-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F7nzg1G/bZ0I1MG0mNYnJnK+DstbsJEF5ONaHIaDDGVNHa6tigwtDtrcU8JHdw// 89N0lSRdWm8U2qaaxxP5rg== 0000950137-97-000449.txt : 19970221 0000950137-97-000449.hdr.sgml : 19970221 ACCESSION NUMBER: 0000950137-97-000449 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970326 FILED AS OF DATE: 19970211 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: IDEX CORP /DE/ CENTRAL INDEX KEY: 0000832101 STANDARD INDUSTRIAL CLASSIFICATION: PUMPS & PUMPING EQUIPMENT [3561] IRS NUMBER: 363555336 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-10235 FILM NUMBER: 97524310 BUSINESS ADDRESS: STREET 1: 630 DUNDEE RD STE 400 CITY: NORTHBROOK STATE: IL ZIP: 60062 BUSINESS PHONE: 7084987070 DEF 14A 1 NOTICE & PROXY STATEMENT 1 SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. ) Filed by the registrant [x] Filed by a party other than the registrant [ ] Check the appropriate box: [ ] Preliminary proxy statement [ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) [X] Definitive proxy statement [ ] Definitive additional materials [ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12 IDEX CORPORATION - ------------------------------------------------------------------------------- (Name of Registrant as Specified in Its Charter) [COMPANY NAME] - ------------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement, if other than the Registrant) Payment of filing fee (Check the appropriate box): [ ] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2). [ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. (1) Title of each class of securities to which transaction applies: - -------------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: - -------------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and state how it was determined): - -------------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: - -------------------------------------------------------------------------------- (5) Total fee paid: - -------------------------------------------------------------------------------- / / Fee paid previously with preliminary materials. - -------------------------------------------------------------------------------- [ ] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. (1) Amount previously paid: - -------------------------------------------------------------------------------- (2) Form, schedule or registration statement no.: - -------------------------------------------------------------------------------- (3) Filing party: - -------------------------------------------------------------------------------- (4) Date filed: - -------------------------------------------------------------------------------- 2 - -------------------------------------------------------------------------------- [IDEX LOGO] IDEX CORPORATION NOTICE AND PROXY STATEMENT FOR THE ANNUAL SHAREHOLDERS' MEETING TO BE HELD TUESDAY, MARCH 25, 1997 YOUR VOTE IS IMPORTANT Please mark, date and sign the enclosed proxy card and promptly return it to the Company in the enclosed envelope. 3 IDEX CORPORATION 630 DUNDEE ROAD NORTHBROOK, ILLINOIS 60062 --------------------------------- NOTICE OF ANNUAL MEETING OF SHAREHOLDERS --------------------------------- DEAR IDEX SHAREHOLDER: You are cordially invited to attend the Annual Meeting of the shareholders of IDEX Corporation which will be held on Tuesday, March 25, 1997, at Bank of America Illinois, Shareholders Room, 21st Floor, 231 South LaSalle Street, Chicago, Illinois 60697. The meeting will begin at 10:00 a.m. At the meeting, shareholders will (a) elect three directors for a term of three years, (b) vote on the recommendation of the Board of Directors that Deloitte & Touche LLP be appointed auditors of the Company for 1997, and (c) transact such other business as may properly come before the meeting. Enclosed is a Proxy Statement which provides information concerning the Company and the Board of Directors' nominees for election as directors. Also enclosed is a copy of the Company's Annual Report which describes the results of our operations during 1996 and provides other information about the Company which will be of interest. The Board of Directors fixed the close of business on February 5, 1997, as the record date for the determination of shareholders owning the Company's Common Stock, par value $.01 per share, entitled to notice of and to vote at the Annual Meeting. Enclosed is a proxy card which provides you with a convenient means of voting on the matters to be considered at the meeting whether or not you attend the meeting in person. All you need to do is mark the proxy card to indicate your vote, sign and date the card, then return it to the Company in the enclosed envelope as soon as conveniently possible. If you desire to vote to elect each of the Company's nominees as directors, for the appointment of Deloitte & Touche LLP as auditors of the Company for 1997, and in the discretion of the proxy holders as to any other business which may properly come before the meeting, you do not need to mark your votes on the proxy card. You only need to sign and date the card and return it to the Company. Management sincerely appreciates your support. We hope to see you at the Annual Meeting. By order of the Board of Directors, WAYNE P. SAYATOVIC Senior Vice President - Finance, Chief Financial Officer and Secretary February 12, 1997 Northbrook, Illinois 4 IDEX CORPORATION 630 DUNDEE ROAD NORTHBROOK, ILLINOIS 60062 ------------------------------------ PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MARCH 25, 1997 ------------------------------------ The Annual Meeting of the shareholders of IDEX Corporation (the "Company" or "IDEX") will be held on Tuesday, March 25, 1997, at 10:00 a.m. at the Shareholders Room of Bank of America Illinois, 231 South LaSalle Street, Chicago, Illinois 60697. At the Annual Meeting, shareholders will (a) elect three directors for a term of three years, (b) vote on the recommendation of the Board of Directors that Deloitte & Touche LLP be appointed auditors of the Company for 1997, and (c) transact such other business as may properly come before the meeting. This Proxy Statement has been prepared in connection with the solicitation by the Company's Board of Directors of proxies for the Annual Meeting. It provides information concerning the persons nominated by the Board of Directors for election as directors and the other matters to be voted upon as well as other information relevant to the Annual Meeting. The Company commenced distribution of this Proxy Statement and the accompanying materials on February 12, 1997. The record of shareholders entitled to notice of and to vote at the Annual Meeting was taken as of the close of business on February 5, 1997 (the "record date"), and each shareholder will be entitled to vote at the meeting any shares of IDEX Common Stock, par value $.01 per share ("Common Stock"), held of record at the record date. Each shareholder of record is requested to complete, date and sign the accompanying proxy card and return it promptly to the Company in the enclosed envelope. The proxy card lists each person nominated by the Board of Directors for election as director and provides spaces to vote on the appointment of outside auditors. Proxies duly executed and received prior to or at the meeting will be voted in accordance with shareholders' instructions. If no instructions are given, proxies will be voted to elect each of the Company's nominees as directors and in favor of the appointment of Deloitte & Touche LLP as auditors of the Company, and in the discretion of the proxy holders as to any other business which may properly come before the meeting. Votes cast by proxy or in person at the Annual Meeting will be tabulated by the election inspectors appointed for the meeting and will determine whether or not a quorum is present. The election inspectors will treat abstentions as shares that are present and entitled to vote for purposes of determining the presence of a quorum but as unvoted for purposes of determining the approval of any matter submitted to the shareholders for a vote. If a broker indicates on the proxy that it does not have discretionary authority as to certain shares to vote on a particular matter, then those shares will not be considered as present and entitled to vote with respect to that matter. On December 19, 1996 the Company's Board of Directors authorized a three-for-two common stock split effected in the form of a 50% stock dividend payable on January 31, 1997, to shareholders of record on 1 5 January 15, 1997. All references in this proxy statement to number of shares, per share amounts and market prices of the Company's Common Stock have been adjusted to reflect the split. ELECTION OF DIRECTORS The Company's Restated Certificate of Incorporation, as amended, provides for a three-class Board, with one class being elected each year for a term of three years. The Board of Directors currently consists of nine members, three of whom are Class I directors whose terms will expire at the 1999 Annual Meeting, three of whom are Class II directors whose terms will expire at this year's Annual Meeting and three of whom are Class III directors whose terms will expire at the 1998 Annual Meeting. The Company's Board of Directors has nominated three persons for election as Class II directors to serve for a three-year term expiring in 2000, upon the election and qualification of their successors. The three nominees of the Board of Directors are William H. Luers, George R. Roberts and Michael T. Tokarz, each of whom is currently serving as a director of the Company. If for any reason any of the nominees for a Class II directorship is unavailable to serve, proxies solicited hereby may be voted for a substitute. The Board, however, expects all of the nominees to be available. The nominees and the directors whose terms of office continue after this year's Annual Meeting are listed below with brief statements setting forth their present principal occupations and other information, including directorships in other public companies. The affirmative vote of a majority of the shares present in person or by proxy at the Annual Meeting, and entitled to vote, is required for election of the nominees. 2 6 THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE THREE NOMINEES IN CLASS II IDENTIFIED BELOW. NOMINEES FOR DIRECTORSHIPS CLASS II: NOMINEES FOR THREE-YEAR TERM WILLIAM H. LUERS Director since 1989 President Age 67 The Metropolitan Museum of Art Mr. Luers was appointed a director of IDEX by the Board on May 24, 1989, effective June 2, 1989. Mr. Luers has been President of The Metropolitan Museum of Art in New York, New York since prior to 1992. Formerly, he served as Ambassador to Czechoslovakia and Venezuela. Mr. Luers has written extensively for newspapers and magazines on the former Soviet Union and Eastern Europe, on East/West relations and on Latin America. He serves on the boards of The Scudder New Europe Fund, Inc., The Scudder Global/International Funds, Inc., and Wickes Lumber Co. Mr. Luers is the Chairman of the Compensation Committee and a member of the Audit Committee of the Board of Directors. GEORGE R. ROBERTS Director since 1988 Member Age 53 Kohlberg Kravis Roberts & Co., L.L.C. Mr. Roberts was elected director of IDEX on January 22, 1988. Since January 1996 he has been a managing member of the limited liability company which acts as the general partner of Kohlberg Kravis Roberts & Co. ("KKR"). He is a general partner of KKR Associates and was a general partner of KKR from its organization in 1976 to December 1995. Mr. Roberts is a director of Auto Zone, Inc., Bruno's, Inc., Borden, Inc., Flagstar Companies, Inc., Flagstar Corporation, K-III Communications Corp., Merit Behavioral Care Corporation, Newsquest Capital, PLC, Owens-Illinois, Inc., Owens-Illinois Group, Inc., Safeway, Inc., Union Texas Petroleum Holdings, Inc., and World Color Press, Inc. MICHAEL T. TOKARZ Director since 1987 Member Age 47 Kohlberg Kravis Roberts & Co., L.L.C. Mr. Tokarz has been a director of IDEX since its organization in September 1987. Since January 1996 he has been a member of the limited liability company which acts as the general partner of KKR. He has been a general partner of KKR Associates since January 1993 and was a general partner of KKR from January 1993 to December 1995. From prior to 1992 to January 1993 he was an executive of KKR and a limited partner of KKR Associates. Mr. Tokarz is a director of Flagstar Companies, Inc., Flagstar Corporation, K-III Communications Corp., Safeway, Inc., and Walter Industries, Inc. Mr. Tokarz is a member of the Executive Committee of the Board of Directors. 