<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
ROPER INDUSTRIES, INC.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ROPER INDUSTRIES, INC.
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Filing Fee Required.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange ActRule 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:
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(4) Date Filed:
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Notes:
<PAGE>
LOGO
ROPER INDUSTRIES, INC.
160 BEN BURTON ROAD
BOGART, GEORGIA 30622
706-369-7170
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The 1997 Annual Meeting of shareholders of Roper Industries, Inc. ("Annual
Meeting") will be held at its corporate offices at 160 Ben Burton Road,
Bogart, Georgia 30622 on Friday February 14, 1997, at 12 noon for the
following purposes.
1. To elect four (4) Directors;
2. To vote on the proposed amendment of the Certificate of Incorporation of
the Company to increase the number of authorized shares of Common Stock
to 80,000,000;
3. To vote on the proposed amendment of the 1991 Stock Option Plan to
authorize a 250,000 share increase in the number of shares of Common
Stock to be reserved for options thereunder;
4. To transact any other business properly brought before the meeting.
Only shareholders of record at the close of business on December 27, 1996
will be entitled to vote at the Annual Meeting or any adjourned meeting, and
these shareholders will be entitled to vote whether or not they have
transferred their Common Stock since that date.
SHAREHOLDERS UNABLE TO ATTEND THE MEETING IN PERSON ARE URGED TO FILL IN,
SIGN, DATE AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.
By Order of the Board of Directors
/s/ Shanler D. Cronk
Shanler D. Cronk Secretary
Bogart, Georgia
January 7, 1997
<PAGE>
ROPER INDUSTRIES, INC.
160 BEN BURTON ROAD
BOGART, GEORGIA 30622
706-369-7170
-----------------
PROXY STATEMENT
-----------------
GENERAL
THE ENCLOSED PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF ROPER
INDUSTRIES, INC. (THE "COMPANY"). The cost of proxy solicitation will be borne
by the Company. In addition to the solicitation of proxies by use of the
mails, officers and regular employees of the Company may devote part of their
time, without additional compensation, to solicitation by telegraph, telephone
or personal calls. Arrangements may also be made with brokerage houses and
other custodians, nominees and fiduciaries for the forwarding of solicitation
material to beneficial owners and for reimbursement of their out-of-pocket and
clerical expenses incurred in that connection. Proxies may be revoked at any
time prior to voting.
The mailing address of the principal executive offices of the Company is
Roper Industries, Inc., 160 Ben Burton Road, Bogart, Georgia 30622. This Proxy
Statement and the enclosed Proxy together with the 1996 Annual Report was
mailed to shareholders on or about January 7, 1997. ON WRITTEN REQUEST MAILED
TO THE ATTENTION OF THE CHIEF FINANCIAL OFFICER OF THE COMPANY AT THE ADDRESS
SET FORTH ABOVE, THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF ITS 1996
REPORT ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
VOTING SECURITIES
As of December 27, 1996, the Company had outstanding 15,165,546 shares of
Common Stock, all of which shares are entitled to vote. The Company's Restated
Certificate of Incorporation (the "Certificate of Incorporation") provides
that each outstanding share of Common Stock will entitle the holder thereof to
five votes, except that holders of outstanding shares of Common Stock with
respect to which there has been a change in beneficial ownership during the
four years immediately preceding the record date of December 27, 1996 ("the
Record Date") for determining shareholders entitled to vote at the Annual
Meeting will be entitled to one vote per share. Accordingly, shares owned on
or before December 27, 1992, and as to which there has been no change in
beneficial ownership since that date, are entitled to five votes per share.
Stock dividend shares received pursuant to the Company's September 1993 2-for-
1 stock split in the form of a 100% stock dividend shall be entitled to the
same number of votes as the original shares with respect to which they were
distributed. The actual voting power of each holder of Common Stock will be
based on stock ownership on the Record Date, as demonstrated by shareholder
records at the time of the Annual Meeting. FOR VOTING PURPOSES, PROXIES
REQUIRING CONFIRMATION OF THE DATE OF BENEFICIAL OWNERSHIP RECEIVED BY THE
BOARD OF DIRECTORS WITH SUCH CONFIRMATION NOT COMPLETED SO AS TO SHOW WHICH
SHARES BENEFICIALLY OWNED BY THE SHAREHOLDER ARE ENTITLED FIVE VOTES FOR EACH
SHARE WILL BE VOTED WITH ONE VOTE FOR EACH SHARE. See "VOTING BY PROXY AND
CONFIRMATION OF BENEFICIAL OWNERSHIP" on page 17.
Shareholders are urged to sign the enclosed form of proxy and return it
promptly in the envelope enclosed for that purpose. Proxies will be voted in
accordance with the shareholders' directions. If no directions are given,
proxies will be voted (i) FOR the election of the nominees named herein as
Directors, (ii) FOR the proposed amendment of the Certificate of Incorporation
of the Company (the "Certificate of Incorporation") to increase the number of
authorized shares of Common Stock to 80,000,000, and (iii) FOR the proposed
amendment of the 1991 Stock Option Plan to authorize a 250,000 share increase
in the number of shares of Common Stock reserved for options thereunder. With
regard to the election of Directors, votes may be cast in favor of all
nominees or
<PAGE>
withheld from all nominees or any particular nominee; votes that are withheld
will be excluded entirely from the vote and will have no effect. Abstentions
may be specified on all proposals, except for the election of Directors, and
will be counted as present for purposes of determining the existence of a
quorum for the conduct of the Annual Meeting. Approval of the proposed
amendment of the Certificate of Incorporation and approval of the proposed
amendment of the 1991 Stock Option Plan requires approval by a majority of the
votes of all issued and outstanding shares and a majority of the votes of
those shares present and entitled to vote at the Annual Meeting, respectively.
Thus, abstentions will have the effect of negative votes on these proposals.
Under the rules of the New York Stock Exchange, brokers who hold shares in a
street name have the authority to vote on certain items when they have not
received instructions from beneficial owners. Thus, brokers that do not
receive instructions are entitled to vote upon each of (i) the election of
Directors, (ii) the proposed amendment to the Certificate of Incorporation to
increase the number of authorized shares of Common Stock to 80,000,000 and
(iii) the proposed amendment to the 1991 Stock Option Plan to authorize a
250,000 share increase in the number of shares of Common Stock reserved for
options thereunder.
