Security Ownership of Certain Beneficial Owners and Management

Set forth below is information with respect to beneficial ownership at March 29, 2019 of the Company’s voting securities by each Director, each of whom (other than Frederick B. Hegi, Jr.) is a nominee for election, by each of our executive officers named in the Summary Compensation Table herein, and by all current Directors and executive officers of the Company as a group. Unless otherwise noted, the stockholders listed in the table have sole voting and investment power with respect to the shares of Common Stock owned by them, and their address is c/o LCI Industries, 3501 County Road 6 East, Elkhart, Indiana 46514.

Name of Beneficial Owner	Amount and Nature of Beneficial Ownership⁽¹⁾			Approximate Percent of Class⁽¹⁾
Frank J. Crespo		9,958	⁽²⁾			*
Brendan J. Deely		16,652	⁽²⁾			*
Ronald J. Fenech		3,378	⁽³⁾			*
James F. Gero		281,019	⁽⁴⁾		1.1	%
Tracy D. Graham		7,199	⁽³⁾			*
Frederick B. Hegi, Jr.		161,524	⁽⁵⁾			*
Virginia L. Henkels		5,858	⁽⁶⁾			*
Jason D. Lippert		262,714	⁽⁷⁾		1.0	%
Kieran M. O’Sullivan		9,494	⁽⁸⁾			*
David A. Reed		39,463	⁽⁹⁾			*
Brian M. Hall		8,341	⁽⁷⁾			*
Andrew J. Namenye		319	⁽⁷⁾			*
Jamie M. Schnur		16,225	⁽⁷⁾			*
Nick C. Fletcher		0	⁽⁷⁾			*
Scott T. Mereness		280,390	⁽¹⁰⁾		1.1	%
All current Directors and executive officers as a group (14 persons)		822,144			3.3	%

Represents less than 1% of the outstanding shares of Common Stock.

(1)

Beneficial ownership is determined in accordance with rules of the SEC, and includes general voting power and/or investment power with respect to securities. Shares of common stock subject to deferred stock units (“DSUs”), restricted stock units (“RSUs”), and performance stock units (“PSUs”) that vest within 60 days of March 29, 2019 are deemed to be outstanding for the purpose of computing the amount of beneficial ownership and percentage ownership of the person holding such equity units, but are not deemed outstanding for computing the percentage ownership of any other person.

(2)

Includes 1,771 RSUs granted in May 2018 that are scheduled to vest within 60 days of March 29, 2019.

(3)

Includes 1,744 RSUs granted in May 2018 that are scheduled to vest within 60 days of March 29, 2019.

(4)

Mr. Gero shares voting and dispositive power with respect to such shares with his wife. Includes 1,900 RSUs granted in May 2018 that are scheduled to vest within 60 days of March 29, 2019.

(5)

Includes 59,000 shares owned of record by Hegi Family Holdings, LP, of which Mr. Hegi has sole voting and dispositive power with respect to such shares. Includes 1,744 RSUs granted in May 2018 that are scheduled to vest within 60 days of March 29, 2019.

(6)

Includes 1,758 RSUs granted in May 2018 that are scheduled to vest within 60 days of March 29, 2019.

(7)

Excludes the following respective equity units that are not issuable within 60 days.

	DSUs		RSUs		PSUs
Jason D. Lippert		5,428		70,462		62,100
Brian M. Hall		541		6,576		5,857
Andrew J. Namenye		—		3,167		3,726
Jamie M. Schnur		968		12,503		7,145
Nick C. Fletcher		509		4,934		2,497

(8)

Includes 1,773 RSUs granted in May 2018 that are scheduled to vest within 60 days of March 29, 2019.

(9)

Includes 1,776 RSUs granted in May 2018 that are scheduled to vest within 60 days of March 29, 2019.

(10)

Includes 808 DSUs granted in December 2010 and 18,732 DSUs granted in February 2011.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires the Company’s executive officers and directors, and persons who beneficially own more than 10% of the Company’s equity securities, to file reports of ownership and changes in ownership with the SEC and the NYSE. Officers, directors, and greater-than-ten-percent stockholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file.

Based on its review of the copies of such forms received by it, the Company believes during 2018 all such filing requirements applicable to its officers and directors were satisfied.

Proposal 1. ELECTION OF DIRECTORS

The business and affairs of the Company are managed under the direction of our Board of Directors. The Company’s Restated Certificate of Incorporation currently provides that the number of directors shall consist of not less than three nor more than twelve persons. Our bylaws provide that the number of directors, not less than three nor more than twelve persons, shall be determined from time to time by resolution of the Board. The Board of Directors currently consists of ten Directors. As discussed further below, it is proposed that, at the 2019 Annual Meeting, the stockholders elect a Board of nine Directors to serve for a term of one year or until their successors are elected and qualify. The Board has resolved that, effective at the 2019 Annual Meeting, the number of directors of the Company will be reduced to nine. Proxies cannot be voted for a greater number of persons than nine, which is the number of nominees named in this Proxy Statement. Following discussions with the tenth director, Mr. Frederick B. Hegi, Jr., regarding his anticipated availability during the upcoming year, the Board of Directors did not nominate Mr. Hegi to stand for re-election at the 2019 Annual Meeting. The Board of Directors thanks Mr. Hegi for his years of service and dedication to the Board and his many contributions to the Company.

On May 25, 2017, the Board of Directors amended the Company’s bylaws to alter the vote required for the election of directors in uncontested elections from a plurality to a majority voting standard. In any contested election, Directors will continue to be elected by a plurality vote. In an uncontested election, which the election of directors at the 2019 Annual Meeting will be, each of the nominees, as an incumbent director, was required to submit an irrevocable resignation, contingent on (i) that person not receiving a majority of the votes cast in his or her election, and (ii) acceptance of that resignation by the Board of Directors in accordance with the policies and procedures adopted by the Board of Directors for such purpose. In the event a nominee in an uncontested election fails to receive a majority of the votes cast, the Corporate Governance and Nominating Committee will make a recommendation to the Board of Directors as to whether to accept or reject the resignation of such incumbent Director, or whether other action should be taken. The Board of Directors will act on the resignation, taking into account the Committee’s recommendation, and publicly disclose (by a press release and filing an appropriate disclosure with the SEC) its decision regarding the resignation and, if such resignation is rejected, the rationale behind the decision, within 90 days following certification of the election results. The Corporate Governance and Nominating Committee in making its recommendation, and the Board of Directors in making its decision, each may consider any factors and other information that they consider appropriate and relevant. If the Board of Directors accepts a Director’s resignation pursuant to this process, the Board of Directors may fill the resulting vacancy.

Director Qualifications and Selection Process

The Corporate Governance and Nominating Committee of the Board leads the search for individuals qualified to become Directors and selects nominees to be presented for stockholder approval at each Annual Meeting. The Committee considers candidates for Board membership suggested by members of the Committee and other Board members, as well as by Management and stockholders. In this regard, the Corporate Governance and Nominating Committee considers the composition of the Board with respect to experience, balance of professional interests, required expertise, and other factors. In addition, the Committee will endeavor to include candidates who reflect diverse backgrounds, including diversity of race, ethnicity, and gender, when assembling an initial pool of qualified candidates from which to fill Board vacancies. The objective of the Committee will be to identify and recommend the most capable candidates who have experience in the areas of expertise needed at that time and meet the criteria for nomination.

The Corporate Governance and Nominating Committee uses the same criteria for evaluating candidates suggested by stockholders as it does for those proposed by Board members or Management. To be considered for membership on the Board, a candidate must meet the following criteria, which are also set forth in the Company’s Governance Principles: (a) should possess the highest personal and professional ethics, integrity, and values, and be committed to representing the long-term interests of the stockholders; (b) should have an inquisitive and objective perspective, practical wisdom, and mature judgment; (c) must be willing to devote sufficient time to carry out his or her duties and responsibilities effectively; (d) should be committed to serving on the Board for an extended period of time; (e) should be prepared to resign in the event of any significant change in his or her personal circumstances which may impair his or her ability to effectively serve on the Board; (f) Directors who also serve as CEOs or in equivalent positions should not serve on more than two boards of public companies in addition to the Company’s Board; and (g) Directors who are not CEOs or equivalent should not serve on more than four boards of public companies in addition to the Company’s Board.

The Corporate Governance and Nominating Committee seeks candidates who have demonstrated exceptional ability and judgment and who can, in conjunction with other Directors, most effectively serve the long-term interests of our stockholders. The particular experience, qualifications, and skills of each nominee described on pages 9 through 12 of this Proxy Statement reflect that our Board, taken as a whole, provides a broad diversity of knowledge of our Company and industry, expertise in finance and investment, experience with technology-based and growth-oriented companies and global markets, competence in accounting and financial reporting, and leadership in business and with socially-responsible organizations.

The Corporate Governance and Nominating Committee recommended to the Board each of the nominees for election as Directors as set forth herein. No candidates for Director nominees were submitted to the Committee by any stockholder in connection with the 2019 Annual Meeting.

Stockholders may propose nominees for consideration by the Corporate Governance and Nominating Committee by submitting the names of such nominees and supporting information to:

Secretary
LCI Industries
4100 Edison Lakes Parkway
Suite 210
Mishawaka, Indiana 46545

The proposed nominee must meet the qualifications for Directors described above and in the Company’s Governance Principles.

In addition, any stockholder who wishes to nominate a Director candidate at an annual meeting may do so by following the procedures and providing the information set forth under “Stockholder Proposals for the 2020 Annual Meeting” and in Section 1.13 of the Company’s bylaws.

Our Director Nominees

Following the recommendation of the Corporate Governance and Nominating Committee, the Board of Directors has nominated the nine persons named below for election to the Board of Directors at the Annual Meeting. Each of Messrs. Gero, Crespo, Deely, Fenech, Graham, Lippert, O’Sullivan, and Reed and Ms. Henkels were elected to his or her present term of office at the Annual Meeting of Stockholders held on May 24, 2018.

James F. Gero

Mr. Gero, 74, Chairman of the Board of Directors, has been a member of our Board of Directors since 1992. Mr. Gero is a private investor and served as Chairman of the Board of Orthofix International, N.V., a publicly-owned international supplier of orthopedic devices for bone fixation and stimulation, from 2004 to December 2013. Mr. Gero also serves as a director of Intrusion, Inc., a publicly-owned supplier of security software.

Mr. Gero has extensive experience with respect to corporate management and leadership, strategic planning, and compensation matters, and has public company board experience.

Committees: Audit; Corporate Governance and Nominating

Frank J. Crespo

Mr. Crespo, 56, has been a member of our Board of Directors since 2015. Mr. Crespo has been Senior Vice President and Chief Supply Chain Officer of Indigo Agriculture, Inc., a privately owned agricultural technology company that works to improve grower profitability, environmental sustainability, and consumer health through the use of natural microbiology and digital technologies, since April 2018. Prior to joining Indigo Agriculture last year, he served as Vice President and Chief Procurement Officer of Caterpillar, Inc., a publicly-owned manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines, and diesel-electric locomotives, from 2010 to 2018, and served as Vice President and Chief Procurement Officer of Honeywell International, Inc., a global diversified technology and manufacturing company, from 2007 to 2010.

Mr. Crespo has over 30 years of executive and leadership experience in procurement, supply chain, and logistics in global electronics, high technology, and industrial markets for marquee and publicly-owned corporations, as well as with the U.S. Navy.

Committees: Corporate Governance and Nominating; Risk (chair)

Brendan J. Deely

Mr. Deely, 53, has been a member of our Board of Directors since 2011. Mr. Deely has been the Chief Executive Officer of Banner Solutions, a leading wholesaler of commercial, residential, and electronic access control door hardware and security products, since April 2018. From 2016 to March 2018, he was an independent director and then President and Chief Executive Officer of A.H. Harris Construction Supplies, a leading distributor of construction supplies and equipment. From 2004 until December 2014, Mr. Deely was President and Chief Executive Officer of L&W Supply Corporation, a subsidiary of USG Corporation, and from 2008 until November 2014, he was Senior Vice President of USG Corporation, a publicly-owned manufacturer and distributor of high-performance building systems. For more than five years prior thereto, Mr. Deely held various executive positions with USG Corporation and its subsidiaries.

Mr. Deely has extensive experience with respect to corporate management, operations, and compensation matters, and extensive experience with social responsibility organizations.

Committees: Compensation; Corporate Governance and Nominating (chair)

Ronald J. Fenech

Mr. Fenech, 61, has been a member of our Board of Directors since 2017. Mr. Fenech co-founded Grand Design Recreational Vehicle Co. in 2012, a fast-growing manufacturer of towable RVs that was acquired in 2016 by Winnebago Industries. Prior to forming Grand Design, he held several executive positions at Thor Industries, Inc., the sole owner of operating subsidiaries that manufacture recreational vehicles, including Senior Group President of Thor Industries from January 2010 to 2012, and President of Keystone RV Company following its acquisition by Thor Industries in November 2001 until January 2010. Mr. Fenech has over 30 years of experience in the RV industry covering a broad range of positions with several companies. He also serves on the Board of Directors of Beacon Health System, a regional provider of healthcare services serving the Elkhart and South Bend communities of northern Indiana.

Mr. Fenech has extensive experience with respect to corporate management, leadership, and strategic planning, and he has particular knowledge of the industries to which we sell our products.

Committees: Strategy and Acquisition; Risk

Tracy D. Graham

Mr. Graham, 45, has been a member of our Board of Directors since March 2016. Mr. Graham is Chief Executive Officer and Managing Principal of Graham-Allen Partners, a private investment firm focused on investing in technology and technology-enabled companies. Prior to forming Graham-Allen Partners in 2009, he served as Vice President of SMB Technology Services for Cincinnati Bell, one of the nation’s leading regionally-focused local exchange, wireless, and data center providers. Mr. Graham also successfully built and sold three technology companies over a 12-year period, including GramTel USA, Inc., a provider of managed data center and related services to mid-sized businesses, which was sold to Cincinnati Bell. Mr. Graham is a director of 1st Source Bank, and during a three-year term that expired in 2015, was a director of 1st Source Corporation, a publicly-owned bank holding company headquartered in South Bend, Indiana. He also serves on the Board of Directors of Beacon Health System, a regional provider of healthcare services serving the Elkhart and South Bend communities of northern Indiana.

Mr. Graham has over 20 years of executive and leadership experience with technology-based and growth-oriented companies, as well as his multifaceted understanding of the data technology and cybersecurity issues facing businesses today.

Committees: Compensation; Risk; Strategy and Acquisition

Virginia L. Henkels

Ms. Henkels, 50, has been a member of our Board of Directors since 2017. From 2008 to 2017, Ms. Henkels served as Executive Vice President, Chief Financial Officer and Treasurer of Swift Transportation Company, a then publicly-traded transportation services company, where she led numerous capital market transactions, including its 2010 initial public offering. She also held various finance and accounting leadership positions with increasing responsibilities since 2004 at Swift Transportation and from 1990 to 2002 at Honeywell International, Inc., a global diversified technology and manufacturing company, including as Worldwide Revenue Chain and Finance Six Sigma Leader and Director of Financial Planning and Analysis at Honeywell International’s Industry Solutions division. Ms. Henkels is currently a member of the National Association of Corporate Directors and the Women’s Corporate Director organizations. Ms. Henkels also serves on the board of directors of Viad Corp., a publicly traded full-service live events and travel experience company and of Echo Global Logistics, Inc., a publicly traded provider of technology-enabled transportation and supply chain management solutions.

Formerly a CPA, Ms. Henkels has extensive experience with finance, accounting, capital markets, and investor relations, as well as experience in strategy development, risk management, mergers and acquisitions, audit, corporate culture, and corporate governance.

Committees: Audit (chair); Compensation

Jason D. Lippert

Mr. Lippert, 46, has been a member of our Board of Directors since 2007. Mr. Lippert became Chief Executive Officer of the Company in May 2013, and has been Chief Executive Officer of Lippert Components since February 2003. Mr. Lippert has over 20 years of experience with the Company and its subsidiaries, and has served in a wide range of leadership positions.

Mr. Lippert has particular knowledge of the industries and customers to which we sell our products, as well as extensive experience with strategic planning, acquisitions, marketing, manufacturing, and sale of our products.

Kieran M. O’Sullivan

Mr. O’Sullivan, 57, has been a member of our Board of Directors since 2015. Mr. O’Sullivan is President, Chief Executive Officer and Chairman of the Board of CTS Corporation, a publicly-owned designer and manufacturer of electronic components and sensors to original equipment manufacturers in the automotive, communications, medical, defense and aerospace, industrial, and computer markets. Prior to joining CTS in 2013, he served as Executive Vice President of Continental AG’s Global Infotainment and Connectivity Business and led the NAFTA Interior Division, having joined Continental AG, a global automotive supplier, in 2006.

Mr. O’Sullivan has over 25 years of leadership experience in operations, strategy, mergers and acquisitions, and finance roles in the manufacturing services, electronics, and automotive business segments, experience in global markets, as well as experience as a sitting President and Chief Executive Officer of a publicly-owned corporation.