3 7 OTHER INCUMBENT DIRECTORS CLASS III: THREE-YEAR TERM EXPIRES IN 1998 PAUL E. RAETHER Director since 1988 Member Age 50 Kohlberg Kravis Roberts & Co., L.L.C. Mr. Raether was elected director of IDEX on January 22, 1988. Since January 1996 he has been a member of the limited liability company which acts as the general partner of KKR. Mr. Raether has been a general partner of KKR Associates since prior to 1992 and was a general partner of KKR from prior to 1992 to December 1995. Mr. Raether is a director of Bruno's, Inc., Flagstar Companies, Inc., Flagstar Corporation, and FRD Acquisition Co. CLIFTON S. ROBBINS Director since 1987 Member Age 38 Kohlberg Kravis Roberts & Co., L.L.C. Mr. Robbins has been a director of IDEX since its organization in September 1987. Since January 1996 he has been a member of the limited liability company which acts as the general partner of KKR. He has been a general partner of KKR Associates since December 1994 and was a general partner of KKR from December 1994 to December 1995. From prior to 1992 to December 1994 he was an executive of KKR and a limited partner of KKR Associates. Mr. Robbins is a director of AEP Industries, Inc., Borden, Inc., Borden Chemicals & Plastics, L.P., Kindercare Learning Centers, Inc., and Newsquest Capital, PLC. Mr. Robbins is a member of the Executive Committee of the Board of Directors. NEIL A. SPRINGER Director since 1990 Managing Director Age 58 Springer Souder & Associates, L.L.C. Mr. Springer was appointed director of IDEX by the Board on February 27, 1990. He has been Managing Director of Springer Souder & Associates, L.L.C. since June 1994. From September 1992 to June 1994 he was Senior Vice President of Slayton International, Inc. and from August 1991 to August 1992 he was President-Central Region of Alexander Proudfoot Company. Mr. Springer is a director of Century Companies of America, CUNA Mutual Insurance Group, Dorsey Trailer, Inc., and TNT Freightways Corporation. Mr. Springer is the chairman of the Audit Committee and a member of the Compensation Committee of the Board of Directors. 4 8 CLASS I: THREE-YEAR TERM EXPIRES IN 1999 DONALD N. BOYCE Director since 1988 Chairman of the Board, President Age 58 and Chief Executive Officer IDEX Corporation Mr. Boyce was elected Chairman of the Board, President and Chief Executive Officer of IDEX on January 22, 1988, the date of the Company's acquisition of its six original operating subsidiaries from Houdaille Industries, Inc. ("Houdaille"). Previously, he served as Chairman of the Board, President and Chief Executive Officer of Houdaille. In total, Mr. Boyce has 27 years of experience with IDEX and Houdaille. Mr. Boyce is the Chairman of the Executive Committee and a member of the Pension and Retirement Committee. RICHARD E. HEATH Director since 1989 Senior Partner Age 66 Hodgson, Russ, Andrews, Woods & Goodyear Mr. Heath was appointed director of IDEX by the Board on April 19, 1989, effective June 9, 1989. Mr. Heath has been a senior partner of the law firm Hodgson, Russ, Andrews, Woods & Goodyear since prior to 1992. HENRY R. KRAVIS Director since 1988 Member Age 53 Kohlberg Kravis Roberts & Co., L.L.C. Mr. Kravis was elected director of IDEX on January 22, 1988. Since January 1996 he has been a managing member of the limited liability company which acts as the general partner of KKR. Mr. Kravis is a general partner of KKR Associates and was a general partner of KKR from its organization in 1976 to December 1995. Mr. Kravis is a director of Auto Zone, Inc., Borden, Inc., Bruno's, Inc., Flagstar Companies, Inc., Flagstar Corporation, Gillette Co., K-III Communications Corp., Merit Behavioral Care Corporation, Newsquest Capital, PLC, Owens-Illinois, Inc., Owens-Illinois Group, Inc., Safeway, Inc., Sotheby's Inc., Union Texas Petroleum Holdings, Inc., and World Color Press, Inc. Mr. Kravis and Mr. Roberts are first cousins. FUNCTIONS OF THE BOARD OF DIRECTORS AND ITS COMMITTEES The Board of Directors has the ultimate authority for the management of the Company's business. The Board selects the Company's executive officers, delegates responsibilities for the conduct of the Company's operations to those officers, and monitors their performance. The Board of Directors held seven meetings during 1996. Important functions of the Board of Directors are performed by committees comprised of members of the Board. Subject to applicable provisions of the Company's By-Laws, the Board as a whole appoints the members of each committee each year at its first meeting following the annual shareholders' meeting. The Board may, at any time, appoint or remove committee members or change the authority or responsibility delegated to any committee. There are four regularly constituted committees of the Board of Directors: the Executive Committee, the Audit Committee, the Compensation Committee, and the Pension and Retirement Committee. The Company does not have a nominating committee or any regularly constituted committee performing the functions of such a committee. 