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Share Name | Share Symbol | Market | Type |
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AZZ Inc | NYSE:AZZ | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 83.17 | 0 | 09:09:53 |
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Filed by the Registrant
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¨
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Filed by a Party other than the Registrant
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Check the appropriate box:
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¨
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Preliminary Proxy Statement
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CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE 14a-6(e)(2))
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Definitive Proxy Statement
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¨
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Definitive Additional Materials
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¨
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Soliciting Material Pursuant to §.240.14a-12
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Payment of Filing Fee (Check the appropriate box):
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þ
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No fee required.
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¨
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is calculated and state how it was determined): |
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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¨
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Fee paid previously with preliminary materials.
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¨
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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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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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TIME AND DATE
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10:00 a.m., local time, on Wednesday, July 8, 2020
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LOCATION
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One Museum Place, 3100 West 7th Street, 4th Floor, Fort Worth, Texas 76107*
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PROPOSALS
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I.
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Elect the eight (8) director nominees named in the accompanying Proxy Statement to serve on the Company’s Board of Directors, each for a one-year term.
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II.
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Vote for an advisory approval of a non-binding resolution approving the Company’s executive compensation program.
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III.
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Vote for the ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 28, 2021.
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IV.
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To transact any other business which may properly come before the Annual Meeting or any adjournment.
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By Order of the Board of Directors,
/s/ Tara D. Mackey
Tara D. Mackey
Chief Legal Officer and Secretary
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TABLE OF CONTENTS
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Page
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Proxy Statement Summary
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Questions and Answers
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PROPOSAL 1 – ELECTION OF DIRECTORS
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Election Process
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Nominees for Election of Directors
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Matters Relating to Corporate Governance, Board Structure, Director Compensation and Stock Ownership
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Certain Relationships and Related Party Transactions
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Director Compensation
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Non-Employee Director Stock Ownership Guidelines
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Procedures for Communicating with Directors
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Director Nomination Process
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Security Ownership of Management and Directors
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Security Ownership of Certain Beneficial Owners
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PROPOSAL 2 – APPROVAL OF THE SAY-ON-PAY PROPOSAL
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Executive Compensation
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Compensation Discussion and Analysis
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Stock Ownership Guidelines for Executive Officers
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Compensation Committee Report
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Summary Compensation Table
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Grants of Plan Based Awards
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Outstanding Equity Awards at Fiscal Year End
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Option/SAR Exercises and Stock Vested for Fiscal Year 2020
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Potential Payments Upon Termination or Change of Control
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CEO Pay Ratio
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Audit Committee Report
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Relationship with Independent Auditors
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PROPOSAL 3 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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Other Information
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Date and Time
July 8, 2020, 10:00 a.m., local time
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Place
AZZ Inc., One Museum Place, 4th Floor,
3100 West 7th Street, Fort Worth, Texas 76107
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Notice
We mailed a Notice Regarding the Availability of Proxy Materials (the “Notice”) on or about May 27, 2020.
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Voting
Holders of shares of common stock as of the Record Date are entitled to vote on all matters.
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Record Date
May 8, 2020
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Item
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Company Proposals
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Board Vote Recommendation
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Page
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1.
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Election of eight (8) Directors
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FOR each director nominee
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13
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2.
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Approval, on a non-binding advisory basis, of the Company’s executive compensation program
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FOR
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35
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3.
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Ratification of Grant Thornton LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 28, 2021
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FOR
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73
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Internet (www.envisionreports.com/AZZ) until 1:00 a.m. Eastern Time, on July 8, 2020;
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Telephone (1-800-652-8683) until 1:00 a.m. Eastern Time, on July 8, 2020;
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Completing, signing and returning your proxy or voting instruction card before July 8, 2020; or
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In person, at the Annual Meeting, if you are a registered shareholder as of the Record Date. You may deliver a completed proxy card or vote by ballot at the meeting.
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ü
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Seven out of eight director nominees are independent
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ü
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Independent committee chairs and members
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ü
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Commitment to continuous board refreshment and diversity
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ü
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Separate chairman and CEO
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Annual election of all directors
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ü
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Regular executive sessions of independent directors
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ü
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Majority voting for directors
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ü
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Risk oversight by full board and committees
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Stock ownership guidelines for directors and officers
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Annual board and committee self-evaluations
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Name
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Age
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DirectorSince
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Occupation
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Committee Memberships
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Other
Public Company
Boards
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Daniel E. Berce
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66
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2000
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President and Chief Executive Officer, General Motors Financial Company
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Audit
Compensation
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2
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Paul Eisman
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64
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2016
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Former President and Chief Executive Officer, Alon USA Energy, Inc.
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Audit
Compensation
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0
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Daniel R. Feehan
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69
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2000
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Chairman of the Board, FirstCash, Inc.
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Compensation
Nominating and Corporate Governance
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2
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Thomas E. Ferguson
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63
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2013
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President and Chief Executive Officer, AZZ Inc.
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Not Applicable
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0
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Kevern R. Joyce
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73
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1997
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Independent Business Consultant and Investor
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Nominating and Corporate Governance
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0
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Venita McCellon-Allen
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60
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2016
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President and Chief Operating Officer, Southwestern Electric Power Company
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Audit
Compensation
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0
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Ed McGough
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59
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2017
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Senior Vice President, Global Manufacturing and Technical Operations,
Alcon Laboratories, Inc.
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Compensation
Nominating and Corporate Governance
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0
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Steven R. Purvis
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55
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2015
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Trustee and Portfolio Manager, Luther King Capital Management
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Audit
Nominating and Corporate Governance
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0
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Name
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Age
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Position
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Since
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Previous Position
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Thomas E. Ferguson
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63
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President and Chief Executive Officer
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2013
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Chief Executive Officer, FlexSteel Pipeline Technologies, Inc.
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Paul W. Fehlman
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56
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Former Senior Vice President and Chief Financial Officer
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2014
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Vice President, Finance, Engineered Products Division, Flowserve Corporation
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Tara D. Mackey
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50
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Chief Legal Officer and Secretary
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2014
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Chief Legal Counsel and Corporate Secretary, First Parts, Inc.
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Gary Hill
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55
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President and General Manager - Industrial
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2017
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President and General Manager - AZZ WSI LLC
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Kenneth Lavelle
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63
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President and General Manager - Electrical
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2017
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President, Global Seals & Systems Operation, Flowserve Corporation
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What We Do
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ü
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A significant portion of our executive officers’ total compensation is financial performance based, and the payouts are contingent upon the attainment of certain pre-established performance metrics and capped to minimize risk.
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Performance measures are highly correlated to the creation of shareholder value.
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We review and benchmark pay relative to the market median of our industry peer group on an annual basis.
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Our executive compensation program is designed to encourage building long-term shareholder value and attract and retain high performance executive talent.
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We use annual cash incentive opportunities and equity-based awards to balance the Company’s short- and long-term performance objectives.
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Our equity awards are equally weighted between time-vested restricted stock units, which vest ratably over a three-year period, and performance share units, which require achievement of financial performance metrics over a three-year performance cycle.
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The compensation committee engages an independent executive compensation consultant.
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Our compensation committee conducts an annual review of all executive compensation program components to ensure alignment with our compensation objectives and the Company’s industry peers.
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We implemented a Compensation Recovery Policy to protect the Company in the event of a financial restatement or an executive officer engages in serious misconduct.
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We provide a limited number of executive perquisites.
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We have stock ownership guidelines for directors and executive officers.
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What We Don’t Do
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û
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We do not provide tax gross ups.
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We do not recycle shares withheld for taxes.
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We do not permit pledging or hedging of Company securities.
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We do not pay dividends or dividend equivalents on unearned RSUs or PSUs until they vest.
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We do not reprice underwater equity awards.
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We do not have pension or supplemental executive retirement plans.
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Category
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Compensation Element
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Description
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Cash
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Base Salary
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Fixed cash compensation based on responsibilities of the position. Reviewed annually for potential adjustments based on factors such as market levels, individual performance and scope of responsibilities.
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Annual Incentive Opportunity
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Annual cash incentive for achievement of specific annual financial operating results.
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Long-Term Incentives
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Restricted Stock Units
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Vest ratably over a three-year period. Settled in shares of AZZ common stock. Dividend equivalent rights accrue with respect to dividends awarded during the vesting period.
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Performance Share Units
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Three-year pre-determined financial performance metric and a potential total shareholder return (“TSR”) modifier. Settled in shares of AZZ common stock. Dividend equivalents accrue during the vesting period and will vest if, and when the PSUs to which such dividend equivalents relate become vested.
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Retirement
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401(k) Plan
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Qualified 401(k) plan available to all U.S. employees. The Company matches 100% of the first 1% and 50% of contributions between 2% and 6% (with a potential total Company match of 3.5%).
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Other
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Employment Agreements
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Sets standard benefits for certain NEOs in the event of termination of employment from the Company.
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Deferred Compensation Plan
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Sets standard benefits for designated management and highly compensated employees (including our NEOs) and the Company's board of directors.
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Severance Plan
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Sets standard benefit guidelines for senior executives in the event of severance; available to all U.S. employees (other than NEOs with employment agreements).
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Change-in-Control Agreements
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Sets standard benefits for senior executives upon a change-in-control.
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Other Benefits
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Executive supplemental disability insurance, financial planning services and annual physical exams.
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Name and
Principal Position
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Year
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Salary
($)
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Bonus
($)
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Stock
Awards/
RSUs
($)
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Option
/SARs
Awards
($)
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Non-Equity
Incentive
Plan
Compensation
($)
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Change in
Pension Value
and Nonquali-
fied Deferred
Compensation
Earnings
($)
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All Other
Compensation
($)
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Total
($)
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Thomas E. Ferguson
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2020
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746,235
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—
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1,500,000
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—
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1,137,262
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—
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28,707
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3,412,204
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President & Chief
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Executive Officer
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Paul W. Fehlman
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2020
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395,484
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—
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450,000
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—
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391,766
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—
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14,583
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1,251,833
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Senior Vice President
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& Chief Financial Officer
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Tara D. Mackey
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2020
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361,471
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—
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300,000
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—
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302,985
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—
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11,921
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976,377
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Chief Legal Officer
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& Secretary
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Gary Hill
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2020
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344,780
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—
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1,446,250
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—
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313,836
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—
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27,117
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2,131,983
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President and General
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Manager - Industrial
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Kenneth Lavelle
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2020
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319,815
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—
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696,200
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—
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209,319
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—
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19,071
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1,244,405
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President and General
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Manager - Electrical
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•
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This Proxy Statement for the Annual Meeting; and
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•
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The Company’s Annual Report on Form 10-K for the fiscal year ended February 29, 2020, as filed with the Securities and Exchange Commission (the “SEC”) on April 29, 2020 (the “Annual Report”).