SECURITY OWNERSHIP
The following table sets forth certain information regarding the ownership
of the Company's common stock as of November 30, 1996 with respect to (i) each
person known by the Company to own beneficially more than 5% of the
outstanding shares of the Company's common stock, (ii) each Director and each
nominee for Director of the Company, (iii) each of the executive officers of
the Company named in the Summary Compensation Table set out on page 11 and
(iv) Directors and executive officers of the Company as a group. Except as
otherwise indicated, each of the following shareholders has sole voting and
investment power with respect to shares beneficially owned by such
shareholder, except to the extent that authority is shared by spouses under
applicable law.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
NAME OF BENEFICIAL OWNER OF COMMON STOCK PERCENT
- ------------------------ -------------------- -------
<S> <C> <C>
Beck Mack & Oliver (1)............................ 929,819 6.1
Ingalls & Snyder (2).............................. 1,222,742 8.1
Inverness Counsel, Inc. (3)....................... 984,629 6.5
W. Lawrence Banks (4) (5)......................... 7,200 *
Luitpold von Braun (4)............................ 42,200 *
Donald G. Calder (4) (6).......................... 71,872 *
John F. Fort III.................................. 10,000 *
E. Douglas Kenna (4) (7).......................... 398,111 2.6
Derrick N. Key (4)................................ 462,771 3.1
George L. Ohrstrom, Jr. (4) (8)................... 387,200 2.6
Georg Graf Schall-Riaucour (9).................... 202,000 1.3
Eriberto R. Scocimara (4) (10).................... 50,766 *
Christopher Wright (4) (11)....................... 7,200 *
A. Donald O'Steen (12)............................ 45,522 *
Zane E. Metcalf (12).............................. 52,619 *
Larry K. Christensen (12)......................... 31,285 *
Nigel W. Crocker(12).............................. 15,718 *
All directors and executive officers as a group
(16 persons)..................................... 1,822,937 12.0
</TABLE>
- --------
*Less than 1%.
(1) The partnership's business address is 330 Madison Avenue, 31st Floor, New
York, New York 10017-5001; has no voting power with respect to any such
shares.
(2) The partnership's business address is 61 Broadway, New York, New York
10006; has no voting power with respect to 1,095,937 shares; has no
disposition power with respect to 334, 161 shares.
(3) The company's business address is 545 Madison Avenue, 9th Floor, New York,
New York 10022.
2
<PAGE>
(4) Includes 7,200 shares (each of Messrs. Banks, Scocimara, von Braun and
Wright), 10,400 shares (Mr. Calder), 66,000 shares (Mr. Key), 6,400
shares (Mr. Ohrstrom) and 400 shares (Mr. Kenna) subject to options
exercisable as of February 28, 1997.
(5) Does not include 197,430 shares owned by several investment funds which
are managed by subsidiaries of Robert Fleming Holdings, Ltd. of which Mr.
Banks is a director. Mr. Banks disclaims beneficial ownership of such
shares.
(6) Does not include (i) 214,477 shares owned by Mr. Calder's wife or (ii)
19,220 shares which are owned by Mr. Calder's adult children, as to all
of which shares Mr. Calder disclaims beneficial ownership.
(7) Includes 75,000 shares held in trust for the benefit of Mr. Kenna's
grandchild, of which Mr. Kenna is trustee. Does not include 15,000 shares
owned by Mr. Kenna's wife, as to which shares Mr. Kenna disclaims
beneficial ownership.
(8) Includes 58,540 shares owned by two family trusts of which Mr. Ohrstrom
is one of three trustees who share voting and investment power. Does not
include (i) 52,890 shares owned by the Ohrstrom Foundation, Inc., a not-
for-profit corporation of which Mr. Ohrstrom is a director and executive
officer, (ii) 3,000 shares owned by the National Sporting Library of
which Mr. Ohrstrom is a trustee, (iii) 11,700 shares owned by Mr.
Ohrstrom's wife, or (iv) 6,400 shares held in custodial accounts for the
benefit of Mr. Ohrstrom's step-children, as to all of which shares Mr.
Ohrstrom disclaims beneficial ownership.
(9) Includes 200,000 shares owned by Wittelsbacher Ausgleichsfonds of which
Mr. Schall-Riaucour is general Director, and as such, is authorized to
vote and dispose of such shares. Mr. Schall-Riaucour disclaims beneficial
ownership of all such shares.
(10) Does not include 27,610 shares owned by Mr. Scocimara's wife, as to which
shares Mr. Scocimara disclaims beneficial ownership.
(11) Does not include 12,760 shares which Kleinwort Benson Limited ("KBL")
beneficially owns or holds the power to vote and dispose. Mr. Wright is a
director of KBL and disclaims beneficial ownership of such shares.
(12) Includes 30,800 shares (Mr. O'Steen), 26,200 shares (Mr. Christensen),
15,180 shares (Mr. Crocker), and 19,200 shares (Mr. Metcalf) subject to
options exercisable as of February 28, 1997.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act requires the Company's
directors and executive officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the
Company. Executive officers, directors and greater than 10% shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended October 31, 1996, all
Company executive officers and directors and greater than 10% beneficial
owners complied with applicable Section 16(a) filing requirements.
3
<PAGE>
BOARD OF DIRECTORS AND EXECUTIVE OFFICERS
PROPOSAL 1: ELECTION OF FOUR DIRECTORS
The Certificate of Incorporation provides that the Board of Directors shall
consist of such number of members as may 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 has fixed the number of Directors at
eleven (11). The Certificate of Incorporation provides that the Board of
Directors shall be divided into three classes of Directors, with the term of
one class expiring at each annual shareholders' meeting and each class serving
three-year terms. The terms of office of Directors Kenna, Ohrstrom, Schall-
Riacour and Scocimara expire at the Annual Meeting, and such persons are
proposed as nominees for Director for terms expiring at the 2000 Annual
Meeting of Shareholders. At the special request of the Board in view of the
Company's recently adopted mandatory retirement age of 70 for Directors, Mr.
Kenna and Mr. Ohrstrom each have agreed, if reelected, to serve as Directors
until the conclusion of the Company's 1998 fiscal year on October 31, 1998.
