Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant To Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

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

Check the appropriate box:

 

☐	Preliminary Proxy Statement

 

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

 

☒	Definitive Proxy Statement

 

☐	Definitive Additional Materials

 

☐	Soliciting Material Pursuant to § 240.14a-12

ROPER TECHNOLOGIES, INC.

(Formerly Roper Industries, Inc.)

(Name of Registrant as Specified in its Charter)

 

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

Payment of Filing Fee (Check the appropriate box):

 

☒		No fee required
☐		Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
		(1)		Title of each class of securities to which transaction applies:
		(2)		Aggregate number of securities to which transaction applies:
		(3)		Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
		(4)		Proposed maximum aggregate value of transaction:
		(5)		Total fee paid:
☐		Fee paid previously with preliminary materials
☐		Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
		(1)		Amount Previously Paid:
		(2)		Form, Schedule or Registration Statement No.:
		(3)		Filing Party:
		(4)		Date Filed:

---

Table of Contents

6901 Professional Parkway East					Telephone (941) 556-2601
Suite 200					Fax (941) 556-2670
Sarasota, Florida 34240
		Roper Technologies, Inc.

April 28, 2017

Dear Fellow Shareholders,

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

Our Strategy for Outstanding Value Creation for Shareholders

Over the past decade, our shareholders have enjoyed a compound annual return of 14.5%, tripling the total return of the S&P 500. Over the past five years, Roper has delivered an even better 16.8% compound annual return to shareholders.

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

 

•

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

 

•

Disciplined Capital Deployment: We have a unique and disciplined capital deployment model that has guided the successful investment of billions of dollars in new businesses, including the deployment of $3.7 billion in 2016. Unlike many companies that use cash to pay large dividends and buy back shares, Roper uses most of its available cash to buy new businesses to fuel continued growth and value creation for shareholders.

The Board’s Role in Roper’s Success

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

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

Our Governance Practices and Other Best Practices

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

 

•

Declassified Board. Our directors are elected annually.

 

•

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

 

•

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

---

Table of Contents

•

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

 

•

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

 

•

Pay for Performance. Similar to prior years, in 2016, 96% of our CEO’s compensation was subject to performance risk and tied to long-term results and our stock price, and for our other executive officers, on average, approximately 86% of their compensation was performance-based.

 

•

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

 

•

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

Frequency of Say-on-Pay Vote

This year’s agenda includes a proposal to approve the frequency of our shareholder Say-on-Pay vote. We greatly value shareholders’ view on executive compensation and urge you to vote for a “YEARLY” shareholder Say-on-Pay vote.

Open Communications With Our Shareholders

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

Sincerely,

The Board of Directors

 

Amy Woods Brinkley		John F. Fort III		Brian D. Jellison
Robert D. Johnson		Robert E. Knowling, Jr.		Wilbur J. Prezzano
Laura G. Thatcher		Richard F. Wallman		Christopher Wright

---

Table of Contents

NOTICE OF 2017 ANNUAL MEETING OF SHAREHOLDERS

 

Date and Time

Thursday, June 8, 2017, at 8:30 a.m. local time

 

Place

Renaissance Cincinnati Downtown Hotel

36 East Fourth Street,

Cincinnati, Ohio 45202

 

Agenda

•

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

 

•

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

 

•

Proposal 3: To select, on a non-binding advisory basis, the frequency of the shareholder vote on the compensation of our named executive officers.

 

•

Proposal 4: To ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the year ending December 31, 2017.

 

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

 

Record Date

Only shareholders of record at the close of business on April 13, 2017 will be entitled to vote at the Annual Meeting or any postponed or adjourned meeting, and these shareholders will be entitled to vote whether or not they have transferred any of their shares of our common stock since that date.

 

Voting Recommendations

The Company recommends that you vote:

 

•

“FOR” all of the director nominees

 

•

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

 

•

“YEARLY” as the frequency of the shareholder vote on the compensation of our named executive officers

 

•

“FOR” the appointment of PricewaterhouseCoopers LLP

 

Proxy Voting

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

 

April 28, 2017						By Order of the Board of Directors
						John K. Stipancich Vice President, General Counsel and Secretary

 

---

Table of Contents

TABLE OF CONTENTS

 

---

Table of Contents

PROXY STATEMENT SUMMARY

 

 

---

Table of Contents

PROXY STATEMENT SUMMARY (CONTINUED)

 

 

ii						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

PROXY STATEMENT SUMMARY (CONTINUED)

 

 

---

Table of Contents

PROPOSAL 1: ELECTION OF DIRECTORS

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

Our Board unanimously recommended each incumbent director for election at the 2017 Annual Meeting. If re-elected, the director nominees will serve until the 2018 Annual Meeting and until their successors have been duly elected and qualified. Certain information about our director nominees is set forth under “Board of Directors.” This information includes the business experience, qualifications, attributes and skills that each individual brings to our Board.

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

 

 

Name		Age		Director Since		Independent		Occupation
Amy Woods Brinkley		61		2015		Yes		Founder, AWB Consulting, LLC
John F. Fort III		75		1995		Yes		Former CEO of Tyco International Ltd.
Brian D. Jellison		71		2001		No		President and CEO, Roper Technologies, Inc.
Robert D. Johnson		69		2005		Yes		Former CEO, Dubai Aerospace Enterprise Ltd.
Robert E. Knowling,  Jr.		61		2008		Yes		Chairman, Eagles Landing Partners
Wilbur J. Prezzano		76		1997		Yes		Former Vice-Chairman, Eastman Kodak Company
Laura G. Thatcher		61		2015		Yes		Former Head of Executive Compensation Practice, Alston & Bird LLP
Richard F. Wallman		66		2007		Yes		Former CFO and SVP, Honeywell International Inc.
Christopher Wright		59		1991		Yes		Chairman, EMAlternatives LLC

 

---

Table of Contents

BOARD OF DIRECTORS

Nominee Information

for terms expiring at the 2018 Annual Meeting

 

		Amy Woods Brinkley Director since 2015 Independent Age: 61   Committees: Audit

Professional Experience

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

Other Boards and Appointments

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

Director Qualifications

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

 

		John F. Fort III Director since 1995 Independent Age: 75   Committees: Audit Nominating and Governance

Professional Experience

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

Director Qualifications

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

 

2						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

BOARD OF DIRECTORS (CONTINUED)

 

		Brian D. Jellison Chairman since 2003 Director, President and Chief Executive Officer since 2001 Age: 71   Committees: Executive (Chair)

Professional Experience

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

Director Qualifications

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

 

		Robert D. Johnson Director since 2005 Independent Age: 69   Committees: Compensation

Professional Experience

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

Other Boards and Appointments

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

Director Qualifications

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

 

---

Table of Contents

BOARD OF DIRECTORS (CONTINUED)

 

		Robert E. Knowling, Jr. Director since 2008 Independent Age: 61   Committees: Compensation (Chair) Executive

Professional Experience

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

Other Boards and Appointments

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

Director Qualifications

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

 

		Wilbur J. Prezzano Director since 1997 Lead Independent Director Age: 76   Committees: Compensation Nominating and Governance

Professional Experience

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

Other Boards and Appointments

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

 