5 9 The Executive Committee is empowered to exercise the authority of the Board of Directors in the management of the Company between meetings of the Board of Directors, except that the Executive Committee may not fill vacancies on the Board, amend the Company's By-Laws or exercise certain other powers reserved to the Board or delegated to other Board committees. During 1996, the Executive Committee held three meetings. The Audit Committee recommends to the Board of Directors the firm of independent public accountants to audit the Company's financial statements for each fiscal year; reviews with the independent auditors the general scope of this service; reviews the nature and extent of the non-audit services to be performed by the independent auditors; and consults with management on the activities of the Company's independent auditors and the Company's system of internal accounting controls. During 1996, the Audit Committee held two meetings. The Compensation Committee makes recommendations to the Board of Directors with respect to the compensation to be paid and benefits to be provided to directors, officers and employees of the Company. During 1996, the Compensation Committee held seven meetings. The Pension and Retirement Committee makes recommendations to the Board of Directors with respect to the adoption or amendment of the Company's pension and retirement plans and reports to the Board with respect to the operation of such plans. During 1996, the Pension and Retirement Committee held three meetings. During 1996, each member of the Board of Directors attended more than 75% of the aggregate number of meetings of the Board of Directors and of committees of the Board of which he was a member, except for Messrs. Kravis, Robbins and Roberts. CERTAIN INTERESTS LEGAL FEES. Mr. Heath is a senior partner of the law firm of Hodgson, Russ, Andrews, Woods & Goodyear. Such firm is counsel to the Company on certain matters. 6 10 COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS DIRECTOR COMPENSATION Non-management directors of the Company receive an annual fee for their services of $30,000. Under the IDEX Corporation Stock Option Plan for Outside Directors (the "Plan") non-qualified stock options ("Options") are granted to directors of the Company who are not (i) full-time employees of the Company or its subsidiaries or (ii) partners or full-time employees of either KKR or KKR Associates (any such director being an "Outside Director") to purchase, in the aggregate, up to 337,500 shares of Common Stock. If any option expires or is canceled without having been fully exercised, the shares covered thereby may be subject to the grant of new Options. In the year ended December 31, 1996, each of Messrs. Heath, Luers and Springer received an Option to purchase 4,500 shares of Common Stock. In addition, on January 1, 1997, Messrs. Heath, Luers and Springer each received an Option to purchase 4,500 shares of Common Stock and, on each January 1 hereafter for so long as they continue to serve as directors of the Company and the Plan remains effective, will receive an additional Option for 4,500 shares of Common Stock. For so long as the Plan remains effective, any person who becomes an Outside Director will receive an Option to purchase 6,750 shares of Common Stock upon his or her appointment as director and will receive an additional Option for 4,500 shares of Common Stock on each January 1 thereafter. The per share purchase price is specified in each Option and is equal to the fair market value of a share of Common Stock on the date the Option is granted, as determined under the Plan. The per share purchase price under the Options granted to Messrs. Heath, Luers and Springer on January 1, 1996, and January 1, 1997, was $27.94 and $26.03, respectively. The per share closing market price of the Common Stock on January 1, 1996, and on January 1, 1997, was $27.17 and $26.58, respectively. The Option price is based on the average closing price per share of Common Stock on the New York Stock Exchange during the 30-day period immediately preceding the date the Option was granted. Upon exercise of any option, the purchase price of Common Stock must be paid in full in cash or shares of Common Stock as provided in the Plan. No Option may be granted during any period of suspension of the Plan, and in no event may any Option be granted under the Plan after February 26, 2000. 7 11 SUMMARY COMPENSATION TABLE The total compensation paid to the Company's five highest paid executive officers for services rendered to the Company in 1996, 1995 and 1994 is summarized as follows:
ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION ------------------------------ ----------------------------------- SHARES OTHER RESTRICTED UNDERLYING LONG-TERM ANNUAL STOCK OPTIONS INCENTIVE ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMP.(2) AWARDS GRANTED PAYOUTS COMPENSATION(3) --------------------------- ---- ------ ----- -------- ---------- ---------- --------- --------------- Donald N. Boyce................... 1996 $420,000 $404,000 $0 $0 41,850 $0 $3,450 Chairman of the Board, President 1995 400,000 480,000 0 0 41,850 0 3,372 and Chief Executive Officer 1994 375,000 450,000 0 0 64,350 0 3,372 Frank J. Hansen................... 1996 200,000 160,800 0 0 20,588 0 3,450 Senior Vice President-- 1995 191,000 192,000 0 0 20,588 0 3,372 Operations and Chief Operating 1994 168,700 156,300 0 0 33,075 0 3,372 Officer Wayne P. Sayatovic................ 1996 189,000 147,500 0 0 16,875 0 3,450 Senior Vice President--Finance, 1995 180,000 167,400 0 0 16,875 0 3,372 Chief Financial Officer and 1994 166,000 154,400 0 0 27,000 0 3,372 Secretary Wade H. Roberts, Jr............... 1996 175,500 112,900 0 0 14,400 0 3,450 Vice President--Group Executive 1995 168,000 151,600 0 0 14,400 0 3,372 and President, Hale 1994 155,200 123,400 0 0 22,950 0 3,372 Mark W. Baker..................... 1996 158,400 118,800 0 0 10,875 0 3,450 Vice President--Group Executive 1995 151,200 137,700 0 0 10,125 0 3,372 and President, Lubriquip 1994 128,300 111,000 0 0 12,150 0 3,372
- --------------- (1) Includes amounts earned in fiscal year, whether or not deferred. (2) The value of perquisites provided to these individuals did not exceed the lesser of $50,000 or 10% of base salary plus bonus. (3) Company matching contributions to Savings Plan individual accounts. OPTION GRANTS IN 1996 The following tables set forth certain information with respect to options granted to the Company's five highest paid executive officers in 1996.