Upon their retirement, the Board will appoint successors to serve the balance
of their three-year terms. The respective terms of current Directors expire on
the dates set forth below. A search is underway to fill the vacancy created by
Dudley C. Mecum's retirement from the Board in October 1996, but no
appointment by the Board filling that vacancy is expected until after the
Annual Meeting. When appointed, the term of such new Director will expire at
the 1998 Annual Meeting of Shareholders.
Proxies received which contain no instructions to the contrary will be voted
FOR the nominees listed below. In the event any nominee is unable to serve (an
event management does not anticipate), the Proxy will be voted for a
substitute nominee selected by the Board of Directors.
<TABLE>
<CAPTION>
NOMINEES FOR ELECTION AT 1997 ANNUAL MEETING POSITIONS AND OFFICES
FOR TERMS EXPIRING AT THE 2000 ANNUAL MEETING WITH THE COMPANY AGE
- --------------------------------------------- ---------------------- ---
<S> <C> <C>
E. Douglas Kenna (1)(3) Director 72
George L. Ohrstrom, Jr. (1) Director 69
Georg Graf Schall-Riaucour Director 56
Eriberto R. Scocimara (2) (3) Director 61
DIRECTORS WHOSE TERMS EXPIRE
AT THE 1998 ANNUAL MEETING
- ----------------------------
W. Lawrence Banks (2) Director 58
Luitpold von Braun (2) Director 64
John F. Fort III Director 55
DIRECTORS WHOSE TERMS EXPIRE
AT THE 1999 ANNUAL MEETING
- ----------------------------
Donald G. Calder (1) Director 59
Derrick N. Key (1) Chairman of the Board, 49
President and CEO
Christopher Wright (3) Director 39
</TABLE>
- --------
(1) Member of the Executive Committee.
(2) Member of the Audit Committee.
(3) Member of the Compensation Committee
E. Douglas Kenna has been a Director of the Company since December 1981 and
served as Chairman of the Board of the Company from June 1982 until October
31, 1994. He was President of the Company from January 1986 until February
1989. He was a director of Ropex Corporation ("Ropex"), a holding company
which wholly owned, and in February 1992 was merged into, the Company, from
1981 until the merger. Mr. Kenna was chairman of the board of Carlisle
Companies Incorporated, a manufacturing company, from August 1989 to November
1993, a partner of G. L. Ohrstrom & Co. from 1981 to December 1993, a director
of Phillips Petroleum from April, 1977 to May, 1995 and a director of
Fleet/Norstar Financial Group from April, 1981 to January, 1995. Mr. Kenna was
chairman of the board of Bertram-Trojan, Inc. (now called Martreb, Inc.), a
maker of luxury yachts which filed for reorganization under Chapter 11 of the
Federal Bankruptcy Code in March, 1992. The operating assets of that company
were sold in the proceeding and a liquidating plan was submitted to the Court
and the creditors and was confirmed.
4
<PAGE>
George L. Ohrstrom, Jr. has been a Director of the Company since December
1981, and served as a Vice President of the Company from June 1982 until May
1996. Mr. Ohrstrom is President of G. L. Ohrstrom & Co., Inc., and was
managing partner of its predecessor, G. L. Ohrstrom & Co., from 1960 to
October 1996. Mr. Ohrstrom is a director of Carlisle Companies Incorporated
and Harrow Industries, Inc.
Georg Graf Schall-Riaucour has been a Director of the Company since January
1995. He has been general manager of Wittelsbacher Ausgleichsfonds since May
1994, prior to which since 1971 he was senior partner of the Munich, Germany
law firm of Stever & Beiten. Mr. Schall-Riaucour is director of Harrow
Industries, Inc. and several privately held U.S. companies.
Eriberto R. Scocimara was a Director of the Company from December 1981 to
December 1984 and was re-elected as a Director in December 1991, and was a
director of Ropex from December 1981 until its merger into the Company. Mr.
Scocimara has been president and chief executive officer of the Hungarian-
American Enterprise Fund, a privately-managed investment company, since April
1994, and he has been the president of Scocimara & Company, Inc., an
investment management company, since 1984. Mr. Scocimara was a partner of G.L.
Ohrstrom & Co. from 1969 to 1984. Mr. Scocimara is a director of Carlisle
Companies Incorporated, Harrow Industries, Inc., Quaker Fabric Corporation,
Cofinec S.A., Euronet Services, Inc. and several privately owned companies.
W. Lawrence Banks has been a Director of the Company since December 1991 and
was a director of Ropex from December 1982 until its merger into the Company.
Mr. Banks has been a director of Robert Fleming & Co., Limited, an English
merchant banking firm, for more than five years and is a deputy chairman
thereof, and he is chairman of Robert Fleming Inc., its U.S. investment
banking subsidiary. Mr. Banks is also a director of Harrow Industries, Inc.
Luitpold von Braun has been a Director of Roper since December 1991, was a
director of Ropex from December 1982 until its merger into the Company, and is
presently a director of several privately owned companies. For more than five
years, he was the general manager of Wittelsbacher Ausgleichsfonds in Munich,
Germany, from which he retired in May 1994.
John F. Fort III has been a Director of the Company since December 1995. He
is a director and was formerly chairman (through January 1993) and chief
executive officer (through July 1992) of Tyco International Ltd. He is also a
director of Dover Corporation and Kimberly-Clark Corporation.
Donald G. Calder has been a Director of the Company since December 1981, a
Vice President of the Company from December 1981 until May 1996, Treasurer of
the Company from December 1991 to May 1993, and a director of Ropex from 1981
until its merger into the Company. Mr. Calder is vice president of G. L.
Ohrstrom & Co., Inc. and was a partner of its predecessor, G. L. Ohrstrom &
Co., from 1970 to October 1996. He is a director of Carlisle Companies
Incorporated, Central Securities Corp., Harrow Industries, Inc., Brown-Forman
Corp. and several privately held companies.
Derrick N. Key has been Chairman of the Board of the Company since November
1994, has been a Director and Chief Executive Officer since December 1991, and
has been its President since February 1989. Mr. Key was Vice President of the
Company from June 1982 until February 1989, and president of Roper Pump from
November 1985 until November 1991. Mr. Key is also a director of Harrow
Industries, Inc. and two privately held companies.
Christopher Wright has been a Director of the Company since December 1991.
