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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant To Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

Filed by the Registrant  ☒                             Filed by a Party other than the Registrant  ☐

Check the appropriate box:

 

☐	Preliminary Proxy Statement

 

☐	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

 

☒	Definitive Proxy Statement

 

☐	Definitive Additional Materials

 

☐	Soliciting Material Pursuant to § 240.14a-12

ROPER TECHNOLOGIES, INC.

(Formerly Roper Industries, Inc.)

(Name of Registrant as Specified in its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

 

☒		No fee required
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☐		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.
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6901 Professional Parkway East					Telephone (941) 556-2601
Suite 200					Fax (941) 556-2670
Sarasota, Florida 34240
		Roper Technologies, Inc.

April 30, 2018

Dear Fellow Shareholders,

As the members of your Board of Directors, we oversee Roper’s efforts to continually create long-term value for you by efficiently executing our strategy through sound risk management, disciplined capital deployment, performance-driven compensation programs, effective talent and succession planning, adherence to the highest ethical standards and levels of integrity, and continual review and refinement of the Board’s governance practices.

Our Strategy for Outstanding Value Creation for Shareholders

Over the past decade, our shareholders have enjoyed a compound annual return of 16.0%, nearly tripling the total return of the S&P 500. Over the past five years, Roper has delivered an even better 19.0% compound annual return to shareholders.

Our long history of superior shareholder returns is the result of Roper’s simple yet powerful strategy:

 

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Cash Generation Through Operating Excellence: We focus on niche, asset-light businesses with leading solutions and technologies that create significant free cash flow, enabling future investments for sustainable growth. Operating excellence, underpinned by our strategic focus on intellectual capital, channel expansion and a high degree of customer intimacy, drives cash generation.

 

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Disciplined Capital Deployment: We have a unique and disciplined capital deployment model that has guided the successful investment of billions of dollars in new businesses. Unlike many companies that use cash to pay large dividends and buy back shares, Roper uses most of its available cash to buy new businesses to fuel continued growth and value creation for shareholders.

The Board’s Role in Roper’s Success

The Board contributes significantly to our Company’s strong performance. As directors, each of us commits to the rigor and extensive time commitment and workload required to serve on Roper’s Board, including participation in at least 15 days of Board meetings each year. We monitor the existing portfolio of Roper businesses and carefully examine with management the different ways Roper can create value for shareholders. Between Board meetings, we continue our discussions with management and each other, enabling the Company to draw from our broad experiences and expertise.

Our direct involvement in and deep understanding of the Company allows us to address issues such as acquisition selection, capital deployment and succession planning while sustaining Roper’s successful culture and business model.

New Director

Consistent with our principles on board refreshment, Shellye L. Archambeau recently joined our Board and is a nominee for re-election at our 2018 Annual Meeting of Shareholders. Ms. Archambeau brings extensive expertise in technology, ecommerce, risk management and corporate governance. Ms. Archambeau has committed to the time requirements (15 or more days each year) associated with service on our Board. We look forward to working with Ms. Archambeau as she brings her experience to the Board.

Our Governance Practices and Other Best Practices

Roper is committed to strong corporate governance as demonstrated by these practices:

 

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Declassified Board. Our directors are elected annually.

 

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Majority Voting for Directors. Our By-laws require resignation for incumbent directors who fail to receive a majority vote in uncontested elections.

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Proxy Access. Our By-laws permit a shareholder, or a group of up to 20 shareholders, that has owned at least 3% of our outstanding common stock continuously for at least three years to nominate and include in our proxy materials up to the greater of two directors or 20% of the number of our directors then in office.

 

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Lead Independent Director. Our independent directors select a Lead Independent Director who, among other responsibilities, chairs meetings of independent directors at each Board meeting.

 

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Executive Compensation Alignment with Shareholders. Because much of our shareholder value creation is derived from the Roper executive team’s capital deployment strategy, our executives must have a unique set of skills. We continue to refine our executive compensation practices to maintain close alignment with shareholder interests.

 

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Pay for Performance. Similar to prior years, in 2017, 96% of our CEO’s compensation was subject to performance risk and tied to long-term results and our stock price, and for our other executive officers, on average, 89% of their compensation was performance-based.

 

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Clear Proxy Statement Disclosure. We strive to present the information in our Proxy Statement in a clear and easy-to-read manner.

 

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Shareholder Outreach Program. Roper’s senior management team regularly engages shareholders for feedback.

Open Communications With Our Shareholders

We value your continued support and input. Please continue to share your comments with us on any topic. Communications can be addressed to the directors in care of the Corporate Secretary, Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240.

Sincerely,

The Board of Directors

 

Shellye L. Archambeau

Amy Woods Brinkley

John F. Fort III

Brian D. Jellison

Robert D. Johnson

Robert E. Knowling, Jr.

Wilbur J. Prezzano

Laura G. Thatcher

Richard F. Wallman

Christopher Wright

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NOTICE OF 2018 ANNUAL MEETING OF SHAREHOLDERS

 

Date and Time

Monday, June 4, 2018, at 11:30 a.m. local time

 

Place

6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240

 

Agenda

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Proposal 1: To elect ten directors for a one-year term.

 

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Proposal 2: To consider, on a non-binding advisory basis, a resolution approving the compensation of our named executive officers.

 

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Proposal 3: To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2018.

 

We will also transact any other business properly brought before the Annual Meeting.

 

Record Date

Only shareholders of record at the close of business on April 13, 2018 will be entitled to vote at the Annual Meeting or any postponed or adjourned meeting, and these shareholders will be entitled to vote whether or not they have transferred any of their shares of our common stock since that date.

 

Voting Recommendations

The Company recommends that you vote:

 

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“FOR” each director nominee

 

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“FOR” the approval of the compensation of our named executive officers

 

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“FOR” the ratification of the appointment of PricewaterhouseCoopers LLP

 

Proxy Voting

Your vote is important regardless of the number of shares of our common stock you own. Whether or not you plan to attend the Annual Meeting in person, please promptly vote by Internet, telephone, or mail. Instructions for each of these methods and the control number that you will need are provided on the proxy card.

 

April 30, 2018						By Order of the Board of Directors
						John K. Stipancich Vice President, General Counsel and Corporate Secretary

 

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PROXY STATEMENT SUMMARY

 

 

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PROXY STATEMENT SUMMARY (CONTINUED)

 

 

ii						Roper Technologies, Inc. 2018 Proxy Statement

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PROXY STATEMENT SUMMARY (CONTINUED)

 

 

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PROPOSAL 1: ELECTION OF DIRECTORS

Our Certificate of Incorporation provides that the Board of Directors of the Company (the “Board or Directors” or the “Board”) will consist of a number of members to be fixed, from time to time, by the Board of Directors, but not less than the minimum number required under Delaware law. The Board of Directors is currently comprised of ten directors who are elected on an annual basis.

Our Board unanimously recommended each incumbent director for election at the 2018 Annual Meeting. If re-elected, the director nominees will serve until the 2019 Annual Meeting and until their successors have been duly elected and qualified. Certain information about our director nominees is set forth under “Board of Directors.” This information includes the business experience, qualifications, attributes and skills that each individual brings to our Board.

If prior to the meeting a director nominee is unable to serve, which the Board of Directors does not anticipate, the proxy will be voted for a substitute nominee selected by the Board of Directors, or the Board may choose to reduce its size.

 

 

Name		Age		Director Since		Independent		Occupation
Shellye L. Archambeau		55		2018		Yes		Former Chief Executive Officer, MetricStream, Inc.
Amy Woods Brinkley		62		2015		Yes		Founder, AWB Consulting, LLC
John F. Fort III		76		1995		Yes		Former CEO of Tyco International Ltd.
Brian D. Jellison		72		2001		No		President and CEO, Roper Technologies, Inc.
Robert D. Johnson		70		2005		Yes		Former CEO, Dubai Aerospace Enterprise Ltd.
Robert E. Knowling, Jr.		62		2008		Yes		Chairman, Eagles Landing Partners
Wilbur J. Prezzano		77		1997		Yes		Former Vice-Chairman, Eastman Kodak Company
Laura G. Thatcher		62		2015		Yes		Former Head of Executive Compensation Practice, Alston & Bird LLP
Richard F. Wallman		67		2007		Yes		Former CFO and SVP, Honeywell International Inc.
Christopher Wright		60		1991		Yes		Chairman, EMAlternatives LLC

 

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BOARD OF DIRECTORS

Nominee Information

for terms expiring at the 2019 Annual Meeting

 

		Shellye L. Archambeau Director since 2018 Independent Age: 55

Professional Experience

Ms. Archambeau was the Chief Executive Officer of MetricStream, Inc., a global provider of governance, risk, compliance and quality management solutions to corporations across diverse industries, from 2002 to 2017. Prior to joining MetricStream, Ms. Archambeau was Chief Marketing Officer and Executive Vice President of Sales for Loudcloud, Inc., a provider of Internet infrastructure services; Chief Marketing Officer of NorthPoint Communications; and President of Blockbuster Inc.’s ecommerce division. Prior to joining Blockbuster, Ms. Archambeau held domestic and international executive positions during a 15-year career at IBM.

Other Boards and Appointments

Ms. Archambeau has been a director of Nordstrom, Inc. since 2015 and Verizon, Inc. since December 2013. She previously served as a director of Arbitron, Inc. from 2005 to 2013.

Director Qualifications

Ms. Archambeau brings to the Board, among other skills and qualifications, leadership experience in technology, ecommerce, digital media and communications. Her technology and international experience uniquely positions her to advise the Board and senior management on developing and marketing software, emerging technology applications and solutions.

 

		Amy Woods Brinkley Director since 2015 Independent Age: 62   Committees: Audit

Professional Experience

Ms. Brinkley is the founder, owner and manager of AWB Consulting, LLC, which provides executive advising and risk management consulting services. Ms. Brinkley retired from Bank of America Corporation in 2009 after more than 30 years with the company. Ms. Brinkley served as its Chief Risk Officer from 2002 to 2009. Prior to 2002, she served as President of the company’s Consumer Products division and was responsible for the credit card, mortgage, consumer finance, telephone, and eCommerce businesses. During her employment at Bank of America Corporation, Ms. Brinkley also held the positions of Executive Vice President and Chief Marketing Officer overseeing the company’s Olympic sponsorship and its national rebranding and name change.

 

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BOARD OF DIRECTORS (CONTINUED)

 

Other Boards and Appointments

Ms. Brinkley is currently a director of TD Bank Group, Carter’s, Inc. and TD Group US Holdings, LLC. She also serves as a trustee for the Princeton Theological Seminary and on the board of commissioners for Atrium Health.