Committees: Audit; Compensation (chair)

David A. Reed

Mr. Reed, 71, has been a member of our Board of Directors since 2003. Mr. Reed is President of a privately-held family investment management company. Mr. Reed retired as Senior Vice Chair for Ernst & Young LLP in 2000 where he held several senior U.S. and global operating, administrative, and marketing roles in his 26-year tenure with the firm. He served on Ernst & Young LLP’s Management Committee and Global Executive Council from 1991 to 2000. His experience includes service as a director for several publicly-owned, venture capital, and private equity-based companies since 2000.

Mr. Reed has accounting and financial acumen, with particular knowledge of financial reporting and taxation, and has public company board experience.

Committees: Audit; Strategy and Acquisition (chair)

Unless contrary instructions are indicated, the persons named as proxies in the form of proxy solicited from holders of the Common Stock will vote for the election of the nominees indicated above. If any such nominees should be unable or unwilling to serve, the persons named as proxies will vote for such other person or persons as may be proposed by the Board of Directors. The Board of Directors has no reason to believe that any of the named nominees will be unable or unwilling to serve.

The Board of Directors recommends a vote FOR election of each of the nine Director nominees.

CORPORATE GOVERNANCE AND RELATED MATTERS

Statement Regarding Corporate Governance

The Company regularly monitors developments in the area of corporate governance, including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform Act of 2010 (the “Dodd-Frank Act”), and rules promulgated by the SEC and the NYSE. The Company complies with all laws and rules applicable to corporate governance, and has continually implemented “best practices” as the Company deems appropriate to protect and enhance stockholders’ interests.

The Company’s Governance Principles, as well as the Charters of the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee, the Risk Committee, and the Strategy and Acquisition Committee, and the Key Practices of the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee, in addition to the Company’s Guidelines for Business Conduct, Code of Ethics for Senior Financial Officers, and Whistleblower Policy, can be accessed on the Company’s website at www.lci1.com/investors under “Corporate Governance.” A copy of any corporate governance document will be furnished, without charge, upon written request to Secretary, LCI Industries, 4100 Edison Lakes Parkway, Suite 210, Mishawaka, Indiana 46545. Information on our website is not incorporated by reference into this Proxy Statement.

Board of Directors and Director Independence

Directors are elected annually by the Company’s stockholders for one-year terms. The Board currently consists of eight independent Directors, one Director, Jason D. Lippert, who is employed by the Company as its Chief Executive Officer, and one Director, Ronald J. Fenech, who is affiliated with a customer of the Company.

The Board of Directors reviews at least annually the independence of each Director. During these reviews, the Board considers transactions and relationships between each Director (and his or her immediate family and affiliates) and the Company and Management to determine whether any such transactions or relationships are inconsistent with a determination that the Director is independent. The review is based primarily on responses of the Directors to questions in a directors’ and officers’ questionnaire regarding employment, business, familial, compensation, and other relationships. In reviewing the independence of the Directors, the Board applies the standards that it has adopted to assist it in making determinations of independence and that are contained in the Company’s Governance Principles, which are available on the Company’s website at www.lci1.com/investors under “Corporate Governance.” In March 2019, the Board determined that none of Messrs. Gero, Crespo, Deely, Graham, Hegi, O’Sullivan, or Reed, nor Ms. Henkels, has any material relationship with the Company or its subsidiaries. Accordingly, the Board has determined that each of these eight Directors meets the “independence” standards of the NYSE.

As part of its review of the independence of the Directors, the Board considered the fact that one of the Company’s customers is an entity that manufactures pontoon boats, Barletta Boat Company, LLC (“Barletta”). The President and 38% owner of Barletta, William Fenech, is the brother of Ronald Fenech, one of our Directors. Ronald Fenech is also a co-owner of Barletta, holding a 38% ownership interest, and is a director of that entity. Although the purchases by Barletta from the Company were, and future purchases will be, entered into in the ordinary course of business on an arm’s length basis, and contained, and will contain, customary terms and conditions on substantially the same terms as comparable transactions with unrelated third parties, in 2018, Barletta paid the Company amounts that exceed the limitation in the director “independence” standards of the NYSE. As a result, the Board determined that Mr. Fenech is not an independent Director. Mr. Fenech does not serve on any of the Audit Committee, Compensation Committee, or Corporate Governance and Nominating Committee.

The independent Directors have complete access to, and are encouraged to communicate with, the Company’s Chief Executive Officer and any other executives of the Company. During the year ended December 31, 2018, the Board of Directors held eight meetings. All Directors attended at least 75% of the regularly scheduled and special meetings of the Board and the Board committees on which they served.

Board members are expected to attend the Company’s annual meetings. At the Company’s 2018 Annual Meeting, all members of the Board were present.

Leadership Structure

The Company has continuously maintained separate positions for Chairman of the Board and for Chief Executive Officer in order to provide an independent and unbiased level of review and oversight of senior management. James F. Gero currently serves as Chairman of the Board, and Jason D. Lippert serves as Chief Executive Officer. The Chairman of the Board coordinates the activities of the independent Directors, serves as a liaison on Board-related issues between the independent Directors and the CEO, and performs any other duties and responsibilities that the Board of Directors may determine. While the Board elects a Chairman of the Board annually, it is generally expected that he or she will serve for more than one year.

The role of the Chairman of the Board also includes:

►

presiding at executive sessions, with the authority to call meetings of the non-employee Directors;

►

advising on the selection of committee chairs;

►

approving the agenda, schedule, and information sent to the Directors for Board meetings and assuring that there is sufficient time for discussion of all items on Board meeting agendas;

►

working with the CEO to prepare a schedule of strategic discussion items; and

►

guiding the Board’s governance processes, including the annual Board self-evaluation and succession planning.

The Board periodically reviews its leadership structure to evaluate whether it remains appropriate for the Company.

Executive Sessions

The non-employee Directors meet regularly in executive sessions without Management. An executive session is held in conjunction with each regularly scheduled Board meeting and is led by the Chairman of the Board. Additional executive sessions may be called by the Chairman of the Board in his discretion or at the request of the Board.

Board Committees

The Company has five standing committees of the Board of Directors: the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee, the Risk Committee, and the Strategy and Acquisition Committee. All members of the Audit Committee, the Compensation Committee, and the Corporate Governance and Nominating Committee are independent Directors who meet the independence and experience standards of the NYSE and the SEC. The Board annually selects the Directors who serve on the committees. Except as outlined below, each committee functions pursuant to a written Charter and, other than the Risk Committee and Strategy and Acquisition Committee, written Key Practices adopted by the Board of Directors and reviewed annually by each committee.

The following table reflects the current membership of each Board Committee:

Name	Audit Committee	Compensation Committee	Corporate Governance and Nominating Committee	Risk Committee	Strategy and Acquisition Committee
James F. Gero
Frank J. Crespo
Brendan J. Deely
Ronald J. Fenech
Tracy D. Graham
Frederick B. Hegi, Jr.
Virginia L. Henkels
Kieran M. O’Sullivan
David A. Reed


Audit Committee Commitee Members Virginia L. Henkels James F. Gero Frederick B. Hegi, Jr. Kieran M. O’Sullivan David A. Reed Number of meetings in 2018: 7	Key Responsibilties

	The purpose of the Audit Committee of the Board of Directors is to assist the Board in its oversight of (i) the conduct of the Company’s financial reporting processes and the integrity of the Company’s financial statements; (ii) the Company’s compliance with legal and regulatory requirements; (iii) the independence, qualifications, and performance of the Company’s independent auditor; (iv) the adequacy and effectiveness of the Company’s systems of internal control over financial reporting and disclosure controls and procedures, and the performance of the Company’s internal audit function; and (v) the Company’s compliance with ethical standards adopted by the Company. The Committee also prepares an annual report for inclusion in the Company’s Proxy Statement. The Audit Committee selects the Company’s independent auditor, which selection is submitted to the stockholders for ratification in this Proxy Statement. See “Proposal 3. Ratification of Appointment of Auditors.”

	All of the Audit Committee members meet the independence and experience requirements of the NYSE and the SEC. Ms. Henkels serves as Chair of the Audit Committee, and each member of the Committee has been determined by the Board of Directors to be an “audit committee financial expert” as defined by the SEC. This Committee held seven meetings during the year ended December 31, 2018.


Compensation Committee Commitee Members Kieran M. O’Sullivan Brendan J. Deely Tracy D. Graham Virginia L. Henkels Number of meetings in 2018: 4	Key Responsibilities

	The purpose of the Compensation Committee of the Board of Directors is (i) to assist the Board in discharging its responsibilities in respect of compensation of the Company’s executive officers; and (ii) to prepare an annual report on executive compensation for inclusion in the Company’s Proxy Statement.

	The Compensation Committee is responsible for reviewing the performance and development of the Company’s Management in achieving corporate goals, and to ensure that the Company’s senior executives are compensated consistent with the long-term objectives of the Company as well as competitive practices. This Committee provides oversight and guidance in the development of compensation and benefit programs for senior executives of the Company, determines the compensation terms for the Company’s Chief Executive Officer and other executive officers, administers the LCI Industries Equity Award and Incentive Plan, as Amended and Restated (the “2011 Plan”) and the LCI Industries 2018 Omnibus Incentive Plan (the “2018 Plan”), approves equity awards, and coordinates with the Corporate Governance and Nominating Committee with respect to compensation of Directors. The Compensation Committee approved the compensation, consisting of salary, incentive bonus, equity awards, and benefits paid for 2018 to the “Named Executive Officers.” See “Executive Compensation - Compensation Discussion and Analysis.”

	Mr. O’Sullivan serves as Chairman of the Compensation Committee. This Committee held four meetings during the year ended December 31, 2018.


Corporate Governance and Nominating Committee Commitee Members Brendan J. Deely Frank J. Crespo James F. Gero Frederick B. Hegi, Jr. Number of meetings in 2018: 3	Key Responsibilities

	The purpose of the Corporate Governance and Nominating Committee of the Board of Directors is to assist the Board in (i) identifying qualified individuals to become Board members; (ii) determining the composition of the Board of Directors and its Committees; (iii) monitoring a process to assess Board effectiveness; (iv) developing and implementing the Company’s corporate governance principles and business guidelines; and (v) evaluating potential candidates for executive positions. The Corporate Governance and Nominating Committee oversees the development of executive succession plans, coordinates with the Compensation Committee with respect to compensation of Directors, reviews and approves related person transactions, and resolves any conflicts of interest involving a Director. The Committee also reviews and, if necessary, recommends revisions to the Company’s Guidelines for Business Conduct, Code of Ethics for Senior Financial Officers, and other governance policies adopted from time to time.

	The Corporate Governance and Nominating Committee leads the search for individuals qualified to become Directors and selects nominees to be presented for stockholder approval at each Annual Meeting of Stockholders and to fill vacancies on the Board of Directors. See “Proposal 1. Election of Directors - Director Qualifications and Selection Process.”

	Mr. Deely serves as Chairman of the Corporate Governance and Nominating Committee. This Committee held three meetings during the year ended December 31, 2018.


Risk Committee Commitee Members Frank J. Crespo Ronald J. Fenech Tracy D. Graham Number of meetings in 2018: 4	Key Responsibilities

	The purpose of the Risk Committee is to provide oversight of Company-wide risk management practices to assist the Board in (i) overseeing that the executive team has identified and assessed all the risks that the organization faces and has established a risk management infrastructure capable of addressing those risks; (ii) overseeing in conjunction with other Board-level committees or the full Board, if applicable, risk, such as strategic, financial, credit, market, liquidity, cyber and physical security, property, information technology, legal, regulatory, reputational, and other risks; (iii) overseeing the division of risk-related responsibilities to each Board committee as clearly as possible and performing a gap analysis to determine that the oversight of any risks are not missed; and (iv) in conjunction with the full Board, approving the Company’s enterprise-wide risk management framework. The Company faces a number of material risks, including financial and operational risks. Accordingly, the Company conducts regular enterprise risk management reviews to identify and assess these risks, and to implement effective plans to manage them.

	Mr. Crespo serves as Chairman of the Risk Committee. This Committee held four meetings during the year ended December 31, 2018.


Strategy and Acquisition Committee Commitee Members David A. Reed Ronald J. Fenech Tracy D. Graham Number of meetings in 2018: 8	Key Responsibilities

	The purpose of the Strategy and Acquisition Committee is to assist the Board in fulfilling its oversight responsibilities relating to the formulation and execution of strategy for the Company, risks and opportunities relating to such strategy, and strategic decisions regarding investments, acquisitions, and divestitures by the Company. The Strategy and Acquisition Committee (i) works with Management in the development of the Company’s strategy; (ii) monitors execution of the Company’s strategic plan, both domestically and internationally, against stated goals and objectives, and provides guidance and feedback as necessary; (iii) in conjunction with Management, develops an acquisition strategy that aligns with the Company’s long-term strategic plan; (iv) reviews each proposed acquisition by the Company above an established threshold in the context of various factors, including whether to recommend approval of the acquisition; (v) from time to time, reviews and recommends to the Board of Directors whether to exit an existing business or dispose of assets; and (vi) reviews and analyzes actions and results against stated goals and objectives.

	Mr. Reed serves as Chairman of the Strategy and Acquisition Committee. This Committee held eight meetings during the year ended December 31, 2018.

Compensation-Related Risk

To identify risks that could be created by our compensation policies and practices, the Compensation Committee reviews enterprise risk management assessments, and evaluates our controls to determine if they adequately mitigate compensation-related risks. If appropriate, controls are modified or supplemented. The Compensation Committee assessed our executive compensation programs, and concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company. The Compensation Committee believes our executive compensation programs, including the design of long-term incentive plans, oversight by the Compensation Committee, and sufficiency of control features, prevent unintentional material risk. In addition, stock ownership guidelines, the long-term nature of equity awards, share retention, and incentive compensation forfeiture, taken together, motivate Management to carefully consider risk in making business decisions and evaluating growth opportunities, and mitigate excessive risk-taking to achieve short-term results.

Compensation Recoupment Policy

The Board of Directors has adopted a compensation recoupment policy for executive officers that allows for the recovery of performance-based compensation amounts paid under an incentive compensation plan, including any discretionary bonus amounts and equity awards under the 2011 Plan or the 2018 Plan, or any successor plan, the amount, payment, and/or vesting of which was calculated based wholly, or in part, on the application of financial performance criteria. The policy applies in the event there is a required financial restatement due to material noncompliance with any financial reporting requirements under the securities laws, as determined by the Board of Directors, which results in performance-based compensation that would have been a lower amount if such compensation had been calculated based on such restated results. The policy is administered by the Compensation Committee, as more fully described in the policy, which is included in the Compensation Committee Key Practices.

Director Stock Ownership Requirements

To help align the personal interests of non-employee Directors with the interests of stockholders, all non-employee Directors are required to hold Company Common Stock or DSUs equivalent to 5x each non-employee Director’s annual cash retainer (exclusive of any cash retainer for serving as a Board or Committee chair). Equity interests that count toward satisfaction of the guidelines include shares owned outright by, or held in trust for the benefit of, the individual and his or her immediate family members residing in the same household, plus RSUs, DSUs, and stock awards (whether vested or unvested). Stock options (whether vested or unvested) do not count toward satisfaction of the guidelines. Non-employee Directors are required to achieve ownership in accordance with the guidelines within three years of the date they assume their position. As of the date of this Proxy Statement, all non-employee Directors satisfy the stock ownership requirements or are within that three-year period.

Employees and Directors Guidelines for Business Conduct

The Company has Guidelines for Business Conduct that all management employees and Directors are required to annually sign and to follow in conducting the Company’s business, and a Code of Ethics for Senior Financial Officers governing the conduct of its Chief Executive Officer, President, Chief Financial Officer, and the financial officers of the Company and its subsidiaries.

Management and Board Succession

The Board periodically reviews with the Chief Executive Officer and maintains a succession plan for executive officers, after considering recommendations from the Corporate Governance and Nominating Committee. The plan is designed to ensure an effective transition of management of our operations to qualified executives upon the retirement of senior executives. The Board is also responsible for maintaining an emergency succession plan that is reviewed periodically with Management.

Contacting the Board of Directors

Any stockholder, or other interested party, who wishes to communicate with the Board of Directors, or our non-employee Directors as a group, or any member of the Board, may do so electronically by sending an e-mail to LCII@lci1.com or by writing to any Director c/o LCI Industries, 4100 Edison Lakes Parkway, Suite 210, Mishawaka, Indiana 46545. Communications received electronically or in writing will be distributed to the Chairman or the other members of the Board, as appropriate, depending on the facts and circumstances described in communications received. For example, communications regarding accounting, internal accounting, internal accounting controls, and auditing matters generally will be forwarded to the Chair of the Audit Committee.