Mr. Wright is an executive director of Kleinwort Benson Limited, an English
merchant banking firm, and is an executive vice president of it's affiliate,
Dresdner Kleinwort Benson North America LLC. He is also general manager of The
KB Mezzanine Fund, L.P., a director and officer of Merifin Capital, Inc., an
affiliate of a private Dutch investment firm, and he has served since 1989 on
the boards of directors of Bell Sports, Inc., and several privately owned
companies.
5
<PAGE>
MEETINGS OF THE BOARD AND BOARD COMMITTEES; COMPENSATION OF DIRECTORS
During fiscal 1996, the Board of Directors of the Company held four
meetings. Pursuant to Board compensation policies, only those Directors who
were not otherwise employees of the Company receive an annual fee of $18,000
per year for serving on the Board of Directors, and a fee of $750 for each
Board meeting attended, of which there were four during fiscal 1996.
The Board has standing Executive, Audit and Compensation Committees. The
Executive Committee, which has the authority to exercise all powers of the
Board of Directors between regularly scheduled Board meetings, had no meetings
in fiscal 1996. Each member of the Executive Committee who is not otherwise an
employee of the Company receives an annual fee of $1,000 and a fee of $300 for
each committee meeting attended.
The functions of the Audit Committee consist of annually recommending to the
Board of Directors the appointment of independent auditors, reviewing with
such auditors the plan and results of the audit engagement, reviewing the
scope and results of the Company's procedures for internal auditing, and
reviewing the adequacy of the Company's system of internal accounting
controls. During fiscal 1996, the Audit Committee held three meetings. Each
member of the Audit Committee received an annual fee of $1,000, and a fee of
$300 for each meeting attended.
The Compensation Committee administers the Company's executive incentive
compensation programs and decides upon annual salary adjustments and
discretionary bonuses for the Company's "top management" (defined as the
Chairman of the Board, the President, Executive Vice Presidents and Vice
Presidents of the Company, and the presidents and vice presidents of the
Company's subsidiaries and divisions). The Compensation Committee had two
meetings during fiscal 1996. Each member of the Compensation Committee who is
not otherwise an employee of the Company received an annual fee of $1,000 and
a fee of $300 for the meeting attended.
Directors who are also Company employees are eligible to participate in
Roper's Employees' Retirement Savings Plan, to which the Company contributes a
minimum of 3% and up to a maximum of 7 1/2% of their base salary, and a
discretionary incentive stock option plan for management and key employees.
Directors who are not otherwise Company employees are entitled to participate
in a non-employee Director's Stock Option Plan providing for an initial grant
of 10,000 shares of Roper's Common Stock and additional annual grants of 2,000
shares for each year served following the year of initial appointment.
RELATED TRANSACTIONS
The Company has an agreement with Mr. Kenna, a Director, and his wife
effective November 1, 1994, pursuant to which they have agreed to serve as
consultants to the Company for a period of ten (10) years. The Company will
pay consultant fees of $50,000 per year under this agreement. The Company also
has a consulting agreement with G. L. Ohrstrom & Co., Inc., pursuant to which
the latter will provide consulting services for a three-year period expiring
May 31, 1999, the annual fee for which will be $333,000 to be paid in equal
monthly installments. Messrs. Ohrstrom and Calder are directors and officers
of G.L. Ohrstrom & Co., Inc.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
During fiscal 1996, the members of the compensation committee were Messrs.
Kenna, who was Chairman of the Board of Directors from June 1982 through
October 1994 and who serves as consultant to the Company as described above,
Scocimara and Wright. Derrick N. Key, the Company's President and Chief
Executive Officer, was appointed in June, 1996 as a director of Symmetry
Medical Inc., which has no compensation committee and of which Mr. Calder is
chairman of the board and a vice president and Mr. Ohrstrom is a director and
a vice president.
6
<PAGE>
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the current
executive officers of the Company. The executive officers are elected by the
Board of Directors and serve at the discretion of the Board.
<TABLE>
<CAPTION>
NAME POSITION AND OFFICES WITH THE COMPANY AGE
- ---- ------------------------------------- ---
<S> <C> <C>
Derrick N. Key Chairman of the Board of Directors, President and 49
Chief Executive Officer
A. Donald O'Steen Executive Vice President 50
Martin S. Headley Vice President and Chief Financial Officer 40
Zane E. Metcalf Vice President and Treasurer 55
Shanler D. Cronk Vice President, General Counsel and Secretary 48
Larry K. Christensen Group Vice President, Industrial Controls 48
Nigel W. Crocker Group Vice President, Analytical Instrumentation 42
</TABLE>
A. Donald O'Steen has served as Executive Vice President of the Company
since July 1996, and as group vice president of the Fluid Handling segment
since November 1, 1996. Prior thereto he was the Chief Financial Officer of
the Company since May 1993, and was its Controller from 1982 to May 1993. Mr.
O'Steen was president of Roper Pump Company from November 1991 to May 1993,
was its executive vice president and general manager from August 1990 until
November 1991 and from February 1989 until August 1990 was its vice president
of operations. He served as vice president of finance and administration of
Roper Pump Company from January 1986 until February 1989.
Martin S. Headley has served as Vice President and Chief Financial Officer
of the Company since July 23, 1996. From July 1993 to June 1996, Mr. Headley
served as Chief Financial Officer of the US operations of McKechnie Group,
plc, a manufacturer of components and assemblies for a variety of industrial
OEM's. From June 1990 to July 1993, he served as Controller-International
Operations for AM Multigraphics, a manufacturer and distributor of printing
and reproduction equipment and supplies, prior to which was engaged in public
accounting practice with Arthur Anderson & Co., conducting audit and
consulting assignments from a number of American and European locations.
Zane E. Metcalf has served as Treasurer of the Company since June 1982, was
its Chief Accounting Officer from May 1993 until October 31, 1996, and was its
Chief Financial Officer from June 1984 until May 1993. He also has been a Vice
President of the Company since 1984.