Director Qualifications

Ms. Brinkley’s background offers the Board vast experience in risk management and a broad-based knowledge of banking, financial services, and brand marketing.

 

		John F. Fort III Director since 1995 Independent Age: 76   Committees: Audit Nominating and Governance

Professional Experience

Mr. Fort has been self-employed since 1993. Mr. Fort served as Chairman and Chief Executive Officer of Tyco International Ltd., a provider of diversified industrial products and services, from 1982 until his retirement from the company in January 1993, and served as Interim CEO of Tyco from June to September 2002 and as an advisor to Tyco’s Board of Directors from March 2003 to March 2004.

Director Qualifications

Mr. Fort’s leadership experience as the CEO of a diversified industrial company and his in-depth knowledge of our Company gives our Board perspective on important issues, including business strategy and acquisitions.

 

		Brian D. Jellison Chairman since 2003 Director, President and Chief Executive Officer since 2001 Age: 72   Committees: Executive (Chair)

Professional Experience

Mr. Jellison is our President and CEO. He previously served as Corporate Executive Vice President of Ingersoll-Rand, a global diversified industrial company from January 1998 to July 2001. During his 26-year career with Ingersoll-Rand, Mr. Jellison served in a variety of senior level positions and assumed the principal responsibility for completing and integrating a variety of public and private new business acquisitions.

Director Qualifications

Mr. Jellison’s active involvement in Roper’s operations provides our Board with specific knowledge of the business and its challenges and prospects. As the Chairman of the Board, his deep understanding of the organization and its strategic focus has provided key leadership and guidance for our Company’s growth.

 

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BOARD OF DIRECTORS (CONTINUED)

 

		Robert D. Johnson Director since 2005 Independent Age: 70   Committees: Compensation

Professional Experience

Mr. Johnson was Chief Executive Officer of Dubai Aerospace Enterprise Ltd., a global aviation corporation, from August 2006 to December 2008. Mr. Johnson served as Chairman of Honeywell Aerospace, the aviation segment of Honeywell International Inc., from January 2005 to January 2006, and as its President and Chief Executive Officer from 1999 to 2005. Mr. Johnson worked at Honeywell’s predecessor, AlliedSignal, rising to the position of President and Chief Executive Officer of AlliedSignal Aerospace. Mr. Johnson has held management positions with AAR Corporation and GE Aircraft Engines.

Other Boards and Appointments

Mr. Johnson currently serves as the Chairman of the Board of Spirit AeroSystems Holdings, Inc., and as a director of Spirit Airlines, Inc. Mr. Johnson previously served as a director of SAP Ariba, Inc. from 2005 to 2012 and Beechcraft Corp during 2013.

Director Qualifications

Mr. Johnson brings valuable knowledge in marketing, sales and production from his diverse career experiences. His management leadership skills and his general business knowledge provide our Board with guidance in compensation and management issues.

 

		Robert E. Knowling, Jr. Director since 2008 Independent Age: 62   Committees: Compensation (Chair) Executive

Professional Experience

Mr. Knowling is the Chairman of Eagles Landing Partners, a strategic management consulting company. From June 2005 to May 2009, Mr. Knowling served as Chief Executive Officer and director of Telwares, a leading provider of telecommunication spend management solutions. Mr. Knowling has served as the CEO of the NYC Leadership Academy, SimDesk Technologies, Inc. and Covad Communications Company.

Other Boards and Appointments

Mr. Knowling is currently a director of Convergys Corporation and K12 Inc. and previously served as a director of Heidrick & Struggles International from 2000 to 2015, The Bartech Group from 2006 to 2015, Aprimo, Inc. from 2008 to 2011, and as Lead Director of SAP Ariba, Inc. from 2000 to 2012.

 

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BOARD OF DIRECTORS (CONTINUED)

 

Director Qualifications

Mr. Knowling brings a unique perspective to our Board based on his involvement in telecommunications and high-growth technology companies. He also has significant operational and management skills and insight with respect to technology matters. His experience as a director of several other public companies enables him to provide guidance on corporate governance and executive compensation issues.

 

		Wilbur J. Prezzano Director since 1997 Lead Independent Director Age: 77   Committees: Compensation Nominating and Governance

Professional Experience

Mr. Prezzano retired in January 1997 from Eastman Kodak Company, a supplier of imaging material and services, as its board Vice-Chairman and as Chairman and President of its greater China region businesses. During his 32-year career with Eastman Kodak Company, Mr. Prezzano served in various executive capacities and also served as a director from 1992 to 1997.

Other Boards and Appointments

Mr. Prezzano currently serves as a director of TD Bank, NA and as a director of TD Ameritrade Holding Corporation. Mr. Prezzano formerly served as a director of TD Bank Financial Group from 2003 to 2016, EnPro Industries, Inc. from 2006 to 2014 and Snyder’s-Lance, Inc., where he served as board Chair from 2000 to 2016.

Director Qualifications

Mr. Prezzano has a strong background in management and experience in other international operations. Through his service on the boards of directors of several other companies in diverse industries, Mr. Prezzano provides our Board with a broad-based understanding important to our Company’s growth and operations.

 

		Laura G. Thatcher Director since 2015 Independent Age: 62   Committees: Audit Nominating and Governance

Professional Experience

Ms. Thatcher retired in December 2013 from 33 years of legal practice at Alston & Bird LLP, where she developed and headed the firm’s executive compensation practice for 18 years.

Other Boards and Appointments

Ms. Thatcher served on the Board of Directors of Batson-Cook Company, a regional commercial construction and development company, from 1994 to 2007. She also served on the Board of Directors of The Atlanta Legal Aid

 

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BOARD OF DIRECTORS (CONTINUED)

 

Society, Inc., a non-profit organization addressing the civil legal needs of Atlanta’s lower income, elderly and disabled residents from 2008 to 2014, and was a Past Chair of the Advisory Board of the Certified Equity Professional Institute (CEPI) of Santa Clara University.

Director Qualifications

Ms. Thatcher’s strong legal background in corporate, securities, compensation, mergers and acquisitions, and tax law, and her experience in advising a diverse array of public companies in these areas, offer the Board a broad-based as well as technical perspective in matters of corporate governance, executive compensation, and business acquisitions.

 

		Richard F. Wallman Director since 2007 Independent Age: 67   Committees: Nominating and Governance (Chair) Executive

Professional Experience

Mr. Wallman served as the Chief Financial Officer and Senior Vice President of Honeywell International Inc., a diversified industrial technology and manufacturing company, and its predecessor AlliedSignal, from March 1995 to July 2003. Mr. Wallman has also served in senior financial positions with IBM and Chrysler Corporation.

Other Boards and Appointments

Mr. Wallman currently serves as a director of Boart Longyear Ltd., Extended Stay America, Inc., Wright Medical Group (formerly Tornier N.V.), and Charles River Laboratories International, Inc. Mr. Wallman formerly served as a director of SAP Ariba, Inc., from 2002 to 2012, Dana Incorporated from 2010 to 2013, Convergys Corporation from 2007 to 2017, and ESH Hospitality, Inc. from 2013 to 2017.

Director Qualifications

Mr. Wallman’s extensive leadership and financial background brings to our Board a significant understanding of the financial issues and risks that affect our Company. Mr. Wallman also serves on the boards of other diverse publicly held companies, which gives him a multi-industry perspective and exposure to developments and issues that impact the management and operations of a global business.

 

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BOARD OF DIRECTORS (CONTINUED)

 

		Christopher Wright Director since 1991 Independent Age: 60   Committees: Audit (Chair) Executive

Professional Experience

Mr. Wright is the Chairman of EMAlternatives LLC, a Washington, DC based private equity asset management firm focused on emerging markets, and a director of Merifin Capital Group, a private European investment firm. Until mid-2003 he served as Head of Global Private Equity for Dresdner Kleinwort Capital and was a Group Board Member of Dresdner Kleinwort Benson overseeing alternative assets in developed and emerging markets. He acted as Chairman of various investment funds prior to and following the latter’s integration with Allianz A.G., and as Global Head of Private Equity at Standard Bank Group from 2006 to 2007.

Other Boards and Appointments

Mr. Wright currently serves as a director of Yatra Capital Ltd (EuroNext), Spice Private Equity A.G., and sits on the advisory boards of various investment funds. Mr. Wright is a Foundation Fellow of Corpus Christi College, Oxford.

Director Qualifications

Mr. Wright offers a global perspective to our Board gained from his extensive international, private equity and banking experience. He is able to provide a valuable historical perspective on the development of our Company. He also provides our Board with knowledge of current financial issues and risks affecting international business operations and has experience with investing in the software and healthcare sectors.

 

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CORPORATE GOVERNANCE

 

 

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CORPORATE GOVERNANCE (CONTINUED)

 

 

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BOARD COMMITTEES AND MEETINGS

 

 

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BOARD COMMITTEES AND MEETINGS (CONTINUED)

 

 

Set forth below are the current committee memberships.

 

Director		Audit Committee		Compensation Committee		Nominating and Governance Committee		Executive Committee
Amy Woods Brinkley		X
John F. Fort III		X				X
Brian D. Jellison								Chair
Robert D. Johnson				X
Robert E. Knowling, Jr.				Chair				X
Wilbur J. Prezzano				X		X
Laura G. Thatcher		X				X
Richard F. Wallman						Chair		X
Christopher Wright		Chair						X

 

 

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BOARD COMMITTEES AND MEETINGS (CONTINUED)

 

 

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BOARD COMMITTEES AND MEETINGS (CONTINUED)

 

 

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DIRECTOR COMPENSATION

Compensation for our non-employee directors is governed by our Director Compensation Plan, which is a sub-plan of our 2016 Incentive Plan. The Director Compensation Plan ties the vast majority of director compensation directly to the Company’s stock performance, closely aligning the financial interests of our directors to those of our shareholders. An annual grant of 4,000 restricted stock units (“RSUs”) has been made under the Director Compensation Plan since 2004 and has remained unchanged since then to recognize the significant time commitment and workload associated with serving on our Board as well as the Board’s instrumental contribution to Roper’s long-term success and creation of superior shareholder value. Our rapid growth, business transformation into software, and various external developments have made it increasingly challenging to find and assimilate the caliber of independent director capable of adding value to our high-growth, asset-light, diversified enterprise. Because of the significant appreciation in Roper’s stock price over the past 12 months and resulting value of equity awards, the Director Compensation Plan was amended to reduce the number of RSUs awarded annually by 25% to 3,000 RSUs.