DIRECTOR COMPENSATION

The following table summarizes compensation paid to non-employee Directors during fiscal 2018:

Name	Fees Earned or Paid in Cash⁽¹⁾		Stock Awards⁽²⁾		Total
James F. Gero	$	172,500	$	165,958	$	338,458
Frank J. Crespo	$	97,500	$	154,714	$	252,214
Brendan J. Deely	$	97,500	$	154,714	$	252,214
Ronald J. Fenech	$	82,500	$	152,375	$	234,875
Tracy D. Graham	$	82,500	$	152,375	$	234,875
Frederick B. Hegi, Jr.	$	82,500	$	152,375	$	234,875
Virginia L. Henkels	$	93,330	$	153,545	$	246,875
John B. Lowe, Jr.	$	20,625	$	—	$	20,625
Kieran M. O’Sullivan	$	99,000	$	154,894	$	253,894
David A. Reed	$	100,500	$	155,164	$	255,664
Total	$	928,455	$	1,396,114	$	2,324,569

(1)

Represents the Directors’ annual cash retainer amount and the additional annual cash fee paid to the Chairman of the Board and the Committee Chairs, as applicable, for the period of time they served in the respective positions in 2018, except for Messrs. Gero, Crespo, Fenech, Hegi, Lowe, and Reed and Ms. Henkels, who elected to receive shares of our Common Stock in lieu of their cash compensation for 2018. For those Directors, the amount shown includes the value, as of the date earned, of shares of Common Stock issued in lieu of cash compensation in payment of Directors’ fees. To encourage our Directors’ long-term ownership of the Common Stock of the Company, non-employee Directors historically have been able to elect to receive DSUs in lieu of cash compensation in payment of Directors’ fees. Due to an administrative error, our Directors were not given the ability to timely make an election to defer compensation for 2018, and therefore our Board of Directors permitted our non-employee Directors to elect to receive shares of Common Stock, instead of DSUs, in lieu of cash compensation for 2018.

(2)

In May 2018, each non-employee Director who was elected at the 2018 Annual Meeting was granted 1,556 RSUs, having a value of approximately $140,000, as the annual equity grant component of Director compensation. In addition, each such non-employee Director received a number of additional RSUs that had a value equal to 15% of the amount of such Director’s annual cash retainer and any applicable Board or committee chair fees, which 15% was intended to be a reasonable substitute for the fact that Directors were not given an opportunity to elect to receive DSUs for 2018. In years when Directors could elect to receive DSUs, the number of DSUs received was equivalent to 115% of the deferred fee. The fair value of the RSUs granted to Directors in 2018, including the annual grant and the additional RSUs, was $89.95 per share, the closing price on the day before the grant. The closing price on the grant date was $87.65. These RSUs vest in full on the earlier of the first anniversary of the grant date or the date of the annual meeting of stockholders in the following year. Directors do not have any rights of a stockholder of the Company with respect to RSUs, other than to receive dividend equivalents in RSUs with the same vesting period, if dividends are issued to stockholders. Non-employee Directors can also receive non-qualified stock options or other stock-based awards under the 2018 Plan. No stock options or other stock-based awards were granted in fiscal 2018 to our non-employee Directors. As of December 31, 2018, the non-employee Directors held the following number of RSUs:

Name	RSUs Held at December 31, 2018
James F. Gero	1,884
Frank J. Crespo	1,757
Brendan J. Deely	1,757
Ronald J. Fenech	1,730
Tracy D. Graham	1,730
Frederick B. Hegi, Jr.	1,730
Virginia L. Henkels	1,743
Kieran M. O’Sullivan	1,759
David A. Reed	1,762

Discussion of Director Compensation

The Corporate Governance and Nominating Committee has responsibility for recommending to the Board compensation and benefits for non-employee Directors. In discharging this duty, the Committee is guided by three goals: (1) compensation should fairly pay Directors for the time and service they provide; (2) compensation should align the interests of Directors with the long-term interests of stockholders; and (3) the structure of the compensation should be simple, transparent, and easy for stockholders to understand. The Corporate Governance and Nominating Committee believes these goals are served by providing non-employee Directors with an annual retainer fee, fees for each meeting attended, or any combination thereof, and an annual stock-based award. Prior to determining compensation for non-employee Directors for fiscal 2018, the Corporate Governance and Nominating Committee also consulted with Exequity LLP, the Committee’s independent compensation consultant, regarding Director compensation mix and total compensation for Board and Committee service.

For fiscal 2018, non-employee Directors received a combination of an annual cash retainer of $82,500, which covers a Director’s attendance at up to 25 Board and Committee meetings, and an annual grant of RSUs valued at $140,000 on the date of grant, which occurs on the date of the Annual Meeting following their election to the Board for a one-year term. Attendance at any meetings in excess of the 25 earns additional compensation of $1,500 per meeting. The Chairman of the Board and the Chair of each of the Audit Committee, the Compensation Committee, the Corporate Governance and Nominating Committee, the Risk Committee, and the Strategy and Acquisition Committee received an additional annual fee for the additional responsibilities related to their respective positions. The following table sets forth the additional annual fees for the Board and Committee Chairs that were in effect during 2018:

Annual Fee for Board or Committee Chair
Board of Directors	$90,000
Audit Committee	$18,000
Compensation Committee	$16,500
Corporate Governance and Nominating Committee	$15,000
Risk Committee	$15,000
Strategy and Acquisition Committee	$18,000

Annual retainer fees, meeting attendance fees, and chair fees are paid on a quarterly basis.

Non-employee Directors who join the Board of Directors other than on the date of an Annual Meeting receive pro-rated retainer amounts and equity awards.

To encourage our Directors’ long-term ownership of the Common Stock of the Company, non-employee Directors historically have been able to elect to receive DSUs in lieu of cash compensation in payment of Directors’ fees. An initial election to defer compensation for a calendar year must be made prior to December 31^st of the preceding calendar year. The number of shares of DSUs, credited at the fair market value of the stock on the date credited, is equivalent to 115% of the deferred fee. The DSUs are distributed in the form of shares of Common Stock of the Company at the end of the deferral period selected by the Director, subject to earlier distribution upon death, disability, or certain changes-in-control of the Company, and are intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended. Until shares representing the DSUs are distributed, the Director does not have any rights of a stockholder of the Company with respect to such shares, other than to receive dividend equivalents in DSUs with the same deferral period, if dividends are issued to stockholders. Due to an administrative error, our Directors were not given the ability to timely make an election to defer compensation for 2018, and therefore our Board of Directors permitted our non-employee Directors to elect to receive shares of Common Stock, instead of DSUs, in lieu of cash compensation for 2018. In addition, in order to provide a reasonable substitute for the 115% value in the historical DSU election option, in 2018 each non-employee Director who was elected at the 2018 Annual Meeting was also granted an award of additional RSUs that had a value equal to 15% of the amount of such Director’s annual cash retainer and any applicable Board or Committee chair fees. Directors were provided the opportunity to elect to receive DSUs in lieu of cash compensation in payment of Directors’ fees in 2019.

Directors who are employees of the Company do not receive additional fees or other compensation for serving as Directors.

EXECUTIVE COMPENSATION

This section provides information relating to our executive compensation programs and the compensation paid to or accrued for certain executive officers (our “Named Executive Officers,” or “NEOs”) during 2018.

Named Executive Officers

Our Named Executive Officers are determined in accordance with the rules of the SEC, and for 2018 include: Jason D. Lippert, our Chief Executive Officer; Brian M. Hall, our Chief Financial Officer; Andrew J. Namenye, our Vice President - Chief Legal Officer and Secretary; Jamie M. Schnur, our Chief Administrative Officer; Nick C. Fletcher, our Chief Human Resources Officer; and Scott T. Mereness, our former President.

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) describes the major elements of our compensation programs for the Named Executive Officers, as well as the objectives, philosophy, process, and decisions underlying the compensation of our Named Executive Officers. Because Mr. Mereness’s employment with us terminated effective November 16, 2018, this CD&A provides information regarding our compensation programs applicable to Mr. Mereness to the extent they apply based on his status with the Company at the relevant time. This CD&A should be read together with the executive compensation tables and related footnotes found later in this Proxy Statement.

Response to 2018 Stockholder Advisory Vote

At the Annual Meeting of Stockholders held on May 24, 2018, our stockholders approved, in an advisory vote, the compensation paid to our NEOs for 2017. In the advisory vote, 97% of the votes cast voted in favor of the 2017 compensation. Although the vote was non-binding, the Compensation Committee (or, in this CD&A, the “Committee”) reviewed the results of the vote and considered the approval rate as an indication that stockholders support the Company’s executive compensation philosophy and decisions, including the restructured aspects of the compensation program for our Chief Executive Officer and President that were effective for 2017.

Our Board of Directors has determined that our stockholders should vote on an advisory say-on-pay proposal each year. Accordingly, our Board of Directors recommends that you vote FOR Proposal 2 at the Annual Meeting. For more information, see “Proposal 2 - Advisory Vote on Executive Compensation” in this Proxy Statement.

Compensation Philosophy

Our executive compensation policy is designed to enable the Company to attract, motivate, and retain highly-qualified senior executives by providing a competitive compensation opportunity based significantly on performance. The Committee’s intent is to provide fair and equitable compensation in a way that rewards these executives for achieving specified financial goals and other key metrics. Our performance-related awards are structured to link a substantial portion of these executives’ total potential compensation to the Company’s performance on both a long-term and short-term basis, to recognize individual contribution as well as overall business results, and to align executive and stockholder interests. A significant portion of the total compensation paid to our NEOs is in the form of long-term equity.

Our compensation policy has demonstrated over time that sound business decisions by these executives are in the best interests of the Company and our stockholders, as well as the executives. Accordingly, the Committee rewards performance in excess of pre-established targets of return on invested capital (“ROIC”) and growth in earnings per share (“EPS”), and the Committee avoids establishing goals that could divert our executives’ attention from the fundamentals of effective and efficient operations.

We believe the Company’s compensation programs through 2018 have been instrumental in driving our strong financial performance and stockholder returns in recent years. Since 2013, the Committee has primarily emphasized ROIC and EPS in the Company’s executive compensation programs. The Company’s method of measuring ROIC is based on operating profit and average invested capital (defined on page 26). Revenue growth was included as a secondary performance measure in the annual incentive plan in 2015 and 2016, and employee attrition reduction was the secondary performance measure in 2017. In 2018, the Committee chose gross margin improvement as the secondary performance measure because it was one of the Company’s strategic business goals for 2018. The Committee believes a focus on ROIC in the Company’s compensation program incentivizes the CEO and his executive team to increase operating profits through organic growth and capital-efficient acquisitions, which aligns directly with the Company’s long-term growth strategy. Since Mr. Lippert was appointed CEO, ROIC has become ingrained in our corporate culture. The Committee has also strongly supported alignment with stockholder interests by emphasizing EPS in its equity compensation programs. The Committee believes that focusing executives on EPS growth and ROIC performance aligns directly with long-term stockholder value creation.

Compensation Process

The Committee is responsible for reviewing the performance of our executive officers in achieving our long-term business objectives, and ensuring that such executives are compensated consistent with those objectives, as well as competitive practices. The Committee approves the compensation and benefit programs for our senior executives, and confirms compensation paid to those NEOs who have employment agreements is in compliance with the agreements.

The Committee reviews the executive compensation program in connection with our annual performance review process, which typically begins in November of each fiscal year, with changes to base compensation effective January 1^st. The Committee typically sets base salary structures and annual incentive targets after taking into consideration a combination of financial performance results, management recommendations, and market and industry data as well as external data from a peer group of similarly-sized and type of companies. Although not the determinative factor, the Committee believes peer group data provides a useful point of reference to ensure our compensation structures allow us to remain competitive in our markets. The Committee uses an outside compensation consultant to assist it in analyzing our compensation programs and determining appropriate levels of compensation and benefits. The decision to retain consultants and, if so, which consultants to retain, is made solely by the Committee.

The Chief Executive Officer participates in the Committee’s meetings at the Committee’s request. To aid the Committee in making its determination, tally sheets summarizing total compensation for the last three fiscal years, as well as the current inventory of stock-based awards held by the executive officers, are provided. The Chief Executive Officer provides recommendations annually to the Committee regarding the compensation of all executive officers, other than himself. The Committee, not Management, is responsible for the final determination of the amount and form of executive compensation.

In July 2013, the Committee engaged Exequity LLP (“Exequity”), an independent consultant that reports directly to the Committee. Exequity’s role is to provide the Committee with ongoing general advisory services, which may include assistance with review of executive pay proposals and program designs, various data analyses, support with respect to relevant legal and regulatory considerations impacting executive compensation and benefit programs, and updates on market trends. A representative of Exequity regularly attends the Committee meetings and provides data and advice to the Committee throughout the year. Exequity provides no services or advice to any executive or employee of the Company, and provided no other services to the Company for 2018. The Committee is empowered to retain or replace Exequity or to hire additional consultants at any time.

In evaluating the competitiveness of our compensation programs for 2018, Exequity reviewed, and provided to the Committee, market data regarding the compensation practices of a peer group of 20 publicly traded companies listed below:

Peer Group for 2018 Compensation
American Axle & Manufacturing Holdings, Inc.	Modine Manufacturing Company
Applied Industrial Technologies, Inc.	NCI Building Systems, Inc.
Brunswick Corporation	Patrick Industries, Inc.
Cooper-Standard Holdings, Inc.	Standard Motor Products, Inc.
Dana Incorporated	Thor Industries, Inc.
Donaldson Company, Inc.	Tower International, Inc.
Gentex Corporation	Visteon Corporation
Graco Inc.	Wabash National Corporation
Lincoln Electric Holdings, Inc.	Watts Water Technologies, Inc.
Masonite International Corporation	Winnebago Industries, Inc.

The peer group outlined above is the same as the peer group used by the Committee when evaluating our compensation programs for 2017 except that the Committee replaced CLARCOR Inc. with Brunswick Corporation based on Exequity’s recommendation.

In February 2018, in consultation with Exequity and following discussions with the CEO, the Committee approved the compensation arrangement for the CEO and senior officers of the Company and its wholly-owned subsidiary Lippert Components for fiscal year 2018, including with respect to Named Executive Officers of the Company, which, in addition to base salary, included an annual management incentive program and value-based equity awards consisting of PSUs and time-based RSUs. Based on the Committee’s review of the tally sheets and external peer data, the Committee determined the amounts of compensation to be paid to our NEOs for 2018 were reasonable, and were appropriate based on our financial results of operations and the individual performance of each of the executives.

The Committee expects to rely on the same general compensation structure going forward, but reserves the right to make structural modifications to the key elements of the compensation provided to executive officers from year to year. The Committee periodically reviews our compensation policy utilizing both internal and external sources of information and analysis relating to financial results of operations,

individual performance, long-term return to stockholders, compensation-related risk assessment, and compensation afforded by other employers to comparable-level executives. If appropriate, changes are recommended. For example, the Committee made certain adjustments related to 2018 compensation for our executives. Under the Company’s 2018 Annual Incentive Program approved by the Committee for the Company’s senior officers (the “2018 AIP”), the Committee retained the principal performance measure of adjusted ROIC, but up to 10% of the bonus payment amount was subject to the level of achievement of gross margin improvement targets, instead of an employee attrition reduction goal as it was under the 2017 Annual Incentive Program (the “2017 AIP”). In addition, in 2018 the Committee changed the type of annual equity awards granted. Instead of DSUs, the Committee granted RSUs to the NEOs, which, like DSUs, are time-based vesting awards that vest over a period of three years. The Committee also granted PSUs instead of performance shares, but the awards continued to be based on the same underlying performance measures over the same time periods and continued to have a subsequent approximately one-year vesting period. Further, the Committee granted PSUs based on ROIC to certain other NEOs, rather than just to the CEO and President, as it had done in 2017. The Committee made additional adjustments to the 2019 compensation program. See “Compensation Program Changes for 2019” on page 30.

Principal Elements of Compensation of Named Executive Officers

The principal components of our executive compensation program in 2018 were base salary, annual and long-term performance-based incentive compensation, annual equity-based awards consisting of RSUs, and other personal benefits. While the components of compensation are considered separately in this discussion, the Committee took into account the full compensation package provided to each of the NEOs. The following table describes these principal elements of compensation and the objectives of each:

Principal Elements and Key Characteristics		Objectives
Base Salary
• • •	Provides regular recurring compensation for the fulfillment of the regular duties and responsibilities associated with job roles Based on a review of the salaries paid to executives with similar responsibilities at comparable companies and on their business experience, established as a fixed component of a market-competitive total compensation opportunity Reviewed annually, including prior year performance and available market data	• • •	Designed to attract and retain key employees Recognizes prior year performance Recognizes increased responsibilities through increases for promotions or other changes in the scope or breadth of role or responsibilities
Annual Cash Incentive Compensation
•	Variable compensation component payable in cash based on performance against established goals	•	Motivates executives to achieve key measures and objectives
•	For 2018, based primarily on goals for ROIC, with up to 10% based on gross margin improvement	•	Incentivizes investments in opportunities promoting management of assets
•	Target awards based on percentage of base salary
PSUs - ROIC
•	One-year performance period with an additional time-based vesting component	•	Motivates executives to achieve key measures and objectives
•	PSUs are earned based on actual results relative to target ROIC	•	Incentivizes investments in opportunities promoting management of assets
•	Payouts can range from 0% to 400% of target	•	Aligns executives’ and stockholders’ long-term interests and creates a culture of ownership
PSUs - EPS
•	Two-year performance period with an additional time-based vesting component	•	Motivates executives to achieve key measures and objectives
•	PSUs are earned based on actual results relative to target EPS growth	•	Incentivizes investments in opportunities promoting management of assets
•	Payouts can range from 0% to 150% of target	•	Aligns executives’ and stockholders’ long-term interests and creates a culture of ownership
RSUs
•	Annual award that vests over three years	•	Aligns executives’ and stockholders’ long-term interests and creates a culture of ownership

For additional information regarding these compensation elements and 2018 compensation decisions, see “2018 Executive Performance and Compensation.”