Shanler D. Cronk has served as a Vice President and General Counsel of the
Company since September 1993, before which he served as its corporate counsel
since January 1992, and was appointed its Secretary in November 1996. From
June 1991 to January 1992, he served as interim chief counsel to Nevada
Goldfields, Inc., prior to which he was engaged in corporate and securities
law practice with the law firms of Gibson, Dunn & Crutcher, from June 1988 to
October 1990, and Kutak, Rock & Campbell, of which he became a partner in
1987. Mr. Cronk is the son-in-law of Mr. Kenna.
Larry K. Christensen has been Group Vice President, Industrial Controls,
President of Amot U.S., and Managing Director of Amot Controls Ltd. ("Amot
U.K.") since November 1, 1996. Prior thereto he served as executive vice
president of CCC since July 1995. He was president of Amot U.S. from 1991 to
June 1995, and prior thereto, he held various managerial positions in sales,
marketing, project management, planning and engineering at Fisher Controls, a
manufacturer of industrial control products, from July 1974 until December
1990.
Nigel W. Crocker has been Group Vice President, Analytical Instrumentation
since November 1, 1996. Prior thereto, he served both as president of Amot
U.S. since September 1995, and as managing director of Amot U.K. since October
1991. Mr. Crocker served as managing director of Jiskoot Autocontrol Ltd.
U.K., a control engineering company, from January 1990 until August 1991.
Prior to that time, Mr. Crocker was vice president of engineering for North
and South America and, subsequently, president of Jiskoot Inc. from November
1986 until December 1989.
7
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee (the "Committee") of the Board of Directors (the
"Board"). The Committee is appointed by the Board and is comprised of three
non-employee Directors of the Company. The Committee has responsibility for
all compensation matters concerning the Company's executive officers.
COMPENSATION PHILOSOPHY
The Board's executive compensation program strongly links management pay
with the Company's annual and long term performance. The program is intended
to attract, motivate and retain senior management by providing compensation
opportunities that are consistent with Company performance. The program
provides for base salaries which reflect such factors as level of
responsibility, individual performance, internal fairness and external
competitiveness; annual incentive bonus awards which are payable in cash or
stock upon the Company's achievement of annual financial objectives approved
by the Board; and long term incentive opportunities in the form of stock
options which strengthen the mutuality of interest between management and the
Company's shareholders. While the income tax implications of the compensation
program to the Company and its executive officers are continually assessed,
including the recently enacted $1 million per covered employee limitation on
the compensation expenses deductible by the Company, they are not presently a
significant factor in the administration of the program.
The Company strives to provide compensation opportunities which emphasize
effectively rewarding management for the achievement of critical financial
performance objectives. The Committee supports a pay-for-performance policy
that determines compensation amounts based on business unit and individual
performance. While the establishment of base salaries turns principally on the
factors noted above, annual incentive bonuses for senior subsidiary executives
are based on the financial performance of their respective business units, and
annual incentive bonuses for senior corporate executives are based on the
financial performance of the Company as a whole. In addition, the program
provides stock incentive opportunities designed to align the interests of
executives and other key employees with other shareholders through the
ownership of Common Stock. The following is a discussion of each of the
elements of the Company's executive compensation program including a
description of the decisions and actions taken by the Committee with respect
to fiscal 1996 compensation for the Chief Executive Officer (the "CEO") and
all executive officers as a group.
MANAGEMENT COMPENSATION PROGRAM
Compensation paid to the Company's executive officers for the fiscal year
1996 (as reflected in the foregoing tables with respect to the named executive
officers) consisted of the following elements: base salary, annual incentive
cash and stock bonuses under the Company's incentive bonus plans and stock
options under the Company's 1991 Stock Option Plan.
BASE SALARY
With respect to determining the base salary of executive officers, the
Committee takes into consideration a variety of factors including the
executive's levels of responsibility and individual performance, and the
salaries of similar positions in the Company and in comparable companies in
our industry. The Committee also engages the services of independent
consultants from time to time to assess such comparable, external salary
values. The Committee believes that its process for determining and adjusting
the base salary of executive officers is fully consistent with sound personnel
practices. Based on the Committee's consideration of the aforementioned
factors, salary increases were made effective as of January 1, 1996 for each
of the named executive officers and certain other executive officers of the
Company and are reflected in the foregoing compensation tables.
Annual adjustments in base salaries typically are made effective at the
beginning of the calendar year for which they are intended to apply and
therefore reflect in large part prior year's business and individual
performance achievements.
8
<PAGE>
ANNUAL INCENTIVE BONUS PROGRAM
The Company's incentive bonus program for its executive officers (including
those identified in the foregoing tables) is based on the achievement of
annual financial performance targets which are established for three-year
periods, but which are subject to adjustment as the Committee deems
appropriate. Although the program presently emphasizes cash bonus payments,
bonus stock awards are utilized when deemed appropriate, and in fiscal 1996
two such awards were made for an aggregate of 15,000 shares to be issued in
the event of the attainment of specified future financial performance goals.
Subjective performance criteria are not utilized in the determination of
incentive bonuses. The objective criteria utilized include actual-versus-
target sales and actual-versus-target earnings, the latter as expressed by
return on net tangible assets ("RNTA"). Target sales and target RNTA
established for the purpose of determining bonus payments are based on the
annual business plans and operating budgets of the Company and each of its
subsidiaries. Up to 50% of an executive officer's incentive bonus award is
based on the sales performance vs. target of his or her subsidiary company and
up to 50% is based upon the RNTA performance vs. target of such company. The
annual incentive bonuses of corporate-level executive officers, whose
responsibilities encompass all subsidiaries, is based on consolidated earnings
per share, consolidated sales, and operating company RNTA performance targets.
The Company accrues for these bonus payments currently throughout the year.
Final calculation of the Company's financial performance (and the financial
performance of its subsidiaries) and determination and payment of the awards
is made as soon as is practicable after the completion of the Company's fiscal
year which ends October 31, unless they are determinable prior to the fiscal
year-end. Individual incentive bonus awards to executive officers for the
Company's 1996 fiscal year were determined by the Committee based on
application of the aforementioned factors to the Company's financial
performance for fiscal 1996 and were paid after its conclusion.
1991 STOCK OPTION PLAN
The long term incentive element of the Company's management compensation
program is in the form of stock options grants. These discretionary stock
options are granted and administered by the Committee under the 1991 Stock
Option Plan which is intended to create an opportunity for employees of the
Company to acquire a proprietary interest in the Company and thereby enhance
their efforts in the service of the Company and its shareholders. The
compensatory and administrative features of the 1991 Stock Option Plan conform
in all material respects to the design of standard comparable plans in
industry and are, in the Committee's estimation, fair and reasonable.