4						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

BOARD OF DIRECTORS (CONTINUED)

 

Director Qualifications

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

 

		Laura G. Thatcher Director since 2015 Independent Age: 61   Committees: Audit Nominating and Governance

Professional Experience

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

Other Boards and Appointments

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

Director Qualifications

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

 

		Richard F. Wallman Director since 2007 Independent Age: 66   Committees: Nominating and Governance (Chair) Executive

Professional Experience

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

 

---

Table of Contents

BOARD OF DIRECTORS (CONTINUED)

 

Other Boards and Appointments

Mr. Wallman currently serves as a director of Convergys Corporation, ESH Hospitality, Inc., Extended Stay America, Inc., Wright Medical Group (formerly Tornier N.V.), and Charles River Laboratories International, Inc. On January 31, 2017, Mr. Wallman notified the Board of Directors of ESH Hospitality, Inc., of his intention to resign from the board, effective upon the election of his successor at its next annual meeting of shareholders. Mr. Wallman formerly served as a director of Ariba, Inc., from 2002 to 2012 and Dana Holding Corp. from 2010 to 2013.

Director Qualifications

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

 

 

		Christopher Wright Director since 1991 Independent Age: 59   Committees: Audit (Chair) Executive

Professional Experience

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

Other Boards and Appointments

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

Director Qualifications

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

 

6						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

CORPORATE GOVERNANCE

 

 

---

Table of Contents

CORPORATE GOVERNANCE (CONTINUED)

 

 

8						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

BOARD COMMITTEES AND MEETINGS

 

 

---

Table of Contents

BOARD COMMITTEES AND MEETINGS (CONTINUED)

 

Board Committees

 

 

Set forth below are the current committee memberships.

 

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

 

 

10						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

BOARD COMMITTEES AND MEETINGS (CONTINUED)

 

 

---

Table of Contents

BOARD COMMITTEES AND MEETINGS (CONTINUED)

 

 

12						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

DIRECTOR COMPENSATION

Compensation for our non-employee directors is governed by our Director Compensation Plan, which is a sub-plan of our 2016 Incentive Plan. The Director Compensation Plan provides for an annual grant of 4,000 restricted stock units (“RSUs”), which are issued the first business day after our Annual Meeting of Shareholders. Unless the non-employee director has made a timely deferral election as provided in the Director Compensation Plan, each RSU represents the right to receive one share of our common stock on the vesting date and the right to receive a dividend equivalent in the same amount and at the same time as any dividend or other cash distribution is paid on a share of our common stock. RSUs do not have voting rights. One half of the RSUs granted vest six months after the grant date and the remaining RSUs vest the day before the next Annual Meeting. During 2016, each non-employee director received a grant of 4,000 RSUs on May 31, 2016.

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

 

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

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

 

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

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

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

 

---

Table of Contents

DIRECTOR COMPENSATION (CONTINUED)

 

The table below shows the compensation of our non-employee directors for 2016.

2016 Director Compensation

 

Name		Fees Earned or Paid in Cash ($)					Stock Awards ($)(1)(2)(3)					All Other Compensation ($)					Total ($)
Amy Woods Brinkley				59,000					684,320					-					743,320
John F. Fort III				61,000					684,320					-					745,320
Robert D. Johnson				57,000					684,320					-					741,320
Robert E. Knowling, Jr				62,000					684,320					-					746,320
Wilbur J. Prezzano				59,000					684,320					-					743,320
Laura G. Thatcher				58,000					684,320					-					742,320
Richard F. Wallman				60,500					684,320					-					744,820
Christopher Wright				66,000					684,320					-					750,320

(1)	The dollar values shown represent the grant date fair values for RSUs granted to these directors during 2016, calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“ASC Topic 718”).

 

(2)	As of December 31, 2016, each non-employee director had 2,000 unvested RSUs outstanding with the exception of Messrs. Knowling and Prezzano who each had 4,000 unvested RSUs outstanding.

 

(3)	There were no stock option awards outstanding at December 31, 2016 for our non-employee directors.

Our shareholder ownership and retention guidelines for non-employee directors require them to own 4,000 shares of our common stock. Until the share ownership guidelines are met, non-employee directors are required to retain 100% of any shares they receive (on a net after tax basis) under our Director Compensation Plan. All of our current directors are in compliance with the ownership and retention guidelines. The ownership requirement equated to approximately 17 times the annual cash retainer for directors, based on the closing market price of our common stock on December 30, 2016 of $183.08 per share.

 

14						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

EXECUTIVE OFFICERS

The following table sets forth certain information concerning our named executive officers as of December 31, 2016. The named executive officers are elected by the Board of Directors and serve at its discretion. Mr. Liner, our former Vice President, General Counsel and Secretary, retired from his former position with the Company on June 23, 2016.

 

Brian D. Jellison		Professional Experience
President and CEO since 2001 Director since 2001		Mr. Jellison’s professional experience is discussed under “Board of Directors” above.
Chairman since 2003 Age: 71
John Humphrey		Professional Experience
Executive Vice President since 2011 Chief Financial Officer since 2006 Vice President from 2006 to 2011 Age: 51		Prior to joining Roper, Mr. Humphrey served as Vice President and Chief Financial Officer of Honeywell Aerospace, the aviation segment of Honeywell International Inc., after serving in several financial positions with Honeywell International and its predecessor AlliedSignal. Mr. Humphrey’s earlier career included 6 years with Detroit Diesel Corporation, a manufacturer of heavy-duty engines, in a variety of engineering and manufacturing management positions.
Paul J. Soni		Professional Experience
Vice President since 2006 Controller since 2002 Age: 58		Prior to joining Roper, Mr. Soni served four years as Corporate Controller of Oxford Industries, Inc., a clothing company, and four years as Controller of the International Division of Savannah Foods & Industries, Inc., a producer, marketer, and distributor of food products, with responsibilities in the U.S. and Latin America. Mr. Soni’s earlier career included eight years with Price Waterhouse LLP, a professional services firm, in the U.S. and Europe, performing audit and transaction support services.
John K. Stipancich		Professional Experience
Vice President since 2016 General Counsel since 2016 Secretary since 2016 Age: 48		Prior to joining Roper, Mr. Stipancich served as Executive Vice President and Chief Financial Officer of Newell Brands Inc., a consumer products company, where he has also served as General Counsel and Corporate Secretary, and Executive Leader of its operations in the Europe, Middle East and Africa region. Prior to his twelve years at Newell Brands, Mr. Stipancich served as Executive Vice President, General Counsel and Corporate Secretary for Evenflo Company and Assistant General Counsel for Borden, both KKR portfolio companies at the time. He started his legal career in the Cleveland office of the international law firm Squire Patton Boggs.
David B. Liner		Professional Experience
Former Vice President Former General Counsel Former Secretary Age: 61		Prior to joining Roper, Mr. Liner served four years in the corporate finance group of the law firm of Dykema Gossett, PLLC, heading up both the firm’s automotive industry and China teams, and four years as Vice President and General Counsel of MascoTech, Inc., a diversified industrial products company primarily serving the global transportation industry. Mr. Liner’s earlier career included 17 years as a member of the legal department of Masco Corporation, a manufacturer of products for the home improvement and new home construction markets.