POTENTIAL REALIZABLE VALUE AT ASSUMED INDIVIDUAL GRANTS ANNUAL RATES OF ------------------------------------------------------- STOCK PRICE NUMBER OF % OF TOTAL APPRECIATION FOR SHARES OPTIONS OPTION TERM UNDERLYING GRANTED ---------------------- OPTIONS TO EMPLOYEES EXERCISE EXPIRATION NAME GRANTED IN FISCAL YEAR PRICE DATE 5% 10% ---- ---------- -------------- -------- ---------- -- --- Donald N. Boyce......................... 41,850 9.7% $26.25 03/26/06 $691,875 $1,756,164 Frank J. Hansen......................... 20,588 4.8 26.25 03/26/06 340,358 863,919 Wayne P. Sayatovic...................... 16,875 3.9 26.25 03/26/06 278,982 708,131 Wade H. Roberts, Jr..................... 14,400 3.4 26.25 03/26/06 238,064 604,272 Mark W. Baker........................... 10,875 2.5 26.25 03/26/06 179,788 456,351
8 12 OPTION EXERCISES AND YEAR-END VALUES
NUMBER OF SHARES VALUE OF UNEXERCISED, UNDERLYING UNEXERCISED IN-THE-MONEY NUMBER OF OPTIONS AT FISCAL OPTIONS AT FISCAL SHARES YEAR END YEAR END(1) ACQUIRED ON VALUE ---------------------------- ---------------------------- NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE ---- ----------- -------- ----------- ------------- ----------- ------------- Donald N. Boyce.................... 0 $ 0 295,082 147,420 $6,609,881 $1,086,648 Frank J. Hansen.................... 3,230 82,158 41,873 69,503 537,374 486,278 Wayne P. Sayatovic................. 0 0 105,821 60,075 2,308,760 443,830 Wade H. Roberts, Jr................ 0 0 50,760 50,490 819,540 367,310 Mark W. Baker...................... 0 0 13,365 30,585 151,620 187,314
- --------------- (1) Calculated using closing stock price of $26.58 on December 31, 1996. COMPENSATION COMMITTEE REPORT The Compensation Committee (the "Committee") of the Board of Directors of IDEX Corporation reviews and approves base salary, annual management incentive compensation, and long-term incentive awards for all corporate officers and business unit presidents, with the objective of attracting and retaining individuals of the necessary quality and stature to operate the business. The Committee considers individual contributions, performance against strategic goals and directions, and industry-wide pay practices in determining the levels of base compensation for key executives. In addition, key executives participate in the annual Management Incentive Compensation Plan, described below, and they receive awards under the Company's long-term incentive plan which takes the form of a stock option plan tied directly to the market value of the Company's stock. The Management Incentive Compensation Plan, in which key executives participate, provides for payment of annual bonuses based upon performance of the business units of the Company. Individual target bonus percentages are based on base salaries and levels of responsibility. Actual awards are set as a percentage of target based upon meeting certain quantitative performance criteria set each year in connection with the annual business planning process and rankings assigned to certain qualitative criteria measuring performance against long-term objectives. The quantitative and qualitative components of the plan each receive a 50% weighting in determining the total bonus. Actual payouts under the plan since IDEX was formed in 1988 have ranged from 60% of target to 170% of target. The Committee believes that this plan is properly leveraged relative to performance of the Company and its business units, and that the Company's performance has been excellent relative to its peer group. This performance differential is seen in the Company's operating profit margins, cash flow generation capabilities, disciplined acquisition program and stock market performance, among other factors. The Committee believes that both the annual bonus plan and the long-term incentive plan align the interests of management with the shareholders and focus the attention of management on the long-term success of the Company. A significant portion of the executives' compensation is at risk, based on the financial performance of the Company and the value of the Company's stock in the marketplace. Compensation of the Company's Chief Executive Officer, Donald N. Boyce, is set annually by the Compensation Committee based on Company performance, his performance, and prevailing market conditions, and is then approved by the Board of Directors. Mr. Boyce has a large personal stake in the Company through the ownership by himself, his wife, certain family trusts, and a family foundation of 506,911 shares of Common Stock 9 13 of the Company. He also has options to acquire an additional 442,502 shares of Common Stock. With this sizeable ownership position, a very large percentage of Mr. Boyce's personal net worth is tied directly to IDEX's performance. The annual bonus paid to Mr. Boyce is based on IDEX's performance and is made under the same Management Incentive Compensation Plan used for all other Company executives. Mr. Boyce's target level of bonus has been set at 80% of his base pay, and his actual bonus as a percent of target is generally set at the average percentage of target paid to the other plan participants at the various business units. For the year 1996, Mr. Boyce and the other senior executives at the corporate level received bonuses ranging from 105% to 120% of the target amount, which in Mr. Boyce's case was 120% of the target amount or 96% of his base pay. His actual bonuses are comparable to those earned by his peers for comparable performance. Section 162(m) of the Internal Revenue Code limits to $1 million in a taxable year the deduction publicly held companies may claim for compensation paid to executive officers, unless certain requirements are met. The Committee has reviewed this provision and has concluded that the Company is not impacted by Section 162(m) because compensation paid to any executive officer does not exceed $1 million. Accordingly, no changes to any of the compensation plans are contemplated at this time. William H Luers, Chairman Neil A. Springer 10 14 COMMON STOCK PERFORMANCE The following table compares total shareholder returns over the last five fiscal years to the Standard & Poor's (the "S&P") 500 Index and the S&P Manufacturing-Diversified Industrials Index assuming the value of the investment in IDEX Common Stock and each index was $100 on December 31, 1991. Total return values for IDEX Common Stock, the S&P 500 and the S&P Manufacturing-Diversified Industrials were calculated on cumulative total return values assuming reinvestment of dividends. The five-year total return for IDEX Common Stock exceeded the S&P 500 and the S&P Manufacturing-Diversified Industrials by 82% and 40%, respectively. The shareholder return shown on the graph below is not necessarily indicative of future performance. TOTAL SHAREHOLDER RETURNS -- DIVIDENDS REINVESTED [GRAPH]
MEASUREMENT PERIOD MANU-DIVERSIFIED S&P 500 INDEX (FISCAL YEAR COVERED) IDEX CORP INDUSTRIALS 12/91 $ 100.00 $ 100.00 $ 100.00 12/92 141.78 108.39 107.62 12/93 213.42 131.58 118.46 12/94 252.23 136.21 120.03 12/95 370.81 191.80 165.13 12/96 369.38 264.32 203.05
EXECUTIVE EMPLOYMENT AGREEMENTS The Company has entered into employment agreements with Messrs. Boyce, Hansen and Sayatovic. Mr. Boyce is currently serving as Chairman of the Board, President and Chief Executive Officer of IDEX under an employment agreement with IDEX which became effective upon the termination of his employment with Houdaille on August 31, 1988. Such agreement provided for an initial term which ended January 22, 1993 plus successive twelve-month periods thereafter. The agreement was amended and restated on November 22, 1996. His annual base salary in 1997 is $445,000 subject to annual review and adjustment. If Mr. Boyce becomes disabled or dies during the period of his full time employment, he, his wife if she survives him, or his estate if she does not survive him, will receive his base salary as then in effect for a period of eighteen months commencing on the first day of the month immediately following the date of his disability or death, a full year's bonus at no less than his target amount and accrued vacation pay. In addition, if Mr. Boyce becomes disabled and ceases to be 11 15 employed by IDEX he shall be entitled to receive an eighteen-month continuance of fringe benefits. If Mr. Boyce's employment is terminated or he resigns, he will receive continuing salary payments and fringe benefits for a period of twenty-four months. Such payments, which are in addition to any other death benefits, will continue to be paid