During fiscal 1996, the Committee approved six separate grants of stock
options to 118 key employees and executive officers (including those named
executive officers reflected in the foregoing tables) at exercise prices
ranging from $36.125 to $47.125 per share, which prices were the then- current
fair market value of the Common Stock ("fair market value") for which the
options were granted. 20% of the options under each grant will become
exercisable on each succeeding anniversary of the respective Grant Dates
through 2000 and 2001, respectively. The Committee believes that by rationing
the exercisability of these stock options over a five-year period, the
executive retention impact of the 1991 Stock Option Plan will be strengthened
and management's motivation to enhance the value of the Company's stock will
be constructively influenced.
CHIEF EXECUTIVE OFFICER COMPENSATION
During fiscal 1996, Mr. Derrick N. Key, Chief Executive Officer of the
Company was eligible to participate in the same executive compensation plans
as were available to other corporate-level executive officers of the Company.
Based on the performance of the Company in the prior fiscal year and the
Committee's assessment of Mr. Key's ongoing personal performance in the
position of Chief Executive Officer, Mr. Key received a salary increase
effective as of January 1, 1996. Among the factors considered by the committee
in its consideration of Mr. Key's performance were the continued expansion of
the Company's core businesses into both domestic and international markets and
the continued success of the Company's acquisition strategy. Finally, the
Committee desired to commence bringing Mr. Key's salary up to a level with
other CEO's of comparable public companies.
9
<PAGE>
Mr. Key's annual incentive bonus award for fiscal 1996 was earned under the
same plan applicable to all other corporate-level executive officers of the
Company and was based solely on the fiscal 1996 financial performance of the
Company and its subsidiaries. On that basis, Mr. Key received an annual
incentive bonus award equal to 51.73% of his fiscal 1996 year-end salary. No
subjective assessment of Mr. Key's performance entered into the determination
of his annual incentive bonus award.
Mr. Key was granted stock options on December 11, 1995 for 10,000 shares of
Common Stock under the Company's 1991 Stock Option Plan at the option price of
$36.125 per share. These options were based on the continuing success through
internally generated growth and through business acquisitions. He is eligible
to receive additional option grants in the future at the discretion of the
Committee.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Internal Revenue Code"), limits the amount of individual compensation for
certain executive that may be deducted by the employer for federal tax
purposes in any one fiscal year to $1 million unless such compensation is
paid, a number of factors, including shareholder approval of the plan under
which the compensation is paid, the exercise price at which options or similar
awards are granted, the disclosure to and approval by the shareholders of
applicable performance standards, the composition of the Compensation
Committee, and certification by the Compensation Committee that performance
standards were satisfied. In order to preserve the Company's ability to deduct
certain performance-based compensation under Section 162(m), the Compensation
Committee, in structuring compensation programs for its top executive
officers, intends to give strong consideration to the deductibility of awards.
Submitted by the Compensation Committee of the Board of Directors:
E. Douglas Kenna, Chairman
Eriberto R. Scocimara
Christopher Wright
10
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning the cash compensation
and additional incentive compensation paid by the Company to the Chief
Executive Officer and each of its four other most highly compensated executive
officers for the fiscal years ended October 31, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-
TERM COMPENSATION
---------------------
FISCAL ANNUAL COMPENSATION AWARDS PAYOUTS
YEAR --------------------- ----------- ---------
NAME AND ENDED ALL OTHER
PRINCIPAL POSITION OCT. 31, SALARY($) BONUS ($) OPTIONS (#) COMP. ($)
- ------------------ -------- --------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Derrick N. Key 1996 376,667(1) 196,574(1) 10,000 49,529(2)
President & CEO 1995 356,666 183,275 10,000 45,368
1994 287,000 149,700 80,000 24,446
A. Donald O'Steen 1996 185,000(1) 98,287(1) 10,000 31,546(3)
Executive Vice Presi-
dent 1995 158,333 81,456 6,000 29,050
1994 145,000 74,850 20,000 26,978
Zane E. Metcalf 1996 123,167(1) 64,145(1) 2,000 23,594(4)
Vice President 1995 118,416 60,583 2,000 23,017
and Treasurer 1994 114,583 57,635 10,000 22,571
Larry Christensen 1996 144,167(1) 54,375(1) 5,000 84,223(5)
Group Vice President, 1995 135,182 74,668 2,000 17,844
Industrial Controls 1994 117,083 81,600 10,000 16,109
Nigel W. Crocker 1996 130,000(1) 46,800(1) 5,000 28,975(6)
Group Vice President, 1995 91,750 69,625 2,000 10,262
Analytical Inst. 1994 79,687 44,420 10,000 11,350
</TABLE>
- --------
(1) Includes deferrals of income under a non-qualified retirement plan of
$214,977 for Mr. Key, $57,614 for Mr. O'Steen, $20,400 for Mr. Metcalf,
$3,943 for Mr. Christensen, and $11,582 for Mr. Crocker.
(2) (a) Qualified defined contribution plan contribution of $11,250; (b) non-
qualified defined contribution plan contribution of $30,746; (c)
supplemental executive retirement and life insurance plan of $7,533.
(3) (a) Qualified defined contribution plan contribution of 11,250; (b) non-
qualified defined contribution plan contribution of $8,734; (c)
supplemental executive retirement and life insurance plan of $11,562.
(4) (a) Qualified defined contribution plan contribution of $11,250; (b) non-
qualified defined contribution plan contribution of $2,531; (c)
supplemental executive retirement and life insurance plan of $9,813.
(5) (a) Qualified defined contribution plan contribution of $9,000; (b) non-
qualified defined contribution plan contribution of $7,886; (c)
supplemental executive retirement life insurance plan of $4,722; (d)
taxable relocation payments of $62,615.
(6) (a) Qualified defined contribution plan contribution of $11,250; (b) non-
qualified defined contribution plan contribution of $3,765; (c)
supplemental executive retirement and life insurance plan of $850; (d)
taxable relocation payments of $13,110.
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO EXERCISE APPRECIATION FOR
UNDERLYING EMPLOYEES OR BASE OPTION TERM
OPTIONS IN FISCAL PRICE EXPIRATION ---------------------
PRINCIPAL POSITION GRANTED YEAR ($/SH) DATE 5%($) 10%($)
- ------------------ ---------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Derrick N. Key
President &
CEO 10,000 3.59% 36.125 12/10/05 227,155 575,739
A. Donald
O'Steen
Executive Vice
President 10,000 3.59% 36.125 12/10/05 227,185 575,739
Zane E. Metcalf
Vice President
and Treasurer 2,000 0.72% 36.125 12/10/05 45,437 115,148
Larry
Christensen
Group Vice
President,
Industrial
Controls 5,000 1.80% 36.125 12/10/05 113,594 287,869
Nigel W.
