed below and appear in the Compensation Tables beginning on page 67.

The following individuals represented our named executive officers (NEOs) for 2020:

 

Name

  Principal Position

Aldo Pichelli

  President and Chief Executive Officer

Robert Mehrabian

  Executive Chairman

Susan L. Main

  Senior Vice President and Chief Financial Officer

Jason VanWees

  Executive Vice President

Melanie S. Cibik

  Senior Vice President, General Counsel, Chief Compliance Officer and Secretary

Our Compensation Objectives and Core Principles

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. To this end, we are guided by the following principles:

 

   

Pay for Performance

  

The majority of NEO pay is at-risk and performance-based:

 

•  Over 80% of our CEO’s 2020 pay was at-risk and/or tied to stock price

 

•   NEO pay is tied to metrics based upon return to stockholders over time and the Company’s operating performance, including results against long-term growth targets

   
Alignment with Stockholders   

Our compensation programs align NEOs’ interests with those of our stockholders. A majority of pay for our NEOs is tied to Company performance, and we maintain stock ownership guidelines for all NEOs

   
Programs Drive Long-Term Growth   

We invest in and reward talent with the greatest potential to drive the long-term growth of our Company, while holding NEOs accountable to the Company’s strategy and values

 

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Compensation Discussion and Analysis (continued)

 

 

 

Checklist of Compensation Practices

 

What We Do

   What We Don’t Do

 

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

 

 We align pay and performance, with the majority of NEO pay “at-risk”

 

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

 

 Perquisites are minimal, and in the case of Mr. Pichelli is limited to a car allowance

 

 Include “double-trigger” change in control provisions in our NEOs’ severance agreements

 

 We have stock ownership guidelines for key executive officers and directors

 

 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

  

 

LOGO   We do not guarantee bonuses, or equity awards, outside of certain negotiated, one-time new hire situations (no such situations existed for NEOs in 2020)

 

LOGO   We have not exercised discretionary upward adjustment to incentive awards for individuals who were named executives as of the grant date of such award

 

LOGO   We have never re-priced stock options

 

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

 

LOGO   We do not provide tax gross-ups related to change in control

Highlights of 2020 Performance and Stockholder Return

Our balanced portfolio of technologies and the operational improvement initiatives we first started in 2019 helped us successfully navigate a tumultuous 2020. Financial highlights included:

 

$3.09 billion

In reported sales

 

 

2.4% decrease

In reported sales compared with 2019

 

 

$10.62

GAAP diluted earnings per share

 

1.0% decrease

In GAAP diluted earnings per share
compared with 2019

 

 

15.6%

GAAP operating margin, flat
compared with 2019

 

 

$618.9 million

Cash provided by operating activities

 

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Compensation Discussion and Analysis (continued)

 

 

 

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 January 3, 2021, as compared to the Standard & Poor’s 500 Composite Index, the Standard & Poor’s 1500 Industrials and the Russell 1000 Index. We have included the S&P 500 Index which will eventually replace the Russell 1000 Index in our stock price performance graph because in June 2020 Teledyne graduated from the Russell 1000 Index to the S&P 500 Index. For this reason, for awards granted after January 1, 2021, the S&P 500 Index has been selected to replace the Russell 1000 Index as a performance measure in our long-term compensation programs. The graph assumes $100 was invested on December 31, 2015. 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.

 

 

LOGO

Role of the Committee, Management, and Independent Compensation Consultant

The Committee reviews and administers the compensation for Dr. Mehrabian and Mr. Pichelli and other members of senior management, including the NEOs. In the case of Dr. Mehrabian and Mr. Pichelli, the compensation determinations made by the Committee are reviewed by the entire Board. The Committee is composed exclusively of independent directors that are deemed “outside directors” under 162(m) of the Internal Revenue Code and “non-employee directors” under Section 16 of the Exchange Act.

In 2020, the Committee retained Exequity LLP (“Exequity”), an independent compensation consultant, to assist the Committee in fulfilling its responsibilities. The services that Exequity performed for Teledyne were related to executive and director compensation and were primarily in support of decision-making by the Committee and, in the case of director compensation, the Nominating and Governance Committee. No other services were provided by Exequity for the Company during 2020. In January 2020, the Committee conducted a conflict of interest assessment of its retention of Exequity, and no conflicts of interest were identified. In reaching these conclusions, the Committee considered factors set forth in applicable rules promulgated by the SEC.

The Committee is charged with the review and approval of the corporate goals and objectives relevant to NEO compensation, evaluate the NEOs’ performance in light of those goals and objectives, and determine and

 

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approve all NEO compensation based on this evaluation. Dr. Mehrabian and Mr. Pichelli work with the 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 Committee and make compensation recommendations for the other NEOs (other than themselves).

2020 Say-on-Pay Vote

At the Company’s 2020 Annual Meeting of Stockholders held on April 22, 2020, the non-binding advisory vote on executive compensation passed with an approval rate of over 98% of the votes cast. The 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 2020. The Committee will continue to consider the outcome of the Company’s “say on pay” votes when making future compensation decisions for the named executives.

Components of 2020 Executive Compensation Program

The Committee determines compensation for our senior executives, including our NEOs. The 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 Committee also receives advice and assistance in setting compensation from Exequity. The below table shows the compensation components applicable to 2020 executive compensation.