 

---

Table of Contents

BENEFICIAL OWNERSHIP

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

The following table shows the beneficial ownership of Roper common stock as of March 31, 2017 by (i) each of our director nominees, (ii) each named executive officer in the “2016 Summary Compensation Table,” (iii) all of our current directors and executive officers as a group, and (iv) all persons who we know are the beneficial owners of five percent or more of Roper common stock. Except as noted below, the address of each person in the table is c/o Roper Technologies, Inc., 6901 Professional Parkway East, Suite 200, Sarasota, Florida 34240.

 

Name of Beneficial Owner		Beneficial Ownership     of Common  Stock(1)(2)				Percent of Class
T. Rowe Price Associates, Inc. 100 E. Pratt Street, Baltimore, MD 21202			14,226,654	(3)			13.7	%
The Vanguard Group, Inc. 100 Vanguard Blvd., Malvern, PA 19355			10,152,290	(4)			9.8	%
BlackRock, Inc. 55 East 52nd Street, New York, NY 10055			8,499,941	(5)			8.2	%
Amy Woods Brinkley			6,000				*	*
John F. Fort III			18,953	(6)			*	*
Brian D. Jellison			1,857,098				1.8	%
Robert D. Johnson			6,900				*	*
Robert E. Knowling, Jr.			10,038				*	*
Wilbur J. Prezzano			16,000				*	*
Laura G. Thatcher			6,000				*	*
Richard F. Wallman			41,965				*	*
Christopher Wright			61,904				*	*
John Humphrey			255,063				*	*
Paul J. Soni			126,872	(7)			*	*
John K. Stipancich			12,000				*	*
David B. Liner			152,184				*	*
All current directors and executive officers as a group (13 individuals)			2,570,977				2.5	%

**	Less than 1%.

 

(1)

Includes shares that may be acquired on or before May 31, 2017 upon exercise of stock options issued under Company plans as follows: Mr. Jellison (440,000), Mr. Humphrey (165,000), Mr. Liner (90,000), Mr. Soni (66,000) and all 13 current directors and executive officers as a group (761,000). Holders do not have voting or investment power over unexercised option shares.

 

(2)

Includes the following shares of unvested restricted stock held by named executives officers over which they have sole voting power but no investment power: Mr. Jellison (375,000), Mr. Humphrey (45,000), Mr. Soni (15,000), Mr. Stipancich (12,000), and Mr. Liner (9,000). The total for all current executive officers and directors as a group is 456,000.

 

(3)	Based on information reported on Schedule 13G/A filed with the SEC on February 7, 2017, as of December 31, 2016, T. Rowe Price Associates, Inc. beneficially owned 14,226,654 shares of Roper common stock with sole voting power over 4,297,132 shares and sole dispositive power over all of the shares.

 

(4)

Based on information reported on Schedule 13G/A filed with the SEC on February 10, 2017, as of January 31, 2017, The Vanguard Group (“Vanguard”) beneficially owned 10,152,290 shares of Roper common stock with sole voting power over 160,153 shares, shared voting power over 17,729 shares, sole dispositive power over 9,976,345 shares and shared dispositive power over 175,945 shares. Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of Vanguard, is the beneficial owner of 130,116 shares. Vanguard Investments Australia, Ltd., a wholly-owned subsidiary of Vanguard, is the beneficial owner of 75,866 shares.

 

16						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

BENEFICIAL OWNERSHIP (CONTINUED)

 

(5)

Based on information reported on Schedule 13G/A filed with the SEC on January 25, 2017, as of December 31, 2016, BlackRock, Inc. (and certain of its subsidiaries) beneficially owned 8,499,941 shares of Roper common stock with sole voting power over 7,348,139 shares, shared voting power over 6,144 shares, sole dispositive power over 8,493,797 shares and shared dispositive power over 6,144 shares.

 

(6)	Includes 250 shares held by a trust of which Mr. Fort is a trustee.

 

(7)

Mr. Soni and his spouse each participate in a 401(k) plan with a unitized stock fund that consists of cash and common stock in amounts that vary from time to time. Based on a conversion factor representing the units in the fund as of March 31, 2017, the shares in the table include 2,808 shares in Mr. Soni’s account and 950 shares in his spouse’s account.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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

We believe that during 2016 all of our directors and executive officers complied with all Section 16(a) filing requirements, with the exception of one late Form 4 filed April 28, 2016 due to an administrative oversight in reporting a sale of 10 shares for Ms. Woods Brinkley. In making this statement, we have relied upon examination of the copies of Forms 3, 4 and 5, and amendments to these forms, provided to us and the written representations of our directors and executive officers.

 

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS

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

CREATING SHAREHOLDER VALUE

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

Superior Returns for Roper Shareholders

Roper is proud of its long track record of superior returns for its shareholders. Roper has outperformed the S&P 500 over nearly every measurement period including 2, 3, 5 and 10 years. Due to timing and Roper’s significant outperformance in calendar year 2015 (Roper total shareholder return (TSR) of 22.1% vs. 1.4% for the S&P 500), 2016 calendar year performance was temporarily below Roper’s historical standard. However, in the first quarter of 2017, Roper once again significantly outperformed the S&P 500. Measurement periods using December and March end dates are included below for reference.

Compound Annual Shareholder Return

 

Period		End Dec 31, 2016				End Mar 31, 2017
		Roper		S&P 500		Roper		S&P 500
Q1 2017		NA		NA		13.0%		6.1%
1-Year		-2.9%		12.0%		13.8%		17.2%
2-Years		8.9%		6.5%		10.3%		9.2%
3-Years		10.4%		8.9%		16.4%		10.4%
5-Years		16.8%		14.7%		16.5%		13.3%
10-Years		14.5%		6.9%		14.9%		7.5%

As outlined in the graph below, $100 invested in Roper at the end of 2001 would have yielded an investor $920 as of March 31, 2017, compared to only $280 for the same investment in the S&P 500.

 

 

 

18						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Record 2016 Performance Highlights Transformative Year for Roper

2016 was a transformative year for Roper in which we achieved record financial results despite continued weakness in oil & gas end markets. We grew revenue, expanded margins, and continued to compound cash flow. We deployed a record $3.7 billion in software acquisitions consistent with our strategy of disciplined capital deployment to enhance our ability to generate and compound future free cash flow.

 

 

(1)	Please see Appendix A—Reconciliations for reconciliation from GAAP to adjusted results.

Simple Strategy Drives Value Creation

Roper has a simple and successful business model that we believe is unique among application software and multi-industry diversified companies. We operate high-margin, high cash-generating, asset-light businesses across a wide range of diverse end-markets. Our high-performing businesses generate excess free cash flow that our executive team deploys to acquire more high-performing businesses. This creates a “compounding effect” on cash flow that drives long-term value creation. Our free cash flow has increased from $227 million in 2006 to $961 million in 2016, a compound annual growth rate of 16%, driven by this combination of outstanding business performance and value-creating capital deployment.

Roper Annual Free Cash Flow (millions)

 

 

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

⁽¹⁾ Adjusted for taxes on Abel divestiture, see Appendix A for reconciliation from GAAP to adjusted results.