To encourage our executives’ long-term ownership of our Common Stock, the Committee historically has granted annual awards of DSUs under the 2011 Plan and, beginning in 2018, granted RSUs under the 2011 Plan. The Committee shifted the type of award from DSUs to RSUs for administrative ease and due to the fact that executives have not typically elected to defer the awards. The award agreements for all types of equity awards include, among other provisions, termination, change-in-control, and clawback provisions.

The Committee does not limit DSU or RSU grants based on the current level of equity ownership of our NEOs or the unvested portion of their prior awards. On the contrary, the Committee believes the greater the extent of their equity interest in the Company, the more closely aligned our executives’ personal interests become with the interests of our stockholders.

Other Compensation Programs

In order to be competitive with market employment and compensation practices, we maintain the following benefit programs:

401(k) Plan

We do not maintain any defined benefit retirement plans or other pension or profit-sharing plans. To provide retirement benefits for executives, the Company maintains a discretionary 401(k) plan, covering all eligible employees, pursuant to which the Company matched a portion of contributions up to the 2018 statutory maximum of $11,000 per employee. The aggregate amount of the Company’s contributions with respect to the NEOs was $66,000 for 2018. Although our 401(k) plan permits profit-sharing contributions, the Company has not made any such contributions to the plan.

Deferred Compensation Plan

To provide a means for deferral of taxation on compensation, the Company maintains an Executive Non-Qualified Deferred Compensation Plan (“Deferral Plan”) for certain executives, including the NEOs. The Company does not make any contributions to the Deferral Plan but is responsible for certain costs of Deferral Plan administration, which are not significant. Pursuant to the Deferral Plan, the NEOs are eligible to defer all or a portion of their earned base salary and incentive compensation. Each participant is fully vested in all deferred compensation and earnings on investments credited to his or her account because the Deferral Plan participant has made all the contributions. Pursuant to the Deferral Plan, payments to the participants will be made from our general unrestricted assets, and the obligations pursuant to the Deferral Plan are unfunded and unsecured.

Perquisites and All Other Benefits

As a competitive employee benefit, we provide employee health insurance in which the NEOs participate, the aggregate cost of which for the NEOs was $63,507 for 2018. We also provide other employee benefits in which the NEOs participate, including life and disability insurance, and an automobile allowance together with related expenses. We do not provide or reimburse our executives for personal use of an airplane, or for financial planning, tax preparation, or home security.

Severance

In February 2015, the Committee approved and adopted a form of Executive Employment Agreement for senior officers that has an initial three-year term with automatic one-year renewals, and that provides severance payments or other benefits under certain circumstances following termination. The Committee believes the Executive Employment Agreements serve as appropriate retention tools for the Company’s executives by providing security in the event of an unplanned termination of employment for other than cause. Furthermore, from time to time, we examine various strategic alternatives, and the provisions of the agreements are important to retain these key people whose continued employment might be at risk for reasons other than cause. The specific terms of the employment agreements are summarized in “Potential Payments on Termination or Change-in-Control.”

The 2011 Plan and the 2018 Plan, and the related award agreements, contain provisions regarding treatment of outstanding equity awards upon a change in control of the Company and upon certain terminations of employment, as further described in “Potential Payments on Termination or Change-in-Control.”

On November 16, 2018, the Company and Mr. Mereness agreed to Mr. Mereness’s resignation as the Company’s President, and from all other officer and director positions with the Company and its affiliated entities, effective at the close of business on November 16, 2018 (the “Termination Date”). Mr. Mereness’s employment also terminated on November 16, 2018. On November 16, 2018, Mr. Mereness and the Company entered into a Separation and General Release Agreement (the “Separation Agreement”). In the Separation Agreement, Mr. Mereness provided a general release of claims in favor of the Company and related entities and persons. Mr. Mereness also reaffirmed his ongoing obligations under his Executive Employment Agreement, dated as of February 26, 2015 (the “Mereness Employment Agreement”), including the restrictive covenants contained therein, as modified by the Separation Agreement to broaden the definition of “Competitor” in the Mereness Employment Agreement.

The Separation Agreement also provided that Mr. Mereness would receive the severance compensation and other benefits set forth in the Mereness Employment Agreement. The type and amount of severance compensation and benefits that Mr. Mereness was entitled to receive were substantially those provided by the Mereness Employment Agreement in the event of a termination without cause and included: (i) $1,213,442, which was an amount equivalent to two times Mr. Mereness’s annual base salary (at the highest annualized rate in effect at any time within two years of the Termination Date); (ii) $1,213,442, which was an amount equivalent to two times Mr. Mereness’s average bonus or incentive compensation paid during the prior three years (with the average capped at Mr. Mereness’s current base salary); (iii) $218,420, the agreed-upon amount payable related to the 2018 AIP; (iv) accelerated vesting of certain equity awards; (v) $17,796, which was an amount equivalent to 12 months of COBRA premiums; and (vi) outplacement services for at least six months. In addition, in lieu of the 90 days’ prior written notice required under the Mereness Employment Agreement, the Company agreed to pay to Mr. Mereness $151,680, which is approximately equal to his base salary for such period.

On January 22, 2019, the Company filed a lawsuit against Mr. Mereness, alleging that Mr. Mereness used our confidential information to usurp a corporate opportunity. Through this suit, we are seeking to retroactively terminate Mr. Mereness for cause and to recover related damages, including recovery of all amounts paid pursuant to the Separation Agreement and rescission or recovery of Mr. Mereness’s stock awards. We cannot predict the outcome of the litigation.

Executive Stock Ownership Requirements

To further align the personal interests of senior executives with the interests of our stockholders, we have established guidelines for ownership of the Company’s Common Stock by our Chief Executive Officer and Chief Financial Officer (each, a “Restricted Executive”) as a multiple of the executive’s cash base salary as of December 31, 2018 as set forth in the following table:

Named Executive Officer	Title	Multiple of Base Salary	Cash Equivalent
Jason D. Lippert	Chief Executive Officer	5.00	$4,875,000
Brian M. Hall	Chief Financial Officer	3.00	$1,200,000

Equity interests that count toward satisfaction of the guidelines include shares owned outright by, or held in trust for the benefit of, a Restricted Executive and his or her immediate family members residing in the same household, plus DSUs and RSUs (whether vested or unvested), as well as performance shares and PSUs (if unearned, the target number is included, or if earned, the earned number is included, whether vested or unvested). Restricted Executives are required to achieve ownership in accordance with the guidelines within three years of the date they assume their position. At December 31, 2018, all the Restricted Executives were in compliance with the guidelines or were still within the three-year achievement period.

Clawback Policy

The Dodd-Frank Act requires the SEC to adopt rules requiring companies to develop and implement a policy to recapture excess incentive compensation that was paid to certain executives if based on erroneous financial statements (“clawback”). Final rules have not yet been adopted implementing the clawback requirements. Rather than continue to wait for such rules, in 2014, the Board of Directors determined it was prudent to adopt a compensation recoupment policy for executive officers that allows for the recovery of performance-based compensation amounts paid under an incentive compensation plan, including any discretionary bonus amounts and equity awards under the 2011 Plan or 2018 Plan, or any successor plan, the amount, payment, and/or vesting of which was calculated based wholly, or in part, on the application of financial performance criteria. The policy applies in the event there is a required financial restatement due to material noncompliance with any financial reporting requirements under the securities laws, as determined by the Board of Directors, which results in performance-based compensation that would have been a lower amount if such compensation had been calculated based on such restated results. The policy is administered by the Committee, as more fully described in the policy. The Company may amend its policy when the SEC promulgates the final rules. Additionally, all awards of incentive compensation are granted subject to the 2011 Plan or the 2018 Plan, as applicable, each of which provides that the Committee may review any equity award if the amount, payment, or vesting of such award was based on an entry in the financial statements that is the subject of a restatement, and cancel all or any portion of such awards and require the participant to repay to the Company all or any portion of the gain realized on the exercise of equity awards and the value realized on other awards.

Tax Deductibility of Compensation

Section 162(m) of the Internal Revenue Code (the “Code”) limits the deductibility of compensation paid by a publicly-held company to certain executive officers to $1 million per covered officer in any fiscal year. Previously, this limitation applied only to compensation which was not considered performance-based under the Section 162(m) rules, and the 2011 Plan was structured so that certain performance-based incentive compensation could qualify as performance-based compensation not subject to the $1 million limitation. However, in December 2017, the performance-based exception was repealed as part of the Tax Cuts and Jobs Act (the “TCJA”), such that compensation paid in excess of $1 million to certain of our executives will not be deductible going forward, unless it qualifies for transition relief applicable to certain performance-based arrangements in place as of November 2, 2017.

Section 409A of the Code

Our compensation plans and arrangements are designed to comply with Section 409A of the Code, which places strict restrictions on plans that provide for the deferral of compensation.

2018 Executive Performance and Compensation

In the first quarter of 2018, the Committee approved the compensation arrangement for the CEO and senior officers of the Company and Lippert Components for fiscal year 2018, including with respect to the Named Executive Officers, which, in addition to base salary, included an annual management incentive program and, in most cases, value-based equity awards consisting of PSUs and RSUs. This arrangement continued our policy of pay-for-performance and compensation practices designed to align executive and stockholder interests.

The end-of-year base salaries for the following Named Executive Officers were adjusted as follows:

Executive	Title	2017 Base Salary		2018 Base Salary		% Change
Jason D. Lippert	Chief Executive Officer	$	975,000	$	975,000		—	%
Brian M. Hall⁽¹⁾	Chief Financial Officer	$	350,000	$	400,000		14	%
Andrew J. Namenye⁽¹⁾	Vice President - Chief Legal Officer and Secretary	$	350,000	$	375,000		7	%
Jamie M. Schnur	Chief Administrative Officer	$	401,066	$	401,066		—	%
Nick C. Fletcher	Chief Human Resources Officer	$	358,517	$	358,517		—	%
Scott T. Mereness⁽²⁾	Former President	$	606,721	$	606,721		—	%

(1)

The base salaries for Messrs. Hall and Namenye were adjusted based on a market analysis performed by Exequity to better align their base salaries with their peers.

(2)

Mr. Mereness’s 2018 base salary is disclosed as of the Termination Date.

Under the 2018 AIP approved by the Committee for the Company’s senior officers, participants earn incentive compensation based on the results of Company financial performance measurements for the program year, which for 2018 was based on goals for adjusted ROIC, up to 10% of which was subject to the level of achievement of gross margin improvement goals.

For purposes of the 2018 AIP and the ROIC PSUs, “ROIC” means Operating Profit divided by Average Invested Capital, where:

Operating Profit is the Company’s fiscal year consolidated operating profit, as detailed in the Company’s financial statements filed with the SEC; and

Average Invested Capital is the average of the prior year end and current year quarterly (Total Stockholders Equity + Indebtedness) - (Cash, Cash Equivalents, and Short-Term Investments), where:

Total Stockholders’ Equity is the Company’s total stockholders’ equity as of the particular measurement date, as detailed in the Company’s financial statements filed with the SEC;

Indebtedness is the Company’s indebtedness as of the particular measurement date, as detailed in the Company’s financial statements filed with the SEC; and

Cash, Cash Equivalents, and Short-Term Investments is the sum of the cash, cash equivalents, and short-term investments as of the particular measurement date, as detailed in the Company’s financial statements filed with the SEC.

Under the 2018 AIP, certain adjustments, including unrealized fair value adjustments on derivative instruments and the tax impact of the TCJA, as discussed in the 2018 Annual Report, were taken into account in the calculation of ROIC for determining final payouts under the 2018 AIP.

The 2018 AIP provided for the following performance goals related to ROIC in 2018 for the CEO:

	ROIC Achieved			Multiple of Base Salary
Below Threshold		<20	%		0	x
Overall Threshold		20	%		0.25	x
		25	%		0.50	x
Target		30	%		1.00	x
		35	%		2.00	x
Maximum		40	%		3.00	x

These same ROIC performance goals were applicable to our President, but because his employment terminated prior to the end of 2018, we paid Mr. Mereness an agreed-upon amount of $218,420 in respect of the 2018 AIP. As a result, the remainder of this discussion related to the CEO’s and President’s 2018 ROIC goals and potential payouts relate solely to our CEO.

To the extent that the overall threshold of 20% ROIC was achieved or exceeded, the bonus payment amount for the CEO would equal a multiple of base salary for 2018, as set forth in the table above, subject to reduction depending on the level of achievement of the gross margin improvement described below. If ROIC performance was between inflection points set forth above, linear interpolation was to be used to determine the cash bonus payouts.

Target ROIC performance was set at 30%, approximating the 75^th percentile of the 2017 peer group, and a bonus of 50% of target would be earned for achieving 25% ROIC, the 2017 peer group median. As additional reference points, the Company’s historical three-year average ROIC for the periods ending in 2016 and 2017 was 31% and 34%, respectively. While target ROIC was consistent with the 75^th percentile of the 2017 peer group, the Committee believed setting goals based on internal performance was more appropriate than setting relative goals or measuring relative performance in compensation programs.

For the NEOs other than the CEO and the former President, the 2018 AIP provided for the following performance goals related to ROIC in 2018:

	ROIC Achieved			Multiple of Target Cash
Below Threshold		<20	%		0x
Overall Threshold		20	%		0.25	x
		25	%		0.50	x
Target		30	%		1.00	x
		35	%		2.00	x
Maximum		40	%		3.00	x

To the extent that the overall threshold of 20% ROIC was achieved or exceeded, the bonus payment amount for each of the other NEOs would equal a multiple of his target cash established for 2018, as set forth in the table above. If ROIC performance was between inflection points set forth above, linear interpolation was to be used to determine the multiple of target cash. Each such NEO’s target cash amount was established as a percentage of his base salary, as set forth below:

Executive	Target Cash (Percentage of Base Salary)
Brian M. Hall⁽¹⁾		39	%
Andrew J. Namenye⁽¹⁾		46	%
Jamie M. Schnur		62	%
Nick C. Fletcher		35	%

(1)

Subsequently, the target cash percentages of base salary for Messrs. Hall and Namenye were updated by the Compensation Committee to 32.5% and 86.7%, respectively, to account for Mr. Hall’s base salary increase and better align their total projected compensation with their peers.

Amounts determined as set forth above were subject to reduction depending on the level of achievement of the gross margin improvement described below.

No 2018 AIP bonus payments for any of the NEOs would be earned for ROIC performance below threshold, and no additional amounts would be earned for ROIC performance above the maximum level.

For all of the NEOs, once the bonus payment amount was determined, up to 10% of that bonus payment amount was subject to an additional performance goal related to the achievement of gross margin improvement as set forth below, and was to be paid only to the extent that goal was also achieved in 2018:

Gross Margin Improvement	Bonus Payment % Paid
<0.085%	90%
0.085%	91%
0.170%	92%
0.225%	93%
0.340%	94%
0.425%	95%
0.510%	96%
0.595%	97%
0.680%	98%
0.765%	99%
0.850%	100%

All bonus payment amounts under the 2018 AIP were payable in cash.

In February 2019, the Committee met and determined the degree to which the ROIC and gross margin improvement goals were achieved in 2018. ROIC was adjusted for unrealized fair value adjustments on derivative instruments and the tax impact of the TCJA, as described in the 2018 Annual Report. The ROIC achieved for 2018 was 22.48%, resulting in a 37.4% ROIC payout multiple. Further, the Company’s gross margin decreased in 2018. As a result, none of the potential 10% bonus payout under the gross margin improvement goal was actually paid out. The following table sets forth the resulting 2018 AIP bonus cash payment amount to each NEO other than Mr. Mereness:

Name	Target Cash		ROIC - Related Amount		Impact of Gross Margin Improvement Goal			Cash Payment Under 2018 AIP
Jason D. Lippert	$	975,000	$	364,424	$	(36,442	)	$	327,982
Brian M. Hall	$	130,000	$	59,701	$	(5,970	)	$	53,731
Andrew J. Namenye	$	325,000	$	121,474	$	(12,147	)	$	109,327
Jamie M. Schnur	$	250,000	$	93,442	$	(9,344	)	$	84,098
Nick C. Fletcher	$	125,000	$	46,721	$	(4,672	)	$	42,049

As an inducement to Mr. Namenye to join the Company in September 2017, the Committee had agreed that he would be paid a cash bonus related to 2018 in the amount of $325,000. As calculated pursuant to the terms of the 2018 AIP, Mr. Namenye’s cash bonus would have been $109,327. As a result, in March 2019, the Committee approved a special cash bonus payment to Mr. Namenye of the difference between those two amounts, or $215,673.