 

Component

   Purpose   Design

Base salary (cash)

  

Reflects the experience of the NEO and expected day-to-day contributions; amounts are supported by competitive market data

 

Reviewed at least annually to consider changes in responsibility, experience, and market competitiveness

Annual Incentive Plan
(short-term cash opportunities)

  

Short-term, at-risk pay designed to motivate achievement of annual performance goals in support of our strategic priorities and annual business plan

 

Designed principally to reward year-over-year growth and other operational objectives, with market-based targets set for NEOs

Long-term equity compensation

  

Long-term, at-risk pay designed to balance short-term at-risk pay, align the interests of executives with stockholders, support our strategic priorities and three-year strategic plan, encourage executive retention, and align our programs with market practices

 

Our NEOs receive long-term compensation opportunities in three parts:

 

•   Stock options, to reward solid business decisions that increase the stock price in alignment with the benefit realized by stockholders;

 

•   Performance-based restricted stock awards, which are intended to align NEO compensation with TSR relative to the Russell 1000 over a three-year performance period; and

 

•   A performance share program (“PSP”), to reward performance for achieving long-term growth targets set forth in our strategic plan and increases in TSR

 

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Base Salaries

Base salary is fixed cash compensation delivered in return for day-to-day job responsibilities, leadership skills and experience. The Committee annually reviews base salary for our NEOs in October of each year and makes adjustments when appropriate based on market competitiveness. The Committee may also make periodic adjustments in connection with promotions or changes in responsibility.

Base salary for all NEOs 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 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.

Please see 2020 Compensation Decisions for Named Executive Officers beginning on page 50 for 2020 base salary determinations for all of our NEOs.

Annual Incentives

Annual Incentive Plan (“AIP”) cash bonus awards are determined under the Amended and Restated Teledyne Technologies Incorporated 2014 Incentive Award Plan (the “Plan”). AIP award opportunities are expressed as a percentage of a participant’s base salary and are based on the achievement of pre-defined performance measures, with up to 200% of the target award eligible to be paid in the case of significant over-achievement. No AIP bonus will be earned in any year unless operating profit is positive, after accruing for bonus payments, and operating profit is at least 75% of the operating plan, subject in each case to modification by the Committee. The majority of the award is based on Teledyne’s achievement of certain financial performance goals, with a smaller portion tied to the achievement of pre-established individual goals.

For 2020, 40% of the awards were tied to the achievement of predetermined levels of operating profit, 25% to the achievement of predetermined levels of revenue, 15% to the achievement of predetermined levels of managed working capital as a percentage of revenue and 20% to the achievement of specified individual performance objectives. These predetermined levels may vary by business unit. In addition, per the Committee’s policy, downward (but not upward) discretionary adjustments are allowed with respect to awards to NEOs. AIP awards are generally paid from a pool not to exceed 11% of operating profit, subject to modification by the Committee.

See 2020 Compensation Decisions for Named Executive Officers beginning on page 50 for details of the 2020 AIP awards paid to each of our NEOs.

Long-Term Incentive Compensation

The Company grants long-term incentive compensation to reward performance over the longer term and align the interests of employees with stockholders. The majority of these awards are performance-based.

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.

 

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Stock Options.    Stock options provide our employees, including NEOs, with the opportunity to participate in stockholder 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 78 of this Proxy Statement.

Performance Share Program.    PSP awards are intended to reward NEOs to the extent we achieve specific pre-established financial performance goals and provide a greater long-term return to stockholders 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. PSP awards are paid out in stock and cash in three annual installments following the end of a three-year performance 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 stockholders relative to an index. 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 not factored into the calculation except in the case of promotion.

Beginning with the 2021-2023 performance cycle, the Company discontinued the PSP, which provided for awards made every three years, and transitioned to a Performance Plan, which will provide for overlapping three-year performance periods, with cash payouts, if any, following the end of each three-year performance period.

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 NEOs 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 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 Committee determines otherwise, if we fail to meet certain minimum performance goals for a multi-year performance cycle (typically three years) established by the 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.

See 2020 Compensation Decisions for Named Executive Officers beginning on page 50 for details of the 2020 long-term incentive awards granted to each of our NEOs.

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 2020 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.

 

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The peer group used to provide benchmark information for 2020 pay decisions was comprised of the following companies:

 

Ametek Inc.

Bruker Corporation

CACI International, Inc.

Crane Co.

Curtiss-Wright Corporation

FLIR Systems, Inc.

IDEX Corporation

ITT Corporation

  

MOOG, Inc.

National Instruments Corporation

PerkinElmer, Inc.

Teradyne Inc.

Trimble, Inc.

Woodward, Inc.

Xylem, Inc.

The Committee reviews the peer group on an annual basis, with assistance from Exequity. In 2020 we removed Crane Co., which had become an outlier in terms of size, and Moog, Inc., which was an outlier in terms of size and also had a dual class structure with significant employee plan ownership, and added Mettler-Toledo International and Fortive Corporation. The peer group as modified by the changes made in 2020 was referenced in determining 2021 executive compensation.

At the time our peer group was reviewed by the Committee in 2020, our peer group contained companies having median annual revenues and market capitalizations of $2.8 billion and $13.4 billion, respectively. In 2020, Teledyne’s annual revenues were approximately $3.1 billion with a market capitalization that was approximately $14.5 billion at the end of fiscal 2020. In assessing executive compensation, the Committee also reviews data collected from a broader industry group consisting of 104 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 $1.5 billion and $7 billion and the general industry group excludes financial organizations.