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•
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The election of eight (8) nominees to the Company’s board of directors named in this Proxy Statement, each to serve for a one year term (Proposal 1);
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A non-binding advisory resolution to approve AZZ’s executive compensation program (Proposal 2); and
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Ratification of the appointment of Grant Thornton LLP to serve as AZZ’s independent registered public accounting firm for the fiscal year ending February 28, 2021 (Proposal 3).
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•
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“FOR” the election of the eight (8) nominees to serve on the Board for a one year term (Proposal 1);
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•
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“FOR” the approval of AZZ’s executive compensation program (Proposal 2); and
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“FOR” the ratification of the appointment of Grant Thornton LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending February 28, 2021 (Proposal 3).
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•
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View the Company’s proxy materials for the Annual Meeting; and
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•
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Instruct the Company to send future proxy materials to you by email.
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In person. You may vote in person at the Annual Meeting by requesting a ballot when you arrive. You must bring valid picture identification such as a driver’s license or passport and may be requested to provide proof of stock ownership as of the Record Date.
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Via the Internet. You may vote by proxy via the Internet by following the instructions provided in the Notice.
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By Telephone. If you request printed copies of the proxy materials by mail or viewed electronic copies, you may vote by proxy by calling the toll free number found on the proxy card.
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By Mail. If you request printed copies of the proxy materials by mail, you will receive a proxy card and you may vote by proxy by filling out the proxy card and returning it in the envelope provided.
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In person. If you are a beneficial owner of shares held in street name and you want to vote in person at the Annual Meeting, you must obtain a “legal proxy” from the organization that holds your shares. A legal proxy is a written document that will authorize you to vote your shares held in street name at the Annual Meeting. Please contact the organization that holds your shares for instructions regarding obtaining a legal proxy. You must bring a copy of the legal proxy to the Annual Meeting and ask for a ballot when you arrive and a valid picture identification such as a driver’s license or passport. In order for your vote to be counted, you must provide both the copy of the legal proxy and your completed ballot to the inspector of election.
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•
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Via the Internet. You may vote by proxy via the Internet by visiting www.envisionreports.com/AZZ and entering the control number found in your Notice. The availability of Internet voting may depend on the voting process of the organization that holds your shares.
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•
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By Telephone. If you request printed copies or viewed electronic copies of the proxy materials, you may vote by proxy by calling the toll free number found on the voting instruction form. The availability of telephone voting may depend on the voting process of the organization that holds your shares.
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•
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By Mail. If you request printed copies of the proxy materials by mail, you will receive a voting instruction form and you may vote by proxy by filling out the voting instruction form and returning it in the envelope provided.
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•
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Are entitled to vote and you are present in person at the Annual Meeting; or
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•
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Have properly voted by proxy on the Internet, by telephone or by submitting a proxy card by mail.
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•
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Indicate when voting on the Internet or by telephone that you wish to vote as recommended by AZZ’s board of directors; or
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•
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Sign and return a proxy card without giving specific voting instructions,
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Proposal
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Voting Requirement
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1. Election of eight (8) director nominees named in this Proxy Statement, each for a one year term.
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Each director must be elected by a majority of the votes cast. A majority of votes cast means that the number of shares voted “FOR” a director must exceed the number of votes cast “AGAINST” that director. Any director not elected by a majority is expected to tender to the board his or her resignation promptly following the certification of election results pursuant to the Company’s Bylaws. The nominating and corporate governance committee will make a recommendation to the board on whether to accept or reject such resignation. The board will act on such recommendation and publicly disclose its decision within 90 days from the date of the certification of the election results.
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2. Approval, on a non-binding advisory basis, of the Company’s executive compensation program.
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To be approved, this proposal must be approved by a majority of the votes cast by the shareholders present in person or represented by proxy, meaning that the votes cast by the shareholders “FOR” the approval of the proposal must exceed the number of votes cast “AGAINST” the approval of the proposal.
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3. Ratification of the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm for fiscal year 2021.
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To be approved, this proposal must be approved by a majority of the votes cast by the shareholders present in person or represented by proxy, meaning that the votes cast by the shareholders “FOR” the approval of the proposal must exceed the number of votes cast “AGAINST” the approval of the proposal.
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•
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As necessary to meet applicable legal requirements;
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•
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To allow for the tabulation and certification of votes; and
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•
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To facilitate a successful proxy solicitation.
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THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF EACH OF THE DIRECTOR NOMINEES LISTED BELOW.
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DANIEL E. BERCE
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Age: 66
Director Since: 2000
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Board Committees:
• Audit Committee (Chairman)
• Compensation Committee
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PAUL EISMAN
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Age: 64
Director Since: 2016
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Board Committees:
• Audit Committee
• Compensation Committee
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DANIEL R. FEEHAN
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Age: 69
Director Since: 2000
Chairman of the Board Since: 2019
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Board Committees:
• Compensation Committee
• Nominating and Corporate Governance Committee (Chairman)
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THOMAS E. FERGUSON
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Age: 63
Director Since: 2013
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Board Committees:
• None
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KEVERN R. JOYCE
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Age: 73
Director Since: 1997
Chairman of the Board: 2013-2019
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Board Committees:
• Nominating and Corporate Governance Committee
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VENITA MCCELLON - ALLEN
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Age: 60
Director Since: 2016
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Board Committees:
• Audit Committee
• Compensation Committee
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ED MCGOUGH
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Age: 59
Director Since: 2017
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Board Committees:
• Compensation Committee (Chairman)
• Nominating and Corporate Governance Committee
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STEVEN R. PURVIS
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Age: 55
Director Since: 2015
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Board Committees:
• Audit Committee
• Nominating and Corporate Governance Committee
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AZZ Inc.
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Investor Relations
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One Museum Place, Suite 500
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3100 West 7th Street
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|
Fort Worth, TX 76107
|
|
Telephone: 817-810-0095
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|
Fax: 817-336-5354
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Email: info@azz.com
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All of the Company’s directors attended 100% of the total number of board meetings and meetings of the committees of the board on which the director served during fiscal year 2020.
|
AUDIT COMMITTEE
|
Committee Members: Daniel E. Berce* (Chairman), Paul Eisman, Venita McCellon-Allen, Stephen E. Pirnat*(1)
and Steven R. Purvis*
|
|
Committee Functions
|
|
• Oversees the Company’s accounting, auditing, financial reporting, systems of internal controls regarding finance and accounting and corporate finance strategy;
|
• Directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm;
|
• Pre-approves all auditing services and permitted non-audit services to be performed for the Company by its independent auditor;
|
• Reviews and discusses with management (i) the guidelines and policies that govern the processes by which the Company assesses and manages its exposure to risk; and (ii) the Company’s major financial and other risk exposures and the steps management has taken to monitor and control such exposures;
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• Meets regularly in executive session with the Company’s management, internal and independent auditors; and
|
• Reviews and approves any proposed related-party transactions consistent with the Company’s policy regarding such transactions and reports any findings to the full board.
|
(1) Mr. Pirnat served on the Audit Committee until his death in February 2020.
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Independent Members: 5
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*Financial Experts: 2
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FY2020 Audit Committee Meetings Held: 9
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COMPENSATION COMMITTEE
|
Committee Members: Ed McGough (Chairman), Daniel E. Berce, Paul Eisman, Daniel R. Feehan,
and Venita McCellon-Allen
|
|
Committee Functions
|
|
• Establishes, oversees and adjusts the Company’s incentive-based compensation plans, sets compensation for our CEO and approves compensation for the other executive officers;
|
• Reviews and discusses with management the Compensation Discussion & Analysis to be included in the Company’s annual report and proxy statement;
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• Reviews and approves employment agreements, severance agreements or other significant matters relating to the Company’s CEO and other executive officers, including the annual performance review of the CEO;
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• Assists the board in its oversight of the development, implementation and effectiveness of our policies and strategies relating to our human ca;ital management function, (including: recruiting, retention, career development, management succession and diversity and employment practices);
|
• Reviews with management and recommends to the board changes in the Company’s compensation structure and programs and its competitiveness as an employer; and
|
• Administers the Company’s Compensation Recovery Policy allowing AZZ to recoup incentive based compensation paid to applicable officers and employees in the event of a financial restatement or misconduct.
|
Independent Members: 5
|
FY2020 Compensation Committee Meetings Held: 6
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NOMINATING AND CORPORATE GOVERNANCE COMMITTEE
|
Committee Members: Daniel R. Feehan (Chairman), Kevern R. Joyce, Ed McGough, Stephen E. Pirnat(1)
and Steven R. Purvis
|
|
Committee Functions
|
|
• Identifies potential individuals qualified to become members of the board consistent with criteria approved by the board;
|
• Recommends director candidates to the board for election at the annual meetings of shareholders or to fill vacancies pursuant to the Company’s Bylaws;
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• Recommends director nominees to the board for each board committee and the chairman of the board;
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• Responsible for establishing and overseeing AZZ’s Corporate Governance Guidelines, Code of Conduct and the director nomination process;
|
• Provides oversight of AZZ's environmental, social and governance ("ESG") policies and sustainability practices that are of significance to AZZ and its shareholders;
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• Regularly reviews and makes recommendations to the board regarding director compensation; and
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• Leads an annual process for evaluating the performance of the board as a whole and each of the board committees and report its findings and recommendations to the board.
|
(1) Mr. Pirnat served on the Nominating and Corporate Governance Committee until his death in February 2020.
|
Independent Members: 5
|
FY2020 Nominating and Corporate Governance Committee Meetings Held: 4
|
•
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Recommend the retention of any consultants, legal, financial or other professional advisors who are to report directly to the board of directors;
|
•
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Coordinate with committee chairs in the development and recommendations regarding board and committee meeting schedules.
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DIRECTORS STAND FOR ELECTION ANNUALLY BY MAJORITY VOTE
|
|
Pursuant to AZZ’s Bylaws, all members of its board of directors are elected annually. Our Bylaws require that we use a majority voting standard in which a director nominee must receive more votes cast “For” than “Against” in order to be elected.
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OUR NON-EMPLOYEE DIRECTORS HOLD REGULAR EXECUTIVE SESSIONS
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AZZ’s non-employee directors meet in executive session at each regularly scheduled in person board meeting without management present
|
BOARD MEMBERS MAY SUBMIT AGENDA ITEMS AND INFORMATION REQUESTS
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Each board member may request items to be placed on the agenda for board meetings, raise subjects that are not on the agenda for that meeting or request information that has not otherwise been provided during the meeting. Additionally, the chairman of the board reviews and approves all board meeting schedules and agendas and consults with the CEO regarding other information sent to the board in connection with board meetings or other board action items.
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BOARD MEMBERS HAVE COMPLETE ACCESS WITH MANAGEMENT
|
|
Each board member has complete and open access to any member of the Company’s management team and to the chairman of each board committee for the purpose of discussing any matter related to the work of such committee.