Under our Director Compensation Plan, each non-employee director also receives an annual cash retainer and fees for Board and committee meetings as shown in the table below. The cash retainer and the number of RSUs granted will be prorated for any new director based on the number of full months such director serves as a non-employee director during the year.

 

Annual Cash Retainer
Cash Retainer		$	42,500
Supplemental Annual Cash Retainers
Chair of Audit Committee		$	5,000
Chair of Compensation Committee		$	5,000
Chair of Nominating and Governance Committee		$	5,000
Board Meeting Compensation(1)
In-Person Attendance		$	2,000
Telephonic Attendance		$	1,000
Committee Meeting Compensation(2)
In-Person Attendance		$	1,000
Telephonic Attendance		$	500

(1)	An extended Board meeting over multiple days is treated as a single Board meeting for payment purposes.

 

(2)	Directors attending a Board and a committee meeting on the same day will only receive a fee for the Board meeting.

We also reimburse our directors for reasonable travel expenses incurred in connection with attendance at Board, committee and shareholder meetings and other Company business.

Mr. Jellison is an employee of our Company and did not receive any compensation for his service as a director. His compensation is set forth in the “Executive Compensation” section below.

 

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DIRECTOR COMPENSATION (CONTINUED)

 

The table below shows the compensation of our non-employee directors for 2017.

2017 Director Compensation

 

Name		Fees Earned or Paid in Cash ($)					Stock Awards ($)(1)(2)(3)					All Other Compensation ($)					Total ($)
Amy Woods Brinkley				57,000					915,360					-					972,360
John F. Fort III				58,500					915,360					-					973,860
Robert D. Johnson				55,500					915,360					-					970,860
Robert E. Knowling, Jr				60,500					915,360					-					975,860
Wilbur J. Prezzano				56,500					915,360					-					971,860
Laura G. Thatcher				59,000					915,360					-					974,360
Richard F. Wallman				59,500					915,360					-					974,860
Christopher Wright				62,000					915,360					-					977,360

(1)	The dollar values shown represent the grant date fair values for RSUs granted to these directors during 2017, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”).

 

(2)	As of December 31, 2017, each non-employee director had 2,000 unvested RSUs outstanding with the exception of Messrs. Knowling and Prezzano who each had 8,000 unvested RSUs outstanding.

 

(3)	There were no stock option awards outstanding at December 31, 2017 for our non-employee directors.

Our share ownership and retention guidelines for non-employee directors require them to own 4,000 shares of our common stock. Until the ownership requirements are met, non-employee directors are required to retain 100% of any shares they receive (on a net after tax basis) under our Director Compensation Plan. All of our current directors are in compliance with the ownership and retention guidelines. The ownership requirement equated to 24 times the annual cash retainer for directors, based on the closing market price of our common stock on December 29, 2017 of $259.00 per share.

 

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EXECUTIVE OFFICERS

The following table sets forth certain information concerning our executive officers as of December 31, 2017. The executive officers are elected by the Board of Directors and serve at its discretion.

 

Brian D. Jellison		Professional Experience
President and CEO since 2001 Director since 2001		Mr. Jellison’s professional experience is discussed under “Board of Directors” above.
Chairman since 2003 Age: 72
L. Neil Hunn		Professional Experience
Executive Vice President, Chief Operating Officer since February 2018 Group Vice President from 2011 to 2017 Age: 46		Prior to being named Executive Vice President in 2017, Mr. Hunn was a Group Vice President with Roper since 2011. Prior to joining Roper, Mr. Hunn held several positions in the software sector and was involved in businesses at varied stages of development. Most recently he was with MedAssets, an Atlanta-based SaaS company, where he served as Executive Vice President and CFO, as well as President of its revenue cycle technology businesses. He was previously with CMGI, an incubator of Internet businesses, and Parthenon Group, a strategy consulting firm.
Robert C. Crisci		Professional Experience
Vice President and Chief Financial Officer since 2017 Vice President, Finance and Investor Relations from 2013 to 2017 Age: 42		Prior to being named Vice President and Chief Financial Officer, Mr. Crisci joined Roper in 2013 as Vice President, Finance and Investor Relations and led the Company’s financial planning and analysis and investor relations activities. Prior to joining Roper, he served in various roles across investment banking, consulting and finance with positions at Morgan Keegan, VRA Partners, Devon Value Advisers and Deloitte & Touche.
John K. Stipancich		Professional Experience
Vice President since 2016 General Counsel since 2016 Corporate Secretary since 2016 Age: 49		Prior to joining Roper, Mr. Stipancich served as Executive Vice President and Chief Financial Officer of Newell Brands Inc., a consumer products company, where he has also served as General Counsel and Corporate Secretary, and Executive Leader of its operations in Europe. Prior to his twelve years at Newell Brands, Mr. Stipancich served as Executive Vice President, General Counsel and Corporate Secretary for Evenflo Company and Assistant General Counsel for Borden, both KKR portfolio companies at the time. He started his legal career in the Cleveland office of the international law firm Squire Patton Boggs.
Paul J. Soni		Professional Experience
Executive Vice President since 2017 Vice President from 2006 to 2017 Controller from 2002 to 2017 Age: 59		Prior to being named Executive Vice President, Mr. Soni served as Roper’s Controller and Principal Accounting Officer since 2011 and Vice President since 2006. Prior to joining Roper, Mr. Soni served as the Controller of both Oxford Industries, Inc., and the International Division of Savannah Foods & Industries, Inc. Mr. Soni’s earlier career included eight years with PricewaterhouseCoopers LLP, a professional services firm, in the U.S. and Europe, performing audit and transaction support services.

 

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BENEFICIAL OWNERSHIP

Beneficial ownership is determined in accordance with SEC rules. Under the rules, the number of shares beneficially owned by a person and the percentage of ownership held by that person includes shares of common stock that could be acquired upon exercise of an option within sixty days, although such shares are not deemed exercised and outstanding for computing the percentage of ownership held by any other person. Unless otherwise indicated in the footnotes below, the persons and entities named in the table have sole voting and investment power with respect to all shares beneficially owned, subject to community property laws where applicable.

The following table shows the beneficial ownership of Roper common stock as of March 31, 2018 by (i) each of our director nominees, (ii) each named executive officer in the “2017 Summary Compensation Table,” (iii) all of our current directors and executive officers as a group, and (iv) all persons who we know are the beneficial owners of five percent or more of Roper common stock. Except as noted below, the address of each person in the table is c/o Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240.

 

Name of Beneficial Owner		Beneficial Ownership     of Common Stock(1)(2)					Percent of Class
T. Rowe Price Associates, Inc. 100 E. Pratt Street, Baltimore, MD 21202				15,099,696	(3)				14.7	%
The Vanguard Group 100 Vanguard Blvd., Malvern, PA 19355				11,116,567	(4)				10.9	%
BlackRock, Inc. 55 East 52nd Street, New York, NY 10055				7,008,681	(5)				6.8	%
Shellye L. Archambeau				0
Amy Woods Brinkley				12,000					*	*
John F. Fort III				16,253	(6)				*	*
Brian D. Jellison				1,535,172					1.5	%
Robert D. Johnson				8,700					*	*
Robert E. Knowling, Jr.				14,038					*	*
Wilbur J. Prezzano				22,000					*	*
Laura G. Thatcher				11,000					*	*
Richard F. Wallman				48,465					*	*
Christopher Wright				61,550					*	*
L. Neil Hunn				321,560					*	*
Robert C. Crisci				50,926					*	*
John K. Stipancich				23,822					*	*
Paul J. Soni				143,389	(7)				*	*
John Humphrey				62,477					*	*
All current directors and executive officers as a group (14 individuals)				2,331,552					2.3	%

**	Less than 1%.

 

(1)

Includes the following shares that could be acquired on or before May 31, 2018 upon exercise of stock options issued under Company plans as follows: Mr. Hunn (132,000), Mr. Crisci (22,000), Mr. Soni (78,000), and all current directors and executive officers as a group (232,000). Holders do not have voting or investment power over unexercised option shares.

 

(2)

Includes the following shares of unvested restricted stock held by named executives officers over which they have sole voting power but no investment power: Mr. Jellison (337,500), Mr. Hunn (150,000), Mr. Crisci (27,500), Mr. Stipancich (21,500), and Mr. Soni (16,000). Also includes 2,000 shares that will be acquired on June 9, 2018 upon the vesting of unvested restricted stock units for the following non-employee directors: Messrs. Fort, Johnson, Knowling, Prezzano, Wallman, and Wright and Mses. Brinkley and Thatcher. The total for all current directors and executive officers as a group is (591,950).

 

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BENEFICIAL OWNERSHIP (CONTINUED)

 

(3)	Based on information reported on Schedule 13G/A filed with the SEC on February 14, 2018, as of December 31, 2017, T. Rowe Price Associates, Inc. beneficially owned 15,099,696 shares of Roper common stock with sole voting power over 4,818,953 shares and sole dispositive power over all of the shares.

 

(4)

Based on information reported on Schedule 13G/A filed with the SEC on February 12, 2018, as of December 31, 2017, The Vanguard Group (“Vanguard”) beneficially owned 11,116,567 shares of Roper common stock with sole voting power over 147,322 shares, shared voting power over 23,150 shares, sole dispositive power over 10,949,850 shares, and shared dispositive power over 166,717 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 114,337 shares. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 84,703 shares.

 

(5)

Based on information reported on Schedule 13G/A filed with the SEC on February 8, 2018, as of December 31, 2017, BlackRock, Inc. (and certain of its subsidiaries) beneficially owned 7,008,681 shares of Roper common stock with sole voting power over 6,050,450 shares and sole dispositive power over 7,008,681 shares.

 

(6)	Includes 250 shares held by a trust of which Mr. Fort is a trustee and 300 shares held by Mr. Fort’s spouse.

 

(7)

Mr. Soni and his spouse each participate in a 401(k) plan with a unitized stock fund that consists of cash and common stock in amounts that vary from time to time. Based on a conversion factor representing the units in the fund as of March 31, 2018, the shares in the table include 2,835 shares in Mr. Soni’s account and 958 shares in his spouse’s account.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) requires Roper’s directors, officers and persons who own more than 10% of Roper common stock to file with the SEC initial reports of ownership and reports of changes in ownership. Officers, directors and greater than 10% shareholders are required by SEC rules to furnish Roper with copies of all Section 16(a) forms they file.

We believe that during 2017 all of our directors and executive officers complied with all Section 16(a) filing requirements. In making this statement, we have relied upon examination of the copies of Forms 3, 4 and 5, and amendments to these forms, provided to us and the written representations of our directors and executive officers.