2020 Compensation Decisions for Named Executive Officers

Our compensation program is designed to provide competitive levels of pay opportunity and to align programs with internal performance objectives and shareholder value creation, while motivating and retaining talent. In October of each year the Committee, with assistance from Exequity, reviews and compares each named executive’s pay to various market data points for that named executive’s position. The 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 Committee will consider the amount of prior salary increases, AIP awards, and long-term equity grants as factors in determining compensation for the current period.

 

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The table below shows the competitive position of compensation in 2020 for each of our NEOs. It reflects targeted total compensation in terms of percentage deviation from the peer group and general industry median for each of our NEOs as presented to the Committee in October 2020. For purposes of this review, the Committee considers an 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

  

-39%

  

-46%

 Robert Mehrabian

  

-30%

  

-38%

 Susan L. Main

  

  -5%

  

-14%

 Jason VanWees

  

  -6%

  

-13%

 Melanie S. Cibik

  

+10%

  

+16%

The following table shows the allocation of 2020 compensation among base salary, target AIP awards, and target long-term equity grants for Dr. Mehrabian, our Executive Chairman and Mr. Pichelli, our President and Chief Executive Officer, in 2020, and all other named executives as a group. We believe this allocation emphasizes our focus on variable, rather than fixed, pay.

 

     Robert Mehrabian    Aldo Pichelli    Other Named Executives    

Base salary

  

19%

  

19%

  

24%

2020 AIP bonus (at target)

  

23%

  

21%

  

17%

2020 long-term compensation (at target)

  

58%

  

60%

  

59%

2020 Base Salary

The base salaries for our NEOs were reviewed by the Committee in October 2019, with general merit and market-based increases effective 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 Committee in October of each year. The following table shows changes to NEO base salary effective for 2020:

 

Name

   2019 Base Salary    2020 Base Salary    % Change    

Aldo Pichelli

  

$800,000

  

$800,000

  

Robert Mehrabian

  

$995,000

  

$900,000

  

(9.5%)

Susan L. Main

  

$469,600

  

$479,000

  

2%

Jason VanWees

  

$440,000

  

$448,800

  

2%

Melanie S. Cibik

  

$428,700

  

$437,300

  

2%

Pursuant to his employment agreement, Dr. Mehrabian’s base salary was adjusted to $900,000 for 2020. Pursuant to his employment agreement, Mr. Pichelli’s remained unchanged.

 

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Short-Term Incentives

In January 2020, the Committee set AIP award opportunities based on the following parameters:

 

 

Award Component

        

 

Weighting    

Adjusted income before taxes*

    

  40% 

Revenue

    

  25% 

Managed working capital as a percentage of sales (MWC)

    

  15% 

Individual Performance Objectives

    

  20% 

Total

    

100% 

              

 

*

If adjusted income before taxes is below 75% of target, no AIP award will be earned. For purposes of determining actual income before taxes and revenue for the AIP, we adjust the amounts for intercompany sales and certain one-time events and tax items.

Target amounts are derived from our business plan, which is presented to and approved by our Board in January of each year. We chose income before taxes, revenue and MWC as the corporate performance components of the 2020 AIP 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. All of our NEOs for 2020 are corporate executives.

 

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Generally, AIP awards for NEOs are based on overall corporate results. For segment executives, the award is based on a combination of corporate and segment results. 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 adjusted income before taxes is below 75% of target, no AIP award will be earned. Both 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:

 

 

Adjusted income before taxes

  

 

•   If actual performance equals or exceeds 120% of target, the component is weighted by multiplying the percentage by two (200%).

•   If actual performance is less than 75% of target, the component is given a weighting of 0% and no AIP awards are payable.

•   To the extent actual performance falls between 75% and 120% of target, the multiplying factor is adjusted proportionally (a reduction of 3% for each percentage point that actual performance falls below 100% and an increase of 5% 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 two (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 3% for each percentage point that actual performance falls below 100% and an increase of 5% 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 two (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%.

In January 2020, the following target AIP award opportunities were set and approved by the Committee for each NEO:

 

    

 

AIP Award as a Percent of Salary

   

Participants

  

 

Target

   Maximum    Actual    

Aldo Pichelli

  

110%

  

220%

  

75%

 

Robert Mehrabian

  

120%

  

240%

  

82%

 

Susan L. Main

  

  75%

  

150%

  

51%

 

Jason VanWees

  

  75%

  

150%

  

66%

 

Melanie S. Cibik

  

  60%

  

120%

  

41%

   

 

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The target and maximum percentages were the same as in 2019.

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 Committee may make downward (but not upward) discretionary adjustments to this amount for awards granted to individuals who were NEOs as of the grant date of such award.

2020 AIP Corporate Performance Results

The tables below show income before taxes, revenue and MWC for 2020 as compared to target amounts.

Income before taxes (in millions):

 

     Target      Actual 2020 Results   

2020 Results

(% of Target)

     

Teledyne (corporate)

   $ 540.2      $490.5    90.8%        

Revenue (in millions):

 

     Target      Actual 2020 Results   

2020 Results

(% of Target)

     

Teledyne (corporate)

   $ 3,382.0      $3,120.8    92.3%        

MWC

 

     Target      Actual 2020 Results   

2020 Results

(% of Target)

     

Teledyne (corporate)

     22.5    24.7%    90.0%        

2020 AIP Individual Objectives

For 2020, aggregate individual performance objectives consisted of between seven to eight goals for each NEO, weighted in terms of importance. Some of the goals are corporate-level goals shared by all NEOs 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 2020 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, reduction in administrative and structural complexity, 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 planning systems and succession planning. In 2020, achievement of no specific individual performance goal for NEOs accounted for more than 10% of a named executive’s actual bonus. The Committee evaluates the achievement of these individual performance goals holistically.