to Mr. Boyce's wife if she survives, or his estate if he dies before the payments are complete. In addition, at such time as Mr. Boyce ceases to be employed by IDEX, he will receive a lump sum payment of $20,000 for each twelve-month period or portion thereof that he has been employed by IDEX up to a maximum of $240,000. The employment agreements with Messrs. Hansen and Sayatovic became effective August 1, 1994, and March 1, 1988, respectively. Each provides for an initial three-year term (during which the Company could terminate the agreement) plus successive twelve-month periods thereafter. The agreements were amended and restated on November 22, 1996. The annual base salaries for 1997, subject to annual review and adjustment, are $210,800 for Mr. Hansen and $198,500 for Mr. Sayatovic. In the event of termination by the Company, the executive will be entitled to continuing salary payments and fringe benefits for twenty-four months. Such payments will continue to the executive's wife if she survives, or his estate if he dies before the payments are complete. In addition, the agreement provides that in the event the executive dies during his full-time employment, his wife if she survives him, or his estate if she does not, will be entitled to a death benefit equal to his base salary for a continuing period of nine months. When Mr. Boyce ceases to be employed by IDEX he will be entitled to receive a supplemental retirement benefit for three years (subject to an annual cost of living adjustment) equal to 40% of his maximum annual base salary in effect at any time during the term of his employment agreement, such payments to commence after all other salary continuation payments have been paid and to be reduced by the amount of the lump sum benefit described above. He will also be entitled to receive a supplemental retirement benefit equal to 20% of his maximum annual base salary for the remainder of his life (subject to an annual cost of living adjustment) commencing upon completion of payment of the 40% benefit. The supplemental retirement benefit referred to in the two preceding sentences may, under certain circumstances on Mr. Boyce's death, be paid to his spouse in the form of an actuarially equivalent joint and 50% surviving spouse annuity. If payments under either or both of the supplemental retirement provisions commence prior to Mr. Boyce attaining age 59, the payments are to be actuarially adjusted such that the present value of such payments at that time is equivalent to the present value of such payments as if such payments commenced at age 59. The agreement between Mr. Boyce and IDEX provides for reimbursement of all medical, hospitalization, dental and similar benefits and expenses for himself and his wife and dependents continuing for the longer of his life or his wife's life. The employment agreements with each of Messrs. Hansen and Sayatovic provide for reimbursement of all medical, hospitalization, dental and similar benefits and expenses for him, his wife and dependents during the term of his employment with IDEX and for the longer of his life or his wife's life, if he remains employed by IDEX until his 55th birthday, if he dies, or he becomes disabled while employed by IDEX, or he ceases to be employed at any time following an acquisition of IDEX as defined in the employment agreement. If the executive remains employed by IDEX until age 55 and subsequently leaves the Company voluntarily or retires, reimbursements for medical expenses will be reduced, until he attains age 59, to the extent reimbursement is available from other programs sponsored by subsequent employers, if any. Also, should the executive terminate his employment prior to age 55 following an acquisition of IDEX, reimbursements for medical expenses will be reduced until age 55 to the extent reimbursement is available from subsequent employers. 12 16 Bonuses provided for in the employment agreements will be calculated by the Board of Directors. However, Mr. Boyce's target bonus must equal at least 80% of his base salary as of the end of the fiscal period for which the bonus is calculated. Messrs. Hansen and Sayatovic each will receive a bonus of not less than his target amount for the entire year in the event his employment is terminated by the Company or by death or disability. Mr. Boyce will receive a bonus of not less than his target amount for the entire year during which his employment with IDEX ceases. Each employment agreement also provides for payment of the 20% golden parachute excise tax, increased for taxes due on the payment, in the event that the Internal Revenue Service determines any such taxes to be payable due to a change in control. Also, pursuant to the agreements, each executive will be entitled to receive a guarantee of his pension benefits under the IDEX Corporation Retirement Plan described below under "Pension and Retirement Plans," without regard to the limitations on the maximum benefits that may be paid under that plan under certain provisions of the Internal Revenue Code of 1986, as amended. PENSION AND RETIREMENT PLANS Most salaried employees of IDEX, including the executive officers and certain hourly employees, are covered under the IDEX Corporation Retirement Plan (the "IDEX Plan"). IDEX and the other sponsoring subsidiaries are required to make an annual contribution to the IDEX Plan in such amounts as are actuarially required to fund the benefits of the participants. The IDEX Plan is an ongoing "career average" plan that provides a level of benefit times a participant's compensation for a year, historically with periodic updates to average compensation over a fixed five-year period. Under the IDEX Plan, participants are entitled to receive an annual benefit on retirement equal to the sum of the benefit earned through 1995 using the five-year average compensation of a participant through 1995 plus the benefit earned under the current formula for each year of employment after 1995. For each year of participation prior to 1996, a participant earns a benefit equal to 1.25% of the first $16,800 of such average compensation through 1995 and 1.65% of such compensation in excess of $16,800. Beginning with January 1, 1996, the benefit earned equals the sum of 1.6% of the first $16,800 of each year's total compensation plus 2.0% for such compensation in excess of $16,800 for each full year of service credited after 1995 under the IDEX Plan. As required by law, compensation counted for purposes of determining this benefit is limited to $150,000 per year. For all participants in the IDEX Plan, the normal form of retirement benefit is payable in the form of a life annuity with five years of payments guaranteed. Other optional forms of benefits are available. As of December 31, 1996, the total accrued monthly benefit under the IDEX Plan for Messrs. Boyce, Hansen, Sayatovic, Roberts and Baker was $2,682, $4,376, $3,155, $1,626 and $4,062, respectively. Assuming projected earnings in 1997 of $849,000, $371,600, $346,000, $296,900 and $284,800 for Messrs. Boyce, Hansen, Sayatovic, Roberts and Baker, respectively, and that such earnings remain level until each person reaches age 65, the projected monthly benefit for Messrs. Boyce, Hansen, Sayatovic, Roberts and Baker under this Plan would be $4,358, $6,909, $6,854, $5,477 and $8,260, respectively, upon retirement at age 65. Pursuant to the Company's Supplemental Executive Retirement Plan (the "SERP"), employees of the Company are entitled to retirement benefits to compensate for any reduction in benefits under the IDEX Plan arising from the maximum benefit limitations under Sections 401 and 415 of the Internal Revenue Code of 1986, as amended. Based on the above assumptions, the projected monthly benefit at age 65 for Messrs. Boyce, Hansen, Sayatovic, Roberts and Baker under the Company's SERP would be $23,989, $6,503, $6,772, $4,081 and $5,001, respectively. 13 17 PRINCIPAL SHAREHOLDERS The following table furnishes information, as of December 31, 1996, with respect to the shares of Common Stock beneficially owned by (i) all directors, (ii) the officers named in the Summary Compensation Table, (iii) all directors and officers of IDEX as a group, and (iv) any person owning beneficially more than five percent of the outstanding shares of Common Stock of the Company. Except as indicated by the notes to the following table the holders listed below have sole voting power and investment power over the shares beneficially held by them. An * indicates ownership of less than 1 percent of the outstanding Common Stock.