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BOARD MEMBERS MAY REQUEST SPECIAL BOARD MEETINGS
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Special meetings of the board may be called by the chairman of the board or the Company’s CEO or Secretary at the request of any board member.
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THE BOARD OR ANY BOARD COMMITTEE MAY RETAIN INDEPENDENT ADVISORS
|
|
The board and each board committee has the authority at any time to retain independent auditors, legal, financial and other advisors as they deem appropriate.
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Initiation of Process
|
>
|
A list of potential topics are circulated by the chairman of the board to the directors for consideration in advance of the board’s self-assessment discussion. Committee chairs follow a similar process for their respective committees.
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Discussion
|
>
|
The chairman of the board meets with the board to gather their views and obtain feedback. Committee chairs lead their respective committee discussions during executive session.
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Follow-Up
|
>
|
The chairman of the board shares a summary of the board results which addresses any requests or enhancements in practices that may be applicable to the board or management. Committee chairmen report on their respective self-assessments to the full board.
|
•
|
The audit committee oversees the integrity of the financial statements of the Company, the independent auditor's qualifications and independence, the performance of the Company's internal audit function and independent auditors; and the Company’s compliance with legal and regulatory requirements. Complaints and concerns relating to AZZ’s accounting matters should be communicated to the audit committee. Any such communications may be made on an anonymous basis. Any concerns or complaints may be reported to the audit committee through a third-party vendor, NAVEX Global Inc., which has been retained by the audit committee for this purpose. The AZZ Alertline may be accessed toll-free at 1 (855) 268-6428 or via the website at https://azz.alertline.com. Outside parties, including customers, vendors, suppliers or shareholders may bring issues regarding accounting matters to the attention of the audit committee by writing to the Chairman of the Audit Committee, AZZ Inc., 3100 West 7th St., Suite 500, Fort Worth, TX 76107. All complaints and concerns will be reviewed under the direction of the audit committee and oversight provided by the chief legal officer and other appropriate persons as determined by the audit committee.
|
•
|
The compensation committee oversees the risks relating to the Company’s compensation philosophy and programs and generally evaluates any potential effect the Company’s compensation structure may have on management risk taking. The compensation committee reviews the recommendations of the Company’s management regarding adjustments to the Company’s executive compensation programs. The compensation committee has retained and regularly meets with Meridian Compensation Partners, LLC ("Meridian"), its independent executive compensation consultant, which assists the compensation committee in evaluating the Company’s compensation programs and adherence to the philosophies and principles as discussed under “Executive Compensation – Compensation Discussion and Analysis.” The compensation committee also monitors risks relating to the overall management and organizational structure, as well as succession planning at the executive officer and key leadership levels.
|
•
|
The nominating and corporate governance committee provides oversight on the composition of the board of directors and it’s committees and provides leadership to the board in maintaining best corporate practices in the Company’s corporate governance principles and practices. Many of our corporate policies are summarized in the Company's Code of Conduct, including our policies regarding conflict of interest, insider trading, related- party transactions, environmental health and safety, human rights, confidentiality and compliance with laws and regulations applicable to the way the Company conducts its business. All officers, directors, employees and representatives are required to acknowledge and agree to be bound by the Code of Conduct and are subject to disciplinary action, including termination, for violations. The Code of Conduct and the Vendor Code of Business
|
Service
|
Fee Amount
|
||
Annual Retainer for Board Service
|
|
$65,000
|
|
Annual Retainer for Board Chairman Service
|
|
$60,000
|
|
Annual Audit Committee Chairman Retainer
|
|
$3,000
|
|
Annual Audit Committee Member Retainer
|
|
$5,000
|
|
Annual Compensation Committee Chairman Retainer
|
|
$2,000
|
|
Annual Nominating and Corporate Governance Committee Chairman Retainer
|
|
$1,500
|
|
Service
|
Fee Amount
|
||
Annual Retainer for Board Service
|
|
$70,000
|
|
Annual Retainer for Board Chairman Service
|
$60,000
|
|
|
Annual Audit Committee Chairman Retainer
|
|
$10,000
|
|
Annual Audit Committee Member Retainer
|
$5,000
|
|
|
Annual Compensation Committee Chairman Retainer
|
|
$5,000
|
|
Annual Nominating and Corporate Governance Committee Chairman Retainer
|
$1,500
|
|
Name
|
|
Fees
Earned or
Paid in Cash
($)
|
|
Stock
Awards
($)(1)
|
|
Total
($)
|
||||
|
|
|
|
|
|
|
||||
Daniel E. Berce(2)
|
|
$
|
72,908
|
|
|
$100,000
|
|
$
|
172,908
|
|
|
|
|
|
|
|
|
||||
Paul Eisman
|
|
$
|
70,000
|
|
|
$100,000
|
|
$
|
170,000
|
|
|
|
|
|
|
|
|
||||
Daniel R. Feehan(2)
|
|
$
|
121,557
|
|
|
$100,000
|
|
$
|
221,557
|
|
|
|
|
|
|
|
|
||||
Kevern R. Joyce(2)
|
|
$
|
70,682
|
|
|
$100,000
|
|
$
|
170,682
|
|
|
|
|
|
|
|
|
||||
Venita McCellon-Allen(2)
|
|
$
|
69,538
|
|
|
$100,000
|
|
$
|
169,538
|
|
|
|
|
|
|
|
|
||||
Ed McGough(2)
|
|
$
|
66,815
|
|
|
$100,000
|
|
$
|
166,815
|
|
|
|
|
|
|
|
|
||||
Stephen E. Pirnat(3)
|
|
$
|
66,154
|
|
|
$100,000
|
|
$
|
166,154
|
|
|
|
|
|
|
|
|
||||
Steven R. Purvis
|
|
$
|
70,000
|
|
|
$100,000
|
|
$
|
170,000
|
|
(1)
|
Eligible directors received an annual equity grant of common stock of the Company having a $100,000 fair market value at the time of grant, on the date of the annual meeting of shareholders, which was July 9, 2019. The equity values in this column for the fiscal year ended February 29, 2020 reflect the aggregate grant date fair market value calculated in accordance with FASB ASC Topic 718 for stock awards granted to each of the non-employee directors under the 2014 Plan. Assumptions used in the calculation of this amount are included in footnote 10 to the Company’s audited financial statements for the fiscal year ended February 29, 2020, included in the Company’s Annual Report on Form 10-K.
|
(2)
|
The amounts reported have been pro-rated due to a rotation in committee and chairperson responsibilities, effective April 4, 2019.
|
(3)
|
All amounts reported for Mr. Pirnat are as of the date of his death on February 9, 2020.
|
Mr. Daniel R. Feehan
|
Chairman of the Board
|
AZZ Inc.
|
One Museum Place, Suite 500
|
3100 West 7th Street
|
Fort Worth, Texas 76107
|
• spam;
|
• junk mail and mass mailings;
|
• product or service inquiries or complaints;
|
• new product or service suggestions;
|
• resumés and other forms of job inquiries;
|
• surveys; and
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• business solicitations or advertisements.
|
• relevant industry knowledge and diversity of background and experience;
|
• practical wisdom and mature judgment;
|
• personal and professional demonstration of ethics, integrity and professionalism; and
|
• willingness to represent the best interests of shareholders and objectively appraise management's performance.
|
• chief executive officer, chief financial officer or other executive level experience;
|
• financial and accounting expertise;
|
• corporate governance experience;
|
• mergers and acquisitions experience;
|
• general domestic and global knowledge of the electrical and industrial products industry, metal coatings services or the highly engineered welding services industry;
|
• international experience; and
|
• strategic planning and oversight expertise.
|
•
|
To add members with significant international experience;
|
•
|
To add members with engineering and industrial manufacturing expertise;
|
•
|
To provide for a smooth transition over time while reducing the average age and tenure of the board;
|
•
|
To expand the board size so that no member served on more than two committees;
|
•
|
To add diversity and strength to the board through race, gender, national origin, differences in education, and professional experience; and
|
•
|
To gradually add members to the board over the next several years and maintain board stability and culture during the refreshing process.
|
FOUR NEW, HIGHLY QUALIFIED DIRECTORS HAVE JOINED THE AZZ BOARD IN THE PAST FIVE YEARS.
|
Name of Beneficial Owner
|
|
Amount and Nature of Beneficial
Ownership(1)
|
|
Percent of
Common Stock Outstanding
|
Shares of Unvested RSUs Included in Total that Vest Within 60 Days of 4/30/2020
|
Daniel E. Berce
|
|
64,871
|
|
*
|
|
Paul Eisman
|
|
10,628
|
|
*
|
|
Daniel R. Feehan
|
|
66,621
|
|
*
|
|
Paul W. Fehlman
|
|
16,295(2)
|
|
*
|
3,509
|
Thomas E. Ferguson
|
|
90,946(3)
|
|
*
|
10,505
|
Gary Hill
|
|
7,168
|
|
*
|
1,949
|
Kevern R. Joyce
|
|
63,420(4)
|
|
*
|
|
Kenneth Lavelle
|
|
2,554
|
|
*
|
1,949
|
Tara D. Mackey
|
|
8,666(5)
|
|
*
|
2,339
|
Venita McCellon-Allen
|
|
12,628
|
|
*
|
|
Ed McGough
|
|
5,987
|
|
*
|
|
Stephen E. Pirnat
|
|
11,543(6)
|
|
*
|
|
Steven R. Purvis
|
|
9,543
|
|
*
|
|
|
|
|
|
|
|
All Current Directors and Executive
Officers as a Group (17 persons)
|
|
430,394(7)
|
|
1.65%
|
25,627
|
(1) Each person named in the table above has sole investment and voting power with respect to all shares of common stock shown to be beneficially owned by such person. Beneficial ownership has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The percentage of voting stock held is based upon 26,155,975 shares outstanding as of April 30, 2020.
|
(2) This number does not include 8,089 SARs that Mr. Fehlman has the right to exercise within 60 days of April 30, 2020. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price. Based on the closing price of our common stock on April 30, 2020 ($31.39), no amounts would be payable with respect to the SARs.
|
(3) This number does not include 66,471 SARs that Mr. Ferguson has the right to exercise within 60 days of April 30, 2020. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price. Based on the closing price of our common stock on April 30, 2020 ($31.39), no amounts would be payable with respect to the SARs.
|
(4) This number does not include 1,603 SARs that Mr. Joyce has the right to exercise within 60 days of April 30, 2020. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price. Based on the closing price of our common stock on April 30, 2020 ($31.39), no amounts would be payable with respect to the SARs.
|
(5) This number does not include 2,711 SARs that Ms. Mackey has the right to exercise within 60 days of April 30, 2020. These SARs do not convert into common stock on a one-for-one basis when exercised. The SARs are settled in shares of AZZ common stock of an amount equal to the excess value of the exercise price over the grant date price. Based on the closing price of our common stock on April 30, 2020 ($31.39), no amounts would be payable with respect to the SARs.
|
(6) This number represents the total shares of AZZ common stock owned by Mr. Pirnat as of the date of his death on February 9, 2020.
|
(7) The number of shares of our common stock that all of our directors and executive officers own as a group (including any non-NEO executive officers). This number also includes 25,627 RSUs that will vest within 60 days of April 30, 2020 for our executive officers (including any non-NEO executive officers).
|
Name and Address of
Beneficial Owner
|
|
Amount and Nature of Beneficial Ownership
|
|
Percent of Class
|
|
|
|
|
|
BlackRock, Inc.