 

   

The Committee determined that Mr. Pichelli achieved 100% of his individual performance objectives, based on his leadership as President and Chief Executive Officer in driving operational improvement across all our businesses, and achieving cost reductions and procurement savings, among other factors.

 

   

The Committee determined that Dr. Mehrabian achieved 100% of his individual performance objectives, based on his leadership of Teledyne’s margin enhancement and strategic sourcing initiatives, improving the effectiveness of research and development investments, succession planning and implementing compliance improvements, among other factors.

 

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Based on recommendations by Dr. Mehrabian and Mr. Pichelli, the Committee determined that:

 

   

Ms. Main achieved 100% of her individual performance objectives, based on reducing complexity and operating costs, improving business processes, and her management of effective internal financial controls, including continued reduction in identified deficiencies, among other factors;

 

   

Mr. VanWees achieved 200% of his individual performance objectives, based on his leadership efforts in our margin expansion initiative, among other factors and his efforts on the pending acquisition of FLIR Systems, Inc., which was announced on January 4, 2021; and

 

   

Miss Cibik achieved 100% of her individual performance objectives, based on support of COVID-19 response plans, cost reduction efforts, streamlining Teledyne’s intellectual property portfolio and IP-related cost reductions, and implementing compliance improvements and overseeing legal work, among other factors.

2020 AIP Payouts

The following is an illustration of the AIP award calculation, using actual corporate performance results for 2020:

 

Performance Goal

  Performance
Goal (%) of
AIP Award
   

Performance
Results

(multiplier)

    Adjusted Performance       

Adjusted income before taxes

    40%        72.4%      29.0% (40% x 0.724)   

Revenue

    25%        76.8%      19.2% (25% 0.768)   

MWC

    15%          0.0%      0.0% (15% x 0.0)   

Individual objectives

    20%        100%      20.0% (20% x 1.0%)   

Performance Weighting

                  68.2%         

The resulting AIP payout is based on the following formula:

 

2020 AIP Payout

Base Salary ($)

  x   Performance Weighting   =   AIP Payout

Based on the above results and formula, the NEOs earned the following AIP payments for 2020 performance:

 

Name

   AIP Target ($)    Performance Weighting (%)    2020 AIP Payout ($)    

Robert Mehrabian

  

$1,080,000

  

68.2%

  

$736,200

Aldo Pichelli

  

$   880,000

  

68.2%

  

$599,900

Susan L. Main

  

$   359,250

  

68.2%

  

$244,900

Jason VanWees

  

$   336,600

  

88.2%

  

$296,800

Melanie S. Cibik

  

$   262,380

  

68.2%

  

$178,900

It is the policy of the Committee not to make discretionary upward adjustments in determining AIP awards for named executives, and no such adjustments were made in determining actual 2020 AIP awards.

For 2020, aggregate awards for all employees (including the named executives) were paid from a pool equal to 2.8% of income before taxes before payment of AIP awards, which is less than the 11% limit initially established by the Committee when it approved the 2020 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.

 

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Long-Term Incentives

Stock Options

In 2020, stock options covering an aggregate of 247,273 shares of common stock were awarded to Teledyne employees, of which options to purchase 36,048 shares of common stock (or 14.6% of total options) were awarded to NEOs. For purposes of the Summary Compensation Table, stock options are valued based on the grant date fair value calculated in accordance with FASB ASC Topic 718 as reported in the Option Awards column.

The 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 Committee believes this 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 NEOs in 2020 as well as the fair value target used to determine the number of awards for each NEO in 2020. For reference, 2019 option grants are also provided.

 

Participants

   2020
Fair Value
Target
     2020
Options
Awarded
   2019
Options
Awarded
(for reference)

Aldo Pichelli

     $800,000      7,433    11,122

Robert Mehrabian

     $900,000      8,362    33,672

Susan L. Main

     $726,600      6,751    10,102

Jason VanWees

     $726,600      6,751    10,102

Melanie S. Cibik

     $726,600      6,751    10,102

The Committee determines the size of awards for NEOs by taking into account recommendations from Dr. Mehrabian and Mr. Pichelli (other than with respect to their own awards). Awards for Dr. Mehrabian and Mr. Pichelli were determined at the sole discretion of the Committee. For 2020, the Committee used the employment agreements for Dr. Mehrabian and Mr. Pichelli (described below) as a guideline in determining the size of their respective stock option awards. In determining the long-term incentive component of Dr. Mehrabian’s and Mr. Pichelli’s compensation, the Committee considers corporate performance and shareholder return, the value of similar incentive awards to chief executive officers at comparable companies, and the awards granted to Dr. Mehrabian and Mr. Pichelli in past years.

In determining the fair value target for the options awarded to the named executives in 2020, the Committee used guidelines for senior management that it reviews and approves annually, and which are based in part on historical awards.

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. Prior to the discontinuation of the PSP program in 2021, PSP awards were granted every three years; the Committee most recently granted PSP awards in January 2018 related to a 2018 – 2020 performance cycle. All NEOs participated in the 2018 – 2020 PSP.