In February 2018, the Committee also approved terms and conditions for additional incentive grants of PSUs and RSUs for the Company’s senior officers, including the NEOs, pursuant to the 2011 Plan, except that (i) Mr. Namenye received a grant of RSUs only, which had been agreed to as part of the inducement for Mr. Namenye to join the Company in September 2017, and (ii) Mr. Fletcher elected to only receive a grant of PSUs based on ROIC. Two types of PSUs were awarded to the other NEOs: (i) PSUs subject to the Company’s ROIC performance (“ROIC PSUs”); and (ii) PSUs subject to the Company’s EPS performance (“EPS PSUs”).

The ROIC PSUs provide that the number of PSUs that could be earned was based on whether and to what extent ROIC performance goals for the one-year period of January 1, 2018 through December 31, 2018 are satisfied, and that any earned PSUs will vest on March 1, 2020. The Company’s ROIC (as it may be adjusted) for fiscal 2018 must be 30% in order for the target number of ROIC PSUs to be earned, and must be 45% for fiscal 2018 for the maximum number of ROIC PSUs to be earned, which maximum amount is 400% of the target number of ROIC performance stock units. The multiple of the target number of ROIC PSUs that could be earned based on ROIC results for 2018 is set forth in the table below:

ROIC Performance	Multiple of ROIC PSUs
20% (Threshold)		0.25x
25%		0.50x
30% (Target)		1.00x
35%		2.00x
40%		3.00x
45% (Maximum)		4.00x

If ROIC performance was between inflection points, linear interpolation would be used to determine the number of earned ROIC PSUs. The target number of ROIC PSUs granted to each NEO is set forth in the table below. The number of ROIC PSUs granted at target to each NEO was determined by dividing the target equity value assigned to each NEO by the 15-day average trading price through the date of grant.

The EPS PSUs provide that the number of PSUs that will be earned will be based on whether and to what extent cumulative growth of adjusted EPS exceeds a benchmark determined by the Committee over the two-year performance period of January 1, 2018 through December 31, 2019, and that any earned PSUs will vest on March 1, 2021. The number of EPS PSUs that can be earned is: (i) if a threshold annualized growth percentage of approximately 7% is achieved, 50% of the target number of PSUs will be earned; (ii) if a target annualized growth percentage of approximately 14% is achieved, 100% of the target number of PSUs will be earned; and (iii) if a maximum annualized growth percentage of approximately 22% is achieved, 150% of the target number of PSUs will be earned. The number of shares earned will be interpolated for percentage growth between threshold and maximum. The target number of EPS PSUs granted to each NEO is set forth in the table below. The number of EPS PSUs granted at target to each NEO was determined by dividing the target equity value assigned to each NEO by the 15-day average trading price through the date of grant.

The RSUs granted in 2018 to the NEOs vest over a three-year period, with one-third vesting each year on the anniversary of the grant date. The Committee believes the RSUs granted to our executives and employees constitute an effective incentive to achieving long-term Company success, and are an important compensation component to our executives and employees. The number of RSUs granted to each of our NEOs for 2018 was value-based after consideration by the Committee of factors and events relative to the Company’s performance, the expense related to the RSUs, resulting dilution, the element of motivation that equity awards provide, and other factors. The number of RSUs granted to each NEO is set forth in the table below and was determined by dividing the equity value assigned to each NEO by the 15-day average trading price through the date of grant. The NEOs received aggregate awards for 19,602 RSUs representing 21% of the total RSUs granted to all employees in 2018. The aggregate expense to the Company applicable to the RSUs granted in 2018 to the NEOs was $2,079,772, which will be expensed over the vesting term of those RSUs.

The number of ROIC PSUs (at target), EPS PSUs (at target), and RSUs granted to the NEOs was as follows:

Name	ROIC PSUs (at Target)		EPS PSUs (at Target)		RSUs
Jason D. Lippert		8,567		22,844		11,422
Brian M. Hall		1,187		1,296		638
Andrew J. Namenye		N/A		N/A		1,318
Jamie M. Schnur		2,197		1,766		870
Nick C. Fletcher		1,099		N/A		N/A
Scott T. Mereness		5,331		11,635		5,354

Based on the target number of shares for the ROIC PSUs and the EPS PSUs, of the equity awards granted by the Committee to the NEOs in 2018, approximately 75% were performance-based and 25% vest over time alone.

In connection with Mr. Mereness’s termination of employment, he forfeited all ROIC PSUs and EPS PSUs held by him. Pursuant to the terms of the Separation Agreement, Mr. Mereness’s 2018 grant of RSUs, as well as dividend equivalents accrued through the Termination Date, vested, resulting in his receipt of 5,451 shares of the Company’s Common Stock.

In February 2019, the Committee met and determined the degree to which the ROIC performance goals under the ROIC PSUs were achieved in 2018. The ROIC, as adjusted for unrealized fair value adjustments on derivative instruments and the tax impact of the TCJA, as described in the 2018 Annual Report, as contemplated by the terms of the ROIC PSUs, achieved for 2018 was 22.48%, resulting in 37.4% of the target number of ROIC PSUs for each of the NEOs (other than Mr. Namenye and Mr. Mereness) being earned, or 3,202 ROIC PSUs for Mr. Lippert, 444 ROIC PSUs for Mr. Hall, 821 ROIC PSUs for Mr. Schnur, and 411 ROIC PSUs for Mr. Fletcher. These earned ROIC PSUs will vest on March 1, 2020.

As previously disclosed, in February 2017, the Committee approved terms and conditions for long-term incentive grants of performance shares based on EPS (“EPS Performance Shares”) for the Company’s senior officers, including the NEOs, pursuant to the 2011 Plan. The number of EPS Performance Shares that could be earned was based on whether and to what extent the cumulative growth of adjusted EPS exceeded a benchmark of $5.14 per share over the two-year period from January 1, 2017 through December 31, 2018. In February 2019, the Committee met and determined the degree to which the EPS performance goals under the EPS Performance Shares were achieved. The annualized growth percentage of EPS over 2017-2018 was approximately 6%, resulting in none of the EPS Performance Shares being earned by any of the NEOs who held such EPS Performance Shares. Mr. Mereness previously forfeited all EPS Performance Shares pursuant to the terms of the Separation Agreement.

Compensation Program Changes for 2019

In February and March 2019, the Committee discussed, reviewed, and approved executive compensation matters for 2019. For 2019, the Committee retained the general structure and components of the 2018 executive compensation program, with a few modifications. Under the 2019 annual cash incentive program, the performance measures were changed from goals for adjusted ROIC, up to 10% of which was subject to the level of achievement of gross margin improvement goals, to revenue and earnings before interest and taxes, each as adjusted. With respect to the annual equity awards, the Committee determined to grant PSUs that are based on ROIC (as it may be adjusted) of the Company for 2021, and included an opportunity for additional PSUs to be earned depending on the extent to which the Company’s revenues are diversified in 2021. The Committee continued its practice of granting RSUs that vest over a three-year period as part of the annual equity grants to executive officers. In addition, the Committee granted a special award of additional RSUs that vest over a three-year period to Messrs. Lippert, Hall, Schnur, and Fletcher in connection with each such NEO’s agreement to extend the time period of the restrictive covenants in his employment agreement by an additional 12 months.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with Management. Based on this review and discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

	COMPENSATION COMMITTEE
	Kieran M. O’Sullivan, Chairman Brendan J. Deely Tracy D. Graham Virginia L. Henkels

The foregoing Compensation Committee Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall this information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into a filing.

Summary Compensation Table

The following table sets forth the annual compensation awarded to or earned by our Named Executive Officers for the years ended December 31, 2018, 2017, and 2016:

SUMMARY COMPENSATION TABLE

Name and Principal Position	Year		Salary		Bonus⁽¹⁾		Stock Awards⁽²⁾		Non-Equity Incentive Plan Compensation⁽³⁾		All Other Compensation⁽⁴⁾		Total
Jason D. Lippert Chief Executive Officer		2018	$	975,000	$	—	$	4,544,581	$	327,982	$	145,132	$	5,992,695
		2017	$	975,000	$	—	$	7,183,896	$	1,966,213	$	138,324	$	10,263,433
		2016	$	856,800	$	—	$	5,643,142	$	3,770,241	$	119,612	$	10,389,795
Brian M. Hall⁽⁵⁾ Chief Financial Officer		2018	$	386,539	$	—	$	331,138	$	43,731	$	39,975	$	801,383
		2017	$	321,154	$	—	$	294,550	$	551,253	$	33,940	$	1,200,897
		2016	$	225,727	$	50,000	$	204,489	$	99,611	$	32,174	$	612,001
Andrew J. Namenye⁽⁶⁾ Vice President - Chief Legal Officer and Secretary		2018	$	368,269	$	215,673	$	139,840	$	109,327	$	35,688	$	868,797
Jamie M. Schnur Chief Administrative Officer		2018	$	401,066	$	—	$	512,781	$	84,098	$	44,095	$	1,042,040
		2017	$	401,066	$	—	$	379,819	$	1,432,427	$	46,167	$	2,259,479
		2016	$	389,385	$	—	$	808,663	$	1,274,402	$	48,042	$	2,520,492
Nick C. Fletcher Chief Human Resources Officer		2018	$	358,517	$	—	$	116,604	$	42,049	$	42,619	$	559,789
		2017	$	358,517	$	—	$	275,808	$	674,698	$	41,891	$	1,350,914
		2016	$	295,800	$	150,000	$	219,065	$	563,314	$	39,015	$	1,267,194
Scott T. Mereness⁽⁷⁾ Former President		2018	$	548,383	$	—	$	2,368,152	$	—	$	4,323,649	$	7,240,184
		2017	$	606,721	$	—	$	3,828,712	$	1,223,531	$	84,774	$	5,743,738
		2016	$	589,050	$	—	$	4,259,260	$	2,875,865	$	99,094	$	7,823,269

(1)

With respect to Mr. Hall, the amount reported for 2016 represents a discretionary bonus paid to Mr. Hall in recognition of exceptional performance. With respect to Mr. Namenye, the amount reported for 2018 represents a special bonus paid to Mr. Namenye in an amount equal to the excess of the 2018 cash bonus amount we agreed to pay Mr. Namenye as an inducement for him to join the Company, over the amount earned pursuant to the 2018 AIP. As calculated pursuant to the terms of the 2018 AIP, Mr. Namenye’s cash bonus would have been $109,327, which is reported in the “Non-Equity Incentive Plan Compensation” column. As a result, in March 2019, the Committee approved a special cash bonus payment to Mr. Namenye of the difference between those two amounts, or $215,673. With respect to Mr. Fletcher, the amount reported for 2016 represents a retention bonus that was subject to repayment if Mr. Fletcher’s employment with the Company had ended before December 31, 2018.

(2)

The amounts in this column represent the aggregate grant date fair value of the stock awards granted in that year determined in accordance with Accounting Standards Codification Topic 718 (“ASC 718”). For a discussion of assumptions made in determining the grant date fair value, see Note 12 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. The stock awards consist of: (i) with respect to 2018, annual awards of ROIC PSUs, EPS PSUs, and RSUs (except that Mr. Namenye only received RSUs and Mr. Fletcher only received ROIC PSUs); (ii) with respect to 2017, DSUs, EPS Performance Shares, and, for Mr. Lippert and Mr. Mereness, performance shares based on ROIC; and (iii) with respect to 2016, time-based DSUs, performance shares based on EPS, and, with respect to Messrs. Lippert, Schnur, and Mereness, performance-based incentive compensation paid in DSUs pursuant to the 2016 Annual Incentive Program (the “2016 AIP”).

The amounts included in the table above for the annual stock awards that are subject to performance conditions represent the value at the grant date based on the probable outcome of the applicable performance conditions. The following table presents the grant date fair value of the performance-based stock awards included in the “Stock Awards” column and the grant date fair value of these awards assuming that the highest level of performance conditions would be achieved, other than for Mr. Namenye who did not receive any performance-based awards in any of the years presented:

	2018 ROIC PSUs				2018 EPS PSUs				2017 EPS Performance Shares				2017 ROIC Performance Shares				2016 EPS Performance Shares
Name	Grant Date Fair Value (Based on Probable Outcome)		Grant Date Fair Value (Based on Maximum Performance)		Grant Date Fair Value (Based on Probable Outcome)		Grant Date Fair Value (Based on Maximum Performance)		Grant Date Fair Value (Based on Probable Outcome)		Grant Date Fair Value (Based on Maximum Performance)		Grant Date Fair Value (Based on Probable Outcome)		Grant Date Fair Value (Based on Maximum Performance)		Grant Date Fair Value (Based on Probable Outcome)		Grant Date Fair Value (Based on Maximum Performance)
Jason D. Lippert	$	908,959	$	3,635,835	$	2,423,748	$	3,635,835	$	3,909,596	$	3,909,596	$	1,971,046	$	3,900,000	$	2,736,290	$	2,736,290
Brian M. Hall	$	125,941	$	503,763	$	137,506	$	206,258	$	221,776	$	221,776		N/A		N/A	$	43,813	$	43,813
Jamie M. Schnur	$	233,102	$	932,407	$	187,373	$	281,059	$	285,892	$	285,892		N/A		N/A	$	131,439	$	131,439
Nick C. Fletcher	$	116,604	$	466,416		N/A		N/A	$	207,637	$	207,637		N/A		N/A	$	43,813	$	43,813
Scott T. Mereness	$	565,619	$	2,262,476	$	1,234,474	$	1,851,710	$	1,991,377	$	1,991,377	$	1,226,534	$	2,426,884	$	1,958,338	$	1,958,338

The following table presents the grant date fair value of the RSU and DSU awards included in the “Stock Awards” column:

Name	2018 RSUs		2017 DSUs		2016 DSUs – Time-Based		2016 DSUs – 2016 AIP
Jason D. Lippert	$	1,211,874	$	1,303,254	$	898,514	$	2,008,338
Brian M. Hall	$	67,692	$	72,774	$	160,676		N/A
Andrew J. Namenye	$	139,840		N/A		N/A		N/A
Jamie M. Schnur	$	92,307	$	93,927	$	193,253	$	483,971
Nick C. Fletcher		N/A	$	68,171	$	175,252		N/A
Scott T. Mereness	$	568,059	$	610,801	$	643,034	$	1,657,888

(3)

The amounts in this column represent: (i) for 2018, bonus payment amounts earned pursuant to the 2018 AIP; (ii) for 2017, bonus payment amounts earned pursuant to the 2017 AIP; and (iii) for 2016, the cash portion of the bonus payment earned pursuant to the 2016 AIP, under which bonus amounts earned up to twice the participant’s base salary were paid in cash, and any excess was paid half in cash, half in fully-vested DSUs with a minimum deferral period of one year.

(4)

Amounts shown in this column include the following payments the Company made to or on behalf of our NEOs:

Name	Year		Dividend Equivalent Unit Value^(A)		401(k) Matching Contribution		Health Insurance		Severance^(B)		Other Perquisites^(C)		Total All Other Compensation
Jason D. Lippert		2018	$	101,562	$	11,000	$	11,495		N/A	$	21,075	$	145,132
		2017	$	92,278	$	10,800	$	9,579		N/A	$	25,667	$	138,324
		2016	$	69,510	$	10,600	$	10,607		N/A	$	28,895	$	119,612
Brian M. Hall		2018	$	7,400	$	11,000	$	11,495		N/A	$	10,080	$	39,975
		2017	$	4,159	$	10,800	$	5,944		N/A	$	13,037	$	33,940
		2016	$	4,848	$	10,600	$	10,606		N/A	$	6,120	$	32,174
Andrew J. Namenye		2018	$	3,125	$	11,000	$	11,495		N/A	$	10,068	$	35,688
Jamie M. Schnur		2018	$	11,460	$	11,000	$	11,495		N/A	$	10,140	$	44,095
		2017	$	5,363	$	10,800	$	10,077		N/A	$	19,927	$	46,167
		2016	$	7,171	$	10,600	$	6,848		N/A	$	23,423	$	48,042
Nick C. Fletcher		2018	$	2,606	$	11,000	$	6,905		N/A	$	22,108	$	42,619
		2017	$	1,285	$	10,800	$	10,077		N/A	$	19,729	$	41,891
		2016	$	5,220	$	10,600	$	5,495		N/A	$	17,700	$	39,015
Scott T. Mereness		2018	$	39,288	$	11,000	$	10,622	$	4,244,143	$	18,596	$	4,323,649
		2017	$	48,101	$	10,800	$	6,021		N/A	$	19,852	$	84,774
		2016	$	49,747	$	10,600	$	10,308		N/A	$	28,439	$	99,094

(A)

Represents the dollar value of dividend equivalents credited on stock awards in the applicable year, when those amounts were not factored into the grant date fair value of the award.