55 East 52nd Street
New York, NY 10055
|
|
4,056,565(1)
|
|
15.5%
|
|
|
|
|
|
The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, PA 19355
|
|
2,767,314(2)
|
|
10.54%
|
|
|
|
|
|
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
|
|
1,991,988(3)
|
|
7.5%
|
|
|
|
|
|
Van Berkom & Associates Inc.
1130 Sherbrooke Street West, Suite 1005
Montreal, Quebec H3A 2M8
|
|
1,405,056(4)
|
|
5.39%
|
(1)
|
Blackrock, Inc. is the parent holding company of certain institutional investment managers, which collectively had sole voting power over 3,993,413 shares and sole investment power over all 4,056,565 shares. Information based solely on Schedule 13G/A filed with the SEC on February 4, 2020.
|
(2)
|
The Vanguard Group, Inc., a registered investment advisor, had sole voting power over 36,406; shared voting power over 7,785 shares; sole power to dispose of or to direct the disposition of 2,728,275 shares; and shared power to dispose or to direct the disposition of 39, 039 shares. Information based solely on a Schedule 13G/A filed with the SEC on February 12, 2020.
|
(3)
|
T. Rowe Price Associates, Inc., a registered broker, had sole voting power over 390,347 shares and sole investment power over all 1,991,988 shares. Information based solely on Schedule 13G/A filed with the SEC on February 14, 2020.
|
(4)
|
Van Berkom & Associates Inc., an investment management company, had sole voting and sole investment power over all 1,405,056 shares. Information based solely on the most current available Schedule 13G filed with the SEC on February 11, 2019.
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF AZZ’S EXECUTIVE COMPENSATION PROGRAM.
|
•
|
Thomas E. Ferguson – President and Chief Executive Officer
|
•
|
Paul W. Fehlman – Former Senior Vice President and Chief Financial Officer(1)
|
•
|
Tara D. Mackey – Chief Legal Officer and Secretary
|
•
|
Gary Hill – President and General Manager - Industrial
|
•
|
Kenneth Lavelle – President and General Manager - Electrical
|
•
|
an increase in AZZ's consolidated total revenue from $927 million to $1.06 billion, for the year ended February 29, 2020 as compared to the year ended February 28, 2019, an increase of 14.5%; and
|
•
|
Earnings per share declined by 6.1% to $1.84 per share for fiscal year 2020 compared to $1.96 in fiscal year 2019, on a diluted basis.
|
•
|
Our NEOs’ total compensation is comprised of a mix of base salary, annual short-term cash incentive compensation, long-term incentive awards and other benefits. As illustrated below, the chief executive officer’s total compensation for fiscal years 2016 through 2020 was significantly contingent upon the Company’s performance. Actual total compensation paid to Mr. Ferguson during fiscal year 2020 was higher than fiscal year 2019 as a result of an above target payout under the Company's annual cash incentive plan based on the achievement of specific annual financial operating results. For additional detail see also the section below titled "Performance-Based Incentive Compensation".
|
•
|
In fiscal year 2020, our NEOs received annual base salary adjustments ranging from 2% to 3.5% for their performance on the execution of several business initiatives and, with respect to certain officers, on the successful identification and evaluation of potential business acquisition targets, additional corporate responsibilities, expanding international business, product and market development initiatives and reducing corporate expenses. Mr. Ferguson had not received a base salary increase since fiscal year 2016. See also the table on page 44 regarding adjustments to the NEOs base salaries.
|
•
|
For fiscal year 2020, our NEOs continued to receive a substantial portion of their compensation in the form of equity compensation, a portion of which is at risk because the awards are tied to increasing shareholder value through return on net assets and stock appreciation performance metrics in the form of performance share units (“PSUs”) and the other portion of equity compensation being tied to time vested RSUs. The grant value of equity awards made to our NEOs in fiscal year 2020 was allocated 50% to RSUs and 50%
|
Named Executive Officer
|
|
Percent of Fiscal Year 2020 Pay “At Risk”
|
|
|
|
|
|
Thomas E. Ferguson
|
|
78
|
%
|
Paul W. Fehlman
|
|
68
|
%
|
Tara D. Mackey
|
|
62
|
%
|
Gary Hill
|
|
84
|
%
|
Kenneth Lavelle
|
|
74
|
%
|
•
|
Each of our NEOs have an employment agreement with the Company, except for Ms. Mackey. Each of our NEOs are employed at-will and are expected to demonstrate exceptional personal performance and leadership in order to continue serving as a member of the executive management team.
|
•
|
For fiscal year 2020, payments made under the Company's Senior Management Bonus Plan were above target for the NEOs aligning compensation with the Company's performance.
|
•
|
On the last day of fiscal year 2020, the three-year performance cycle for the PSUs granted to our NEOs on April 27, 2017 (the "FY2018 PSUs"), concluded. The payout on the FY2018 PSUs is determined based on the adjusted return on assets ("Adjusted ROA") achieved during the three-year performance cycle (March 1, 2017 to February 29, 2020), which was 5.6% on a target of 8.5%. As a result, award recipients were not entitled to receive a payout because the Adjusted ROA achieved did not exceed at least 75% of the target Adjusted ROA. The TSR modifier did not apply to the FY2018 PSUs. The target PSU awards, performance metrics, performance outcomes and actual shares earned under such awards are shown in the tables below:
|
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Actual
|
|
TSR
Performance
Multiplier
|
Adjusted ROA (%)
|
|
6.42%
|
|
8.5%
|
|
10.625%
|
|
5.6%
|
|
N/A
|
Name
|
|
Target Shares
|
|
Shares Earned
|
|
Thomas W. Ferguson
|
|
7,475
|
|
|
0
|
Paul W. Fehlman
|
|
3,049
|
|
|
0
|
Tara D. Mackey
|
|
1,245
|
|
|
0
|
Gary Hill
|
|
1,245
|
|
|
0
|
Kenneth Lavelle
|
|
869
|
|
|
0
|
What We Do
|
|
ü
|
A significant portion of our executive officers’ total compensation is financial performance based, and the payouts are contingent upon the attainment of certain pre-established performance metrics and capped to minimize risk.
|
ü
|
Performance measures are highly correlated to the creation of shareholder value.
|
ü
|
We review and benchmark pay relative to the market median of our industry peer group on an annual basis.
|
ü
|
Our executive compensation program is designed to encourage building long-term shareholder value and attract and retain high performance executive talent.
|
ü
|
We use annual cash incentive opportunities and equity-based awards to balance the Company’s short- and long-term performance objectives.
|
ü
|
Our equity awards are equally weighted between time-vested RSUs, which vest ratably over a three-year period, and PSUs, which emphasize achievement of financial performance metrics over a three-year performance cycle.
|
ü
|
The compensation committee engages an independent executive compensation consultant.
|
ü
|
Our compensation committee conducts an annual review of all executive compensation program components to ensure alignment with our compensation objectives.
|
ü
|
We implemented a Compensation Recovery Policy to protect the Company in the event of a financial restatement or an executive officer engages in serious misconduct.
|
ü
|
We provide a limited number of executive perquisites.
|
ü
|
We have stock ownership guidelines for directors and executive officers.
|
What We Don’t Do
|
|
û
|
We do not provide tax gross ups.
|
û
|
We do not recycle shares withheld for taxes.
|
û
|
We do not permit pledging or hedging of Company securities.
|
û
|
We do not pay dividends or dividend equivalents on unearned RSUs and PSUs until they vest.
|
û
|
We do not reprice underwater equity awards.
|
û
|
We do not have pension or supplemental executive retirement plans.
|
●
|
The executive’s contributions and performance
|
●
|
Market levels of compensation for positions comparable to the executive’s position
|
●
|
The executive’s roles and responsibilities, including the executive’s tenure in such role
|
●
|
The executive’s experience and management responsibilities
|
Category
|
|
Compensation Element
|
|
Description
|
Cash
|
|
Base Salary
|
|
Fixed cash compensation based on responsibilities of the position. Reviewed annually for potential adjustments based on factors such as market levels, individual performance and scope of responsibilities.
|
|
|
Annual Incentive Opportunity
|
|
Annual cash incentive for achievement of specific annual financial operating results.
|
Long-Term Incentives
|
|
Restricted Stock Units
|
|
Vest ratably over a three-year period. Settled in shares of AZZ common stock. Dividend equivalents rights accrue with respect to dividends awarded during the vesting period.
|
|
|
Performance Share Units
|
|
Three-year pre-determined financial performance metric and a potential TSR modifier. Settled in shares of AZZ common stock. Dividend equivalents accrue during the vesting period and will vest if, and when the PSUs to which such dividend equivalents relate become vested.
|
Retirement
|
|
401(k) Plan
|
|
Qualified 401(k) plan available to all U.S. employees. The Company matches 100% of the first 1% and 50% of contributions between 2% and 6% (with a potential total Company match of 3.5%).
|
Other
|
|
Employment Agreements
|
|
Sets standard benefits for certain NEOs in the event of termination of employment from the Company.
|
|
|
Deferred Compensation Plan
|
|
Sets standard benefits for designated management and highly compensated employees (including our NEOs) and the Company's board of directors.
|
|
|
Severance Plan
|
|
Sets standard benefits for senior executives in the event of severance; available to all U.S. employees (other than NEOs with employment agreements).
|
|
|
Change-in-Control Agreements
|
|
Sets standard benefits for senior executives upon a change-in-control.
|
|
|
Other Benefits
|
|
Executive supplemental disability insurance, financial planning services and annual physical exams.
|
•
|
market data and advisory services periodically provided by Meridian, the compensation committee’s external consultant;
|
•
|
internal data regarding the executive’s compensation, both individually and relative to other executive officers; and
|
•
|
individual performance of the executive.