NUMBER OF SHARES NAME AND ADDRESS OF BENEFICIALLY BENEFICIAL OWNER OWNED PERCENT OF CLASS ------------------- ------------ ---------------- KKR Associates(1) 8,753,592 29.6 9 West 57th Street New York, NY 10018 Henry R. Kravis Paul E. Raether George R. Roberts Clifton S. Robbins Michael T. Tokarz Mario J. Gabelli(2) 3,284,647 11.1 GAMCO Investors, Inc. Gabelli & Company, Inc. 655 Third Avenue New York, NY 10017 Fidelity Investments(3) 2,304,675 7.8 82 Devonshire Street Boston, MA 02109 Donald N. Boyce(4) 801,993 2.7 Richard E. Heath(5)(6) 30,960 * William H. Luers(6) 25,200 * Clifton S. Robbins(1) 33,750 * Neil A. Springer(6) 24,750 * Michael T. Tokarz(1) 45,000 * Mark W. Baker(7) 198,414 * Frank J. Hansen(8) 59,778 * Wade H. Roberts, Jr.(7) 51,370 * Wayne P. Sayatovic(9) 371,246 1.3 All directors and officers as a 1,873,286 6.3 group (17 persons excluding shares owned by KKR Associates)(1)(10)
- --------------- (1) Shares of Common Stock shown as owned by KKR Associates are owned of record by two partnerships, of which KKR Associates is the sole general partner and as to which it possesses sole voting and investment power. KKR Associates is a limited partnership of which Messrs. Kravis, Roberts, Raether, Robbins and 14 18 Tokarz (each of whom is a director of the Company) and Messrs. Edward Gilhuly, Perry Golkin, Robert I. MacDonnell, Michael W. Michelson, Saul A. Fox and James H. Greene, Jr. are general partners. Such persons may be deemed to share beneficial ownership of the shares shown as beneficially owned by KKR Associates. All of the foregoing persons disclaim beneficial ownership of any shares of the Company, listed above as beneficially owned by KKR Associates. (2) Mario J. Gabelli, GAMCO Investors, Inc. ("GAMCO") and Gabelli Fund, Inc. ("Gabelli Fund"), have filed a Form 13F with respect to Common Stock owned by GAMCO, Gabelli Fund and certain other entities which Mr. Gabelli directly or indirectly controls and for which he acts as chief investment officer. IDEX has not attempted to independently verify any of the foregoing information, which is based solely upon the information contained in the Form 13F. (3) Fidelity Investments has filed a Form 13F with respect to Common Stock owned by certain portfolios for which Fidelity Investments is an investment advisor on a discretionary basis. IDEX has not attempted to independently verify any of the foregoing information, which is based solely upon the information contained in the Form 13F. (4) Includes: 355,500 shares owned by Mr. Boyce's wife as to which Mrs. Boyce has sole investment power and as to which Mr. Boyce has sole voting power over 351,000 of such shares; 45,000 shares held in separate trusts as to which Mrs. Boyce is the trustee for the benefit of Mr. and Mrs. Boyce's children; 49,500 shares held by The Boyce Family Foundation; and 295,082 shares which are eligible for exercise under the Officer Option Plan. (5) Includes: 4,500 shares which are owned by various family trusts as to which Mr. Heath is a co-trustee of each trust; and 900 shares which are owned by Mr. Heath's wife. (6) Includes for each of Messrs. Heath, Luers and Springer 24,750 shares under option which are eligible for exercise under the IDEX Corporation Stock Option Plan for Outside Directors. (7) Of such shares, 13,365 and 50,760 are shares under option which are eligible for exercise under the Company's Stock Option Plan for Non-Officer Key Employees and the Officer Option Plan for Messrs. Baker and Roberts, respectively. (8) Includes: 17,905 shares which are owned directly by Mr. Hansen's wife and 41,873 shares which are eligible for exercise under the Company's Stock Option Plan for Non-Officer Key Employees and the Officer Option Plan. (9) Includes: 45,000 shares which are owned directly by Mr. Sayatovic's wife; 6,750 shares which are owned by Mrs. Sayatovic as custodian for their children; and 105,821, shares which are eligible for exercise under the Officer Option Plan. (10) Includes 74,250 shares under option which are eligible for exercise under the IDEX Corporation Stock Option Plan for Outside Directors, 492,273 shares under option which are eligible for exercise under the Officer Option Plan, and 75,225 shares under option which are eligible for exercise under the Stock Option Plan for Non-Officer Key Employees. 15 19 RATIFICATION OF AUDITORS The Board of Directors, upon the recommendation of the Audit Committee, has recommended the selection of Deloitte & Touche LLP as the Company's independent auditors for 1997. Representatives of Deloitte & Touche LLP will attend the Annual Meeting of shareholders and will have the opportunity to make a statement if they desire to do so. They will also be available to respond to appropriate questions. THE COMPANY'S BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE RATIFICATION OF DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR 1997. GENERAL INFORMATION OUTSTANDING STOCK An aggregate of 29,146,410 shares of the Company's Common Stock was outstanding at the close of business on February 5, 1997. Each share entitles its holder of record to one vote on each matter upon which votes are taken at the Annual Meeting. No other securities are entitled to be voted at the Annual Meeting. REVOCABILITY OF PROXIES Any proxy solicited hereby may be revoked by the person or persons giving it at any time before it has been exercised at the