 

Roper Compared to S&P 500 Cumulative Total Shareholder Return

[$1oo Invested at end of 2001]

 

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Market Capitalization Growth

Roper’s market capitalization increased by more than $16 billion since January 2010, and over $5 billion since January 2015.

 

 

Key Metric: Cash Return on Investment

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

 

•

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

 

•

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

 

•

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

 

 

 

Roper Market Capitalization

 

20						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Acquisition-Focused Capital Deployment

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

OVERVIEW OF OUR COMPENSATION PROGRAM

 

 

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Checklist of Compensation Practices

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

 

 

Objectives of our Compensation Program

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

 

 

22						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

ELEMENTS OF COMPENSATION

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

 

 

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Other Pay Elements

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

 

 

24						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Mix of Total Compensation

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

 

•

For 2016, 96% of CEO, and 86% of other named executive officers, total direct compensation at target was at risk and tied to stock price and multi-year performance objectives

2016 Total Direct Compensation Mix

 

COMPENSATION PROCESS

Compensation Committee Oversight

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

 

•

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

 

•

Our financial results against prior periods.

 

•

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

 

•

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

 

•

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

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

 

96% Performance Based Salary 4% Annual Incentive 10% Chief Executive Officer Performance-Based Restricted Stock 86%

86% Performance Based Salary 14% Annual Incentive 7% Stock Options 17% Other Executive Officers Performance-Based Restricted Stock 63%

 

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Consulting Assistance

For 2016, the Compensation Committee retained FW Cook (the “Consultant”) to provide the committee with independent, objective analysis and professional opinions on executive compensation.

 

•

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

 

•

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

 

•

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

 

•

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

Role of Our Named Executive Officers

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

 

•

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

 

•

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

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

Market Benchmarking

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

 

 

26						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

2016 Peer Group

 

•

Changes were made to our self-selected peer group for 2016 to reflect our continued strong growth and sustained value creation, our continuing expansion into medical, software, and technology-driven businesses, and market valuation relative to revenues and gross investment. In light of the transformation of our business portfolio, Standard & Poor’s changed our GICS assignment in 2014 and we anticipate we will request another change to a more appropriate GICS to reflect our significant growth in software. The peer companies are listed below along with various size indicators.

 

Company		Ticker		Enterprise Value(1) ($ millions)				Market Capitalization(1) ($ millions)				Revenue(2) ($ millions)				Net Income (2) ($ millions)				Global Industry Classification Standard (GICS) Sub-Industry
Salesforce.com, inc.		CRM		$	47,806			$	46,491			$	8,392			$	180			Application Software
Adobe Systems Incorporated		ADBE		$	48,330			$	51,190			$	6,153			$	1,313			Application Software
Intuit Inc.		INTU		$	29,912			$	29,417			$	4,852			$	969			Application Software
Citrix Systems, Inc.		CTXS		$	13,605			$	13,929			$	3,418			$	536			Application Software
Autodesk, Inc.		ADSK		$	15,992			$	16,471			$	2,031			($	582	)		Application Software
VMware, Inc.		VMW		$	25,770			$	32,524			$	7,093			$	1,186			Systems Software
CA, Inc.		CA		$	12,779			$	13,275			$	4,033			$	792			Systems Software
Motorola Solutions, Inc.		MSI		$	17,084			$	13,756			$	6,038			$	560			Communications Equipment
TransDigm Group Incorporated		TDG		$	21,973			$	13,281			$	3,284			$	576			Aerospace and Defense
Hologic, Inc.		HOLX		$	13,993			$	11,162			$	2,872			$	332			Healthcare Equipment
C. R. Bard, Inc.		BCR		$	17,163			$	16,518			$	3,714			$	531			Healthcare Equipment
Zimmer Biomet Holdings, Inc.		ZBH		$	31,765			$	20,671			$	7,684			$	306			Healthcare Equipment
Waters Corporation		WAT		$	9,898			$	10,829			$	2,167			$	522			Life Sciences Tools and Services
Median				$	19,568			$	16,495			$	4,443			$	548
Roper		ROP		$	20,777			$	18,571			$	3,790			$	659			Industrial Conglomerates

Source: S&P Capital IQ

(1)	As of 12/31/16

(2)	Last four quarters available as of 12/31/16

Relative Performance Comparisons Caveat

Long-Term Measurement Period Needed

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

 

•

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

 

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

CEO Compensation

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

 

 

28						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

Equity Grants

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

Equity Award Determination

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

The Compensation Committee continues to review the application of the constant share approach to ensure that it does not unduly reward named executive officers for past performance. In January 2016, the committee retained the approach for the 2016 equity awards in light of various considerations including the $3.5 billion increase in Roper’s market capitalization in 2015, the biggest single-year increase in our history. The committee continues to closely monitor the grant size methodology to ensure it is consistent with our overall executive compensation philosophy and program and remains aligned with the best interest of shareholders.

ANALYSIS OF 2016 COMPENSATION

This section discusses compensation actions taken in 2016 for our named executive officers, as reported in the “Executive Compensation” section below.

 

 

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

2016 Annual Cash Incentive Schedule

 

 

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

 

 

CEO Long-Term Cash Incentive Schedule

 

 

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

 

30						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

 

ADDITIONAL INFORMATION ABOUT OUR PROGRAM

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

Share Ownership and Retention Guidelines

We believe named executive officers should have a significant equity interest in the Company. To promote equity ownership and further align the interests of named executive officers with shareholders, we adopted share ownership and retention guidelines for our named executive officers. The share ownership guidelines vary based upon the named executive officer’s position and are expressed as a number of shares which, as shown below, result in ownership guidelines far higher than market norms. All our named executive officers hold shares substantially above these guidelines, other than Mr. Stipancich who joined the Company in 2016.

 

Position		Guideline Number of Shares				Market Value at Year-End Close*				Salary				Guideline Multiple of Salary
CEO			100,000			$	18,308,000			$	1,225,000				14.9x
Average Other Named Executive Officers**			18,333			$	3,356,000			$	564,000				6.0x

*	Based on closing market price of our common stock on December 30, 2016 of $183.08 per share.

**	Excludes Mr. Stipancich who joined the Company in 2016.

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

 

---

Table of Contents

COMPENSATION DISCUSSION AND ANALYSIS (CONTINUED)

 

 

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

During 2016, Messrs. Knowling, Johnson and Prezzano served on the Compensation Committee. No member of the Compensation Committee was, during 2016, an officer or employee of the Company, was formerly an officer of the Company, or had any relationship requiring disclosure by the Company as a related party transaction under Item 404 of Regulation S-K under the Securities Act of 1933 (the “Securities Act”). During 2016, none of the Company’s executive officers served on the board of directors or the compensation committee of any other entity, any officers of which served either on the Board of Directors or the Compensation Committee.

COMPENSATION COMMITTEE REPORT

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

Submitted by:

Robert E. Knowling, Jr., Chairman

Robert D. Johnson

Wilbur J. Prezzano

 

32						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

EXECUTIVE COMPENSATION

The following table sets forth certain information with respect to compensation paid to our principal executive officer, our principal financial officer, and our other executive officers for the fiscal year ended December 31, 2016. In this section, we refer to the individuals in the 2016 Summary Compensation Table as our “named executive officers.”