 

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (“CD&A”) provides information about our compensation objectives and policies for our CEO and other executive officers included in the Summary Compensation Table and referred to in this CD&A as “named executive officers”. The CD&A puts in perspective the information set forth in the “Executive Compensation” section that follows in this Proxy Statement.

CREATING SHAREHOLDER VALUE

The creation of shareholder value is the foundation and driver of our executive compensation program. The compensation of our named executive officers is closely aligned with the long-term interests of our shareholders.

Superior Returns for Roper Shareholders

Roper is proud of its long track record of superior returns for its shareholders. Roper has significantly outperformed the S&P 500 over the past 1, 3, 5, 10 and 15 years.

 

Period		Compound Annual Shareholder Return				Total Shareholder Return (TSR)
		Roper		S&P 500		Roper		S&P 500
1-Year		42.4%		21.8%		42.4%		21.8%
3-Years		19.1%		11.4%		68.9%		38.3%
5-Years		19.0%		15.8%		139.1%		108.1%
10-Years		16.0%		8.5%		340.2%		126.0%
15-Years		20.1%		9.9%		1,454.1%		313.3%

As outlined in the graph below, $100 invested in Roper at the end of 2001 would have yielded an investor $1,159 as of December 31, 2017, compared to only $322 for the same investment in the S&P 500.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Record 2017 Performance for Roper

2017 was a remarkable year for Roper in which we grew revenue, net earnings, EBITDA and cash flow by greater than 20%. Our large 2016 acquisitions, Deltek and ConstructConnect, exceeded our revenue and cash flow expectations, and augmented our strong organic revenue growth in 2017. Following a year of record capital deployment in 2016, we reduced our debt by $1.06 billion in 2017. Our strategic focus on asset-light diversified technology businesses and our ability to generate and compound cash flow delivered another year of outstanding shareholder return.

 

 

(1)	This financial information is presented on an adjusted (non-GAAP) basis. A reconciliation from non-GAAP financial measures to the most comparable GAAP measure and other related information is available in “Appendix A—Reconciliations.

Simple Strategy Drives Powerful Value Creation

Roper has a simple and successful business model we believe is unique among application software and multi-industry diversified companies. We operate high-margin, high cash-generating, asset-light businesses across a wide range of diverse end-markets. Our high-performing businesses generate excess free cash flow that our executive team deploys to acquire more high-performing businesses. This creates a “compounding effect” on cash flow that drives long-term value creation. Our free cash flow has increased from $307 million in 2007 to $1.17 billion in 2017, a compound annual growth rate of 14%, driven by this combination of outstanding business performance and value-creating capital deployment.

Roper Annual Free Cash Flow and Operating Cash Flow (millions)

 

Note: Free Cash Flow = Cash from Operations less Capital Expenditures less Capitalized Software Expenditures

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Market Capitalization Growth

Roper’s market capitalization has increased more than $21 billion since January 2010, and increased almost $8 billion during 2017.

 

 

Key Metric: Cash Return on Investment

Cash return on investment (“CRI”) is the key operating metric Roper uses to measure the performance and value of its operating businesses and potential acquisitions. Our business leaders and corporate executive leadership focus on cash flow growth and disciplined investments.

 

•

CRI is highly correlated to value creation and we believe our strategy of improving CRI has been a key driver of our long-term performance.

 

•

Our CRI discipline, as applied throughout the organization, allows us to focus our investment on areas that will increase shareholder value, drive cash flow growth, and minimize physical assets.

 

•

Through a combination of internal improvements and disciplined capital deployment, Roper has increased CRI dramatically over the past 15 years, a key driver of our strong shareholder returns over the period.

 

 

 

Cash Earnings    Net Income + D&A – Maintenance Cap-Ex    Gross Investment Net Working Capital + Net PP&E + Accumulated Depreciation Cash    Return on Investment

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Acquisition-Focused Capital Deployment

We deploy most of our free cash flow in acquisitions to generate long-term growth and create long-term shareholder value. Unlike most other large corporations, we do not have a separate corporate development or merger-and-acquisition team; our CEO and other top executives are responsible for the disciplined deployment of capital through acquisitions.

OVERVIEW OF OUR COMPENSATION PROGRAM

 

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Checklist of Compensation Practices

Consistent with shareholder interests and market best practices, positive features of our executive compensation program include the following:

 

 

Objectives of our Compensation Program

Our compensation program for named executive officers reflects our business needs and challenges in creating shareholder value and is designed to:

 

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

ELEMENTS OF COMPENSATION

Our executive compensation program consists of several elements, each with an objective that fits into our overall program to provide an integrated and competitive total pay package.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Other Pay Elements

As Roper has largely avoided perquisites, supplemental pensions, and other compensation not tied to performance, the other items summarized below represent only a small portion of named executive officers’ total compensation.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Mix of Total Compensation

Compensation for our named executive officers encourages a long-term focus and closely aligns with shareholder interests.

 

•

For 2017, 96% of CEO, and 89% of other executive officers, total direct compensation at target was at risk and tied to stock price and multi-year performance objectives.

2017 Total Direct Compensation Mix

 

 

COMPENSATION PROCESS

Compensation Committee Oversight

The Compensation Committee oversees our executive compensation programs to appropriately compensate named executive officers, motivate named executive officers to achieve our business objectives, and align our named executive officers’ interests with the long-term interests of our shareholders. The committee reviews each element of compensation for each named executive officer and determines any adjustments to compensation structure and levels in light of various considerations, including:

 

•

The scope of the named executive officer’s responsibilities, performance and experience as well as competitive compensation levels.

 

•

Our financial results against prior periods.

 

•

The structure of our compensation programs relative to sound risk management, as discussed with management.

 

•

The results of the advisory shareholder vote on the compensation of our named executive officers and input from shareholders.

 

•

Competitive pressures from private equity and capital deployment companies, as well as market practices and external developments generally.

The Compensation Committee has maintained a simple program that drives long-term performance and superior value creation for shareholders and believes it has enabled Roper to attract, retain, and motivate an outstanding leadership team.

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Consulting Assistance

For 2017, the Compensation Committee has continued the retained services of FW Cook (the “Consultant”) to provide the committee with independent, objective analysis and professional opinions on executive compensation.

 

•

The Consultant is independent, reports directly to the Chair of the Compensation Committee and has never performed other work for the Company. The committee determined that its engagement of the Consultant did not raise any conflicts of interest.

 

•

The Consultant generally attends all meetings of the Compensation Committee where evaluations of the effectiveness of overall executive compensation programs are conducted or where compensation for named executive officers is analyzed or approved.

 

•

The Chair of the Compensation Committee meets with the Consultant in advance of committee meetings and confers via telephone with the Consultant between meetings.

 

•

The Consultant assists in gathering and analyzing market data on compensation levels and provides expert knowledge of marketplace trends and best practices relating to competitive pay levels as well as developments in regulatory and technical matters.

Role of Our Named Executive Officers

While the Compensation Committee is ultimately responsible for making all compensation decisions affecting our named executive officers, our CEO participates in the process because of his close day-to-day association with the other named executive officers and his knowledge of the Company’s diverse business operations.

 

•

Our CEO discusses with the Compensation Committee the performance of the Company and of each named executive officer, including himself. The CEO also discusses with the committee the performance of key executives reporting to his direct reports.

 

•

The CEO makes recommendations on the components of compensation for the named executive officers, other than himself, and does not participate in the portion of the committee meeting regarding the review of his own performance or the determination of the actual amounts of his compensation.

Our Chief Financial Officer also assists the Compensation Committee as an information resource in regard to metrics related to incentive compensation. The other named executive officers provide support to the committee, as needed, in regard to their respective technical areas.

Market Benchmarking

Market pay levels and practices, including those of a self-selected peer group, are one of many factors the Compensation Committee considers in making compensation decisions.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

 

2017 Peer Group

 

•

Changes were made to our self-selected peer group for 2017 to reflect our continued strong growth and sustained value creation, our continuing expansion into software, medical, and technology-driven businesses, our market valuation relative to revenues and gross investment, and our intense competition with private equity for talent and investment opportunities. In light of the transformation of our business portfolio, Standard & Poor’s changed our GICS assignment in 2014 and we may request another change to a more appropriate GICS to reflect our significant growth in software. The peer companies are listed below along with various size indicators.

 

Company		Ticker		Market Capitalization(1) ($ millions)				Enterprise Value(1) ($ millions)				Revenue(2) ($ millions)				Net Income(2) ($ millions)				Global Industry Classification Standard (GICS) Sub-Industry
TransDigm Group Incorporated		TDG		$	14,269			$	25,381			$	3,504			$	469			Aerospace & Defense
Adobe Systems Incorporated		ADBE		$	86,383			$	82,150			$	7,269			$	1,694			Application Software
salesforce.com, inc.		CRM		$	73,841			$	72,390			$	9,923			$	8			Application Software
Intuit Inc.		INTU		$	40,336			$	40,434			$	5,285			$	984			Application Software
Citrix Systems, Inc.		CTXS		$	13,259			$	13,648			$	2,825			$	22			Application Software
KKR & Co. L.P.		KKR		$	10,058			$	40,833			$	3,153			$	1,023			Asset Management and Custody Banks
Blackstone Group L.P.		BX		$	20,196			$	37,963			$	7,269			$	1,471			Asset Management and Custody Banks
Motorola Solutions, Inc.		MSI		$	14,635			$	17,934			$	6,380			($	155	)		Communications Equipment
Zimmer Biomet Holdings, Inc.		ZBH		$	24,432			$	33,981			$	7,824			$	1,840			Health Care Equipment
Waters Corporation		WAT		$	15,365			$	14,019			$	2,309			$	20			Life Sciences Tools & Services
VMware, Inc. Class A		VMW		$	12,925			$	43,141			$	7,644			$	1,450			Systems Software
CA, Inc.		CA		$	13,929			$	13,673			$	4,164			$	419			Systems Software
Median				$	15,000			$	35,972			$	5,833			$	727
Roper		ROP		$	26,512			$	30,946			$	4,607			$	972			Industrial Conglomerates

Source: FactSet

(1)	As of 12/31/17

(2)	Last four quarters available as of 12/31/17

Relative Performance Comparisons Caveat

Long-Term Measurement Period Needed

Comparing other companies’ performance to Roper’s can generate misleading or distorted results due to our consistently strong performance, our business transformation and GICS change, and short-term stock price movements. As a result, we believe a long-term performance period most accurately portrays relative performance for Roper.

 

•

Over shorter periods, performance comparisons can be skewed by the easier performance baselines of peer companies that, unlike Roper, have experienced periods of historical underperformance and benefit from a “bounce back” from a lower starting point.