(B)

Pursuant to the Separation Agreement, Mr. Mereness received the following type and amount of compensation benefits: (i) an amount equivalent to two times Mr. Mereness’s annual base salary (at the highest annualized rate in effect at any time within two years of the Termination Date), or $1,213,442, (ii) an amount equivalent to two times Mr. Mereness’s average bonus or incentive compensation paid during the prior three years (with the average capped at Mr. Mereness’s current base salary), or $1,213,442, (iii) an agreed-upon amount payable related to the 2018 AIP, or $218,420, (iv) the value of the accelerated vesting of certain equity awards, or $1,829,684, and (v) a lump sum amount equivalent to 12 months of COBRA premiums, or $17,796. In addition, in lieu of the 90 days’ prior written notice required under his Executive Employment Agreement, we agreed to pay Mr. Mereness $151,680, which is approximately equal to his base salary for such period.

(C)

Other perquisites included automobile allowance and related expenses, costs of spousal travel for Company events, and long-term disability insurance.

(5)

Mr. Hall was promoted to Chief Financial Officer effective November 17, 2016, following the decision of his predecessor to resign from the position in September 2016.

(6)

Mr. Namenye joined the Company in September 2017. As permitted by the SEC, because 2018 was Mr. Namenye’s first year as a Named Executive Officer, the compensation paid to him prior to 2018 is not included in this table.

(7)

Mr. Mereness’s employment with the Company terminated on November 16, 2018.

Grants of Plan-Based Awards Table

The following table summarizes the RSUs and PSUs granted to the NEOs in 2018:

GRANTS OF PLAN-BASED AWARDS IN 2018

	Grant Date		Date of Compensation Committee Approval		Estimated Possible Payouts Under Non-Equity Incentive Plan Awards⁽¹⁾						Estimated Future Payouts Under Equity Incentive Plan Awards									All Other Stock Awards: Number of Shares of Stock or Units			Grant Date Fair Value of Stock and Option Awards⁽⁵⁾
Name	Grant Date		Date of Compensation Committee Approval		Threshold		Target		Maximum		Threshold			Target			Maximum
Jason D. Lippert		03/01/18		02/27/18								—			—			—			11,422	⁽²⁾	$	1,211,874
		03/01/18		02/27/18								11,422	⁽³⁾		22,844	⁽³⁾		34,266	⁽³⁾		—		$	2,423,748
		03/01/18		02/27/18								2,142	⁽⁴⁾		8,567	⁽⁴⁾		34,268	⁽⁴⁾		—		$	908,959
						243,750		975,000		2,925,000
Brian M. Hall		03/01/18		02/27/18								—			—			—			638	⁽²⁾	$	67,692
		03/01/18		02/27/18								648	⁽³⁾		1,296	⁽³⁾		1,944	⁽³⁾		—		$	137,506
		03/01/18		02/27/18								297	⁽⁴⁾		1,187	⁽⁴⁾		4,748	⁽⁴⁾		—		$	125,941
						32,500		130,000		390,000
Andrew J. Namenye		03/01/18		02/27/18		81,250		325,000		325,000		—			—			—			1,318	⁽²⁾	$	139,840
Jamie M. Schnur		03/01/18		02/27/18								—			—			—			870	⁽²⁾	$	92,307
		03/01/18		02/27/18								883	⁽³⁾		1,766	⁽³⁾		2,649	⁽³⁾		—		$	187,373
		03/01/18		02/27/18								549	⁽⁴⁾		2,197	⁽⁴⁾		8,788	⁽⁴⁾		—		$	233,102
						62,500		250,000		750,000
Nick C. Fletcher		03/01/18		02/27/18								275	⁽⁴⁾		1,099	⁽⁴⁾		4,396	⁽⁴⁾		—		$	116,604
						31,250		125,000		375,000
Scott T. Mereness		03/01/18		02/27/18								—			—			—			5,354	⁽²⁾	$	568,059
		03/01/18		02/27/18								5,818	⁽³⁾		11,635	⁽³⁾		17,453	⁽³⁾		—		$	1,234,474
		03/01/18		02/27/18								1,333	⁽⁴⁾		5,331	⁽⁴⁾		21,324	⁽⁴⁾		—		$	565,619
						151,680		606,721		1,820,163

(1)

Amounts shown in this column represent the potential cash payout amounts under the 2018 AIP. With respect to the Named Executive Officers other than Mr. Mereness, the actual payout amounts related to 2018 performance are disclosed in the Summary Compensation Table in the “Non-Equity Incentive Plan Compensation” column. As provided by the Separation Agreement, Mr. Mereness received a cash payment of $218,420, which the Company and Mr. Mereness agreed represented the 2018 AIP award for him.

(2)

Represents RSU awards that vest ratably each year on the first through the third anniversaries of the respective grant date. Upon Mr. Mereness’s termination of employment, the RSUs held by him vested in full and shares of our Common Stock were issued to him, net of tax withholdings.

(3)

Represents EPS PSUs that will be earned depending on the level of achievement of adjusted EPS-related performance goals over a two-year period from January 1, 2018 through December 31, 2019. The final number of shares earned will be from 50% to 100% of target for performance between the threshold and target level and up to 150% of target for maximum performance. Earned EPS PSUs will vest on March 1, 2021. Mr. Mereness forfeited the EPS PSUs held by him upon his termination of employment.

(4)

Represents ROIC PSUs that would be earned depending on the level of achievement of ROIC-related performance goals over fiscal year 2018. The final number of shares earned could be from 25% of target for performance at the threshold level up to 400% of target for maximum performance. The number of earned ROIC PSUs was determined in early 2019 and was: 3,202 units for Mr. Lippert, 444 units for Mr. Hall, 821 units for Mr. Schnur, and 411 units for Mr. Fletcher. Earned ROIC PSUs will vest on March 1, 2020. Mr. Mereness forfeited the ROIC PSUs held by him upon his termination of employment.

(5)

Amounts represent the grant date fair value of the awards determined in accordance with ASC 718. For a discussion of assumptions made in determining the grant date fair value, see Note 12 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. Amounts related to PSUs represent the value at the grant date based upon the probable outcome of the performance conditions.

Grants of Plan-Based Awards

In February 2018, the Compensation Committee approved the 2018 AIP, under which participants could earn incentive compensation based on the level of achievement of certain financial performance measurements in 2018, which for 2018 was based on goals for ROIC and gross margin improvement. In February 2018, the Compensation Committee granted ROIC PSUs, EPS PSUs, and RSUs under the 2011 Plan to the Named Executive Officers. For additional information regarding the 2018 AIP and these equity awards, see “Compensation Discussion and Analysis - 2018 Executive Performance and Compensation.”

Equity Award and Incentive Plans

On May 18, 2011, our stockholders approved the 2011 Plan, and approved an amendment to the 2011 Plan on May 22, 2014. Executive officers and other employees of the Company and its subsidiaries and affiliates, and non-employee Directors, consultants, and others who provide substantial services to the Company and its subsidiaries and affiliates, were eligible to be granted awards under the 2011 Plan. Under the 2011 Plan, the Compensation Committee was authorized to grant stock options, including both incentive stock options and non-qualified stock options, stock appreciation rights, restricted stock, DSUs, performance-based awards, annual incentive awards, and related rights and interests.

On May 24, 2018, our stockholders approved the 2018 Plan, which provides that the number of shares of our Common Stock that may be the subject of awards and issued under the 2018 Plan is 1,500,000, plus shares subject to any awards outstanding as of May 24, 2018 under the 2011 Plan that subsequently expire, are forfeited or canceled, are settled for cash, are not issued in shares, or are tendered or withheld to pay the exercise price or satisfy any tax withholding obligations related to the award. Following our stockholders’ approval of the 2018 Plan, no further awards may be made under the 2011 Plan. Executive officers and other employees of the Company and its subsidiaries and affiliates, and non-employee Directors, consultants, and others who provide substantial services to the Company and its subsidiaries and affiliates, are eligible to be granted awards under the 2018 Plan. Under the 2018 Plan, the Compensation Committee is authorized to grant stock options, stock appreciation rights, restricted stock awards, stock unit awards, other stock-based awards, and cash incentive awards. There were 1,570,274 shares of our Common Stock available for future awards under the 2018 Plan as of December 31, 2018, which number is calculated using the target number of outstanding PSU awards.

Outstanding Equity Awards at Fiscal Year-End

The following table summarizes the number of shares of Common Stock underlying outstanding unvested equity awards held by each NEO as of December 31, 2018:

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

	Stock Awards
Name	Grant Date		Number of Shares or Units of Stock That Have Not Vested			Market Value of Shares or Units That Have Not Vested⁽¹⁾		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⁽¹⁾
Jason D. Lippert		11/20/14		1,233	⁽²⁾	$	82,364		—		$	—
		02/10/16		5,771	⁽³⁾	$	385,503		—		$	—
		02/24/17		8,302	⁽³⁾	$	554,574		—		$	—
		03/01/18		11,728	⁽⁴⁾	$	783,430		—		$	—
		02/10/16		52,106	⁽⁵⁾	$	3,480,681		—		$	—
		03/15/17		18,646	⁽⁶⁾	$	1,245,553		—		$	—
		03/01/18		3,202	⁽⁷⁾	$	213,894		—		$	—
		03/01/18		—		$	—		11,728	⁽⁸⁾	$	783,397
Brian M. Hall		11/20/14		303	⁽²⁾	$	20,240		—		$	—
		02/10/16		1,033	⁽³⁾	$	69,004		—		$	—
		02/24/17		467	⁽³⁾	$	31,196		—		$	—
		03/01/18		655	⁽⁴⁾	$	43,754		—		$	—
		02/10/16		835	⁽⁵⁾	$	55,778		—		$	—
		03/01/18		444	⁽⁷⁾	$	29,659		—		$	—
		03/01/18		—		$	—		666	⁽⁸⁾	$	44,455
Andrew J. Namenye		03/01/18		1,353	⁽⁴⁾	$	90,380		—		$	—
Jamie M. Schnur		11/20/14		660	⁽²⁾	$	44,088		—		$	—
		02/10/16		1,242	⁽³⁾	$	82,966		—		$	—
		02/24/17		599	⁽³⁾	$	40,013		—		$	—
		03/01/18		894	⁽⁴⁾	$	59,719		—		$	—
		02/10/16		2,505	⁽⁵⁾	$	167,334		—		$	—
		03/01/18		821	⁽⁷⁾	$	54,843		—		$	—
		03/01/18		—		$	—		907	⁽⁸⁾	$	60,554
Nick C. Fletcher		11/20/14		286	⁽²⁾	$	19,105		—		$	—
		02/10/16		1,127	⁽³⁾	$	75,284		—		$	—
		02/24/17		437	⁽³⁾	$	29,192		—		$	—
		02/10/16		837	⁽⁵⁾	$	55,912		—		$	—
		03/01/18		411	⁽⁷⁾	$	27,455		—		$	—
Scott T. Mereness		11/20/13		1,007	⁽²⁾	$	67,268		—		$	—
		11/20/14		1,936	⁽²⁾	$	129,325		—		$	—

(1)

Market value determined based on the closing market price of our Common Stock on December 31, 2018 of $66.80 per share, multiplied by the number of underlying shares not yet vested.

(2)

Represents DSU awards, including dividends thereon, where applicable, that vest ratably each year on the first through the fifth anniversaries of the respective grant date.

(3)

Represents DSU awards, including dividends thereon, where applicable, that vests ratably each year on the first through the third anniversaries of the respective March 1^st following the grant date.

(4)

Represents RSU awards, including dividends thereon, where applicable, that vest ratably each year on the first through the third anniversaries of the respective March 1^st following the grant date.

(5)

Represents performance share awards, including dividends thereon, where applicable, that were earned based on achievement of specified performance conditions over two years and have a holding period of approximately one year post-earning. See “Executive Compensation - Compensation Discussion and Analysis - 2018 Executive Performance and Compensation.”

(6)

Represents performance share awards, including dividends thereon, where applicable, that are earned based on achievement of specified performance conditions over one year and have a holding period of approximately one year post earning. See “Executive Compensation - Compensation Discussion and Analysis - 2018 Executive Performance and Compensation.”

(7)

Represents PSU awards, including dividends thereon, where applicable, that were earned based on achievement of ROIC-related performance conditions over 2018 and have a holding period of approximately one year post-earning. See “Executive Compensation - Compensation Discussion and Analysis - 2018 Executive Performance and Compensation.”

(8)

Represents PSU awards, including dividends thereon, where applicable, that are earned based on achievement of EPS-related performance conditions over 2018-2019 and have a holding period of approximately one year post-earning. See “Executive Compensation - Compensation Discussion and Analysis - 2018 Executive Performance and Compensation.”

Option Exercises and Stock Vested

The following table presents the value realized by the NEOs on the vesting of DSUs and other stock-based awards in 2018. None of our NEOs holds any stock options, and therefore no stock options were exercised in 2018.

OPTION EXERCISES AND STOCK VESTED IN 2018

	Stock Awards
Name	Number of Shares Acquired On Vesting⁽¹⁾		Value Realized on Vesting⁽²⁾
Jason D. Lippert		72,564	$	7,639,188
Brian M. Hall		3,565	$	360,708
Andrew J. Namenye		—	$	—
Jamie M. Schnur		7,351	$	737,477
Nick C. Fletcher		3,457	$	358,386
Scott T. Mereness		74,065	$	7,060,825

(1)

Includes time-based DSUs, time-based RSUs, and performance stock awards which vested in 2018.

(2)

Value realized calculated by multiplying the number of shares vested by the average high/low price of our Common Stock as reported by the NYSE on the vesting date.

Non-Qualified Deferred Compensation

The Company maintains an Executive Non-Qualified Deferred Compensation Plan. The Company does not make any contributions to the Deferral Plan, but is responsible for certain costs of administration, which are not significant. Pursuant to the Deferral Plan, the NEOs are eligible to defer all or a portion of their earned base salary and incentive compensation. The Deferral Plan participant is fully vested in all deferred compensation and earnings credited to the participant’s account because the participant has made all the contributions. Pursuant to the Deferral Plan, payments to the participants will be made from the Company’s general unrestricted assets, and the obligations pursuant to the Deferral Plan are unfunded and unsecured.

The Deferral Plan participant’s account is deemed invested (but is not actually invested) among various deemed investment alternatives selected by the participant. The Company has elected to invest a portion of the compensation deferred by the participant in life insurance policies for the benefit of the Company. The investments within these life insurance policies track the deemed investments selected by the participant in order to generate the funds needed to make payments to the participants. The deemed investments selected by the participant determine the amount of earnings and losses that are credited to the participant’s account.

The following table summarizes activity in the Deferral Plan by those NEOs who participated in 2018:

NON-QUALIFIED DEFERRED COMPENSATION IN 2018

Name	Executive Contributions in 2018⁽¹⁾		Aggregate Earnings in 2018⁽²⁾			Aggregate Withdrawals/ Distributions in 2018		Aggregate Balance at December 31, 2018⁽³⁾
Jason D. Lippert	$	786,485	$	(404,625	)	$	—	$	8,113,163	⁽⁴⁾
Brian M. Hall	$	330,752	$	(8,970	)	$	—	$	321,782
Andrew J. Namenye	$	—	$	—		$	—	$	—
Jamie M. Schnur	$	716,214	$	(112,563	)	$	—	$	2,428,278	⁽⁵⁾
Nick C. Fletcher	$	202,410	$	(6,863	)	$	—	$	195,547
Scott T. Mereness	$	200,000	$	(91,470	)	$	—	$	1,085,845	⁽⁶⁾

(1)

The executive contributions in 2018 were withheld from each NEO’s 2017 Non-Equity Incentive Plan Compensation in the Summary Compensation Table.

(2)

Amounts represent earnings or losses on the executives’ contributions, and have not been included in the Summary Compensation Table.

(3)

Amounts reported in this column previously were reported as compensation to the NEO in the Summary Compensation Table for the previous years.

(4)

Includes cumulative contributions by the participant of $6,774,651, as well as cumulative earnings of $1,338,511.

(5)

Includes cumulative contributions by the participant of $2,308,407, as well as cumulative earnings of $277,232, and cumulative withdrawals of $107,361.

(6)

Includes cumulative contributions by the participant of $1,238,289, as well as cumulative earnings of $60,296.

Potential Payments on Termination or Change-In-Control

Executive Employment Agreements

Each of the NEOs is party to an Executive Employment Agreement with the Company. The Executive Employment Agreements have an initial three-year term with automatic one-year renewals, and provide severance payments or other benefits under certain circumstances following termination.

In the event of a termination by the Company without cause (as defined in the agreement) or by the executive for good reason (as defined in the agreement), the executive (including each of the NEOs) would be entitled to: (i) an amount equivalent to two years of base salary (at the highest annualized rate in effect at any time within two years of the termination date), (ii) an amount equivalent to two times his or her average bonus during the prior three years (with the average capped at his or her then-current base salary), (iii) amounts payable under the then-current management incentive plan, (iv) accelerated vesting of time-based equity awards, (v) a lump sum amount equivalent to 12 months of COBRA premiums, and (vi) outplacement services for at least six months. The salary and bonus amounts would be paid out in equal weekly payments on the regular payroll cycle over the 24-month period following the termination.