2016 Summary Compensation Table

 

Name and Principal Position		Year				Salary(1) ($)				Bonus(2) ($)				Stock Awards(3) ($)				Option Awards(3) ($)				Non-Equity Incentive Plan Compensation(1)(4) ($)				Change in Pension Value & Nonqualified Deferred Compensation Earnings(5) ($)				All Other Compensation(6) ($)				Total Compensation ($)
Brian D. Jellison			2016				1,225,000				-				24,960,000								-				-				131,166				26,316,166
Chairman of the Board, President and Chief Executive Officer			2015				1,225,000				-				21,862,500				-				-				-				127,080				23,214,580
			2014				1,225,000				-				21,129,000				-				-				-				335,220				22,689,220
John Humphrey			2016				767,000				-				4,992,000				990,573				506,220				-				139,844				7,395,637
Executive Vice President and Chief Financial Officer			2015				767,000				-				4,372,500				888,729				598,260				-				179,802				6,806,291
			2014				767,000				-				4,225,800				1,086,312				1,150,500				-				183,258				7,412,870
Paul J. Soni			2016				475,000				-				998,400				396,229				209,000				-				79,792				2,158,421
Vice President and Corporate Controller			2015				410,000				-				874,500				355,492				170,560				-				86,470				1,897,022
			2014				410,000				-				845,160				434,525				328,000				-				89,031				2,106,716
John K. Stipancich Vice President, General Counsel and Secretary			2016				331,136				375,000				2,039,160				606,312				143,902				-				118,263				3,613,773
David B. Liner			2016				450,000				-				998,400				396,229				198,000				-				76,855				2,119,484
Former Vice President, General Counsel and Secretary			2015				450,000				-				874,500				355,492				234,000				-				93,354				2,007,346
			2014				450,000				-				845,160				434,525				450,000				-				99,426				2,279,111

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

 

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

 

(3)

The dollar values shown represent the grant date fair values for restricted stock and option awards calculated in accordance with ASC Topic 718. The assumptions used in determining the grant date fair values of these option awards are set forth in Note 11 to our consolidated financial statements for 2016, which are included in our Annual Report on Form 10-K for the fiscal year ended 2016 filed with the SEC. The named executive officers have no assurance that these amounts will be realized. The change in value of stock awards is due solely to the increase in share price as the same number of shares were granted each year. The restricted stock awards are subject to both time-based and performance-based vesting criteria. The performance-based criteria for awards granted in 2016 are described in the CD&A under “Analysis of 2016 Compensation—Long-Term Stock Incentives,” and the vesting schedule for awards granted in 2016 is set forth in the notes to the 2016 Outstanding Equity Awards at Fiscal Year End table below.

 

(4)	The amounts in this column reflect payments made pursuant to our cash incentive bonus program, which is described above in the CD&A under “Analysis of 2016 Compensation—Annual Cash Incentive” and “Analysis of 2016 Compensation—CEO Long-Term Cash Incentive.”

 

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

 

---

Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

(6)	Amounts reported in the “All Other Compensation” column for 2016 include the following items. In respect of any of these items that constitute perquisites, the value shown is the Company’s incremental cost.

 

 

(1)	Reflects contributions to the Non-Qualified Retirement Plan and Employees’ Retirement Savings 003 Plan.

 

(2)	Includes $55,346 for moving expenses and temporary housing and $25,000 stipend for other miscellaneous relocation-related expenses paid to Mr. Stipancich.

2016 Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards for the fiscal year ended December 31, 2016 to the named executive officers.

 

						Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1)												Estimated Future Payouts Under Equity Incentive Plan Awards				All Other Option Awards: # of Securities Underlying Options				Exercise / Base Price of Option Awards ($/Sh)				Grant Date Fair Value(6) ($)
Name		Grant Date				Threshold ($)				Target ($)				Maximum ($)				Target (#)
Brian D. Jellison			1/21/2016																150,000	(2)											24,960,000
			3/10/2016				964,688				2,756,250				2,756,250
John Humphrey			1/21/2016																30,000	(2)											4,992,000
			1/21/2016																				30,000	(4)			166.40				990,573
			3/10/2016				402,675				1,150,500				1,150,500
Paul J. Soni			1/21/2016																6,000	(2)											998,400
			1/21/2016																				12,000	(4)			166.40				396,229
			3/10/2016				166,322				475,000				475,000
John K. Stipancich			6/22/2016																12,000	(3)											2,039,160
			6/22/2016																				18,000	(5)			166.93				606,312
			6/22/2016				114,517				327,050				327,050
David B. Liner			1/21/2016																6,000	(2)											998,400
			1/21/2016																				12,000	(4)			166.40				396,229
			3/10/2016				157,568				450,000				450,000

(1)	For an explanation of the material terms, refer to the CD&A section above captioned “Analysis of 2016 Compensation—Annual Cash Incentive.” Amounts paid under this program for 2016 are set forth in the 2016 Summary Compensation Table.

 

(2)

The performance restricted shares vest in two equal installments in November 2017 and 2018, subject to the performance criteria described in the CD&A under “Analysis of 2016 Compensation—Long-Term Stock Incentives” and “Analysis of 2016 Compensation—CEO Long-Term Cash Incentive.” Dividends on restricted shares will be paid only if the shares are earned by performance.

 

34						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

(3)

The performance restricted shares will vest in three equal installments in November 2017, 2018 and 2019, subject to the performance criteria described in the CD&A under “Analysis of 2016 Compensation—Long-Term Stock Incentives” and “Analysis of 2016 Compensation—CEO Long-Term Cash Incentive.” Dividends on restricted shares will be paid only if the shares are earned by performance.

 

(4)	The stock options vest in two equal installments in January 2018 and 2019, and expire on the tenth anniversary of the grant. The exercise price of the stock options is 100% of the fair market value of our common stock on the date of grant.

 

(5)	The stock options vest in two equal installments in June 2018 and 2019, and expire on the tenth anniversary of the grant. The exercise price of the stock options is 100% of the fair market value of our common stock on the date of grant.

 

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

2016 Outstanding Equity Awards at Fiscal Year End

The following table sets forth certain information with respect to outstanding equity awards at December 31, 2016 for the named executive officers.