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

CEO Compensation

The Compensation Committee considers many factors in determining the compensation of Roper’s CEO, Brian Jellison, and believes his compensation is reasonable, appropriate, and aligned with shareholders’ best interests.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Equity Grants

The Compensation Committee grants awards of performance-based restricted stock and stock options to named executive officers under the Company’s 2016 Incentive Plan at the first regularly scheduled meeting each year. The exercise price for stock options is the closing price of Roper common stock on the date of grant. From time to time the Compensation Committee may grant additional awards in connection with promotions or increased responsibilities as well as to new hires.

Equity Award Determination

Historically, the size of individual equity awards has been expressed as a constant number of shares, which fluctuates in value from year to year with changes in the stock price. We believe this approach strengthens the alignment with shareholder interests, provides additional incentive for increasing the value of our shares, exposes executives to the risks of share ownership, and assists in attracting and retaining talented leaders. Consistent with this “constant share” approach to equity award denomination, changes in total compensation for our named executive officers align with our TSR.

In 2017 and January 2018, the Compensation Committee again reviewed the application of the constant share approach in light of various considerations including the $7.9 billion increase in Roper’s market capitalization in 2017, the largest single-year increase in our history. In 2018, the CEO’s award was reduced by 25% and the committee continues to closely monitor the grant size methodology to ensure it is consistent with our overall executive compensation philosophy and program and remains aligned with the best interests of shareholders.

ANALYSIS OF 2017 COMPENSATION

This section discusses compensation actions taken in 2017 for our named executive officers, as reported in the “Executive Compensation” section below.

 

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

2017 Annual Cash Incentive Schedule

 

 

Adjusted net earnings is net earnings increased or reduced to eliminate the effects of extraordinary items, accounting and tax law changes, discontinued operations, restructuring of debt obligations, asset dispositions, asset write-downs or impairment charges, acquisition-related expenses, acquisition-related intangible amortization, litigation expenses and settlements, reorganization and restructuring programs, and non-recurring or special items (as discussed in Management’s Discussion and Analysis of Financial Conditions and Results of Operations in the Company’s Annual Report on Form 10-K for that year).

 

 

CEO Long-Term Cash Incentive Schedule

 

 

Adjusted net earnings is net earnings increased or reduced to eliminate the effects of extraordinary items, accounting and tax law changes, discontinued operations, restructuring of debt obligations, asset dispositions, asset write-downs or impairment charges, acquisition-related expenses, acquisition-related intangible amortization, litigation expenses and settlements, reorganization and restructuring programs, and non-recurring or special items (as discussed in Management’s Discussion and Analysis of Financial Conditions and Results of Operations in the Company’s Annual Report on Form 10-K for that year).

 

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

 

ADDITIONAL INFORMATION ABOUT OUR PROGRAM

Other arrangements and considerations important to a shareholder’s understanding of our overall executive compensation program are described below.

Share Ownership and Retention Guidelines

We believe named executive officers should have a significant equity interest in the Company. To promote equity ownership and further align the interests of named executive officers with shareholders, we adopted share ownership and retention guidelines for our named executive officers. The guidelines vary based upon the named executive officer’s position and are expressed as a number of shares which, as shown below, result in guidelines far higher than market norms. All named executive officers are in compliance with our ownership and retention policy, and the majority of named executive officers own shares well in excess of the applicable guidelines.

 

Position		Guideline Number of Shares				Guideline Market Value at Year-End Close*				Salary				Guideline Multiple of Salary
CEO			100,000			$	25,900,000			$	1,225,000				21.1x
Average Other Named Executive Officers			20,000			$	5,180,000			$	637,500				8.1x

*	Based on closing market price of our common stock on December 29, 2017 of $259.00 per share.

Until the ownership requirements are met, a named executive officer must retain 100% of any applicable shares received (on a net after tax basis) under our equity compensation program.

 

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COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2017, Messrs. Knowling, Johnson and Prezzano served on the Compensation Committee. No member of the Compensation Committee was, during 2017, an officer or employee of the Company, was formerly an officer of the Company, or had any relationship requiring disclosure by the Company as a related party transaction under Item 404 of Regulation S-K under the Securities Act of 1933 (the “Securities Act”). During 2017, none of the Company’s executive officers served on the board of directors or the compensation committee of any other entity, any officers of which served either on the Board of Directors or the Compensation Committee.

COMPENSATION COMMITTEE REPORT

We have reviewed and discussed the foregoing Compensation Discussion and Analysis with management. Based on our review and discussion with management, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by:

Robert E. Knowling, Jr., Chairman

Robert D. Johnson

Wilbur J. Prezzano

 

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EXECUTIVE COMPENSATION

The following table sets forth certain information with respect to compensation paid to our principal executive officer, our principal financial officer, and our other executive officers for the fiscal year ended December 31, 2017. In this section, we refer to the individuals in the 2017 Summary Compensation Table as our “named executive officers.”

2017 Summary Compensation Table

 

Name and Principal Position		Year				Salary(1) ($)				Bonus(2) ($)				Stock Awards(3) ($)				Option Awards(3) ($)				Non-Equity Incentive Plan Compensation(1)(4) ($)				Change in Pension Value & Nonqualified Deferred Compensation Earnings(5) ($)				All Other Compensation(6) ($)				Total Compensation ($)
Brian D. Jellison			2017				1,225,000								27,813,000				-				-				-				120,675				29,158,675
Chairman of the Board, President and Chief Executive Officer			2016				1,225,000				-				24,960,000				-				-				-				131,166				26,316,166
			2015				1,225,000				-				21,862,500				-				-				-				127,080				23,214,580
L. Neil Hunn			2017				800,000								8,343,900				1,412,348				1,200,000				-				119,625				11,875,873
Executive Vice President, Chief Operating Officer
Robert C. Crisci			2017				498,030								2,528,980				850,766				550,000				-				66,792				4,494,568
Vice President and Chief Financial Officer
John K. Stipancich			2017				650,000								1,373,040				512,474				650,000				-				82,243				3,267,757
Vice President, General Counsel and Corporate Secretary			2016				331,136				375,000				2,039,160				606,312				143,902				-				118,263				3,613,773
Paul J. Soni			2017				531,439				-				1,112,520				423,704				550,000				-				87,719				2,705,382
Executive Vice President			2016				475,000				-				998,400				396,229				209,000				-				79,792				2,158,421
			2015				410,000				-				874,500				355,492				170,560				-				86,470				1,897,022
John Humphrey			2017				767,000				-				-				-				575,250				-				128,877				1,471,127
Former Executive Vice President and Chief Financial Officer			2016				767,000				-				4,992,000	(7)			990,573	(7)			506,220				-				139,844				7,395,637
			2015				767,000				-				4,372,500	(7)			888,729	(7)			598,260				-				179,802				6,806,291

(1)	Amounts shown include, as applicable, deferrals to the 401(k) plan and the Non-Qualified Retirement Plan.

 

(2)	The amount in this column represents a lump sum bonus paid to Mr. Stipancich upon commencement of his employment.

 

(3)

The dollar values shown represent the grant date fair values for restricted stock and option awards calculated in accordance with ASC Topic 718. The assumptions used in determining the grant date fair values of these option awards are set forth in Note 11 to our consolidated financial statements for 2017, which are included in our Annual Report on Form 10-K for the fiscal year ended 2017 filed with the SEC. There is no assurance that these amounts will be realized. The restricted stock awards are all subject to performance-based vesting criteria. The performance-based criteria for awards granted in 2017 are described in the CD&A under “Analysis of 2017 Compensation—Long-Term Stock Incentives,” and the vesting schedule for awards granted in 2017 is set forth in the notes to the 2017 Outstanding Equity Awards at Fiscal Year End table below.

 

(4)

The amounts in this column reflect payments made pursuant to our annual cash incentive program, which is described above in the CD&A under “Analysis of 2017 Compensation—Annual Cash Incentive” and “Analysis of 2017 Compensation—CEO Long-Term Cash Incentive.” Mr. Humphrey’s participation in the annual cash incentive program was discontinued when he ceased serving as the Company’s Chief Financial Officer in May 2017.

 

(5)	The Non-Qualified Retirement Plan does not provide for “above-market” or preferential earnings as defined in applicable SEC rules.

 

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EXECUTIVE COMPENSATION (CONTINUED)

 

(6)	Amounts reported in the “All Other Compensation” column for 2017 include the following items. In respect of any of these items that constitute perquisites, the value shown is the Company’s incremental cost.

 

 

¹	Reflects contributions to the Non-Qualified Retirement Plan and the 401(k) plan.

 

(7)	Any outstanding equity from these grants was forfeited in connection with Mr. Humphrey’s separation from the Company, effective December 31, 2017.

 

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EXECUTIVE COMPENSATION (CONTINUED)

 

2017 Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards for the fiscal year ended December 31, 2017 to the named executive officers.

 

						Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)												Estimated Future Payouts Under Equity Incentive Plan Awards				All Other Option Awards:# of Securities Underlying Options				Exercise / Base Price of Option Awards ($/Sh)				Grant Date Fair Value(6) ($)
Name		Grant Date				Threshold ($)				Target ($)				Maximum ($)				Target (#)
Brian D. Jellison			1/19/2017				964,688				2,756,250				2,756,250				150,000	(2))											27,813,000
L. Neil Hunn			1/19/2017																45,000	(2))											8,343,900
			1/19/2017																				40,000	(4)			185.42				1,412,348
			3/9/2017				420,000				1,200,000				1,200,000
Robert C. Crisci			1/19/2017																5,000	(2))											927,100
			1/19/2017																				12,000	(4)			185.42				423,704
			6/9/2017																7,000	(3))											1,601,880
			6/9/2017																				10,000	(5)			228.84				427,062
			3/9/2017				192,500				550,000				550,000
John K. Stipancich			6/9/2017																6,000	(3))											1,373,040
			6/9/2017																				12,000	(5)			228.84				512,474
			3/9/2017				227,500				650,000				650,000
Paul J. Soni			1/19/2017																6,000	(2))											1,112,520
			1/19/2017																				12,000	(4)			185.42				423,704
			3/9/2017				192,500				550,000				550,000
John Humphrey			3/9/2017				201,388				575,250				575,250				-				-				-				-

(1)	For an explanation of the material terms, refer to the CD&A section above captioned “Analysis of 2017 Compensation—Annual Cash Incentive and “Analysis of 2017 Compensation—CEO Log-Term Cash Incentive.” Amounts paid under these programs for 2017 are set forth in the 2017 Summary Compensation Table.