Annual Meeting by giving notice of revocation to the Company in writing or in open meeting. SOLICITATION COSTS The Company will pay the cost of preparing and mailing this Proxy Statement and other costs of the proxy solicitation made by the Company's Board of Directors. Certain of the Company's officers and employees may solicit the submission of proxies authorizing the voting of shares in accordance with the Board of Directors' recommendations, but no additional remuneration will be paid by the Company for the solicitation of those proxies. Such solicitations may be made by personal interview, telephone and facsimile transmission. Arrangements have also been made with brokerage firms and others for the forwarding of proxy solicitation materials to the beneficial owners of Common Stock, and the Company will reimburse them for reasonable out-of-pocket expenses incurred in connection therewith. In addition, the Company has retained Morrow & Co. to assist in proxy solicitation and collection for an anticipated fee of $5,000 plus out-of-pocket expenses. SHAREHOLDER PROPOSALS AND NOMINATIONS FOR 1997 ANNUAL MEETING A shareholder desiring to submit a proposal for inclusion in the Company's Proxy Statement for the 1998 Annual Meeting must deliver the proposal so that it is received by the Company no later than November 28, 1997. The Company requests that all such proposals be addressed to Wayne P. Sayatovic, Senior Vice President-Finance, Chief Financial Officer and Secretary, IDEX Corporation, 630 Dundee Road, Northbrook, Illinois 60062, and mailed by certified mail, return receipt requested. In addition, the Company's By-Laws require that notice of shareholder nominations for directors and related information be received by the Secretary of the Company not later than 60 days before the anniversary of the 1997 Annual Meeting which, for the 1998 Annual Meeting will be January 24, 1998. 16 20 COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT Section 16(a) of the Securities and Exchange Act of 1934 requires the Company's officers, directors and persons who own more than 10% of the Company's Common Stock to file reports of ownership and changes in ownership with the Securities and Exchange Commission (the "SEC"), the New York Stock Exchange, and the Chicago Stock Exchange. Officers, directors and greater than 10% shareholders are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. Based solely on its review of the copies of such forms received by it, or written representations from certain reporting persons that no Form 5's were required for such persons, the Company believes that during the year ended December 31, 1996 all filing requirements applicable to its officers, directors and greater than 10% shareholders were complied with. REPORTS TO SHAREHOLDERS The Company has mailed this Proxy Statement and a copy of its 1996 Annual Report to each shareholder entitled to vote at the Annual Meeting. Included in the 1996 Annual Report are the Company's financial statements for the year ended December 31, 1996. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1996, INCLUDING THE FINANCIAL STATEMENT SCHEDULES, AS FILED WITH THE SEC MAY BE OBTAINED BY SHAREHOLDERS WITHOUT CHARGE BY SENDING A WRITTEN REQUEST THEREFOR TO WAYNE P. SAYATOVIC, SENIOR VICE PRESIDENT-FINANCE, CHIEF FINANCIAL OFFICER AND SECRETARY, IDEX CORPORATION, 630 DUNDEE ROAD, NORTHBROOK, ILLINOIS 60062. Northbrook, Illinois February 12, 1997 17 21 [Face of Proxy Card]:[DRAFT - see actual Proxy Card for Final] THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS IDEX CORPORATION The undersigned hereby appoints Donald N. 630 Dundee Road Boyce, Clifton S. Robbins, Wayne P. Sayatovic Northbrook, Illinois 60062 and Michael T. Tokarz and each of them, as Proxies with full power of substitution, and hereby authorize(s) them to represent and to vote, as designated below, all the shares of common stock of IDEX Corporation held of record by the undersigned on February 5, 1997, at the Annual Meeting of shareholders to be held on March 25, 1997, or at any adjournment thereof. 1. ELECTION OF DIRECTORS FOR ALL NOMINEES LISTED WITHHOLD AUTHORITY BELOW (except as marked to the to vote for all nominees contrary below) listed below Class II: William H. Luers George R. Roberts and Michael T. Tokarz (INSTRUCTION: To withhold authority to vote for any individual nominee write that nominee's name on the space provided below.) 2. SELECTION OF FOR approval of AGAINST ABSTAIN AUDITORS Deloitte & Touche approval of with respect to LLP Deloitte approval of & Touche LLP Deloitte & Touche LLP 3. In their discretion, the Proxies are authorized to vote upon such other business as may properly come before the meeting
[Reverse Side of Proxy Card]: THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2 Please sign exactly as name appears below. When shares are held by joint tenants, both should sign. When signing as attorney, as executor, administrator, trustee or guardian, please give full title as such. If a corporation, please sign if full corporate name by President or other authorized officer. If a partnership please sign in partnership name by authorized person. DATED: ,1997 ------------------------------ ---------------------- Signature PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE. ------------------------------ Signature, if held jointly -----END PRIVACY-ENHANCED MESSAGE-----