 

Name		Option Awards																Stock Awards
		# of Securities Underlying Unexercised Options Exercisable				# of Securities Underlying Unexercised Options Unexercisable				Option Exercise Price ($)				Option Expiration Date				# of Shares or Units of Stock That Have Not Vested				Market Value of Shares or Units of Stock That Have Not Vested ($)				Equity Incentive Plan Awards: # of Unearned Shares, Units or Other Rights That Have Not Vested				Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)(1)
Brian D. Jellison			440,000								55.2200				02/18/18
																											225,000	(6)(10)			41,193,000
John Humphrey			1,916								52.1900				02/16/17
			60,000								73.5600				01/20/21
			30,000								93.6200				01/18/22
			30,000								115.2200				01/17/23
			20,000				10,000	(2)			140.8600				01/16/24
							30,000	(3)			145.7500				01/16/25
							30,000	(4)			166.4000				01/21/26
																											45,000	(7)(10)			8,238,600
Paul J. Soni			12,000								51.1100				01/22/20
			12,000								73.5600				01/20/21
			12,000								93.6200				01/18/22
			12,000								115.2200				01/17/23
			8,000				4,000	(2)			140.8600				01/16/24
							12,000	(3)			145.7500				01/16/25
							12,000	(4)			166.4000				01/21/26
																											9,000	(8)(10)			1,647,720
John K. Stipancich							18,000	(5)			169.9200				06/22/26
																											12,000	(9)(10)			2,196,960
David B. Liner			12,000								52.1900				02/16/17
			12,000								55.2200				02/18/18
			12,000								41.9500				02/12/19
			12,000								51.1100				01/22/20
			12,000								73.5600				01/20/21
			12,000								93.6200				01/18/22
			12,000								115.2200				01/17/23
			8,000				4,000	(2)			140.8600				01/16/24
							12,000	(3)			145.7500				01/16/25
							12,000	(4)			166.4000				01/21/26
																											9,000	(8)(10)			1,647,720

(1)	Calculated by multiplying $183.08, the closing market price of our common stock on December 30, 2016, by the number of restricted shares that have not vested.

 

---

Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

(2)	These stock options were granted on January 16, 2014 with unexercisable shares vesting in January 2017.

 

(3)	These stock options were granted on January 16, 2015 with unexercisable shares vesting in two equal installments in January 2017 and 2018.

 

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

 

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

 

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

 

(I)

75,000 shares remaining from 150,000 shares granted January 16, 2015 and vesting in November 2017; and

 

(II)

150,000 shares remaining from 150,000 shares granted January 21, 2016 and vesting in two equal installments in November 2017 and 2018.

 

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

 

(I)

15,000 shares remaining from 30,000 shares granted January 16, 2015 and vesting in November 2017;

 

(II)

30,000 shares remaining from 30,000 shares granted January 21, 2016 and vesting in two equal installments in November 2017 and 2018.

 

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

 

(I)

3,000 shares remaining from 6,000 shares granted January 16, 2015 and vesting in November 2017; and

 

(II)

6,000 shares remaining from 6,000 shares granted January 21, 2016 and vesting in two equal installments in November 2017 and 2018.

 

(9)	This represents one restricted stock award with the shares vesting, subject to applicable Company performance conditions, as follows:

 

(I)

12,000 shares remaining from 12,000 shares granted June 22, 2016 and vesting in three equal installments in November 2017, 2018 and 2019.

 

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

2016 Option Exercises and Stock Vested

 

Name		Option Awards								Stock Awards
		# of Shares Acquired on Exercise				Value Realized Upon Exercise ($)				# of Shares Acquired on Vesting				Value Realized on Vesting ($)
Brian D. Jellison			108,084				14,462,721				50,000				9,055,500
											75,000				13,583,250
John Humphrey			40,000				4,700,898				10,000				1,811,100
											15,000				2,716,650
Paul J. Soni											2,000				362,220
											3,000				543,330
John K. Stipancich			-				-				-				-
David B. Liner											2,000				362,220
			-				-				3,000				543,330

No Pension Benefits

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

 

36						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

2016 Non-Qualified Deferred Compensation

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

The following table sets forth certain information with respect to the Non-Qualified Retirement Plan for our named executive officers during the fiscal year ended December 31, 2016.

 

Name		Executive Contributions in Last FY(1) ($)				Registrant Contributions in Last FY(2) ($)				Aggregate Earnings in Last FY(3) ($)				Aggregate Withdrawals/ Distributions ($)				Aggregate Balance at Last FYE ($)
Brian D. Jellison			73,500				72,000				701				-				291,814
John Humphrey			1,023,945				82,519				327,259				-				5,831,609
Paul J. Soni			68,827				28,542				60,624				-				732,333
John K. Stipancich			17,050				11,642				245				-				28,937
David B. Liner			40,719				31,023				93,668				-				1,035,258

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

 

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

 

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

Potential Payments upon Termination or Change in Control

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

Employment Agreement with Mr. Jellison

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

Termination Due to Death or Disability. If Mr. Jellison were to die or terminate employment due to disability, he (or his estate) would receive salary and vested benefits accrued through the date of termination, plus a pro-rata portion of his annual bonus earned through the date of termination, assuming our Company achieved the level of performance for which a bonus would be paid for that year. No special severance benefits would be payable.

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

 

---

Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

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

 

•

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

 

•

accelerated vesting of all of his outstanding equity awards; and

 

•

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

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

Offer Letters to Messrs. Humphrey and Stipancich and Retirement Agreement with Mr. Liner

Mr. Humphrey. Pursuant to an offer letter dated April 24, 2006, as amended December 30, 2008, if Mr. Humphrey’s employment is terminated without cause, he would be entitled to receive one year of medical benefit coverage and a severance payment equal to his then-current annual base salary.

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

Mr. Liner. Pursuant to a retirement agreement and general release dated November 18, 2016, until his retirement in January 2018, Mr.  Liner will receive a reduced salary of $32,143 per month and other customary employment benefits.

Summary of Termination Payments and Benefits

The following tables summarize the value of the termination payments and benefits that each of our named executive officers would receive if he had terminated employment on December 31, 2016 under the circumstances shown. Scenarios for termination due to involuntarily for cause, voluntary resignation, and retirement have not been included because, in those circumstances, no severance or other additional payments will be made to named executive officers. Scenarios for termination due to death or disability have not been included because they do not discriminate in scope, terms or operation in favor of named executive officers compared to the benefits offered to all salaried employees.

BRIAN D. JELLISON

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason				By Company Without Cause				Change in Control(1)
Cash payments		$	2,450,000			$	2,450,000			$	2,450,000
Accelerated Equity Awards(2)(3)
2015 Restricted Stock Grant			-				-				13,731,000
2016 Restricted Stock Grant			-				-				27,462,000
Continued Medical Benefits			29,376				29,376				29,376
Total		$	2,479,376			$	2,479,376			$	43,672,376

 

38						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

EXECUTIVE COMPENSATION (CONTINUED)

 

JOHN HUMPHREY

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason		By Company Without Cause				Change in Control(1)
Cash payments		$-		$	767,000			$	767,000
Accelerated Equity Awards(2)(3)
2014 Stock Option Grant		-			-				422,200
2015 Stock Option Grant		-			-				1,119,900
2016 Stock Option Grant		-			-				500,400
2015 Restricted Stock Grants		-			-				2,746,200
2016 Restricted Stock Grants		-			-				5,492,400
Continued Medical Benefits		-			19,164				19,164
Total		$-		$	786,164			$	11,067,264

PAUL J. SONI

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason		By Company Without Cause				Change in Control(1)
Cash payments		$-		$	-			$	-
Accelerated Equity Awards(2)(3)
2014 Stock Option Grant		-			-				168,880
2015 Stock Option Grant		-			-				447,960
2016 Stock Option Grant		-			-				200,160
2015 Restricted Stock Grant		-			-				549,240
2016 Restricted Stock Grant		-			-				1,098,480
Continued Medical Benefits		-			-				-
Total		$-		$	-			$	2,464,720

JOHN K. STIPANCICH

 

		Termination Scenario
Potential Payments Upon Termination or Change in Control		By Employee For Good Reason		By Company Without Cause				Change in Control(1)
Cash payments		$-		$	658,186			$	658,186
Accelerated Equity Awards(2)(3)
2016 Stock Option Grant		-			-				236,700
2016 Restricted Stock Grant		-			-				2,196,960
Continued Medical Benefits		-			19,164				19,164
Total		$-		$	677,350			$	3,111,010

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

 

(2)	Based on closing market price of our common stock on December 30, 2016 of $183.08 per share.