 

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Compensation Discussion and Analysis (continued)

 

 

 

The 2018 – 2020 PSP awards were based on the achievement of the following objectives:

 

Award Component

   Weighting    

Adjusted income before taxes*

     40%    

Revenue

     30%    

Return to stockholders **

     30%    

Total

   100%    

 

*

No awards are earned if the three-year aggregate income before taxes is less than 75% of target, unless the Committee determines otherwise. For purposes of determining actual income before taxes and revenue for the PSP, we adjust the amounts for intercompany sales and certain one-time events and tax items.

 

**

Measured as total shareholder return relative to the Russell 1000 Index performance over the 2018 – 2020 performance period.

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 two (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 two (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 two (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.

 

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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 78 of this Proxy Statement. Awards are generally paid 50% in cash and 50% in stock, subject to availability of shares.

The performance period for the 2018 – 2020 PSP awards ended on the last day of the 2020 fiscal year. The 2018-2020 performance cycle had the following target performance goals and results:

 

Performance Goal

  Target    Actual 2020 Results

Adjusted Income before taxes

 

Aggregate of $1,179.4 million for three years

   $1,392.1 million

Revenue

  Aggregate revenue of $8,833.9 million for three years    $9,151.6 million

Return to Shareholders

  Return on Teledyne stock equal to the return of the Russell 1000 Index over three years    151.2%

The three-year performance period applicable to the 2018 – 2020 PSP awards ended on January 3, 2021 and, as described in the table above, the Committee determined that the applicable performance goals were achieved at 171.5% of target, resulting in the following awards earned by NEOs based on the performance results:

 

Name

   PSP Awards
(Target, in $)
     Total Earned
Shares
   Total Earned
Cash

Aldo Pichelli

     $1,838,417      8,240    $1,576,443

Robert Mehrabian

     $1,895,000      8,494    $1,624,963

Susan L. Main

     $569,875      2,555    $488,668

Jason VanWees

     $532,417      2,387    $456,548

Melanie S. Cibik

     $520,250      2,332    $446,115

Pursuant to SEC guidance, the cash portion of the performance share award year is included in the Summary Compensation Table in the year in which the performance criteria are met. For the 2018-2020 performance cycle, the entire cash portion is therefore included in the Summary Compensation Table for 2020 under the Non-Equity Incentive Plan Compensation column, even though no cash payments would be issued under this award until after 2020. 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 was included in the Summary Compensation Table as 2018 compensation under the column headed “Stock Awards”.

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 (including NEOs) 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 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 Committee determines otherwise, if we fail to meet certain minimum performance goals for a multi-year performance cycle (typically three years) established by the 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.

 

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2020 Performance-Based Restricted Stock Grants

The following schedule shows the percent of base salary used to determine the restricted stock awards granted in 2020 to our NEOs and the dollar value of the award (based on percent of base salary), with 2019 also shown as a comparison. 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.

 

Name

   2020
Restricted
Stock Award
(as % of Base
Salary)
  

2020 Restricted

Stock Award ($)

  

2019 Restricted    

Stock Award    

(as % of    

Base Salary)    

Aldo Pichelli

   100%    $800,000    100%    

Robert Mehrabian

   100%    $900,000    100%    

Susan L. Main

     45%    $215,500      45%    

Jason VanWees

     45%    $201,960      45%    

Melanie S. Cibik

     45%    $196,785      45%    

The targeted performance goal for 2020 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 stockholders (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 or a Change in Control” beginning on page 78 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 Committee based on achievement of the specified performance objectives, free of the restrictive legend.

The potential payouts under the 2020 performance-based restricted stock awards can be found in the table headed “Grants of Plan-Based Awards” on page 69 of this Proxy Statement. See also footnote (1) to the Summary Compensation Table on page 67 of this Proxy Statement. The maximum number of shares that each NEO could retain pursuant to such grant can be found in the table headed “Outstanding Equity Awards at Fiscal Year End” beginning on page 70 of this Proxy Statement.

Vesting of 2017 and 2018 Performance-Based Restricted Stock Grants

We granted performance-based restricted stock to key employees, including the NEOs, on January 24, 2017 and January 23, 2018. Restrictions on 100% of the 2017 performance-based restricted stock 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 in January 2020, the Committee confirmed vesting with respect to 100% of such awards as of January 23, 2020.

 

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Restrictions on 100% of the 2018 performance-based restricted stock award lapsed on January 23, 2021, since the performance of our stock price was 151.3% of that of the Russell 1000 for the three-year period ended December 31, 2020, and in January 2021, the Committee confirmed vesting with respect to 100% of such awards as of January 26, 2021.

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.

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 2020, 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.”

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 78 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

 

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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. The Company has entered into employment agreements with each of Dr. Mehrabian (the “Mehrabian Employment Agreement”) and Mr. Pichelli (the “Pichelli Employment Agreement”). With input from Exequity, the 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 Committee further set long term incentives to provide an equal value mix among the three components of Teledyne’s long-term compensation programs (stock options, PSPs, and performance-based restricted stock), 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). The terms of the two employment agreements are set forth below.

The Mehrabian Employment Agreement provides that effective January 1, 2019, Teledyne will employ Dr. Mehrabian as Executive Chairman, with 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 effective January 1, 2020, Dr. Mehrabian’s base salary will be set at $900,000. Such base salary may be increased annually at the discretion of the Committee.

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.

 

   

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 was prorated, with this increased percentage effective as of January 1, 2020. The targeting of 300% reflects the fact that PSP awards are granted every three 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.

 

   

Stock Options:  For 2020, Dr. Mehrabian’s stock option grant had 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).

 

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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 Committee.