 

(2)

The performance restricted shares vest in two equal installments in November 2018 and November 2019 (except for the grant to Mr. Jellison - which shall vest in one installment in November 2019), subject to the performance criteria described in the CD&A under “Analysis of 2017 Compensation—Long-Term Stock Incentives.” Dividends on restricted shares will be paid only if the shares are earned by performance.

 

(3)	The performance restricted shares vest in June 2020, subject to the performance criteria described in the CD&A under “Analysis of 2017 Compensation—Long-Term Stock Incentives.” Dividends on restricted shares will be paid only if the shares are earned by performance.

 

(4)	The stock options vest in two equal installments in January 2019 and 2020, and expire on the tenth anniversary of the grant. The exercise price of the stock options is 100% of the fair market value of our common stock on the date of grant.

 

(5)	The stock options vest in two equal installments in June 2019 and 2020, and expire on the tenth anniversary of the grant. The exercise price of the stock options is 100% of the fair market value of our common stock on the date of grant.

 

(6)	The dollar values reflect the grant date fair value of the awards as calculated in accordance with ASC Topic 718.

 

36						Roper Technologies, Inc. 2018 Proxy Statement

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EXECUTIVE COMPENSATION (CONTINUED)

 

2017 Outstanding Equity Awards at Fiscal Year End

The following table sets forth certain information with respect to outstanding equity awards at December 31, 2017 for the named executive officers.

 

Name		Option Awards																Stock Awards
		# of Securities Underlying Unexercised Options Exercisable				# of Securities Underlying Unexercised Options Unexercisable				Option Exercise Price ($)				Option Expiration Date				# of Shares or Units of Stock That Have Not Vested				Market Value of Shares or Units of Stock That Have Not Vested ($)				Equity Incentive Plan Awards: # 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)
Brian D. Jellison			290,000								55.22				02/18/2018
																											225,000	(10)(16)			58,275,000
L. Neil Hunn			32,000								68.91				09/30/2021
			25,000								115.22				01/17/2023
			30,000								125.68				11/19/2023
			30,000								156.40				11/17/2024
			15,000				15,000	(2)			186.75				11/17/2025
							40,000	(3)			185.42				01/19/2027
																											105,000	(11)(16)			27,195,000
Robert C. Crisci			5,000								119.65				04/30/2023
			5,000								134.23				03/11/2024
			4,000				4,000	(4)			145.75				01/16/2025
							8,000	(5)			170.61				03/09/2026
							12,000	(3)			185.42				01/19/2027
							10,000	(6)			228.84				06/09/2027
																											17,500	(12)(16)			4,532,500
John K. Stipancich							18,000	(7)			169.93				06/22/2026
							12,000	(6)			228.84				06/09/2027
																											14,000	(13)(16)			3,626,000
Paul J. Soni			12,000								51.11				01/22/2020
			12,000								73.56				01/20/2021
			12,000								93.62				01/18/2022
			12,000								115.22				01/17/2023
			12,000								140.86				01/16/2024
			6,000				6,000	(4)			145.75				01/16/2025
							12,000	(8)			166.40				01/21/2026
							12,000	(3)			185.42				01/19/2027
																											9,000	(14)(16)			2,331,000
John Humphrey							15,000	(9)			145.75				01/16/2025
							30,000	(9)			166.40				01/21/2026
																											15,000	(15)(16)			3,885,000

(1)	Calculated by multiplying $259.00, the closing market price of our common stock on December 29, 2017, by the number of restricted shares that have not vested.

 

(2)	These stock options were granted on November 17, 2015 with unexercisable shares vesting in November 2018.

 

(3)	These stock options were granted on January 19, 2017 with unexercisable shares vesting in two equal installments in January 2019 and 2020.

 

(4)	These stock options were granted on January 16, 2015 with unexercisable shares vesting in January 2018.

 

(5)	These stock options were granted on March 9, 2016 with unexercisable shares vesting in two equal installments in March 2018 and 2019.

 

(6)	These stock options were granted on June 9, 2017 with unexercisable shares vesting in two equal installments in June 2019 and 2020.

 

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EXECUTIVE COMPENSATION (CONTINUED)

 

(7)	These stock options were granted on June 22, 2016 with unexercisable shares vesting in two equal installments in June 2018 and 2019.

 

(8)	These stock options were granted on January 21, 2016 with unexercisable shares vesting in two equal installments in January 2018 and 2019.

 

(9)	These stock options were forfeited on December 31, 2017 in connection with Mr. Humphrey’s separation from the Company.

 

(10)	This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to applicable Company performance conditions, as follows:

 

(I)

75,000 shares remaining from 150,000 shares granted January 21, 2016 and vesting in November 2018; and

 

(II)

150,000 shares remaining from 150,000 shares granted January 19, 2017 and vesting in November 2019.

 

(11)	This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to applicable Company performance conditions, as follows:

 

(I)

15,000 shares remaining from 30,000 shares granted on November 17, 2015 and vesting in November 2018;

 

(II)

45,000 shares remaining from 45,000 shares granted on November 17, 2015 and vesting in November 2020; and

 

(III)

45,000 shares remaining from 45,000 shares granted on January 19, 2017 and vesting in two equal installments in November 2018 and November 2019.

 

(12)	This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to applicable Company performance conditions, as follows:

 

(I)

1,000 shares remaining from 2,000 shares granted on January 16, 2015 and vesting in January 2018;

 

(II)

2,500 shares remaining from 2,500 shares granted on November 17, 2015 and vesting in January 2019;

 

(III)

2,000 shares remaining from 2,000 shares granted on March 9, 2016 and vesting in two equal installments in March 2018 and March 2019;

 

(IV)

5,000 shares remaining from 5,000 shares granted on January 19, 2017 and vesting in two equal installments in November 2018 and November 2019; and

 

(v)

7,000 shares remaining from 7,000 shares granted on June 9, 2017 and vesting in June 2020.

 

(13)	This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to applicable Company performance conditions, as follows:

 

(I)

8,000 shares remaining from 12,000 shares granted on June 22, 2016 and vesting in two equal installments in November 2018 and November 2019; and

 

(II)

6,000 shares remaining from 6,000 shares granted on June 9, 2017 and vesting in June 2020.

 

(14)	This represents multiple restricted stock awards with the remaining shares of each grant vesting, subject to applicable Company performance conditions, as follows:

 

(I)

3,000 shares remaining from 6,000 shares granted on January 21, 2016 and vesting in November 2018; and

 

(II)

6,000 shares remaining from 6,000 shares granted on January 19, 2017 and vesting in November 2018 and November 2019.

 

(15)	These restricted stock awards were forfeited on December 31, 2017 in connection with Mr. Humphrey’s separation from the Company.

 

(16)	For restricted stock awards granted in January 2015, November 2015 (to Mr. Hunn), January 2016, June 2016, January 2017 and June 2017 the vesting only occurs if the Compensation Committee certifies our Company’s attainment of related performance goals.

 

38						Roper Technologies, Inc. 2018 Proxy Statement

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EXECUTIVE COMPENSATION (CONTINUED)

 

2017 Option Exercises and Stock Vested

 

Name		Option Awards										Stock Awards
		# of Shares Acquired on Exercise					Value Realized Upon Exercise ($)					# of Shares Acquired on Vesting					Value Realized on Vesting ($)
Brian D. Jellison				150,000					30,660,596					150,000					38,385,000
L. Neil Hunn														30,000					7,686,000
Robert C. Crisci														2,000					399,870
John K. Stipancich														4,000					1,023,600
Paul J. Soni														6,000					1,535,400
John Humphrey				166,916					22,582,066					30,000					7,677,000

No Pension Benefits

None of our named executive officers participate in a Company-sponsored defined-benefit pension plan.

2017 Non-Qualified Deferred Compensation

Pursuant to our Company’s Non-Qualified Retirement Plan, named executive officers may defer base salary and payments earned under the annual cash incentive program. Deferral elections are made by eligible executives before the beginning of each year for amounts to be earned in the following year. The executive may invest such amounts in funds that are substantially similar to those available under the 401(k) plan.

The following table sets forth certain information with respect to the Non-Qualified Retirement Plan for our named executive officers during the fiscal year ended December 31, 2017.

 

Name		Executive Contributions in Last FY(1) ($)				Registrant Contributions in Last FY(2) ($)				Aggregate Earnings in Last  FY(3) ($)				Aggregate Withdrawals/ Distributions ($)				Aggregate Balance at Last FYE ($)
Brian D. Jellison			73,500				71,625				1,847				146,290				292,496
L. Neil Hunn			130,250				76,875				116,447								829,638
Robert C. Crisci			57,723				23,042				28,196								199,113
John K. Stipancich			47,634				39,293				7,447								125,787
Paul J. Soni			111,066				35,283				165,094								1,043,776
John Humphrey			954,915				75,241				288,647								7,150,412

(1)	Amounts reflect participant deferrals under the Non-Qualified Retirement Plan during the fiscal year ended December 31, 2017 and all of these amounts are included in the Summary Compensation Table above in the “Salary” or “Non-Equity Incentive Plan Compensation” column as applicable.

 

(2)	The amounts are included in the Summary Compensation Table in the “All Other Compensation” column.

 

(3)	No portion of these earnings was included in the Summary Compensation Table because the Non-Qualified Retirement Plan does not provide for “above-market” or preferential earnings as defined in applicable SEC rules.

Potential Payments upon Termination or Change in Control

The employment agreement with Mr. Jellison and offer letters with Messrs. Humphrey, Stipancich and Hunn provide for certain benefits in the event of the termination of the officer’s employment under certain conditions. The amount of the benefits varies depending on the reason for termination, as explained below. In no event will excise tax gross-ups be paid in regard to a termination of employment related to a change in control.

 

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EXECUTIVE COMPENSATION (CONTINUED)

 

Employment Agreement with Mr. Jellison

Termination for Cause; Resignation Without Good Reason. If Mr. Jellison were terminated for cause or if he were to resign without good reason (as such terms are defined in his agreement), he would receive the salary and vested benefits that had accrued through the date of termination, plus a pro-rata portion of his annual bonus earned through the date of termination, assuming our Company achieved the level of performance for which a bonus would be paid for that year. No special severance benefits would be payable.

Termination Without Cause; Resignation for Good Reason. If Mr. Jellison were terminated without cause or resigned for good reason, either before a change in control of our Company occurs or more than one year after a change in control, he would receive a severance payment, in addition to accrued salary, earned and unpaid bonus from the prior fiscal year and vested benefits, of two times his annual base salary. He would also receive a pro-rated target bonus for the year and continuation of health and welfare benefits for a period of two years. Any stock option that would have vested during the one-year period following termination would also become immediately exercisable.