 

(3)

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

 

---

Table of Contents

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

We are seeking your advisory vote approving the compensation of our named executive officers as disclosed in this Proxy Statement. We believe that our executive compensation programs are structured in the best manner possible to support our business objectives, evidenced by the superior returns we have delivered to our shareholders. Over the past 10 years, our total return to shareholders was 14.5% compounded annually, tripling the total return for the S&P 500. Over the past five years, our return was even better at 16.8% annually.

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

We are seeking shareholder approval of the following resolution:

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

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

 

PROPOSAL 3: ADVISORY VOTE ON THE FREQUENCY OF THE SHAREHOLDER VOTE ON THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS

Section 14A of the Securities Exchange Act also requires the Company to submit to shareholders a resolution subject to an advisory vote as to whether the shareholder vote to approve named executive officer compensation should occur yearly, every two years or every three years.

The Board of Directors values the shareholders’ opinions and believes it would benefit from direct, timely feedback on the Company’s executive compensation program. Accordingly, the Board of Directors recommends that shareholders vote for a “yearly” advisory vote on executive compensation.

The following resolution is submitted for an advisory shareholder vote at the Annual Meeting:

“RESOLVED, that the shareholders advise the Company to hold a shareholder advisory vote on the approval of the compensation of the Company’s named executive officers:

 

•

yearly;

 

•

every two years; or

 

•

every three years.”

The option that receives the greatest number of votes cast by the shareholders will be considered the option approved by the shareholders.

The vote on this proposal is advisory and non-binding; however, the Compensation Committee and our Board will review the results of the vote and consider them when determining the frequency of the shareholder advisory vote to approve the compensation of the named executive officers.

 

 

40						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

AUDIT COMMITTEE REPORT

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

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

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

The Audit Committee: (i) appointed and retained PricewaterhouseCoopers LLP (“PwC”) as the Company’s independent registered public accounting firm for the fiscal year ended December 31, 2016; (ii) reviewed and discussed with the Company’s management the Company’s audited financial statements for the fiscal year ended December 31, 2016; (iii) discussed with PwC the matters required to be discussed by the Auditing Standard No. 1301, “Communication with Audit Committees,” issued by the Public Company Accounting Oversight Board (the “PCAOB”); (iv) received the written disclosures and the letter from PwC required by PCAOB Ethics and Independence Rule 3526, “Communications with Audit Committees Concerning Independence,” and has discussed with PwC its independence from the Company and its management; (v) discussed matters with PwC outside the presence of management; (vi) reviewed internal audit recommendations; (vii) discussed with PwC the quality of the Company’s financial reporting; and (viii) reviewed and discussed with PwC the results of the audit of the effectiveness of internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”).

In reliance on the reviews, reports and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board of Directors has approved, that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2016, for filing with the SEC.

AUDIT COMMITTEE

Christopher Wright, Chairman

Amy Woods Brinkley

John F. Fort III

Laura G. Thatcher

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

 

---

Table of Contents

INDEPENDENT PUBLIC ACCOUNTANTS FEES

Set forth below are the professional fees billed by PwC for the fiscal years ended December 31, 2016 and 2015. It is the Audit Committee’s policy that all services performed by and all fees paid to the independent registered public accounting firm require the Audit Committee’s prior approval. As such, all audit, audit-related tax and other fees were pre-approved by the Audit Committee.

 

		Dollars in Thousands
Fees		FY 2016				FY 2015
Audit Fees(1)		$	5,030			$	4,514
Audit-Related Fees(2)			800				1,148
Tax Fees(3)			1,169				1,205
All Other Fees			20				14
Total Fees		$	7,019			$	6,881

 

(1)

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

 

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

 

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

 

42						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

PROPOSAL 4: RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2017

The Audit Committee has appointed PwC as our independent registered public accounting firm for the year ending December 31, 2017. Our Board of Directors recommends that the shareholders ratify this appointment. PwC has been our Company’s independent registered public accounting firm since May 2002. One or more representatives of PwC are expected to be present at the Annual Meeting and will be given the opportunity to make a statement if they so desire and respond to appropriate questions of shareholders in attendance. If this proposal does not pass, the selection of our independent registered public accounting firm will be reconsidered by the Audit Committee and the Board of Directors. Even if the proposal passes, the Audit Committee may decide to select another firm at any time.

 

Equity Compensation Plan Information

The following table provides information as of December 31, 2016 regarding our compensation plans under which our equity securities are authorized for issuance.

 

Plan Category		(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights				(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights				(c) Number of Securities Remaining Available for Future Issuance  Under Equity Compensation Plans (Excluding Securities Reflected in Column(a))
Equity Compensation Plans Approved by Shareholders(1)
Stock options			3,419,597			$	121.31
Restricted stock awards(2)			952,672				-
Subtotal			4,372,269								9,190,273
Equity Compensation Plans Not Approved by Shareholders			-				-				-
Total			4,372,269			$	-				9,190,273

 

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

 

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

 

---

Table of Contents

ANNUAL MEETING AND VOTING INFORMATION

Our Company is soliciting the enclosed proxy for use at the 2017 Annual Meeting of Shareholders. This Proxy Statement and the enclosed proxy card are being mailed or otherwise made available to shareholders on or about May 8, 2017.

We are concurrently mailing or making available to shareholders a copy of our 2016 Annual Report, which includes our Annual Report on Form 10-K for the fiscal year ended December 31, 2016. Our Annual Report on Form 10-K and its exhibits are available on the Internet at www.sec.gov. Our 2016 Annual Report and Annual Report on Form 10-K are not part of these proxy soliciting materials.

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

 

 

44						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

ANNUAL MEETING AND VOTING INFORMATION (CONTINUED)

 

 

---

Table of Contents

ANNUAL MEETING AND VOTING INFORMATION (CONTINUED)

 

 

46						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

ANNUAL MEETING AND VOTING INFORMATION (CONTINUED)

 

 

---

Table of Contents

INFORMATION REGARDING THE 2018 ANNUAL MEETING OF SHAREHOLDERS

If you wish to submit a matter to be considered at the 2018 Annual Meeting of Shareholders, you must comply with the procedures set forth below. Any proposal or nomination to be made to the Company should be sent to:

Roper Technologies, Inc.

6901 Professional Parkway East

Suite 200

Sarasota, Florida 34240

Attention: Secretary

 

•

Proxy Statement Proposals. If you intend to submit a proposal to be included in the Proxy Statement for the 2018 Annual Meeting of Shareholders, we must receive your proposal no later than December 29, 2017. All proposals must comply with the SEC regulations under Rule 14a-8 for including shareholder proposals in a company’s proxy material.