The Pichelli Employment Agreement further provides, among other things, that:

 

   

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 were prorated, with this increased percentage effective as of January 1, 2019. The targeting of 300% reflects the fact that PSP awards are granted every three years.

 

   

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.

Beginning with the 2021-2023 performance cycle, the Company transitioned from the Performance Share Program, with awards made every three years and paid out in cash and stock in three annual installments following the end of a three-year performance period, to a Performance Plan, with overlapping three-year performance periods, with cash payouts, if any, following the end of each three-year performance period. As a result of this change, the employment agreements with Dr. Mehrabian and Mr. Pichelli were amended to reflect a PSP target of 100% of base salary, rather than 300%.

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.

 

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Compensation Discussion and Analysis (continued)

 

 

 

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 75 of this Proxy Statement. In addition, the Nonqualified Deferred Compensation Table on page 75 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 NEOs, 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 73 of this Proxy Statement.

A description of the terms of our pension plans can be found under the heading “Pension Benefits” beginning on page 73 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.

 

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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 Committee, which is the administrator of these plans. The 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, 33,527 remained available for grant by our Executive Chairman under this delegated authority as of February 15, 2021.

Stock options are granted to employees by the 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 2020, 1,649 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 the 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 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 Committee, which is the administrator of these plans.

Performance-based restricted stock awards are generally granted each year by the Committee at its regularly scheduled meeting in January. For 2020, 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 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 Committee.

Non-employee directors are automatically granted an award of restricted stock units in an amount equal to $110,000 ($130,000 starting in 2021), 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.

In the past, Section 162(m) contained an exception to the $1 million limit on deductibility for “qualified performance-based” compensation. Historically, the Committee annually considered the impact of Section 162(m) in structuring our executive compensation program and balanced the goal of achieving deductibility under Section 162(m) with our philosophy to pay and reward individual contributions to overall company performance, especially in light of the competitive nature of the market for our executive talent. The Committee always reserved the discretion to reward significant contributions by the NEOs to build shareholder value regardless of the tax deductibility limits of Section 162(m).

For tax years beginning after December 31, 2017, the 2017 Tax Cuts and Jobs Act eliminated the exception for “qualified performance-based compensation,” unless it qualified for transition relief that applied

 

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to compensation paid pursuant to a binding contract that was in effect on November 2, 2017. The 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 is not fully deductibility under Section 162(m) if the Committee believes that such compensation will best attract, retain, and reward executives and contribute to our business objectives.

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 January 3, 2021.

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

Charles Crocker, Chair

Roxanne S. Austin

Kenneth C. Dahlberg

Michelle A. Kumbier

Robert A. Malone

Jane C. Sherburne

February 23, 2021

 

66     TELEDYNE TECHNOLOGIES INCORPORATED  |  2021 Proxy Statement


Table of Contents

 

 

Summary Compensation Table

 

The following Summary Compensation Table sets forth information about compensation earned by: (1) our Chief Executive Officer, (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 Exchange Act for fiscal 2020 (collectively, the “named executives”).

 

Name and Principal Position

Year Salary Stock
Awards
(1)
Option
Awards
(2)
Non-Equity
Incentive
Plan
Compensation
(3)
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
(4)
All Other
Compensation
Total

Aldo Pichelli

President and Chief Executive Officer

(Principal Executive Officer)

  2020 $ 815,385 $ 806,058 $ 682,944 $ 2,176,343 $ 170,004 $ 48,850 (5)  $ 4,699,584  
  2019 $ 800,000 $ 771,200 $ 800,784 $ 1,125,300 $ 279,917 $ 41,587 $ 3,818,788  
  2018 $ 576,581 $ 693,778 $ 1,132,057 $ 912,000 $ $ 37,521 $ 3,351,937  

Robert Mehrabian

Executive Chairman

  2020 $ 917,307 $ 906,590 $ 768,301 $ 2,361,163 $ 2,010,202 $ 12,231 (6)  $ 6,975,794  
  2019 $ 993,183 $ 959,000 $ 2,424,384 $ 1,526,800 $ 1,915,452 $ 12,000 $ 7,830,819  
  2018 $ 995,000 $ 1,704,136 $ 2,264,041 $ 1,783,500 $ 622,754 $ 12,000 $ 7,381,431  

Susan L. Main

Senior Vice President and

Chief Financial Officer (Principal

Financial Officer)

  2020 $ 488,212 $ 217,279 $ 724,315 $ 733,568   $ 32,489 (5)  $ 2,195,863  
  2019 $ 469,781 $ 203,600 $ 727,344 $ 450,400   $ 30,212 $ 1,881,337  
  2018 $ 456,164 $ 489,987 $ 679,205 $ 510,800   $ 29,180 $ 2,165,336  

Jason VanWees

Executive Vice President

  2020 $ 457,431 $ 203,586 $ 724,315 $ 753,348 $ 303,999 $ 14,950 (7)  $ 2,457,629  
  2019 $ 440,169 $ 190,800 $ 727,344 $ 438,500 $ 338,854 $ 14,196 $ 2,149,863  
  2018 $ 398,612 $ 372,577 $ 679,205 $ 356,600 $ $ 14,196 $ 1,821,190  

Melanie S. Cibik

Senior Vice President, General

Counsel, Chief Compliance

Officer and Secretary

  2020 $ 445,710 $ 198,182 $ 724,315 $ 625,015 $ 361,296 $ 14,950 (7)  $ 2,369,468  
  2019 $ 428,865 $ 186,000 $ 727,344 $ 328,900 $ 427,910 $ 14,196 $ 2,113,215  
  2018 $ 416,441 $ 389,886 $ 679,205 $ 373,100 $ $ 14,196 $ 1,872,828  

 

(1)

For 2020, represents the aggregate fair value on the date of grant of the NEO’s 2020 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.