Crocker
Group Vice
President,
Analytical
Instrumentation 5,000 1.80% 36.125 12/10/05 113,594 287,869
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED IN-
UNEXERCISED THE MONEY
OPTIONS AT OPTIONS AT
FY-END(#) FY-END($)
SHARES ------------- ----------------
NAME AND PRINCIPAL ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
POSITION ON EXERCISE RECEIVED UNEXERCISABLE UNEXERCISABLE
- ------------------ ----------- -------- ------------- ----------------
<S> <C> <C> <C> <C>
Derrick N. Key 0 0 46,000/78,000 87,125/1,223,375
President & CEO
A. Donald O'Steen 0 0 19,600/34,000 407,434/483,066
Executive Vice President
Zane E. Metcalf 0 0 12,400/15,200 310,883/282,492
Vice President and
Treasurer
Larry K. Christensen 0 0 18,800/18,200 527,375/301,812
Group Vice President,
Industrial Controls
Nigel W. Crocker 0 0 8,400/18,200 178,520/301,817
Group Vice President,
Analytical
Instrumentation
</TABLE>
12
<PAGE>
SHAREHOLDER RETURN PERFORMANCE
Set forth below is a line graph comparing the Company's quarterly total
shareholder returns to those of the Standard & Poor's 500 Index and a
Comparable Company Index (comprising BWIP Holding, Inc., The Duriron Company,
Inc., Elsag Bailey Process Automation N.V., Gorman-Rupp Company, Goulds Pump,
Incorporated, Idex Corporation, Inc., Keystone International, Inc., Robbins &
Myers Inc. and Watts Industries, Inc.) for the period beginning February 13,
1992, the date following completion of the Company's initial public offering,
and ending October 31, 1996. Total return values were calculated based on
cumulative total return assuming the value of the investment in the Company's
Common Stock and in each index was $100 and that all dividends were reinvested.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG ROPER INDUSTRIES, INC., PEER GROUP INDEX AND S&P 500 INDEX
<TABLE>
<CAPTION>
Measurement period Roper Industries Peer Group S&P 500
(Fiscal Year Covered) Inc. Index Index
- --------------------- ---------------- ---------- --------
<S> <C> <C> <C>
Measurement PT -
02/13/92 $ 100.00 $ 100.00 $ 100.00
FYE 04/30/1992 $ 110.16 $ 105.37 $ 102.24
FYE 07/31/1992 $ 76.72 $ 100.50 $ 105.35
FYE 10/30/1992 $ 110.75 $ 96.69 $ 104.78
FYE 01/29/1993 $ 154.11 $ 104.76 $ 110.60
FYE 04/30/1993 $ 235.79 $ 99.88 $ 111.70
FYE 07/30/1993 $ 379.77 $ 102.28 $ 114.57
FYE 10/29/1993 $ 432.63 $ 108.53 $ 120.44
FYE 01/31/1994 $ 312.40 $ 111.83 $ 124.85
FYE 04/29/1994 $ 300.38 $ 100.68 $ 117.65
FYE 07/29/1994 $ 334.84 $ 97.61 $ 120.48
FYE 10/31/1994 $ 298.27 $ 104.38 $ 125.11
FYE 01/31/1995 $ 270.86 $ 96.26 $ 125.51
FYE 04/28/1995 $ 336.86 $ 111.27 $ 138.20
FYE 07/31/1995 $ 427.93 $ 119.68 $ 151.94
FYE 10/31/1995 $ 453.89 $ 117.78 $ 158.18
FYE 01/31/1996 $ 496.31 $ 106.92 $ 174.04
FYE 04/30/1996 $ 584.21 $ 119.50 $ 179.96
FYE 07/31/1996 $ 465.59 $ 104.71 $ 177.12
FYE 10/31/1996 $ 532.71 $ 109.29 $ 196.30
</TABLE>
13
<PAGE>
OTHER MATTERS TO COME BEFORE THE MEETING
PROPOSAL 2: AMENDMENT OF THE CERTIFICATE OF INCORPORATION TO INCREASE THE
NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 80,000,000
Article 4 of the Certificate of Incorporation presently provides that the
Company is authorized to issue 25,000,000 shares of Common Stock and 1,000,000
shares of preferred stock, $.01 par value per share. The Board of Directors
has adopted an amendment to the Certificate of Incorporation to increase the
authorized Common Stock of the Company from 25,000,000 to 80,000,000 shares
and directed that the proposed amendment be submitted to the shareholders for
approval. The Board of Directors recommends that the shareholders vote FOR the
amendment. The additional shares of Common Stock for which authorization is
sought would be a part of the Company's existing, single class of Common Stock
and if and when issued, would have the same rights and privileges as the
shares of Common Stock now outstanding.
The text of the resolution to be presented for a vote of the shareholders at
the Meeting will be substantially as follows:
RESOLVED, that Article 4 of the Company's Restated Certificate of
Incorporation be, and it hereby is, amended by deleting paragraph A of Article
4 thereof in its entirety and substituting the following paragraph in lieu
thereof:
4. A. The total number of shares of stock which the Corporation shall have
authority to issue is eighty-one million (81,000,000) shares, divided into two
(2) classes as follows:
(i)eighty million (80,000,000) shares, each to be of the par value of
one cent ($.01), and to be designated as Common Stock; and
(ii)one million (1,000,000) shares, each to be of the par value of one
cent ($.01), and to be designated as Preferred Stock.
As of December 27, 1996 there were 15,165,546 shares of Common Stock issued
and outstanding, and no shares of Common Stock were held as treasury stock.
Unexercised options for 1,097,145 shares of Common Stock were outstanding.
369,233 additional shares of Common Stock were reserved for future option
grants under the plans.