In Connection with a Change in Control. If Mr. Jellison were terminated without cause or resigned for good reason within one year following a change in control of our Company, then in addition to accrued salary, prorated bonus and vested benefits, he would be entitled to:

 

•

a severance payment equal to two times the sum of (i) his then-current base salary and (ii) the greater of the average of his last two years’ annual bonuses or his target bonus for the year of termination;

 

•

accelerated vesting of all of his outstanding equity awards; and

 

•

continuation of health and welfare benefits for a period of two years.

Restrictive Covenants. Mr. Jellison has also agreed not to compete with our Company for a period of one year after his termination of employment for any reason.

Mr. Humphrey’s Offer Letter and Separation from the Company

Mr. Humphrey. Pursuant to an offer letter dated April 24, 2006, as amended December 30, 2008, if Mr. Humphrey’s employment is terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary. However, since Mr. Humphrey separated from the Company on December 31, 2017, he is not entitled to any payments in connection with a change in control or termination without cause.

Offer Letters to Messrs. Stipancich and Hunn

Mr. Stipancich. Pursuant to an offer letter dated June 17, 2016, if Mr. Stipancich’s employment is terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary, plus a pro-rated bonus, based upon Company performance.

Mr. Hunn. Pursuant to an offer letter dated August 18, 2011, if Mr. Hunn’s employment is terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary.

 

40						Roper Technologies, Inc. 2018 Proxy Statement

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EXECUTIVE COMPENSATION (CONTINUED)

 

Summary of Termination Payments and Benefits

The following tables summarize the value of the termination payments and benefits that each of our named executive officers would receive if he had terminated employment on December 31, 2017 under the circumstances shown. Scenarios for termination due to involuntarily for cause, voluntary resignation, and retirement have not been included because, in those circumstances, no severance or other additional payments will be made to named executive officers. Scenarios for termination due to death or disability have not been included because they do not discriminate in scope, terms or operation in favor of named executive officers compared to the benefits offered to all salaried employees.

BRIAN D. JELLISON

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason				By Company Without Cause				Change in Control(1)
Cash payments		$	2,450,000			$	2,450,000			$	2,450,000
Accelerated Equity Awards(2)(3)
2016 Restricted Stock Grant											19,425,000
2017 Restricted Stock Grant											38,850,000
Continued Medical Benefits			35,946				35,946				35,946
Total		$	2,485,946			$	2,485,946			$	60,760,946

L. NEIL HUNN

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason		By Company Without Cause				Change in Control(1)
Cash payments		$-		$	800,000			$	800,000
Accelerated Equity Awards(2)(3)
2015 Stock Option Grant		-							2,167,500
2017 Stock Option Grant									2,943,200
2015 Restricted Stock Grants		-							15,540,000
2017 Restricted Stock Grant									11,655,000
Continued Medical Benefits		-			19,341				19,341
Total		$-		$	819,341			$	33,125,041

 

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EXECUTIVE COMPENSATION (CONTINUED)

 

ROBERT C. CRISCI

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason		By Company Without Cause				Change in Control(1)
Cash payments		$-		$	-			$	-
Accelerated Equity Awards(2)(3)
2015 Stock Option Grant		-			-				453,000
2016 Stock Option Grant		-			-				707,120
2017 Stock Option Grants		-			-				1,184,560
2015 Restricted Stock Grants		-			-				906,500
2016 Restricted Stock Grant		-			-				518,000
2017 Restricted Stock Grants									3,108,000
Continued Medical Benefits		-			-				-
Total		$-		$	-			$	6,877,180

JOHN K. STIPANCICH

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason		By Company Without Cause				Change in Control(1)
Cash payments		$-		$	650,000			$	650,000
Accelerated Equity Awards(2)(3)
2016 Stock Option Grant		-			-				1,603,260
2017 Stock Option Grant		-			-				361,920
2016 Restricted Stock Grant									2,072,000
2017 Restricted Stock Grant									1,554,000
Continued Medical Benefits		-			19,341				19,341
Total		$-		$	669,341			$	6,260,521

PAUL J. SONI

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason		By Company Without Cause				Change in Control(1)
Cash payments		$-		$	-			$	-
Accelerated Equity Awards(2)(3)
2015 Stock Option Grant		-			-				679,500
2016 Stock Option Grant		-			-				1,111,200
2017 Stock Option Grant		-			-				882,960
2016 Restricted Stock Grant		-			-				777,000
2017 Restricted Stock Grant		-			-				1,554,000
Continued Medical Benefits		-			-				-
Total		$-		$	-			$	5,004,660

 

42						Roper Technologies, Inc. 2018 Proxy Statement

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EXECUTIVE COMPENSATION (CONTINUED)

 

JOHN HUMPHREY

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason		By Company Without Cause				Change in Control(1)
Cash payments		$-		$	767,000			$	-
Accelerated Equity Awards(2)(3)
2014 Stock Option Grant		-			-				-
2015 Stock Option Grant		-			-				-
2016 Stock Option Grant		-			-				-
2015 Restricted Stock Grants		-			-				-
2016 Restricted Stock Grants		-			-				-
Continued Medical Benefits		-			19,341				-
Total		$-		$	786,341			$	-

(1)	Assumes employment is terminated involuntarily without cause, or also with respect to Mr. Jellison, he resigns for good reason.

 

(2)	Based on closing market price of our common stock on December 29, 2017 of $259.00 per share.

 

(3)

Under the terms of our 2016 Incentive Plan, if within two years after a change in control, employment is terminated by the employee for good reason or by the acquirer without cause, or if the acquirer does not assume the awards upon a change in control, (i) outstanding stock options become fully exercisable, (ii) time-based vesting restrictions on outstanding restricted stock awards lapse, and (iii) the target payout opportunities on outstanding performance-based restricted stock awards shall be deemed to have been fully earned (subject to the conditions provided in the 2016 Incentive Plan).

CEO Pay Ratio

As required by SEC rules, we compared our CEO’s total compensation in 2017 to that of our median employee for the same period. Through our core human capital management system with supplementation from manual inputs, we collected information for our global workforce of 14,015 employees, including our full-time, part-time and temporary workers, and excluded our employees in Germany (284) and France (175) under the de minimis exemption. We identified our median employee as of December 31, 2017 by applying a consistent compensation measure for the period from January 1, 2017 to December 31, 2017 across our global employee population—annual salary or hourly pay, bonus and commissions (excluding equity compensation because inclusion of such would have had no impact on the determination of the median employee). We annualized the compensation for our full-time and part-time employees who were newly-hired in 2017. Our median employee’s total 2017 compensation was $82,543 and our CEO’s was $29,181,078 ($22,353 more than as reported in the Summary Compensation Table above due to the inclusion of certain employee benefits). Accordingly, our 2017 CEO to Median Employee Pay Ratio was 354:1.

 

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PROPOSAL 2: ADVISORY VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

We are seeking your advisory vote approving the compensation of our named executive officers as disclosed in this Proxy Statement. We believe that our executive compensation programs are structured in the best manner possible to support our business objectives, evidenced by the superior returns we have delivered to our shareholders. In 2017, our total shareholder return was 42.4%—double that of the S&P 500’s return of 21.8%. Over the past 10 years, our compound annual return to shareholders was 16.0%, compared to the S&P 500’s return of 8.5%.

Our executive compensation programs are designed to provide competitive total compensation that is tied to the achievement of Company performance objectives and to attract, motivate and retain individuals who will build long-term value for our shareholders. See the “Proxy Statement Summary” and “Compensation Discussion and Analysis” above for key characteristics of our executive compensation programs.

We are seeking shareholder approval of the following resolution:

RESOLVED, that the compensation paid to the Company’s named executive officers as disclosed pursuant to the compensation disclosure rules of the SEC, including the Compensation Discussion and Analysis, the compensation tables and the related material disclosed in this Proxy Statement is hereby APPROVED.

The vote on this proposal is advisory and non-binding; however, the Compensation Committee and our Board will review the results of the vote and consider them when making future determinations regarding our executive compensation programs.

 

 

44						Roper Technologies, Inc. 2018 Proxy Statement

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AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors is comprised of four non-employee directors, each of whom has been determined by the Board of Directors to be independent under the NYSE and SEC rules. The Audit Committee’s responsibilities are set forth in its charter.

The Audit Committee oversees and reviews with the full Board of Directors any issues with respect to the Company’s financial statements, the structure of the Company’s legal and regulatory compliance, the performance and independence of the Company’s independent registered public accounting firm and the performance of the Company’s internal audit function. The committee retains the Company’s independent registered public accounting firm to undertake appropriate reviews and audits of the Company’s financial statements, determines the compensation of the independent registered public accounting firm, and pre-approves all of their services. The committee also periodically reviews the work performed by other public accounting firms retained by the Company to provide various financial and information technology services. The Company’s management is primarily responsible for the Company’s financial reporting process and for the preparation of the Company’s financial statements in accordance with GAAP. The Audit Committee maintains oversight of the independent registered public accounting firm by discussing the overall scope and specific plans for their audits, the results of their examinations, their evaluations of the Company’s internal accounting controls and the overall quality of the Company’s financial reporting. The Audit Committee may delegate its duties and responsibilities to a subcommittee of the Audit Committee.

The Audit Committee maintains oversight of the Company’s internal audit function by evaluating the appointment and performance of the Company’s director of internal audit and periodically meeting with this individual to receive and review reports of the work of the Company’s internal audit department. The Audit Committee meets with management on a regular basis to discuss any significant matters, internal audit recommendations, policy or procedural changes and risks or exposures, if any, that may have a material effect on the Company’s financial statements.

The Audit Committee: (i) appointed and retained PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2017; (ii) reviewed and discussed with the Company’s management the Company’s audited financial statements for the fiscal year ended December 31, 2017; (iii) discussed with PwC the matters required to be discussed by the Auditing Standard No. 1301, “Communication with Audit Committees,” issued by the Public Company Accounting Oversight Board (the “PCAOB”); (iv) received the written disclosures and the letter from PwC required by PCAOB Ethics and Independence Rule 3526, “Communication with Audit Committees Concerning Independence,” and has discussed with PwC its independence from the Company and its management; (v) discussed matters with PwC outside the presence of management; (vi) reviewed internal audit recommendations; (vii) discussed with PwC the quality of the Company’s financial reporting; and (viii) reviewed and discussed with PwC the results of the audit of the effectiveness of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

In reliance on the reviews, reports and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017, for filing with the SEC.