|
•
|
Mr. Ferguson’s efforts in leading the Company to streamline its core businesses and increase profitability, increase investor outreach, and continue to develop a high performance team of executives and implement a CEO succession and retention plan necessary to execute the Company’s current growth and long-term strategy;
|
•
|
Mr. Fehlman’s efforts in continuing to further develop AZZ’s financial team, enhancing its Tax, Treasury and Internal Audit functions while improving the Company’s debt structure, cash flow and relations with investors and financial institutions;
|
•
|
Ms. Mackey's leadership in managing the Company's legal function focusing on compliance, contract and litigation management, risk mitigation, M&A transactions, supporting the expansion of domestic and international business and several corporate initiatives, continuing to implement corporate governance best practices, including the formation of a sustainability council and enhancing the Company’s environmental, corporate responsibility and human capital disclosures;
|
•
|
Mr. Hill's efforts in leading the Industrial platform’s international expansion, leadership development, talent acquisition, and strategic growth initiatives in AZZ’s Energy segment;
|
•
|
Mr. Lavelle's efforts in leading the Electrical platform's performance through significant organizational changes relating to plant managers and financial controllers in AZZ's Energy segment and strengthening our international business in China and Saudi Arabia; and
|
•
|
The relative value to AZZ of the contributions made by each officer.
|
Name
|
|
FY2019 Base Salary
|
|
FY2020 Base Salary
|
|
Change
|
|||||
Thomas E. Ferguson
|
|
|
$724,500
|
|
|
|
$746,235
|
|
|
3
|
%
|
Paul W. Fehlman
|
|
|
$387,729
|
|
|
|
$395,484
|
|
|
2
|
%
|
Tara D. Mackey
|
|
|
$349,247
|
|
|
|
$361,471
|
|
|
3.5
|
%
|
Gary Hill(1)
|
|
—
|
|
|
|
$344,780
|
|
|
—
|
|
|
Kenneth Lavelle
|
|
|
$309,000
|
|
|
|
$319,815
|
|
|
3.5
|
%
|
Named Executive Officer
|
|
FY2020 Target %
|
|
Thomas E. Ferguson
|
|
100%
|
|
Paul W. Fehlman
|
|
65%
|
|
Tara D. Mackey
|
|
55%
|
|
Gary Hill
|
|
55
|
%
|
Kenneth Lavelle
|
|
55%
|
|
Named Executive Officer
|
Weight
|
Performance Measure
|
FY2020 Target Performance Goal
|
FY2020 Achieved Performance
|
% of
Target Performance Achieved
|
||||
|
|
|
|
|
|
||||
Mr. Ferguson
|
70%
|
Diluted earnings per share (“EPS”)
|
|
$2.50
|
|
|
$2.71
|
|
108%
|
|
30%
|
FY2020 Cash Flow(1)
|
|
$75,000,000
|
|
|
$109,700,000
|
|
146%
|
|
|
|
|
|
|
||||
Mr. Fehlman
|
70%
|
EPS
|
|
$2.50
|
|
|
$2.71
|
|
108%
|
|
30%
|
FY2020 Cash Flow
|
|
$75,000,000
|
|
|
$109,700,000
|
|
146%
|
|
|
|
|
|
|
||||
Ms. Mackey
|
70%
|
EPS
|
|
$2.50
|
|
|
$2.71
|
|
108%
|
|
30%
|
FY2020 Cash Flow
|
|
$75,000,000
|
|
|
$109,700,000
|
|
146%
|
|
|
|
|
|
|
||||
Mr. Hill
|
25%
|
EPS
|
|
$2.50
|
|
|
$2.71
|
|
108%
|
|
25%
|
FY2020 Cash Flow
|
|
$75,000,000
|
|
|
$109,700,000
|
|
146%
|
|
25%
|
Industrial Platform ROA(2)
|
4.3
|
%
|
5.41
|
%
|
126%
|
||
|
25%
|
Industrial Platform Operating Income(3)
|
(4
|
)
|
(4
|
)
|
119%
|
||
|
|
|
|
|
|
||||
Mr. Lavelle
|
25%
|
EPS
|
|
$2.50
|
|
|
$2.71
|
|
108%
|
|
25%
|
FY2020 Cash Flow
|
|
$75,000,000
|
|
|
$109,700,000
|
|
146%
|
|
25%
|
Electrical Platform ROA(2)
|
8.67
|
%
|
7.59
|
%
|
88%
|
||
|
25%
|
Electrical Platform Operating Income(3)
|
(5
|
)
|
(5
|
)
|
84%
|
(1)
|
|
Cash flow from operations minus capital expenditures.
|
(2)
|
|
Platform ROA is calculated as a percentage using a numerator of tax adjusted platform operating income, divided by a denominator of total segment assets, minus platform current liabilities, plus platform current portion of long-term debt.
|
(3)
|
|
Platform operating income consists of net sales less cost of sales, specifically identifiable selling, general and administrative expenses and other income and expense items that are specifically identifiable to the respective platform.
|
(4)
|
|
The fiscal year 2020 operating income target and achieved performance for the Industrial platform is not disclosed because such disclosure would result in competitive harm. This operating income target was set at a level necessary to deliver on AZZ’s financial goals and intended to be challenging. The compensation committee believes that the achievement of the operating income target was challenging and required substantial performance by the Industrial platform.
|
(5)
|
|
The fiscal year 2020 operating income target and achieved performance for the Electrical platform is not disclosed because such disclosure would result in competitive harm. This operating income target was set at a level necessary to deliver on AZZ’s financial goals and intended to be challenging. The compensation committee believes that the achievement of the operating income target was challenging and required substantial performance by the Electrical platform.
|
NEO
|
Target as a % of Base Salary
|
Actual Payout as % of Base Salary
|
Target Amount ($)
|
Actual Payout ($)
|
Thomas Ferguson
|
100%
|
152.4%
|
746,235
|
1,137,262
|
Paul Fehlman
|
65%
|
152.4%
|
257,064
|
391,766
|
Tara D. Mackey
|
55%
|
152.4%
|
198,809
|
302,985
|
Gary Hill
|
55%
|
165.5%
|
189,629
|
313,836
|
Kenneth Lavelle
|
55%
|
119.0%
|
175,898
|
209,319
|
•
|
enhance the link between the creation of shareholder value and long-term executive incentive compensation;
|
•
|
provide an opportunity for increased equity ownership in the Company by directors and executives;
|
•
|
maintain competitive levels of total compensation with the Company's industry peer group; and
|
•
|
facilitate compliance with the policy of the board of directors, as described above under the heading “Stock Ownership Guidelines,” requiring AZZ’s executive officers and directors to hold shares of AZZ’s common stock.
|
•
|
the practice of granting equity awards only once every year;
|
•
|
the emphasis placed on equity in the mix of total compensation;
|
•
|
the officer’s experience and performance;
|
•
|
the scope, responsibility and business impact of the NEO's position;
|
•
|
the perceived retention value of the total compensation package in light of the competitive labor market;
|
•
|
alignment with AZZ's compensation philosophy and objectives;
|
•
|
cost and dilution impact;
|
•
|
grant practices of our industry peer group; and
|
•
|
input and advice from our executive compensation consultant.
|
Adjusted ROA is
|
Adjusted Net Income
|
Total Assets – (Current Liabilities – Current Debt)
|
1 - (
|
AZZ Position in Ranking - 1
|
)
|
|
||
|
||
# of companies in Peer Group excluding AZZ
|
(1) The percentage of target PSUs will be interpolated for performance percentiles that fall between the Adjusted ROA percentages shown above.
|
Adjusted ROA % Ranking Achieved
|
|
% of Target Award Payout
(without TSR Modifier)
|
% of Target Award Payout
(with TSR - Top Quartile)
|
% of Target Award
Payout
(with TSR - Bottom Quartile)
|
<25%
|
|
0%
|
0%
|
0%
|
25%
|
|
50%
|
63%
|
38%
|
50%
|
|
100%
|
125%
|
75%
|
100%
|
|
200%
|
250%
|
150%
|
TSR is
|
(Ending Share Price - Beginning Share Price) + Dividends Paid
|
(Beginning Share Price)
|
Position
|
Ownership Requirement
|
Maximum Number of Shares Required
|
Chief Executive Officer
|
4 x Base Salary
|
100,000
|
Chief Financial Officer, Chief Operating Officer and Senior Vice Presidents
|
3 x Base Salary
|
30,000
|
Vice Presidents and other Officers
|
1 x Base Salary
|
7,500
|
Name and
Principal Position
(a)
|
|
Year
(b)
|
|
Salary
($)
(c)
|
|
Bonus
($)
(d)(1)
|
|
Stock
Awards/
RSUs
($)
(e)(2)
|
|
Option
/SARs
Awards
($)
(f)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
(g)(3)
|
|
Change in
Pension Value
and Nonquali-
fied Deferred
Compensation
Earnings
($)
(h)
|
|
All Other
Compensation
($)
(i)(4)
|
|
Total
($)
(j)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Thomas E. Ferguson
|
|
2020
|
|
746,235
|
|
|
—
|
|
1,500,000
|
|
|
—
|
|
1,137,262
|
|
|
—
|
|
28,707
|
|
|
3,412,204
|
|
|
President & Chief
|
|
2019
|
|
724,500
|
|
|
—
|
|
1,200,000
|
|
|
—
|
|
844,767
|
|
|
—
|
|
13,458
|
|
|
2,782,725
|
|
|
Executive Officer
|
|
2018
|
|
724,500
|
|
|
—
|
|
900,000
|
|
|
—
|
|
78,246
|
|
|
—
|
|
14,129
|
|
|
1,716,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Paul W. Fehlman
|
|
2020
|
|
395,484
|
|
|
—
|
|
450,000
|
|
|
—
|
|
391,766
|
|
|
—
|
|
14,583
|
|
|
1,251,833
|
|
|
Former Senior Vice President & Chief
|
|
2019
|
|
387,729
|
|
|
50,000
|
|
|
450,000
|
|
|
—
|
|
293,860
|
|
|
—
|
|
16,964
|
|
|
1,198,553
|
|
Financial Officer
|
|
2018
|
|
376,436
|
|
|
—
|
|
350,000
|
|
|
—
|
|
26,330
|
|
|
—
|
|
19,829
|
|
|
772,595
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Tara D. Mackey
|
|
2020
|
|
361,471
|
|
|
—
|
|
300,000
|
|
|
—
|
|
302,985
|
|
|
—
|
|
11,921
|
|
|
976,377
|
|
|
Chief Legal Officer
|
|
2019
|
|
349,247
|
|
|
50,000
|
|
|
300,000
|
|
|
—
|
|
223,972
|
|
|
—
|
|
6,448
|
|
|
929,667
|
|
& Secretary
|
|
2018
|
|
339,075
|
|
|
—
|
|
150,000
|
|
|
—
|
|
20,074
|
|
|
—
|
|
6,431
|
|
|
515,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Gary Hill(4)
|
|
2020
|
|
344,780
|
|
|
—
|
|
1,446,250
|
|
(5)
|
—
|
|
313,836
|
|
|
—
|
|
27,117
|
|
|
2,131,983
|
|
|
President & General
|
|
2019
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
Manager - Industrial
|
|
2018
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Kenneth Lavelle(6)
|
|
2020
|
|
319,815
|
|
|
—
|
|
696,200
|
|
(7)
|
—
|
|
209,319
|
|
|
—
|
|
19,071
|
|
|
1,244,405
|
|
|
President & General
|
|
2019
|
|
309,000
|
|
|
50,000
|
|
|
250,000
|
|
|
—
|
|
157,204
|
|
|
—
|
|
3,900
|
|
|
770,104
|
|
Manager - Electrical
|
|
2018
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
(1)
|
The amounts in this column for the fiscal year ended February 29, 2020 reflect the aggregate grant date fair market value calculated in accordance with FASB ASC Topic 718 for RSU and PSU awards granted to the NEOs under the 2014 Plan. Assumptions used in the calculation of this amount are included in footnote 10 to the Company’s audited financial statements for the fiscal year ended February 29, 2020, included in the Company’s Annual Report on Form 10-K.