(2)

Represents the aggregate fair value on the date of grant of the NEO’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.

(3)

For 2020, consists of the sum of (a) the Annual Incentive Plan awards for 2020 performance, payment of which was approved by the Personnel and Compensation Committee on January 26, 2021, and paid in February 2021, and (b) the cash portion of the 2018-2020 Performance Share Program, which is scheduled to be paid in three equal installments from 2021 through 2023. The amounts of the Annual Incentive Plan awards for 2020 for each of the named executives were as follows: Mr. Pichelli, $599,900; Dr. Mehrabian, $736,200; Ms. Main, $244,900;

 

Mr. VanWees, $296,800; and Miss Cibik, $178,900. The amount of the cash portion of the 2018-2020 PSP award for each of the named executives was as follows: Mr. Pichelli, $1,576,443; Dr. Mehrabian, $1,624,963; Ms. Main, $488,668; Mr. VanWees, $456,548; and Miss Cibik, $446,115. 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 2020 do not include the following cash amounts paid in 2020, representing the third 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; and Miss Cibik, $83,366, which amounts were included in the Proxy Statement disclosure for our 2018 fiscal year. Participants in the Performance Share Plan may elect to pay taxes due with respect to an installment payment with awarded shares, awarded cash or a combination thereof. All NEOs 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, 2,401 shares, 912 shares, 695 shares and 829 shares, respectively. As a result of their elections, shares issuable to Mr. Pichelli,

 

 

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Table of Contents

 

Summary Compensation Table (continued)

 

 

 

 

Dr. Mehrabian, Ms. Main, Mr. Vanwees and Miss Cibik were reduced by 763, 1,617, 625, 128 and 570 shares, respectively, and the cash portion of their awards increased by $590,173, $278,480, $228,113, $46,717 and $208,039 respectively, to pay applicable taxes.

(4)

For 2020, 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 2020. 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 2020 financial statements.

(5)

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.

(6)

Represents car allowance.

(7)

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

 

 

68     TELEDYNE TECHNOLOGIES INCORPORATED  |  2021 Proxy Statement


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Grants of Plan-Based Awards

 

The table below sets forth information on grants of plan-based awards to the named executives in fiscal year 2020. 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

      1/21/2020                                           7,433     $  682,944 
      1/21/2020(3)        $ 88,000     $  880,000     $ 1,760,000                            
        1/21/2020(4)                                                  783       2,237       2,237                         $  806,058 

Robert Mehrabian

      1/21/2020                                           8,362     $  768,301 
      1/21/2020(3)        $ 108,000     $ 1,080,000     $ 2,160,000                            
        1/21/2020(4)                                                  881       2,516       2,516                         $  906,590 

Susan L. Main

      1/21/2020                                           6,751     $  724,315 
      1/21/2020(3)        $ 35,925     $  359,250     $  718,500                            
        1/21/2020(4)                                                  211       603       603                         $  217,279 

Jason VanWees

      1/21/2020                                           6,751     $  724,315 
      1/21/2020(3)        $ 33,660     $  336,600     $  673,200                            
        1/21/2020(4)                                                  198       565       565                         $  203,586 

Melanie S. Cibik

      1/21/2020                                           6,751     $  724,315 
      1/21/2020(3)        $ 26,238     $  262,380     $  524,760                            
        1/21/2020(4)                                                  193       550       550                         $  198,182 

 

(1)

All stock options were granted with exercise prices at $383.33, 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 2020, established on January 21, 2020. For the actual amounts paid under the 2020 Annual Incentive Plan (which were paid in February 2021), 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 67.

(4)

Represents the estimated future payouts under the performance-based restricted stock award granted on January 21, 2020.

 

 

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.

 

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Outstanding Equity Awards at Fiscal Year-End

 

The following table summarizes the outstanding equity awards held by the named executives as of January 3, 2021, the last day of our 2020 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

      20,000                 $ 75.13       4/24/23           8,240 (3)     $ 3,229,915       1,838 (4)     $ 720,459
      20,000                 $ 94.24       4/23/24                   3,856 (5)     $ 1,511,475
      25,000                 $ 78.40       1/26/26                   2,237 (6)     $ 876,859
      25,000                 $ 123.38       1/24/27                    
      10,514       5,255           $ 192.00       1/23/28                    
      3,708       7,414           $ 217.39       1/22/29                    
              7,433           $ 383.33       1/21/30                                                  

Robert Mehrabian

      50,000                 $ 94.24       4/23/24           8,494 (3)     $ 3,329,478       5,328 (4)     $ 2,088,469
      50,000                 $ 78.40       1/26/26                   4,795 (5)     $ 1,879,544
      50,000                 $ 123.38       1/24/27                   2,516 (6)     $ 986,222
      21,026       10,511           $ 192.00       1/23/28                    
      11,224       22,448           $ 217.39       1/22/29                    
              8,362           $ 383.33       1/21/30                                                  

Susan L. Main

      4,000                 $ 78.40       1/26/26           2,555 (3)     $ 1,001,509       1,099 (4)     $ 430,786
      15,000                 $ 123.38       1/24/27                   1,018 (5)     $ 399,036
      6,308       3,153           $ 192.00       1/23/28                   603 (6)     $ 236,364
      3,368       6,734           $ 217.39       1/22/29                    
              6,751           $ 383.33       1/21/30                                                  