AUDIT COMMITTEE

Christopher Wright, Chairman

Amy Woods Brinkley

John F. Fort III

Laura G. Thatcher

The foregoing report and other information provided above regarding the Audit Committee should not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act or the Exchange Act, except to the extent that Roper specifically incorporates this information by reference, and shall not otherwise be deemed filed under either the Securities Act or the Exchange Act.

 

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INDEPENDENT PUBLIC ACCOUNTANTS FEES

Set forth below are the professional fees billed by PwC for the fiscal years ended December 31, 2017 and 2016. It is the Audit Committee’s policy that all services performed by and all fees paid to the independent registered public accounting firm require the Audit Committee’s prior approval. As such, all audit, audit-related tax and other fees were pre-approved by the Audit Committee.

 

		Dollars in Thousands
Fees		FY 2017				FY 2016
Audit Fees(1)		$	4,172			$	5,030
Audit-Related Fees(2)			231				800
Tax Fees(3)			1,029				1,169
All Other Fees			26				20
Total Fees		$	5,458			$	7,019

 

(1)

Aggregate fees from PwC for audit or review services in accordance with the standards of the PCAOB and fees for services, such as statutory audits and review of documents filed with the SEC. Audit fees also include fees paid in connection with services required for compliance with Section 404 of the Sarbanes-Oxley Act.

 

(2)	Aggregate fees from PwC for assurance and related services which primarily include due diligence on acquisition targets.

 

(3)	Tax fees include tax compliance, assistance with tax audits, tax advice and tax planning.

 

46						Roper Technologies, Inc. 2018 Proxy Statement

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PROPOSAL 3: RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2018

The Audit Committee has appointed PwC as our independent registered public accounting firm for the year ending December 31, 2018. Our Board of Directors recommends that the shareholders ratify this appointment. PwC has been our Company’s independent registered public accounting firm since May 2002. One or more representatives of PwC are expected to be present at the Annual Meeting and will be given the opportunity to make a statement if they so desire and respond to appropriate questions of shareholders in attendance. If this proposal does not pass, the selection of our independent registered public accounting firm will be reconsidered by the Audit Committee and the Board of Directors. Even if the proposal passes, the Audit Committee may decide to select another firm at any time.

 

Equity Compensation Plan Information

The following table provides information as of December 31, 2017 regarding our compensation plans under which our equity securities are authorized for issuance.

 

Plan Category		(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights				(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights				(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans  (Excluding Securities Reflected in Column(a))
Equity Compensation Plans Approved by Shareholders(1)
Stock options			3,195,864			$	140.68
Restricted stock awards(2)			858,996				-
Subtotal			4,054,860								7,802,395
Equity Compensation Plans Not Approved by Shareholders			-				-				-
Total			4,054,860			$	-				7,802,395

 

(1)	Consists of the Company’s Amended and Restated 2006 Plan and 2016 Incentive Plan.

 

(2)	The weighted-average exercise price is not applicable to restricted stock awards.

 

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ANNUAL MEETING AND VOTING INFORMATION

Our Company is soliciting the enclosed proxy for use at the 2018 Annual Meeting of Shareholders. This Proxy Statement and the enclosed proxy card are being mailed or otherwise made available to shareholders on or about April 30, 2018.

We are concurrently mailing or making available to shareholders a copy of our 2017 Annual Report, which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Our Annual Report on Form 10-K and its exhibits are available on the Internet at www.sec.gov. Our 2017 Annual Report and Annual Report on Form 10-K are not part of these proxy soliciting materials.

This Proxy Statement contains important information for you to consider when deciding how to vote. Please read this information carefully.

 

 

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ANNUAL MEETING AND VOTING INFORMATION (CONTINUED)

 

 

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ANNUAL MEETING AND VOTING INFORMATION (CONTINUED)

 

 

50						Roper Technologies, Inc. 2018 Proxy Statement

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ANNUAL MEETING AND VOTING INFORMATION (CONTINUED)

 

 

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INFORMATION REGARDING THE 2019 ANNUAL MEETING OF SHAREHOLDERS

If you wish to submit a matter to be considered at the 2019 Annual Meeting of Shareholders, you must comply with the procedures set forth below. Any proposal or nomination to be made to the Company should be sent to:

Roper Technologies, Inc.

6901 Professional Parkway East

Suite 200

Sarasota, Florida 34240

Attention: Secretary

 

•

Proxy Statement Proposals. If you intend to submit a proposal to be included in the Proxy Statement for the 2019 Annual Meeting of Shareholders, we must receive your proposal no later than December 31, 2018. All proposals must comply with the SEC regulations under Rule 14a-8 for including shareholder proposals in a company’s proxy material.

 

•

Director Candidate Nomination. Our By-laws set forth the procedures you must follow if you wish to nominate a director candidate in connection with the 2019 Annual Meeting of Shareholders.

Proxy Access to Include Nominees in our 2019 Proxy Statement. If you are a shareholder, or a group of up to 20 shareholders, owning 3% or more of our outstanding common stock continuously for at least three years and wish to nominate a director candidate and require us to include such nominee in our Proxy Statement and form of proxy, you must submit your request so it is received by the Company between December 1, 2018 and December 31, 2018, in accordance with our By-laws. The number of candidates that may be so nominated is limited to the greater of two or the largest whole number that does not exceed 20% of our Board, provided that the shareholder(s) and nominee(s) satisfy the requirements set forth in our By-laws. All proxy access nominations must be accompanied by information about the nominating shareholders as well as the nominees and meet the requirements specified in our By-laws, including the information specified under “Nominees Not for Inclusion in our 2019 Proxy Statement” below.

Nominees Not for Inclusion in our 2019 Proxy Statement. If you wish to nominate a director candidate in connection with the 2019 Annual Meeting of Shareholders and are not requiring the nominee be included in our Proxy Statement, you must submit the nomination so it is received by the Company between February 4, 2019 and March 6, 2019, in accordance with our By-laws. The notice to nominate a person for election as a Company director, notice must include a written statement setting forth (i) the name of the person to be nominated; (ii) the number and class of all shares of each class of Company stock owned of record and beneficially by such person, as reported by such person to you; (iii) such other information regarding each nominee proposed by you as would have been required to be included in a Proxy Statement filed pursuant to the proxy rules of the SEC if the nominee had been nominated by the Board of Directors; (iv) such person’s signed consent to serve as a director of our Company if elected; (v) your name and address; (vi) the number and class of all shares of each class of Company stock owned of record and beneficially by such shareholder (and any beneficial owner on whose behalf the nomination is made); and (vii) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, you (and any beneficial owner on whose behalf the proposal is made) with respect to Roper’s securities.

 

•

Matters for Annual Meeting Agenda. If you wish to have other business (not the nomination of a director candidate) brought before the 2019 Annual Meeting of Shareholders, you must submit the proposal between February 4, 2019 and March 6, 2019, in accordance with our By-laws. If you intend to present the matter directly at the 2019 Annual Meeting of Shareholders, the notice must include (a) the text of the proposal; (b) a brief statement of the reasons why you favor the proposal; (c) your name and address; (d) the number and class of all shares of each class of Company stock owned of record and beneficially by you (and any beneficial owner on whose behalf the proposal is made); (e) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on

 

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INFORMATION REGARDING THE 2019 ANNUAL MEETING OF SHAREHOLDERS (CONTINUED)

 

behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, you (and any beneficial owner on whose behalf the proposal is made) with respect to the Roper’s securities; and (f) if applicable, any material interest of you and such beneficial owner in the matter proposed (other than as a shareholder).

With respect to matters not included in the Proxy Statement but properly presented at the 2019 Annual Meeting of Shareholders, management generally will be able to vote proxies in its discretion if it receives notice of the proposal during the period specified above and advises shareholders in the Proxy Statement for the 2019 Annual Meeting of Shareholders about the nature of the matter and how management intends to vote on the matter, unless the proponent of the shareholder proposal (a) provides us with a timely written statement that the proponent intends to deliver a Proxy Statement to at least the percentage of our voting shares required to carry the proposal; (b) includes the same statement in the proponent’s own proxy materials; and (c) provides us with a statement from a solicitor confirming that the necessary steps have been taken to deliver the Proxy Statement to at least the percentage of our voting shares required to carry the proposal.

OTHER MATTERS

As of the date of this Proxy Statement, the Board of Directors knows of no other business which will be or is intended to be presented at the Annual Meeting. If any other business properly comes before the Annual Meeting or any postponed or adjourned Annual Meeting, the proxy holders named in the enclosed proxy will have discretionary authority to vote the shares represented by the proxy in their discretion.

By the Order of the Board of Directors

 

 

Brian D. Jellison

Chairman, President and Chief Executive Officer

Dated: April 30, 2018

 

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APPENDIX A—RECONCILIATIONS

Table 1: EBITDA and EBITDA Margin Reconciliation

(in millions, except percentages)

 

		2017				2016
GAAP Revenue		$	4,607			$	3,790
Purchase accounting adjustment to acquired deferred revenue			57				15
Rounding			1				-
Adjusted Revenue (A)		$	4,665			$	3,805
GAAP Net Earnings		$	972			$	659
Taxes			63				282
Interest expense			181				112
Depreciation			50				37
Amortization			295				203
Purchase accounting adjustment to acquired deferred revenue			57				15
Purchase accounting adjustment for commission expense			(5	)			(0	)
Gain on sale of divested Energy product line			(9	)			-
Impairment charge on minority investment			2				-
Acquisition-related expenses deemed significant			-				6
Acquisition-related inventory step-up charge			-				0
Debt extinguishment charge			-				1
Rounding			(1	)			-
Adjusted EBITDA (B)		$	1,605			$	1,315
Adjusted EBITDA Margin (B) / (A)			34.4	%			34.6	%

Table 2: Cash Flow Reconciliation

(in millions)

 

		2017				2016				2012				2007
GAAP Operating Cash Flow		$	1,234			$	964			$	678			$	344
Cash taxes related to 2015 sale of Abel Pump			-				37				-				-
Adjusted Operating Cash Flow		$	1,234			$	1,001			$	678			$	344
Capital expenditures			(49	)			(37	)			(38	)			(30	)
Capitalized software expenditures			(11	)			(3	)			(1	)			(7	)
Rounding			1				-				-				-
Adjusted Free Cash Flow		$	1,175			$	961			$	639			$	307

 

54						Roper Technologies, Inc. 2018 Proxy Statement

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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

E45663-P06988                    KEEP THIS PORTION FOR YOUR RECORDS

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DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

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Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting to be

Held on June 4, 2018:

The Notice and Proxy Statement and Annual Report to Shareholders are available at www.proxyvote.com.

 

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E45664-P06988