|
(2)
|
The amounts in this column reflect the cash awards granted under the Company's Senior Management Bonus Plan.
|
(3)
|
All other compensation in column (i) consists of the perquisites as described in the table below entitled “Perquisites” on a per executive basis for fiscal year 2020.
|
(4)
|
Mr. Hill was not an NEO during fiscal years 2018 and 2019.
|
(5)
|
This amount includes 27,500 RSUs with a fair market values of $1,196,250 granted to Mr. Hill on February 11, 2020 in consideration for entering into an employment agreement with the Company as part of the CEO's retention and succession planning efforts, (20,000 RSUs cliff vest in full on November 1, 2022 and 7,500 RSUs cliff vest in full on November 1, 2020). The fair market value of the RSUs is based upon the closing market price of AZZ's common stock on February 11, 2020, which was $43.50.
|
(6)
|
Mr. Lavelle was not an NEO during fiscal year 2018.
|
(7)
|
This amount includes 10,000 RSUs with a fair market value of $446,200 granted to Mr. Lavelle on January 14, 2020 in consideration for entering into an employment agreement with the Company as part of the CEO's retention and succession planning efforts. The RSUs will cliff vest in full on November 1, 2022. The fair market value of the RSUs is based upon the closing market price of AZZ's common stock on January 14, 2020, which was $44.62.
|
Perquisites
|
||||||||||||||||||
Name
|
|
Contribution to 401(k) Plan
($)(1)
|
|
Insurance Benefits
($)(2)
|
|
Club Dues
($)
|
|
Physical Exams
($)
|
|
All Other Perquisites
($)
|
|
Total
($)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Thomas E. Ferguson
|
|
9,028
|
|
|
3,079
|
|
|
—
|
|
|
1,600
|
|
|
15,000
|
|
|
28,707
|
|
Paul W. Fehlman
|
|
9,800
|
|
|
2,389
|
|
|
2,394
|
|
|
—
|
|
|
—
|
|
|
14,583
|
|
Tara D. Mackey
|
|
9,909
|
|
|
2,012
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,921
|
|
Gary Hill
|
|
9,800
|
|
|
2,317
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
|
27,117
|
|
Kenneth Lavelle
|
|
4,071
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,000
|
|
|
19,071
|
|
(1)
|
|
Matching 401(k) contributions allocated by the Company during fiscal year 2020 to each of the NEOs pursuant to the Company’s Benefit Plan (which is more fully described on page 52 under the heading “Retirement and Other Benefits”).
|
(2)
|
|
The value attributable to each of the NEOs pursuant to the AZZ Supplemental Individual Disability Insurance Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
Stock/RSU
Awards:
|
|
All Other
Option/SARs Awards:
|
|
|
Grant
Date
Fair
Value
|
||||||||||||
|
|
Estimated Future Payouts Under Non- Equity Incentive Plan Awards (1)
|
Estimated Future Payouts Under Equity Incentive
Plan Awards (2)
|
|
Number
of
Shares
of
Stock
|
|
Number
of
Securities
Underlying
Options/
|
|
Exercise
or Base
Price of
Option/
SARs
|
of
Stock/RSU
and
Option/
SARs
|
||||||||||||||||||||
Name
|
Grant
Date
|
Threshold
($)
|
|
Target
($)
|
|
Maximum
($)
|
Threshold
(#)
|
|
Target
(#)
|
|
Maximum
(#)
|
|
or Units
(#) (3)
|
|
SARs
(#) (4)
|
|
Awards
($/sh)
|
Awards
($) (5)
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Thomas E. Ferguson
|
3/1/19
|
|
14,925
|
|
|
746,235
|
|
|
1,492,470
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,229
|
|
|
—
|
|
|
—
|
|
|
750,000
|
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
17,229
|
|
|
43,073
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Paul W. Fehlman
|
3/1/19
|
|
5,141
|
|
|
257,065
|
|
|
514,130
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,168
|
|
|
—
|
|
|
—
|
|
|
225,000
|
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
5,168
|
|
|
12,922
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
225,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Tara D. Mackey
|
3/1/19
|
|
3,976
|
|
|
198,809
|
|
|
397,618
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,445
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
3,445
|
|
|
8,615
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gary Hill
|
3/1/19
|
|
3,792
|
|
|
189,629
|
|
|
379,258
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,871
|
|
|
—
|
|
|
—
|
|
|
125,000
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
2,871
|
|
|
7,179
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,000
|
|
|
|
2/11/20
|
(6)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
27,500
|
|
|
—
|
|
|
—
|
|
|
1,196,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Kenneth Lavelle
|
3/1/19
|
|
3,518
|
|
|
175,898
|
|
|
351,796
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,871
|
|
|
—
|
|
|
—
|
|
|
125,000
|
|
|
5/22/19
|
|
—
|
|
|
—
|
|
|
—
|
|
0
|
|
|
2,871
|
|
|
7,179
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
125,000
|
|
|
|
1/14/20
|
(7)
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
—
|
|
|
—
|
|
|
446,200
|
|
(1)
|
Possible payouts to each NEO under the Company’s Senior Management Bonus Plan.
|
(2)
|
In fiscal year 2020, long-term equity incentive grants included PSUs, which will vest at the end of three years, if at all, based on an annual average Adjusted ROA during the performance cycle (March 1, 2019 to February 28, 2022) with a potential TSR modifier at the end of the performance cycle. Payouts may range from 0% to 200% with a maximum award payout of 250% with the TSR modifier. The PSUs granted accrue dividend equivalents during the performance cycle, which will be paid either in cash or shares of AZZ common stock at the discretion of the compensation committee upon the vesting of the underlying award.
|
(3)
|
Number of RSUs granted to the NEOs under the 2014 Plan. These RSUs vest ratably over a three-year period beginning on the first anniversary of the grant date. The RSUs granted accrue dividend equivalents during the restricted vesting period, which will be paid either in cash or shares of AZZ common stock at the discretion of the compensation committee upon the vesting of the underlying award.
|
(4)
|
Beginning in fiscal year 2016, SARs were no longer granted as a component of the Company’s executive compensation program. The final vesting date for outstanding SARs awarded under the 2005 Plan was on March 1, 2017, with an expiration date on or before May 9, 2021 for all such unexercised SARs.
|
(5)
|
The amounts in this column for the fiscal year ended February 29, 2020 reflect the aggregate grant date fair market value calculated in accordance with FASB ASC Topic 718 for RSU and PSU awards granted to the NEOs under the 2014 Plan. Assumptions used in the calculation of this amount are included in footnote 10 to the Company’s audited financial statements for the fiscal year ended February 29, 2020, included in the Company’s Annual Report on Form 10-K.
|
(6)
|
Mr. Hill was granted 27,500 RSUs on February 11, 2020 in connection with entering into an employment agreement with the Company as part of the CEOs retention and succession planning efforts. (20,000 RSUs cliff vest in full on November 1, 2022 and 7,500 RSUs cliff vest in full on November 1, 2020. The fair market value of $1,196,250 is based upon the closing market price of AZZ’s common stock on February 11, 2020, which was $43.50.
|
(7)
|
Mr. Lavelle was granted 10,000 RSUs on January 14, 2020 in connection with entering into an employment agreement with the Company as part of the CEOs retention and succession planning efforts. The RSUs will cliff vest in full on November 1, 2022. The fair market value of the RSUs is based upon the closing market price of AZZ’s common stock on January 14, 2020, which was $44.62.
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLES
|
||||||||||||||||||||
OPTION/SAR AWARDS
|
||||||||||||||||||||
Name
|
|
Grant Date
|
|
Number of
Securities
Underlying
Unexercised
Options/SARs
(#)
Exercisable
(1)
|
|
Number of
Securities
Underlying
Unexercised
Options/SARs
(#)
Unexercisable
(2)
|
|
Option/SARs
Exercise
Price
($)
|
|
Option/SARs
Expiration
Date
(3)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas E. Ferguson
|
|
|
11/04/13
|
|
|
|
40,000
|
|
|
|
—
|
|
|
|
45.26
|
|
|
|
11/04/20
|
|
|
|
|
03/01/14
|
|
|
|
26,471
|
|
|
|
—
|
|
|
|
43.92
|
|
|
|
03/01/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul W. Fehlman
|
|
|
03/01/14
|
|
|
|
8,089
|
|
|
|
—
|
|
|
|
43.92
|
|
|
|
03/01/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tara D. Mackey
|
|
|
05/09/14
|
(4)
|
|
|
2,711
|
|
|
|
—
|
|
|
|
43.89
|
|
|
|
05/09/21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gary Hill
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kenneth Lavelle
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
(1)
|
Amounts in this column represent vested but unexercised SAR awards.
|
(2)
|
All of the SARs granted to the NEOs have fully vested. Beginning in fiscal year 2016, SARs were no longer granted as a component of the Company's executive compensation program. The final vesting date for outstanding SARs awarded under the 2005 Plan was on March 1, 2017.
|
(3)
|
The SARs have a seven year term from the grant date.
|
(4)
|
The SARs listed were granted on May 9, 2014 and vested and became exercisable over a three-year period with one-third of the SARs vesting on March 1, 2015, March 1, 2016 and March 1, 2017. All unexercised SARs will expire on or before May 9, 2021. Based on the closing price of our stock on February 28, 2020 (the last trading day of the Company's fiscal year), no amount would be payable with respect to any SARs.