 

•

Director Candidate Nomination. Our By-laws set forth the procedures you must follow if you wish to nominate a director candidate in connection with the 2018 Annual Meeting of Shareholders.

Proxy Access to Include Nominees in our 2018 Proxy Statement. If you are a shareholder, or a group of up to 20 shareholders, owning 3% or more of our outstanding common stock continuously for at least three years and wish to nominate a director candidate and require us to include such nominee in our Proxy Statement and form of proxy, you must submit your request so it is received by the Company between November 29, 2017 and December 29, 2017, in accordance with our By-laws. The number of candidates that may be so nominated is limited to the greater of two or the largest whole number that does not exceed 20% of our Board, provided that the shareholder(s) and nominee(s) satisfy the requirements set forth in our By-laws. All proxy access nominations must be accompanied by information about the nominating shareholders as well as the nominees and meet the requirements specified in our By-laws, including the information specified under “Nominees Not for Inclusion in our 2018 Proxy Statement” below.

Nominees Not for Inclusion in our 2018 Proxy Statement. If you wish to nominate a director candidate in connection with the 2018 Annual Meeting of Shareholders and are not requiring the nominee be included in our Proxy Statement, you must submit the nomination so it is received by the Company between February 8, 2018 and March 10, 2018, in accordance with our By-laws. The notice to nominate a person for election as a Company director, notice must include a written statement setting forth (i) the name of the person to be nominated; (ii) the number and class of all shares of each class of Company stock owned of record and beneficially by such person, as reported by such person to you; (iii) such other information regarding each nominee proposed by you as would have been required to be included in a Proxy Statement filed pursuant to the proxy rules of the SEC if the nominee had been nominated by the Board of Directors; (iv) such person’s signed consent to serve as a director of our Company if elected; (v) your name and address; (vi) the number and class of all shares of each class of Company stock owned of record and beneficially by such shareholder (and any beneficial owner on whose behalf the nomination is made); and (vii) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on behalf of, or any other agreement, arrangement or understanding that has been made, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of, you (and any beneficial owner on whose behalf the proposal is made) with respect to Roper’s securities.

 

•

Matters for Annual Meeting Agenda. If you wish to have other business (not the nomination of a director candidate) brought before the 2018 Annual Meeting of Shareholders, you must submit the proposal between February 8, 2018 and March 10, 2018, in accordance with our By-laws. If you intend to present the matter directly at the 2018 Annual Meeting of Shareholders, the notice must include (a) the text of the proposal; (b) a brief statement of the reasons why you favor the proposal; (c) your name and address; (d) the number and class of all shares of each class of Company stock owned of record and beneficially by you (and any beneficial owner on whose behalf the proposal is made); (e) a description of any agreement, arrangement or understanding (including any derivative or short positions, profit interests, options, warrants, stock appreciation or similar rights, hedging transactions and borrowed or loaned shares) that has been entered into by or on

 

48						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

INFORMATION REGARDING THE 2018 ANNUAL MEETING OF SHAREHOLDERS (CONTINUED)

 

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

With respect to matters not included in the Proxy Statement but properly presented at the 2018 Annual Meeting of Shareholders, management generally will be able to vote proxies in its discretion if it receives notice of the proposal during the period specified above and advises shareholders in the Proxy Statement for the 2018 Annual Meeting of Shareholders about the nature of the matter and how management intends to vote on the matter, unless the proponent of the shareholder proposal (a) provides us with a timely written statement that the proponent intends to deliver a Proxy Statement to at least the percentage of our voting shares required to carry the proposal; (b) includes the same statement in the proponent’s own proxy materials; and (c) provides us with a statement from a solicitor confirming that the necessary steps have been taken to deliver the Proxy Statement to at least the percentage of our voting shares required to carry the proposal.

OTHER MATTERS

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

By the Order of the Board of Directors

 

 

Brian D. Jellison

Chairman, President and Chief Executive Officer

Dated: April 28, 2017

 

---

Table of Contents

APPENDIX A—RECONCILIATIONS

Table 1: EBITDA and EBITDA Margin Reconciliation

(in millions, except percentages)

 

		2016				2015
GAAP Revenue		$	3,789.9			$	3,582.4
Add: Purchase accounting adjustment to acquired deferred revenue			15.1				10.6
Rounding			0.1				-
Adjusted Revenue (A)		$	3,805.1			$	3,593.0
GAAP Net Earnings		$	658.6			$	696.1
Add: Taxes			282.0				306.3
Add: Interest expense			111.6				84.2
Add: Depreciation			37.3				38.2
Add: Amortization			203.2				166.1
Add: Acquisition-related expenses deemed significant			6.1				-
Add: Purchase accounting adjustment to acquired deferred revenue, pretax			15.1				10.6
Add: Acquisition-related inventory step-up charge, pretax			0.3				4.6
Add: Debt extinguishment charge			0.9				-
Add: Impairment Charge on Minority Investment			-				9.5
Less: Gain on Disposal of a Business			-				(70.9	)
Rounding			(0.1	)			-
Adjusted EBITDA (B)		$	1,315.0			$	1,244.7
EBITDA Margin (B) / (A)			34.6	%			34.6	%

Table 2: Cash Flow Reconciliation

(in millions)

 

		2016				2015				2011				2006
GAAP Operating Cash Flow		$	963.8			$	928.8			$	601.6			$	262.5
Add: Cash taxes related to 2015 sale of Abel Pump			37.4				-				-				-
Adjusted Operating Cash Flow		$	1,001.2			$	928.8			$	601.6			$	262.5
Less: Capital expenditures			(37.3	)			(36.3	)			(40.7	)			(32.2	)
Less: Capitalized software expenditures			(2.8	)			(2.4	)			(3.4	)			(3.5	)
Rounding			-				-				-				0.1
Adjusted Free Cash Flow		$	961.1			$	890.1			$	557.5			$	226.9

 

50						Roper Technologies, Inc. 2017 Proxy Statement

---

Table of Contents

ROPER TECHNOLOGIES, INC. 6901 PROFESSIONAL PKWY EAST SARASOTA, FL 34240 ATTN: LEGAL DEPT				VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time on June 7, 2017. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.   ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.   VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Eastern Time on June 7, 2017. Have your proxy card in hand when you call and then follow the instructions.   VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

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

E24106-P91273                    KEEP THIS PORTION FOR YOUR RECORDS

^{—  —  —  —  —   —  —  —  —  —  —  —  —  —  —  —  —  —  —   —  —  —  —  —  —  —  —  —  —  —  —  —   —  —  —  —  —  —  —  —  —  —  —   —  —  —  —  —  —  —  —  —  —  —  —}

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

V.1.1

---

Table of Contents

 

Important Notice Regarding Internet Availability of Proxy Materials for the Annual Meeting to be Held on June 8, 2017:

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

 

— — — — — — — — — — — — —  — — — — — — — — — — — — — — — — — — — —  — — — — — — — — — — 

E24107-P91273

 

V.1.1