In the event of a termination on account of death, the executive would be entitled to: (i) an amount equivalent to one year of base salary, (ii) incentive compensation (excluding equity awards) that the executive would have been entitled to receive at the end of the year, (iii) accelerated vesting of time-based equity awards, and (iv) performance stock awards remaining outstanding subject to their terms. The base salary portion would be paid out in equal weekly payments on the regular payroll cycle, and incentive compensation would be calculated and paid in accordance with the terms of the applicable plan.

In the event of a termination on account of disability, the executive would be entitled to: (i) the difference between the executive’s base salary and the amount of disability payments received pursuant to disability insurance provided in accordance with the agreement, for a period of one year, (ii) incentive compensation (excluding equity awards) that the executive would have been entitled to receive at the end of the year, (iii) accelerated vesting of time-based equity awards, (iv) performance stock awards remaining outstanding subject to their terms, and (v) a lump sum amount equivalent to 12 months of COBRA premiums. The base salary portion would be paid out in equal weekly payments on the regular payroll cycle, and incentive compensation would be calculated and paid in accordance with the terms of the applicable plan.

Executives must sign and not revoke a general release in favor of the Company in order to receive severance or disability amounts under the Executive Employment Agreements. The Executive Employment Agreements also include restrictive covenants with respect to non-competition, non-solicitation, and confidentiality.

The 2011 Plan and Award Agreements

The 2011 Plan and the related award agreements provide for accelerated vesting under certain circumstances. With respect to DSUs granted under the 2011 Plan, in the event of a termination of employment by the Company without cause, a termination by the executive for good reason, death, disability, or a change in control of the Company, all unvested DSUs would become fully vested.

With respect to performance shares granted under the 2011 Plan, in the event of an executive’s death or disability, or a change in control of the Company, before the end of the performance period, the number of performance shares deemed earned will be the target amount, and if one of those events occurs after the end of the performance period, the number of performance shares deemed earned will be based on actual performance, and in either case, the number of performance shares earned will be prorated based on the portion of the vesting period that had occurred before the date of the event, and the performance shares so earned will become fully vested. In the event the executive’s employment is terminated by the Company without cause or is terminated by the executive for good reason, after the end of the performance period but before the vesting date, the performance shares will become fully vested.

With respect to RSUs granted under the 2011 Plan, which includes the RSUs granted to the NEOs in 2018, all unvested RSUs would become fully vested in the event of (i) the executive’s death or disability; (ii) a termination of employment by the Company without cause or a termination by the executive for good reason; (iii) a change in control of the Company in which the surviving or successor entity does not continue, assume, or replace unvested RSUs; and (iv) a termination of employment by the Company without cause or a termination by the executive for good reason within 24 months after a change in control of the Company in which the surviving or successor entity continues, assumes, or replaces unvested RSUs.

With respect to PSUs granted under the 2011 Plan, which includes the PSUs granted to NEOs in 2018, in the event of: (i) an executive’s death or disability, (a) if that event occurs before the last day of the performance period, the target number of PSUs, prorated, will be deemed earned and will fully vest, and (b) if that event occurs after the conclusion of the performance period, a number of PSUs based on the actual level of achievement of the performance goals will be deemed earned and will fully vest; (ii) a termination of employment by the Company without cause or a termination by the executive for good reason, if that event occurs after the conclusion of the performance period, a number of PSUs based on the actual level of achievement of the performance goals will be deemed earned and will fully vest; and (iii) a change in control of the Company in which the surviving or successor entity does not continue, assume, or replace unvested PSUs or a termination of employment by the Company without cause or a termination by the executive for good reason within 24 months after a change in control of the Company in which the surviving or successor entity continues, assumes, or replaces unvested PSUs, (a) if that event occurs before the last day of the performance period, the target number of PSUs, prorated, will be deemed earned and will fully vest, and (b) if that event occurs after the conclusion of the performance period, a number of PSUs based on the actual level of achievement of the performance goals will be deemed earned and will fully vest.

The 2018 Plan and Award Agreements

The 2018 Plan and the related award agreements provide for accelerated vesting under certain circumstances. Although no equity awards had been granted to any of the NEOs as of December 31, 2018, forms of award agreements under the 2018 Plan had been adopted by the Compensation Committee. With respect to RSUs to be granted to executives under the 2018 Plan, all unvested RSUs would become fully vested in the event of: (i) the executive’s death or disability; (ii) an approved retirement, a termination of employment by the Company without cause, or a termination by the executive for good reason, except for RSUs with respect to which less than one year has elapsed since the grant date; (iii) a change in control of the Company in which the surviving or successor entity does not continue, assume, or replace unvested RSUs; and (iv) a termination of employment by the Company without cause or a termination by the executive for good reason within 24 months after a change in control of the Company in which the surviving or successor entity continues, assumes, or replaces unvested RSUs. With respect to PSUs to be granted under the 2018 Plan, in the event of: (a) an executive’s death or disability, (1) if that event occurs before the last day of the performance period, the target number of PSUs, prorated, will be deemed earned and will fully vest, and (2) if that event occurs after the conclusion of the performance period, a number of PSUs based on the actual level of achievement of the performance goals will be deemed earned and will fully vest; (b) an executive’s approved retirement, a termination of employment by the Company without cause, or a termination by the executive for good reason, if that event occurs after the conclusion of the performance period, a number of PSUs based on the actual level of achievement of the performance goals will be deemed earned and will fully vest; and (c) a change in control of the Company in which the surviving or successor entity does not continue, assume, or replace unvested PSUs or a termination of employment by the Company without cause or a termination by the executive for good reason within 24 months after a change in control of the Company in which the surviving or successor entity continues, assumes, or replaces unvested PSUs, (1) if that event occurs before the last day of the performance period, the target number of PSUs, prorated, will be deemed earned and will fully vest, and (2) if that event occurs after the conclusion of the performance period, a number of PSUs based on the actual level of achievement of the performance goals will be deemed earned and will fully vest.

Potential Payments on Termination or Change-in-Control Table

The table below reflects the estimated value of compensation and benefits payable to each of the NEOs, other than Mr. Mereness, upon the occurrence of certain events. The amounts in the table are based on a hypothetical termination or change in control date of December 31, 2018. The amounts actually payable to Mr. Mereness in connection with his employment termination effective November 16, 2018 are described immediately following the table below.

Name / Benefit	Involuntary Termination Without Cause or for Good Reason		Involuntary Termination Due to Disability⁽²⁾		Involuntary Termination Due to Death		Change in Control		Change in Control; Awards not Assumed or Involuntary Termination Without Cause or for Good Reason Within 24 Months after a Change in Control⁽³⁾
Jason D. Lippert
Base salary	$	1,950,000	$	975,000	$	975,000	$	—	$	—
Annual bonus	$	1,950,000	$	—	$	—	$	—	$	—
Current AIP	$	327,982	$	327,982	$	327,982	$	—	$	—
Other benefits	$	44,954	$	43,814	$	43,814	$	—	$	—
Acceleration of unvested equity	$	3,265,318	$	7,508,988	$	7,508,988	$	5,748,674	$	7,508,988
Total Benefits⁽¹⁾	$	7,538,254	$	8,855,784	$	8,855,784	$	5,748,674	$	7,508,988
Brian M. Hall
Base salary	$	800,000	$	400,000	$	400,000	$	—	$	—
Annual bonus	$	463,064	$	—	$	—	$	—	$	—
Current AIP	$	43,731	$	43,731	$	43,731	$	—	$	—
Other benefits	$	38,466	$	38,346	$	38,346	$	—	$	—
Acceleration of unvested equity	$	193,854	$	292,918	$	292,918	$	176,218	$	292,918
Total Benefits⁽¹⁾	$	1,539,115	$	774,995	$	774,995	$	176,218	$	292,918
Andrew J. Namenye
Base salary	$	750,000	$	375,000	$	375,000	$	—	$	—
Annual bonus	$	216,666	$	—	$	—	$	—	$	—
Current AIP	$	325,000	$	325,000	$	325,000	$	—	$	—
Other benefits	$	38,018	$	37,910	$	37,910	$	—	$	—
Acceleration of unvested equity	$	90,380	$	90,380	$	90,380	$	—	$	90,380
Total Benefits	$	1,420,064	$	828,290	$	828,290	$	—	$	90,380
Jamie M. Schnur
Base salary	$	802,132	$	401,066	$	401,066	$	—	$	—
Annual bonus	$	802,132	$	—	$	—	$	—	$	—
Current AIP	$	84,098	$	84,098	$	84,098	$	—	$	—
Other benefits	$	39,486	$	38,346	$	38,346	$	—	$	—
Acceleration of unvested equity	$	281,629	$	507,947	$	507,947	$	334,401	$	507,947
Total Benefits⁽¹⁾	$	2,009,477	$	1,031,457	$	1,031,457	$	334,401	$	507,947

Name / Benefit	Involuntary Termination Without Cause or for Good Reason		Involuntary Termination Due to Disability⁽²⁾		Involuntary Termination Due to Death		Change in Control		Change in Control; Awards not Assumed or Involuntary Termination Without Cause or for Good Reason Within 24 Months after a Change in Control⁽³⁾
Nick C. Fletcher
Base salary	$	717,034	$	358,517	$	358,517	$	—	$	—
Annual bonus	$	717,034	$	—	$	—	$	—	$	—
Current AIP	$	42,049	$	42,049	$	42,049	$	—	$	—
Other benefits	$	39,652	$	39,136	$	39,136	$	—	$	—
Acceleration of unvested equity	$	151,035	$	206,946	$	206,946	$	179,492	$	206,946
Total Benefits⁽¹⁾	$	1,666,804	$	646,648	$	646,648	$	179,492	$	206,946

(1)

Deferred compensation balances are not included above as the Deferral Plan participant is fully vested in all deferred compensation and earnings credited to the participant’s account because the participant has made all the contributions. For additional information regarding the NEOs’ deferred compensation balances under the Deferral Plan, see the Non-Qualified Deferred Compensation Table.

(2)

Amounts payable by the Company will be reduced by the disability payments received by the executive.

(3)

Upon involuntary termination without cause or for good reason the NEO would also receive the base salary, annual bonus, current AIP, and other benefits as noted in the “Involuntary Termination Without Cause or for Good Reason” column.

As discussed above, on November 16, 2018, the Company and Mr. Mereness agreed to Mr. Mereness’s resignation as the Company’s President, and from all other officer and director positions with the Company and its affiliated entities, as well as his termination of employment. The Separation Agreement with Mr. Mereness, among other things, provides that Mr. Mereness would receive the severance compensation and other benefits set forth in the Mereness Employment Agreement. The type and amount of severance compensation and benefits that Mr. Mereness was entitled to receive were substantially those provided by the Mereness Employment Agreement in the event of a termination without cause and consist of:

►

$1,213,442, which is an amount equivalent to two times Mr. Mereness’s annual base salary (at the highest annualized rate in effect at any time within two years of the Termination Date), payable in weekly installments beginning January 2019 and ending November 2020;

►

$151,680, in lieu of the 90 days’ prior written notice required under the Mereness Employment Agreement, which is approximately equal to his base salary for such period and which was paid in a lump sum in November 2018;

►

$1,213,442, which is an amount equivalent to two times Mr. Mereness’s average bonus or incentive compensation paid during the prior three years (with the average capped at Mr. Mereness’s current base salary), payable in weekly installments beginning January 2019 and ending November 2020;

►

$218,420, the agreed-upon amount payable related to the 2018 AIP, which was paid in a lump sum in January 2019;

►

$1,829,684, which is the value of the accelerated vesting of certain equity awards held by Mr. Mereness, which vested or are scheduled to vest on certain dates between the Termination Date and May 2019; and

►

$17,796, which is an amount equivalent to 12 months of COBRA premiums, which was paid in a lump sum in January 2019.

EQUITY COMPENSATION PLAN INFORMATION

The following table sets forth information regarding outstanding grants and shares available for grant under our existing equity compensation plans, including the 2011 Plan and the 2018 Plan. All information is as of December 31, 2018.

Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights⁽¹⁾ (a)		Weighted-average exercise price of outstanding options, warrants and rights⁽²⁾ (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))⁽³⁾ (c)
Equity compensation plans approved by security holders		469,577	$	—		1,552,472
Equity compensation plans not approved by security holders		N/A		N/A		N/A
Total		469,577	$	—		1,552,472

(1)

Consists of performance shares, DSUs, RSUs, and PSUs. The number of performance shares and PSUs included in these amounts consists of (a) the actual number of performance shares or PSUs earned for the completed performance periods of 2016-2017, 2017-2018, and 2018 and (b) the maximum number of shares which the participant is eligible to receive if applicable performance metrics are fully achieved with respect to the 2018-2019 EPS PSUs. The actual number of shares that will be issued under the EPS PSUs referenced in clause (b) depends on the performance over the applicable performance period.

(2)

Performance shares, DSUs, PSUs, and RSUs do not have an exercise price and, therefore, they have been excluded from the weighted average exercise price calculation in this column.

(3)

Pursuant to the 2018 Plan, which was approved by stockholders in May 2018, the Company may grant stock options, stock appreciation rights, restricted stock awards, stock unit awards, other stock-based awards, and cash incentive awards. Prior to the stockholders’ approval of the 2018 Plan, the Company could grant equity-based awards, such as stock options, restricted stock, performance shares, and DSUs, pursuant to the 2011 Plan. No further awards may be made under the 2011 Plan. The number of shares available for grant of new awards under the 2018 Plan was 1,570,274 as of December 31, 2018, which number is calculated using the target number of PSU awards instead of the maximum number used in the table above. The 2011 Plan and the 2018 Plan are the Company’s only existing equity compensation plans.

CEO PAY RATIO

We are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Jason D. Lippert, our Chief Executive Officer (“CEO”):

For 2018, our last completed fiscal year:

►

the annual total compensation of our median employee was $52,414; and

►

the annual total compensation of our CEO, as reported in the Summary Compensation Table included on page 31 of this Proxy Statement, was $5,992,695.

Based on this information for fiscal year 2018, we reasonably estimate that the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee was 114:1. We used reasonable estimates in the methodology used to identify the median employee and calculate the annual total compensation of the median employee in a manner consistent with SEC rules and guidance. Our pay ratio estimate has been calculated in a manner consistent with Item 402(u) of Regulation S-K.

As permitted under SEC rules, we are using the same median employee for our pay ratio disclosure for 2018 that we used for our pay ratio disclosure for 2017 because we did not experience any change in our employee population compensation arrangements during 2018 that we reasonably believe would significantly impact our pay ratio disclosure.

We determined the median employee’s total compensation for 2018, including any perquisites and other benefits, in the same manner that we determine the total compensation of our Named Executive Officers for purposes of the Summary Compensation Table disclosed above. The elements included in the CEO’s total compensation are fully discussed above in the footnotes to the Summary Compensation Table.

TRANSACTIONS WITH RELATED PERSONS

The Company currently has over 9,000 employees and seeks to employ the most qualified candidates. Consequently, the Company does not preclude the hiring of family members of incumbent Directors and executive officers. The compensation of each of the following employees was established in accordance with the Company’s employment and compensation practices applicable to employees with equivalent qualifications, experience, and responsibilities.

During 2018, the Company employed Jason D. Lippert as Chief Executive Officer of the Company, who received total salary and incentive compensation of $5,992,695 (see “Executive Compensation - Summary Compensation Table”), and Lippert Components employed Jarod Lippert as Vice President of Marketing and Public Relations, who received total compensation of $459,965, and Jayde Lippert as Assistant General Manager, who received total compensation of $79,811. Jason D. Lippert, Jarod Lippert, and Jayde Lippert, brothers, have been employed by Lippert Components in excess of 24, 17, and four years, respectively.

In addition, as described earlier in this Proxy Statement, one of the Company’s customers, Barletta, is an entity that manufactures pontoon boats. The President and 38% owner of Barletta, William Fenech, is the brother of Ronald Fenech, one of our Directors. Ronald Fenech is also a co-owner of Barletta, holding a 38% ownership interest, and is a director of that entity. Between January 1, 2018 and March 25, 2019, Barletta paid the Company approximately $11,822,000 for the purchase of components. The Company anticipates that these purchases will continue during the remainder of 2019. The purchases by Barletta from the Company were, and future purchases will be, entered into in the ordinary course of business on an arm’s length basis, and contained, and will contain, customary terms and conditions on substantially the same terms as comparable transactions with unrelated third parties.

Approval of Certain Related Person Transactions

The Corporate Governance and Nominating Committee is charged with reviewing and approving or ratifying any transaction between the Company and a related person, which is required to be disclosed under the rules of the SEC. For purposes of this practice the terms “transaction” and “related person” have the meanings contained in Item 404 of Regulation S-K. In the course of its review and approval or ratification of a transaction, the Corporate Governance and Nominating Committee shall consider:

►

the nature of the related person’s interest in the transaction;

►

the material terms of the transaction, including without limitation, the amount and type of transaction;

►

the importance of the transaction to the related person;

►

the importance of the transaction to the Company;

►

whether the transaction would impair the judgment of a Director or executive officer to act in the best interest of the Company; and

►

any other matters the Committee deems appropriate, including any third-party fairness opinions or other expert review obtained by the Company in connection with the transaction.