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLES
|
|||||||||||||||||||||
STOCK AWARDS
|
|||||||||||||||||||||
Name
|
|
Grant Date
|
|
Number of
Shares or Units
of Stock That
Have Not
Vested
(#)(1)(2)
|
|
Market Value of
Shares or Units of
Stock That Have
Not Vested
($)(3)
|
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested(#)(4)
|
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested
($)(3)
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Thomas E. Ferguson
|
|
|
04/27/17
|
|
|
|
2,563
|
|
|
|
|
94,549
|
|
|
|
7,608
|
|
|
|
280,659
|
|
|
|
|
05/18/18
|
|
|
|
9,659
|
|
|
|
|
356,321
|
|
|
|
14,487
|
|
|
|
534,425
|
|
|
|
|
05/22/19
|
|
|
|
17,229
|
|
|
|
|
635,578
|
|
|
|
17,229
|
|
|
|
635,578
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Paul W. Fehlman
|
|
|
04/27/17
|
|
|
|
783
|
|
|
|
|
28,885
|
|
|
|
2,324
|
|
|
|
85,732
|
|
|
|
|
07/11/17
|
(5)
|
|
|
262
|
|
|
|
|
9,665
|
|
|
|
778
|
|
|
|
28,700
|
|
|
|
|
05/18/18
|
|
|
|
3,622
|
|
|
|
|
133,616
|
|
|
|
5,432
|
|
|
|
200,386
|
|
|
|
|
05/22/19
|
|
|
|
5,168
|
|
|
|
|
190,648
|
|
|
|
5,168
|
|
|
|
190,648
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Tara D. Mackey
|
|
|
04/27/17
|
|
|
|
426
|
|
|
|
|
15,715
|
|
|
|
1,267
|
|
|
|
46,740
|
|
|
|
|
05/18/18
|
|
|
|
2,414
|
|
|
|
|
89,052
|
|
|
|
3,621
|
|
|
|
133,579
|
|
|
|
|
05/22/19
|
|
|
|
3,445
|
|
|
|
|
127,086
|
|
|
|
3,445
|
|
|
|
127,086
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gary Hill
|
|
|
04/27/17
|
|
|
|
426
|
|
|
|
|
15,715
|
|
|
|
1,267
|
|
|
|
46,740
|
|
|
|
|
05/18/18
|
|
|
|
2,012
|
|
|
|
|
74,223
|
|
|
|
3,018
|
|
|
|
111,334
|
|
|
|
|
05/22/19
|
|
|
|
2,871
|
|
|
|
|
105,911
|
|
|
|
2,871
|
|
|
|
105,911
|
|
|
|
|
02/11/20
|
(6)
|
|
|
7,500
|
|
|
|
|
276,675
|
|
|
|
|
|
|
|
||
|
|
|
02/11/20
|
(7)
|
|
|
20,000
|
|
|
|
|
737,800
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Kenneth Lavelle
|
|
|
08/01/17
|
(5)
|
|
|
297
|
|
|
|
|
10,956
|
|
|
|
884
|
|
|
|
32,611
|
|
|
|
|
05/18/18
|
|
|
|
2,012
|
|
|
|
|
74,223
|
|
|
|
3,018
|
|
|
|
111,334
|
|
|
|
|
05/22/19
|
|
|
|
2,871
|
|
|
|
|
105,911
|
|
|
|
2,871
|
|
|
|
105,911
|
|
|
|
|
01/14/20
|
(7)
|
|
|
10,000
|
|
|
|
|
368,900
|
|
|
|
|
|
|
|
(1)
|
Amounts in this column represent RSU awards, which vest ratably over a three-year period from the grant date.
|
|
(2)
|
The amounts in this column include dividend equivalents accrued through February 29, 2020, of the underlying equity award that will vest if, and when the RSUs to which such dividend equivalent relate becomes vested.
|
|
(3)
|
The fair market value of the RSU and the PSU awards is based upon the closing market price of AZZ common stock as of February 28, 2020 (the last trading day of the Company's fiscal year 2020), which was $36.89.
|
|
(4)
|
Amounts in this column represent PSUs granted on April 27, 2017, May 18, 2018 and May 22, 2019, which have a three-year performance cycle and will vest and become payable, if at all, on the third anniversary of the grant date. The amounts in this column also include accrued dividend equivalents through February 29, 2020, that will vest if, and when the PSUs to which such dividend equivalents relate become vested.
|
|
(5)
|
These RSUs vest ratably over a three-year period beginning on April 27, 2018.
|
|
(6)
|
These RSUs cliff vest in full on November 1, 2020.
|
|
(7)
|
These RSUs cliff vest in full on November 1, 2022.
|
|
|
|
|
|
|
|
|
|
|
|
|
Option/SAR Awards
|
|
Stock Awards(2)
|
||||
Name
|
|
Number of Shares
Acquired on Exercise(1) (#) |
|
Value Realized
on Exercise ($) |
|
Number of Shares
Acquired on Vesting
(#)
|
|
Value Realized on
Vesting ($) |
Thomas E. Ferguson
Paul W. Fehlman
Tara D. Mackey
Gary Hill
Kenneth Lavelle
|
|
—
—
—
—
—
|
|
—
—
—
—
—
|
|
40,806(3)
3,678(5)
2,051(7)
1,821(9)
1,302(11)
|
|
1,782,508(4)
170,036(6)
94,559(8)
84,040(10)
59,709(12)
|
(1)
|
Awards exercised were SARs. The SARs were awarded under the Company's 2005 Plan.
|
(2)
|
Awards vested were RSUs awarded under the Company’s 2014 Plan, which accrue dividend equivalents during the restricted vesting period, which were settled in shares of AZZ common stock at the discretion of the compensation committee upon the vesting of the underlying award.
|
(3)
|
This number includes: (i) 5,102 RSUs that vested on April 27, 2019 plus 157 accrued dividend equivalents; (ii) 4,761 RSUs that vested on May 18, 2019 plus 67 accrued dividend equivalents; and (iii) 30,000 RSUs that vested on September 29, 2019 plus 719 accrued dividend equivalents.
|
(4)
|
The value realized upon the vesting of (i) 5,259 RSUs (including accrued dividend equivalents), based on the closing price of our common stock on April 26, 2019 (the last previous trading date), of $46.88; (ii) 4,828 RSUs (including accrued dividend equivalents), based on the closing price of our common stock on May 17, 2019 (the last previous trading date), of $45.56; and (iii) 30,719 RSUs (including accrued dividend equivalents), based on the closing price of our common stock on September 27, 2019 (the last previous trading date) of $42.84.
|
(5)
|
This number includes: (i) 1,814 RSUs that vested on April 27, 2019 plus 54 accrued dividend equivalents; and (ii) 1,785 RSUs that vested on May 18, 2019 plus 25 accrued dividend equivalents.
|
(6)
|
The value realized upon the vesting of (i) 1,868 RSUs (including accrued dividend equivalents), based on the closing price of our common stock on April 26, 2019 (the last previous trading date), of $46.88; and (ii) 1,810 RSUs (including accrued dividend equivalents), based on the closing price of our common stock on May 17, 2019 (the last previous trading date), of $45.56.
|
(7)
|
This number includes: (i) 821 RSUs that vested on April 27, 2019 plus 24 accrued dividend equivalents; and (ii) 1,190 RSUs that vested on May 18, 2019 plus 16 accrued dividend equivalents.
|
(8)
|
The value realized upon the vesting of (i) 845 RSUs (including accrued dividend equivalents) based on the closing price of our common stock on April 26, 2019 (the last previous trading date), of $46.88; and (ii) 1,206 RSUs (including accrued dividend equivalents) based on the closing price of our common stock on May 17, 2019 (the last previous trading date), of $45.56.
|
(9)
|
This number includes: (i) 792 RSUs that vested on April 27, 2019 plus 23 accrued dividend equivalents; and (ii) 992 RSUs that vested on May 18, 2019 plus 14 accrued dividend equivalents.
|
(10)
|
The value realized upon the vesting of (i) 815 RSUs (including accrued dividend equivalents) based on the closing price of our common stock on April 26, 2019 (the last previous trading date), of $46.88; and (ii) 1,006 RSUs (including accrued dividend equivalents) based on the closing price of our common stock on May 17, 2019 (the last previous trading date), of $45.56.
|
(11)
|
This number includes: (i) 290 RSUs that vested on April 27, 2019 plus 6 accrued dividend equivalents; and (ii) 992 RSUs that vested on May 18, 2019 plus 14 accrued dividend equivalents.
|
(12)
|
The value realized upon the vesting of (i) 296 RSUs (including accrued dividend equivalents) based on the closing price of our common stock on April 26, 2019 (the last previous trading date), of $46.88; and (ii) 1,006 RSUs (including accrued dividend equivalents) based on the closing price of our common stock on May 17, 2019 (the last previous trading date) of $45.56.
|
|
•
|
|
If the executive’s employment is terminated within one year following a change in control by the Company for Cause or by the executive for other than Good Reason, the Company must pay him or her their full base salary through the date of termination plus all other amounts to which he or she is entitled under any compensation or benefit plan of the Company at the time such payments are due, and the Company shall have no further obligation to him or her under the Change in Control Agreement.
|
|
•
|
|
If the executive’s employment is terminated before one year following a change in control by the Company other than for Cause or disability, or by the executive for Good Reason, he or she shall be entitled to a lump sum payment of his or her base salary through the date of termination plus any other amounts to which he or she is entitled under any compensation plan of the Company at the time such payments are due; a lump sum severance payment in an amount equal to two (2) times his or her base amount, as defined in Section 280G(b)(3) of the Internal Revenue Code, and the vesting and immediate exercisability of all stock options, RSUs and SARs; and reimbursement for all legal fees and expenses incurred in seeking to enforce the Executive Change in Control Severance Agreement.
|
|
•
|
|
“Cause” as used in the Executive Change in Control Severance Agreements is defined as (1) conviction of a crime involving moral turpitude or providing for imprisonment, (2) commission of any willful malfeasance or gross negligence in the discharge of his or her duties to the Company or any of its subsidiaries, having a material adverse effect on the Company or any of its subsidiaries or (3) failure to timely correct after written notice, any specific failure in performance of the duties of his or her position with the Company.