Jason VanWees

      10,200                 $ 78.40       1/26/26           2,387 (3)     $ 935,656       639 (4)     $ 250,475
      15,000                 $ 123.38       1/24/27                   954 (5)     $ 373,949
      6,308       3,153           $ 192.00       1/23/28                   565 (6)     $ 221,469
      3,368       6,734           $ 217.39       1/22/29                    
              6,751           $ 383.33       1/21/30                                                  

Melanie S. Cibik

      2,000                 $ 94.24       4/23/24           2,332 (3)     $ 914,097       669 (4)     $ 262,235
      15,000                 $ 123.38       1/24/27                   930 (5)     $ 364,541
      6,308       3,153           $ 192.00       1/23/28                   550 (6)     $ 215,589
      3,368       6,734           $ 217.39       1/22/29                    
              6,751           $ 383.33       1/21/30                                                  

 

(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 23, 2018, January 22, 2019 and January 21, 2020.

(2)

Based on a closing share price of $391.98 on December 31, 2020, the last trading day before our fiscal year end.

(3)

Represents stock awards under the Performance Share Program for the 2018-2020 performance cycle that will be paid in one-third increments in 2021, 2022 and 2023 to executives who at the time of the payout are employed by us or who have retired. The first installment was paid in February 2021.

(4)

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

 

 

70     TELEDYNE TECHNOLOGIES INCORPORATED  |  2021 Proxy Statement


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Outstanding Equity Awards at Fiscal Year-End (continued)

 

 

 

 

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.

(5)

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.

(6)

Represents the maximum number of shares that the named executive could retain under the restricted stock award granted on January 21, 2020, 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.

 

 

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Option Exercises and Stock Vested

 

The following table sets forth information about stock options exercised by the named executives in fiscal year 2020 and stock awards that vested or were paid in fiscal year 2020 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

       5,000      $ 1,337,179     

 

 

 

       2,736 (2)       $ 990,076 (4) 
           
 

 

      

 

 

 

 

 

      

 

 

 

 

 

      

 

 

 

 

 

       364 (3)       $ 131,721 (4) 
           

Robert Mehrabian

       15,000      $ 3,966,426     

 

 

 

       7,925 (2)       $ 2,867,820 (4) 
           
 

 

      

 

 

 

 

 

      

 

 

 

 

 

      

 

 

 

 

 

       784 (3)       $ 283,706 (4) 
           

Susan L. Main

       8,000      $ 2,025,331     

 

 

 

       1,635 (2)       $ 591,657 (4) 
           
 

 

      

 

 

 

 

 

      

 

 

 

 

 

      

 

 

 

 

 

       287 (3)       $ 103,857 (4) 
           

Jason VanWees

       9,800      $ 2,075,383     

 

 

 

       951 (2)       $ 344,138 (4) 
           
 

 

      

 

 

 

 

 

      

 

 

 

 

 

      

 

 

 

 

 

       567 (3)       $ 205,180 (4) 
           

Melanie S. Cibik

       10,000      $ 2,417,954     

 

 

 

       995 (2)       $ 360,061 (4) 
           
 

 

      

 

 

 

 

 

      

 

 

 

 

 

      

 

 

 

 

 

       259 (3)       $ 93,724 (4) 

 

(1)

The value realized upon exercise of options reflects the price at which shares acquired upon exercise of the options were sold or valued for income tax purposes, net of the exercise price for acquiring the shares.

(2)

Represents restricted stock granted on January 24, 2017 that vested on January 24, 2020, with restrictions on 100% of the original award lapsing.

(3)

Represents the third installment of the 2015-2017 performance cycle under the PSP paid as of January 24, 2020. 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 NEOs 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, 2,401 shares, 912 shares, 695 shares and 829 shares, respectively. As a result of their elections, shares issuable to Mr. Pichelli, Dr. Mehrabian, Ms. Main, Mr. Vanwees and Miss Cibik were reduced by 763, 1,617, 625, 128 and 570 shares, respectively, and the cash portion of their awards increased by $590,173, $278,480, $228,113, $46,717 and $208,039 respectively, to pay applicable taxes.

(4)

Based on a closing share price of $361.87 on January 24, 2020.

 

 

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Pension Benefits

 

The following table describes pension benefits provided to the named executives as of the end of our 2020 fiscal year. For a discussion of the assumptions made in the valuation, please see Note 12 (Pension Plans and Postretirement Benefits) to the financial statements in our Annual Report on Form 10-K. Ms. Main does not participate in any defined benefit pension plan sponsored by us and is not included as a named executive for purposes of this Pension Benefits discussion.

 

Name

   Plan Name    Number of
Years
Credited
Service
(#)
   Present
Value of
Accumulated
Benefit
($)
  

Payments    

During
Last
Fiscal Year    

($)

Aldo Pichelli

   Teledyne Pension Plan        30      $ 1,410,669       

 

   Benefit Restoration/     

 

 

 

    

 

 

 

    

 

 

 

 

 

   Pension Equalization Plan        30      $ 2,825,953       

Robert Mehrabian

   Teledyne Pension Plan        21.17      $ 1,254,642       

 

   Pension Equalization/        15.33      $ 11,521,668       

 

   Benefit Restoration Plan     

 

 

 

    

 

 

 

    

 

 

 

 

   Supplemental Pension        10      $ 4,312,856       
 

 

   (Employment Agreement)