Any Corporate Governance and Nominating Committee member who is a related person with respect to a transaction under review may not participate in the deliberations or vote respecting such approval or ratification, provided, however, that such Director may be counted in determining the presence of a quorum at a meeting of the Committee which considers the transaction.

Compensation Committee Interlocks and Insider Participation

During fiscal 2018, the Compensation Committee of our Board of Directors was comprised of Messrs. Deely, Graham, Lowe, and O’Sullivan and Ms. Henkels (from January 1, 2018 through May 24, 2018) and Messrs. Deely, Graham, and O’Sullivan and Ms. Henkels (from May 24, 2018 through December 31, 2018), all of whom are independent, outside Directors. No member of this Committee has had any relationship with our Company requiring disclosure in this Proxy Statement other than service as a Director. No executive officer of the Company serves as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our Board of Directors or Compensation Committee, and there are no “interlocks,” as defined by the SEC.

Proposal 2. ADVISORY VOTE ON EXECUTIVE COMPENSATION

SEC rules require that the Company seek a non-binding advisory vote from its stockholders to approve the compensation of our NEOs as described in this Proxy Statement.

Our executive compensation policy is designed to enable the Company to attract, motivate, and retain highly qualified senior executives by providing a competitive compensation opportunity based significantly on performance. Our intent is to provide fair and equitable compensation in a way that rewards executives for achieving specified financial goals. Our performance-related awards are structured to link a substantial portion of our executives’ total potential compensation to the Company’s performance on both a long-term and short-term basis, to recognize individual contributions, as well as overall business results, and to align executive and stockholder interests. Accordingly, we reward performance in excess of pre-established targets of adjusted EPS and ROIC, and we avoided establishing goals that could divert our executives’ attention from the fundamentals of effective and efficient operations. A significant portion of the total compensation paid to our NEOs is in the form of long-term equity.

At the Annual Meeting of Stockholders held on May 24, 2018, our stockholders approved, in an advisory vote, the compensation paid to our NEOs for 2017. In the advisory vote, 97% of the votes cast voted in favor of the 2017 compensation. Although the vote was non-binding, the Compensation Committee reviewed the results of the vote and considered the high approval rate as an indication that our stockholders support the Company’s executive compensation philosophy and decisions, including the restructured aspects of the compensation program for our Chief Executive Officer and President that were effective for 2017 and were continued for 2018.

We are requesting stockholder advisory approval of the compensation paid to our NEOs as described in this Proxy Statement, including the disclosures under “Executive Compensation - Compensation Discussion and Analysis,” the compensation tables, and the related information and discussion. The vote is intended to address the overall compensation paid to our NEOs and the policies and practices described in this Proxy Statement.

The vote is advisory and therefore not binding on the Company, the Compensation Committee, or the Board of Directors. However, we value the opinions of our stockholders, and we will carefully consider the outcome of the advisory vote on executive compensation when making future compensation decisions.

For the reasons stated, the Board of Directors recommends a vote FOR the following non-binding resolution:

“RESOLVED, that the compensation paid to the Company’s NEOs, as disclosed in this Proxy Statement pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, compensation tables, and related information and discussion, is hereby APPROVED.”

In connection with the stockholder preference expressed at the 2017 Annual Meeting, our Board of Directors has determined that stockholder advisory votes on executive compensation will occur on an annual basis. Therefore, the next advisory vote will occur at our 2020 Annual Meeting.

The Board of Directors recommends that you vote FOR adoption of the resolution approving the compensation paid to our NEOs as described in this Proxy Statement.

Proposal 3. RATIFICATION OF APPOINTMENT OF AUDITORS

It is proposed the stockholders ratify the appointment by the Audit Committee of KPMG LLP (“KPMG”) as independent auditors for the purpose of auditing and reporting on the consolidated financial statements and internal control over financial reporting of the Company for the year ending December 31, 2019. KPMG is an independent registered public accounting firm. It is expected that a representative of that firm will be present at the Annual Meeting of Stockholders to be held on May 23, 2019 and will be afforded the opportunity to make a statement and respond to appropriate questions from stockholders present at the meeting.

If the holders of a majority in voting power of the outstanding shares of Common Stock which are present in person or by proxy at the meeting and entitled to vote thereon do not approve the proposal, the Audit Committee will reconsider its choice, taking into consideration the views of the stockholders, and may, but will not be required to, appoint a different independent registered public accounting firm.

Fees for Independent Auditors

The following is a summary of the fees billed to the Company by KPMG for professional services rendered for the fiscal years ended December 31, 2018 and 2017:

	2018		2017
Audit Fees:
Consists of fees billed for professional services rendered for the annual audit of the Company’s financial statements and for the reviews of the interim financial statements included in the Company’s Quarterly Reports	$	1,202,500	$	1,000,000
Audit-Related Fees:
Consists primarily of fees billed for transaction related services	$	—	$	—
Tax Fees:
Consists of fees billed for tax planning and compliance, assistance with the preparation of tax returns, tax services rendered in connection with acquisitions made by the Company and advice on other tax-related matters	$	—	$	24,000
All Other Fees:
Other Services	$	—	$	—
Total All Fees	$	1,202,500	$	1,024,000

As part of its duties, the Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditors in order to assure that the provision of such services does not impair the auditors’ independence. The Audit Committee does not delegate to Management its responsibilities to pre-approve services performed by the independent auditors. All services performed by KPMG were approved by the Audit Committee.

In making its recommendation to ratify the appointment of KPMG LLP as the Company’s independent auditors for the year ending December 31, 2019, the Audit Committee has determined the non-audit services provided by KPMG are compatible with maintaining the independence of KPMG LLP.

The Board of Directors recommends that you vote FOR ratification of the appointment of KPMG LLP as independent auditors for the year ending December 31, 2019.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee serves as a representative of the Company’s Board of Directors, and is responsible for providing independent, objective oversight of the Company’s (i) financial reporting processes and financial statements, (ii) compliance with legal and regulatory requirements, (iii) appointment and performance of the independent auditor, (iv) system of internal control, and (v) compliance with ethical standards. The Audit Committee operates under a written charter, a copy of which is available on the Company’s website at www.lci1.com/investors under “Corporate Governance.” The Audit Committee currently consists of Virginia L. Henkels (Chair), James F. Gero, Frederick B. Hegi, Jr., Kieran M. O’Sullivan, and David A. Reed, each of whom satisfies the independence requirement of Rule 10A-3 under the Securities Exchange Act of 1934, as amended, and each of whom has been determined by the Board of Directors to be an “audit committee financial expert” as defined by the SEC.

Management is responsible for the Company’s internal controls and the financial reporting process. KPMG LLP, an independent registered public accounting firm acting as the Company’s independent auditor, is responsible for performing an audit of the Company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”), and to issue a report thereon. KPMG is also responsible for issuing a report on the effectiveness of the Company’s internal control over financial reporting. As set forth in its Charter, the Committee acts only in an oversight capacity and relies on the work and assurances of Management and other advisors retained by the Company, and KPMG’s opinion on the Company’s consolidated financial statements.

The Audit Committee has reviewed and discussed with Management and KPMG the Company’s audited financial statements for the year ended December 31, 2018. Management represented to the Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed with Management their assessment of the effectiveness of the Company’s internal control over financial reporting. The Audit Committee reviewed and discussed with KPMG the consolidated financial statements, and KPMG’s evaluation of the Company’s internal control over financial reporting. The Audit Committee also discussed with KPMG the matters required to be discussed by the applicable rules of the PCAOB. In fulfilling the Audit Committee’s oversight responsibility of the external auditor, the Audit Committee reviews the policies and procedures for the engagement of the independent registered public accounting firm, including the scope of the audit, audit fees, auditor independence matters, performance of the auditor, lead partner selection, and auditor tenure. The current lead audit partner for the Company has held that position since 2018. The Audit Committee has received the written disclosures and the letter from KPMG required by applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence, and has discussed with KPMG their independence.

The Audit Committee considered whether non-audit services provided by, and fees paid to, KPMG are compatible with maintaining their independence. The Audit Committee concluded that non-audit services provided by KPMG during the year ended December 31, 2018, which consisted of tax planning and compliance, and other accounting and audit-related services, were compatible with KPMG’s independence.

Based on the review and discussions referenced above, the Audit Committee recommended to the Board of Directors the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC.

	AUDIT COMMITTEE
	Virginia L. Henkels, Chair James F. Gero Frederick B. Hegi, Jr. Kieran M. O’Sullivan David A. Reed

The foregoing report of the Audit Committee shall not be deemed to be “soliciting material” or to be “filed” with the SEC, nor shall this information be incorporated by reference into any future filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into a filing.

TRANSACTION OF OTHER BUSINESS

As of the date of this Proxy Statement, the only business which Management intends to present or knows that others will present at the Annual Meeting is that set forth herein. If any other matter or matters are properly brought before the Annual Meeting, or any adjournment or postponement thereof, it is the intention of the persons named in the proxy solicited from holders of the Common Stock to vote the proxy on such matters in accordance with their judgment, subject to NYSE rules.

STOCKHOLDER PROPOSALS FOR THE 2020 ANNUAL MEETING

In order for a stockholder proposal to be considered for inclusion in the Company’s Proxy Statement for the Annual Meeting to be held in 2020, the Company must receive the written proposal at its principal executive offices on or before December 11, 2019. The proposal must comply with SEC regulations regarding the inclusion of stockholder proposals in company-sponsored proxy materials.

Additionally, the Company’s bylaws establish an advance notice procedure relating to director nominations and stockholder proposals that are not submitted for inclusion in the Company’s Proxy Statement, but that the stockholder instead wishes to present directly at an annual meeting. To be properly brought before the Annual Meeting to be held in 2020, the stockholder must give timely written notice of the nomination or proposal to:

Secretary
LCI Industries
4100 Edison Lakes Parkway
Suite 210
Mishawaka, IN 46545

To be timely, a stockholder’s notice must be delivered not later than the close of business on the 90^th day, nor earlier than the close of business on the 120^th day, prior to the first anniversary of the preceding year’s annual meeting. For the Annual Meeting to be held in 2020, such notice must be delivered no earlier than January 24, 2020 and no later than February 23, 2020. In the event that the date of the annual meeting is advanced by more than 30 or delayed by more than 70 days from such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the 120^th day prior to such annual meeting and not later than the close of business on the later of the 90^th day prior to such annual meeting or the 10^th day following the day on which public announcement of the date of such meeting is first made. The notice must contain specified information about each nominee or the proposed business and the stockholder making the nomination or proposal. A copy of the Company’s bylaws, including the advance notice requirements, may be obtained upon request to the Company’s Secretary at the address noted above.

	By Order of the Board of Directors

	ANDREW J. NAMENYE Vice President - Chief Legal Officer and Secretary

April 9, 2019

☒	No fee required.

o	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:

o	Fee paid previously with preliminary materials.

o	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:

Date and Time:	May 23, 2019 at 9:00 A.M., CDT
Place:	Hotel Crescent Court, 400 Crescent Court, Dallas, Texas 75201
Record Date:	March 29, 2019

Voting Matter		Board Recommendation	Page Number with More Information
Proposal 1:	Election of nine directors	FOR each nominee	8
Proposal 2:	Advisory vote to approve the compensation of the Company’s named executive officers	FOR	45
Proposal 3:	To ratify the appointment of KPMG LLP as independent auditor for the Company for the year ending December 31, 2019	FOR	46

Nominee	Age	Director Since	Principal Occupation	Independent	Other Public Boards	Committee Memberships
Nominee	Age	Director Since	Principal Occupation	Independent	Other Public Boards	A	C	CG&N	R	S&A
James F. Gero*	74	1992	Private Investor	✔	1	✔		✔
Frank J. Crespo	56	2015	Senior Vice President and Chief Supply Chain Officer of Indigo Agriculture, Inc.	✔	0			✔	Chair
Brendan J. Deely	53	2011	Chief Executive Officer of Banner Solutions	✔	0		✔	Chair
Ronald J. Fenech	61	2017	Founder of Grand Design Recreational Vehicle Co.		0				✔	✔
Tracy D. Graham	45	2016	Chief Executive Officer and Managing Principal of Graham-Allen Partners	✔	0		✔		✔	✔
Virginia L. Henkels	50	2017	Former Executive Vice President, Chief Financial Officer and Treasurer of Swift Transportation Company	✔	2	Chair	✔
Jason D. Lippert	46	2007	Chief Executive Officer of the Company		0
Kieran M. O’Sullivan	57	2015	President, Chief Executive Officer and Chairman of the Board of CTS Corporation	✔	1	✔	Chair
David A. Reed	71	2003	President of a privately-held family investment management company	✔	0	✔				Chair

✔	Pay for performance
✔	Establish challenging performance goals in incentive plans
✔	Maintain robust stock ownership guidelines for CEO, CFO, and Directors
✔	Require termination of employment in addition to a change in control for accelerated equity vesting (double trigger), beginning 2018
✔	Require non-competition agreement for receipt of equity awards
✔	Subject executives’ cash and equity-based incentives to clawback
✔	Provide limited executive perquisites
✔	Provide no excise tax gross-ups

	By Order of the Board of Directors,
	ANDREW J. NAMENYE Vice President - Chief Legal Officer and Secretary

PROXY STATEMENT SUMMARY		1
PROXY STATEMENT		4
General Information		4
VOTING SECURITIES		5
Vote Required on Proposals		5
Recommendations of the Board of Directors		5
Principal Holders of Voting Securities		6
Security Ownership of Certain Beneficial Owners and Management		7
Section 16(a) Beneficial Ownership Reporting Compliance		7
Proposal 1. ELECTION OF DIRECTORS		8
Director Qualifications and Selection Process		8
Our Director Nominees		9
CORPORATE GOVERNANCE AND RELATED MATTERS		13
Statement Regarding Corporate Governance		13
Board of Directors and Director Independence		13
Leadership Structure		14
Executive Sessions		14
Board Committees		14
Compensation-Related Risk		17
Compensation Recoupment Policy		17
Director Stock Ownership Requirements		17
Employees and Directors Guidelines for Business Conduct		18
Management and Board Succession		18
Contacting the Board of Directors		18
DIRECTOR COMPENSATION		19
Discussion of Director Compensation		20
EXECUTIVE COMPENSATION		21
Named Executive Officers		21
Compensation Discussion and Analysis		21
Compensation Committee Report		30
Summary Compensation Table		31

►	7 of 9 Director Nominees are Independent	►	Independent Chairman of the Board
►	Annual Election of All Directors	►	Directors Elected by Majority Vote in Uncontested Director Elections
►	Annual Board and Committee Evaluations	►	Non-Employee Directors Regularly Meet Without Management Present
►	Extensive Board Oversight of Risk Management, Including Separate Risk Committee	►	Guidelines for Business Conduct Applicable to All Employees and Directors
►	Single Class Voting Structure (One Share, One Vote)	►	No Supermajority Voting Requirements
►	Code of Ethics for Senior Financial Officers	►	No Shareholder Rights Plan (Poison Pill)

Proposal Number	Subject	Vote Required	Impact of Abstentions and Broker Non-Votes, if any
1	Election of directors	A nominee must receive a majority of the votes cast with respect to his or her election, which means that the number of votes cast “for” a nominee must exceed the number of votes cast “against” that nominee.	Abstentions and broker non-votes will not affect the outcome of this proposal.
2	Advisory vote on executive compensation	Approval by the affirmative vote of the holders of a majority in voting power of the outstanding shares of Common Stock that are present in person or by proxy at the meeting and entitled to vote thereon.	Abstentions will have the same effect as votes cast against this proposal. Broker non-votes will not affect the outcome of this proposal.
3	Ratification of appointment of independent auditor	Approval by the affirmative vote of the holders of a majority in voting power of the outstanding shares of Common Stock that are present in person or by proxy at the meeting and entitled to vote thereon.	Abstentions will have the same effect as votes cast against this proposal. Broker non-votes will not affect the outcome of this proposal.

FOR	Each of the nominees for the Board of Directors named in this Proxy Statement (Proposal 1).
FOR	Advisory approval of the compensation of the Company’s Named Executive Officers as described in this Proxy Statement (Proposal 2).
FOR	Ratification of the appointment of KPMG LLP as the Company’s independent auditor for the fiscal year ending December 31, 2019 (Proposal 3).

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership⁽¹⁾	Approximate Percent of Class⁽¹⁾
BlackRock, Inc.⁽²⁾ 55 East 52nd Street New York, NY 10055	3,606,789	14.4%
The Vanguard Group, Inc.⁽³⁾ 100 Vanguard Boulevard Malvern, PA 19355	2,514,157	10.1%
Neuberger Berman Group LLC⁽⁴⁾ Neuberger Berman Investment Advisers LLC 1290 Avenue of the Americas New York, NY 10104	1,313,768	5.3%
JPMorgan Chase & Co⁽⁵⁾ 270 Park Avenue New York, NY 10017	1,261,840	5.0%

	Sincerely,
	JAMES F. GERO Chairman of the Board