|
|
•
|
|
“Good Reason” as used in such Executive Change in Control Severance Agreements includes, with respect to each executive:
|
TRIGGERING EVENTS
|
||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
Termination of Employment Before Change in Control
|
|
|
Termination of Employment Within
Two Years After Change in Control
|
||||||||||||||||||||||||||||||
|
Death/ Disability
|
|
Termination for Cause
|
|
Termination Without Cause
|
|
|
Death/ Disability
|
|
Termination for Cause
|
|
Termination Without Cause
|
|
|
Voluntary For Good Reason
|
|
|
Voluntary Without Good Reason
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mr. Ferguson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Severance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,238,705
|
|
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,231,243
|
|
(2)
|
|
$
|
2,231,243
|
|
(2)
|
|
$
|
—
|
|
Short-Term
Cash Incentive(3)
|
$
|
746,235
|
|
|
$
|
—
|
|
|
$
|
746,235
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
SARs(4)
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
—
|
|
RSUs(5)
|
$
|
1,086,448
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1,086,448
|
|
|
$
|
—
|
|
|
$
|
1,086,448
|
|
|
|
$
|
1,086,448
|
|
|
|
$
|
—
|
|
PSUs(6)
|
$
|
1,450,662
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1,450,662
|
|
|
$
|
—
|
|
|
$
|
1,450,662
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
TOTAL
|
$
|
3,283,345
|
|
|
$
|
—
|
|
|
$
|
2,984,940
|
|
|
|
$
|
2,537,110
|
|
|
$
|
—
|
|
|
$
|
4,768,353
|
|
|
|
$
|
3,317,691
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mr. Fehlman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Severance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
652,549
|
|
(7)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,019,666
|
|
(8)
|
|
$
|
1,019,666
|
|
(8)
|
|
$
|
—
|
|
Short-Term
Cash Incentive(3)
|
$
|
257,065
|
|
|
$
|
—
|
|
|
$
|
257,065
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
SARs(4)
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
—
|
|
RSUs(5)
|
$
|
362,814
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
362,814
|
|
|
$
|
—
|
|
|
$
|
362,814
|
|
|
|
$
|
362,814
|
|
|
|
$
|
—
|
|
PSUs(6)
|
$
|
505,466
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
505,466
|
|
|
$
|
—
|
|
|
$
|
505,466
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
TOTAL
|
$
|
1,125,345
|
|
|
$
|
—
|
|
|
$
|
909,614
|
|
|
|
$
|
868,280
|
|
|
$
|
—
|
|
|
$
|
1,887,946
|
|
|
|
$
|
1,382,480
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Ms. Mackey
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Severance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
722,942
|
|
(9)
|
$
|
—
|
|
|
$
|
722,942
|
|
(9)
|
|
$
|
722,942
|
|
(9)
|
|
$
|
—
|
|
Short-Term
Cash Incentive(3)
|
$
|
198,809
|
|
|
$
|
—
|
|
|
$
|
198,809
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
SARs(4)
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
0
|
|
|
$
|
—
|
|
|
$
|
0
|
|
|
|
$
|
0
|
|
|
|
$
|
—
|
|
RSUs(5)
|
$
|
231,853
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
231,853
|
|
|
$
|
—
|
|
|
$
|
231,853
|
|
|
|
$
|
231,853
|
|
|
|
$
|
—
|
|
PSUs(6)
|
$
|
307,405
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
307,405
|
|
|
$
|
—
|
|
|
$
|
307,405
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
TOTAL
|
$
|
738,067
|
|
|
$
|
—
|
|
|
$
|
198,809
|
|
|
|
$
|
1,262,200
|
|
|
$
|
—
|
|
|
$
|
1,262,200
|
|
|
|
$
|
954,795
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mr. Hill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Severance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
689,560
|
|
(9)
|
$
|
—
|
|
|
$
|
689,560
|
|
(9)
|
|
$
|
689,560
|
|
(9)
|
|
$
|
—
|
|
Short-Term
Cash Incentive(3)
|
$
|
189,629
|
|
|
$
|
—
|
|
|
$
|
189,629
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
SARs(4)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$ —
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$ —
|
|
|
|
$
|
—
|
|
||
RSUs(5)
|
$
|
1,210,324
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
1,210,324
|
|
|
$
|
—
|
|
|
$
|
1,210,324
|
|
|
|
$
|
1,210,324
|
|
|
|
$
|
—
|
|
PSUs(6)
|
$
|
263,985
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
263,985
|
|
|
$
|
—
|
|
|
$
|
263,985
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
TOTAL
|
$
|
1,663,938
|
|
|
$
|
—
|
|
|
$
|
189,629
|
|
|
|
$
|
2,163,869
|
|
|
$
|
—
|
|
|
$
|
2,163,869
|
|
|
|
$
|
1,899,884
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Mr. Lavelle
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Severance
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
639,630
|
|
(9)
|
$
|
—
|
|
|
$
|
639,630
|
|
(9)
|
|
$
|
639,630
|
|
(9)
|
|
$
|
—
|
|
Short-Term Cash Incentive(3)
|
$
|
175,898
|
|
|
$
|
—
|
|
|
$
|
175,898
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
SARs(4)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
RSUs(5)
|
$
|
559,990
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
559,990
|
|
|
$
|
—
|
|
|
$
|
559,990
|
|
|
|
$
|
559,990
|
|
|
|
$
|
—
|
|
PSUs(6)
|
$
|
249,856
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
$
|
249,856
|
|
|
$
|
—
|
|
|
$
|
249,856
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
TOTAL
|
$
|
985,744
|
|
|
$
|
—
|
|
|
$
|
175,898
|
|
|
|
$
|
1,449,476
|
|
|
$
|
—
|
|
|
$
|
1,449,476
|
|
|
|
$
|
1,199,620
|
|
|
|
$
|
—
|
|
(1)
|
This amount is Mr. Ferguson’s base salary for a period of 24 months plus a pro-rated short-term cash incentive payment. Mr. Ferguson’s Second Amended CEO Agreement with the Company provides that if he is terminated without cause, he will be entitled to his base salary for the period from the date of termination to the end of the term of the Second Amended CEO Agreement, but in any case a period of at least 24 months.
|
(2)
|
This amount is 2.99 times the base salary of Mr. Ferguson. Severance benefits for Mr. Ferguson are set forth in his Second Amended CEO Agreement.
|
(3)
|
Assuming a termination date of February 29, 2020, Mr. Ferguson would be eligible to a target annual cash incentive of 100% of his fiscal year 2020 annual base salary. Mr. Fehlman would be eligible to a target annual cash incentive of 65% of his annual base salary for fiscal year 2020 and Ms. Mackey and Messrs. Hill and Lavelle would be eligible to a target annual cash incentive of 55%.
|
(4)
|
All SARs for the applicable NEOs (if applicable) have vested. The value of exercising the SARs are calculated based upon the difference between the closing price of the Company's common stock on February 28, 2020, the last previous trading day ($36.89), and the grant date price. Based on the closing price of our common stock on February 28, 2020, no amounts would be payable to our NEOs with respect to any SARs.
|
(5)
|
The value of the accelerated vesting of RSUs, including any dividend equivalents accrued during the vesting period, are calculated based upon the closing price of the Company’s common stock on February 28, 2020, the last previous trading day ($36.89).
|
(6)
|
Pursuant to the 2014 Plan and the accompanying award agreements, the compensation committee in its sole discretion may deem that the PSUs be payable at the target amount (i.e., 100% achievement of the performance goals) in the event that the vesting date of such PSUs is accelerated. The value of the PSUs granted during fiscal years 2018, 2019 and 2020, including any dividend equivalents accrued, was calculated using the closing price of the Company's common stock on February 28, 2020 ($36.89) and assuming that the compensation committee determined that these PSUs were each payable at their respective target amounts.
|
(7)
|
This amount is Mr. Fehlman’s base salary for a period of 12 months plus a pro-rated short-term cash incentive payment. Mr. Fehlman’s employment agreement with the Company provides that if he is terminated without cause, he will be entitled to his base salary for the period from the date of termination to the end of the term of the employment agreement, but in any case a period of at least 12 months.
|
(8)
|
This amount is two times Mr. Fehlman’s base salary plus the average amount of cash bonus actually paid to Mr. Fehlman with respect to the five (5) fiscal years of the Company immediately preceding the occurrence of the event. Severance benefits for Mr. Fehlman are set forth in his employment agreement.
|
(9)
|
This amount represents two times the base salary for Ms. Mackey and Messrs. Hill and Lavelle.
|
Year
|
Mr. Ferguson’s Total Compensation
($)(1)
|
Median Employee Total Compensation ($)
|
Pay Ratio of CEO Compensation to Median Employee
|
2020
|
3,412,204
|
33,352
|
102:1
|
(1)
|
The annual total compensation of Mr. Ferguson, as reported in the Summary Compensation Table presented on page 58 in this Proxy Statement.
|
•
|
We selected December 31, 2019, as the date upon which the Company identified the “median employee”, which is within the last three months of the Company’s fiscal year end and enables us to make an identification in a reasonably efficient and economical manner.
|
•
|
We determined that as of December 31, 2019, AZZ’s employee population consisted of approximately 5,615 individuals (full-time, part-time and our variable workforce) working at the parent company headquarters and consolidated subsidiaries. Of these individuals, 4,794 were located in the United States and 821 were located in the following countries:
|
Country
|
Employees(#)
|
Brazil
|
48
|
Canada
|
503
|
China
|
33
|
Netherlands
|
24
|
Poland
|
213
|
•
|
AZZ’s employee population, after taking into consideration the adjustments permitted by SEC rules as described above, consisted of approximately 5,345 individuals as of December 31, 2019.
|
|
•
|
|
reviewed and discussed the audited consolidated financial statements with management;
|
|
|
|
|
|
•
|
|
discussed with GT the independence of GT and the matters, if any, required to be discussed by PCAOB Auditing Standard No. 1301 "Communications with Audit Committees"; and
|
|
|
|
|
|
•
|
|
received the letter and the written disclosures from GT required by Rule 3520 of the PCAOB.
|
|
|
February 29, 2020
|
|
|
February 28, 2019
|
|
||
Audit Fees (1)
|
|
$
|
863,508
|
|
|
$
|
898,256
|
|
Audit-Related Fees
|
|
$
|
—
|
|
|
$
|
—
|
|
Tax Fees (2)
|
|
$
|
—
|
|
|
$
|
125,034
|
|
All Other Fees
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
Total Fees
|
|
$
|
863,508
|
|
|
$
|
1,023,290
|
|
(1)
|
Includes fees for services related to the annual audit of the consolidated financial statements, and reviews of our quarterly reports on Form 10-Q.
|
(2)
|
Includes fees for services related to tax compliance, tax advice and tax planning performed by BDO in fiscal year 2019.
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION OF GT TO SERVE AS THE COMPANY'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING FEBRUARY 28, 2021.
|
1.
|
Head toward South 22nd Ave. on West 32nd St. (183 ft)
|
2.
|
Make a U-Turn onto West 32nd St. (0.1 miles)
|
3.
|
Turn slightly right onto South Service Rd. (1.3 miles)
|
4.
|
Take left ramp onto International Pkwy South (TX-97-SPUR) toward TX-183/TX-360 (0.9 miles)
|
5.
|
Take ramp onto TX-183 West (Airport Fwy) toward Ft. Worth (10.7 miles)
|
6.
|
Continue on I-820 (0.7 miles)
|
7.
|
Keep left onto TX-121 South toward Downtown Ft. Worth (7.1 miles)
|
8.
|
Take the exit toward Downtown/Belknap St. onto East Belknap St. (1.7 miles)
|
9.
|
Turn slightly left onto Energy Way (0.1 miles)
|
10.
|
Turn slightly right onto Summit Ave. (301 ft)
|
11.
|
Turn right onto West 7th St. (1.2 miles)
|
12.
|
Arrive at West 7th St. (One Museum Place) Your destination is on the right.
|
1.
|
Head toward West 6th St. on Taylor St. (124 ft)
|
2.
|
Turn right onto West 6th St. (0.2 miles)
|
3.
|
Turn slightly right onto West 7th St. (1.6 miles)
|
4.
|
Arrive at West 7th St. (One Museum Place) Your destination is on the right.
|
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