Although the Board of Directors has no present plans for the issuance of
Common Stock, the additional shares of Common Stock that would be authorized
but unissued and not reserved for issuance would be available to the Company
for issuance in connection with general corporate purposes including, without
limitation, stock splits, stock dividends, dividend reinvestment plan and
other employee benefit plans, raising additional capital and acquisitions. The
Board of Directors believes that additional authorized Common Stock would give
the Company greater flexibility in executing its business strategies by
allowing the Company to issue shares of Common Stock without the expense and
delay of a shareholders' meeting to authorize additional shares if and when
the need arises.
The proposed amendment of the Certificate of Incorporation is not being
recommended in response to any specific effort of which management is aware to
obtain control of the Company. However, shares of authorized and unreserved
Common Stock could be issued to a holder who might thereby obtain sufficient
voting power to create voting impediments that would frustrate third parties
seeking to gain control of the Company against the wished of the Board of
Directors, whether or not such a takeover bid is in the best interest of the
shareholders. The Company has no agreements, understandings, commitments or
plans with respect to the sale or issuance of additional shares of Common
Stock other than pursuant to its employee benefit and incentive compensation
plans.
14
<PAGE>
The issuance of additional shares of Common Stock by the Company may,
depending upon the circumstances under which the shares are issued, reduce
shareholders' equity per share and may reduce the percentage of ownership of
Common Stock of existing shareholders. The issuance of additional shares of
Common Stock in payment of a stock dividend or to effect a stock split,
however, would not reduce the percentage of ownership of the Company by
existing shareholders or reduce any stockholder's interest in the earnings of
the Company. Shareholders have no preemptive right to subscribe for or
purchase any additional shares of Common Stock issued by the Company.
Proxies received which contain no instructions to the contrary will be voted
FOR approval of the proposed amendment of the Certificate of Incorporation.
The affirmative vote of holders of shares of Common Stock having, in the
aggregate, a majority of the votes of all of such shares issued and
outstanding is required for its approval. If the proposal is approved by the
shareholders, the amendment to the Certificate of Incorporation would become
effective upon the filing of a Certificate of Incorporation with the Secretary
of State of Delaware, which would occur as soon as practicable following the
approval of the proposal by the shareholders.
PROPOSAL 3: AMENDMENT OF THE 1991 STOCK OPTION PLAN TO AUTHORIZE A 250,000
SHARE INCREASE IN THE NUMBER OF SHARES OF COMMON STOCK TO BE RESERVED
FOR OPTIONS THEREUNDER.
Effective December 18, 1991, the Company adopted a Stock Option Plan (the
"1991 Stock Option Plan") under which incentive stock options intended to
qualify under Section 422 of the Internal Revenue Code of 1986, as amended, as
well as nonqualified options, may be granted. Under its present terms and
conditions, all employees and consultants of the Company are eligible to
participate in the 1991 Stock Option Plan which is administered by the
Compensation Committee of the Board of Directors. This Committee selects the
optionees and determines: (i) the amount of Common Stock subject to each
option; (ii) the vesting schedule of the option; (iii) the exercise price
(which, in the case of incentive stock options, cannot be less than 100% of
the fair market value on the date of grant); and (iv) the duration of the
option (which, in the case of incentive stock options, cannot exceed 10
years). All options are non-transferable other than by will or the laws of
descent and distribution, and incentive stock options are exercisable during
the lifetime of the optionee only while the optionee is in the employ of the
Company, or within three months (one year in the case of disability) after
termination of employment. If an optionee dies, the option is exercisable not
later than one year from the date of death to the extent the optionee was
entitled to exercise the option on the date of death.
Amendments to the 1991 Stock Option Plan (i) to increase the total number of
shares reserved for options, (ii) reduce the exercise price of any incentive
stock option below the exercise price at the time of its award, (iii) to
modify its eligibility provision or (iv) to materially increase the benefits
accruing to participants, require the approval of the Company's shareholder.
All other amendments may be made, from time to time, by the Board of
Directors. The Company's shareholders approved amendments to the 1991 Stock
Option Plan in 1993 and in 1994 which increased to 730,000 and 1,500,000,
respectively, the number of shares of Common Stock authorized to be reserved
for options thereunder.
From the inception of the 1991 Stock Option Plan to December 27, 1996, the
Compensation Committee has granted options thereunder to executive officers
and employees for 1,176,767 shares of Common Stock, net of subsequent
forfeitures, leaving 323,233 shares reserved for future option grants
thereunder. The expiration date for all options granted is ten years from the
respective grant dates, and all options granted become exercisable 20% per
year commencing with the grant date. The option prices have reflected fair
market value of the underlying shares at each grant date which ranged from
$7.50 to $47.125. On December 27, 1996, the last reported sale price of the
Common Stock on the New York Stock Exchange was $39.25 per share.
The Board of Directors believes that successful continuation of the
Company's business strategy, in particular additional acquisitions of
profitable businesses capable of continuing their growth and improving their
financial performance, depends on attracting and retaining able executives,
managers, and key employees. The Board of Directors believes that additional
shares must be reserved to facilitate the Company's attraction and retention
of capable personnel. The Board of Directors is also seeking shareholder
approval for the amendment to the 1991 Stock Option Plan to comply with the
terms of the plan and to preserve the Company's ability to
15
<PAGE>
deduct, for federal income tax purposes, compensation expense attributable to
stock options granted or that may be granted thereunder. Under Section 162(m)
of the Internal Revenue Code, shareholder approval of performance-based
compensation plans (including material amendments thereto) is necessary to
qualify for the performance-based compensation exception to the limitation on
a company's ability to deduct compensation paid to certain specified
individuals in excess of $1 million.
The following table sets forth information regarding stock options granted
to date under the 1991 Stock Option Plan, including stock options that have
been exercised to, (i) each of the Company's executive officers named in the
Summary Compensation Table set forth on page 11, (ii) all executive officers
of the Company as a group (non-employee Directors are not eligible to receive
stock options under the 1991 Stock Option Plan) and (iii) all employees of the
Company, other than executive officers, as a group.
<TABLE>
<CAPTION>
OPTIONS GRANTED WEIGHTED AVERAGE
NAME OF PERSON OR GROUP (NO. OF SHARES) EXERCISE PRICE PER SHARE
----------------------- --------------- ------------------------
<S> <C> <C>
Derrick N. Key...................... 130,000 $25.3990
A. Donald O'Steen................... 60,000 24.1125
Zane E. Metcalf..................... 34,000 18.7426
Larry Christensen................... 37,000 20.1520
Nigel W. Crocker.................... 37,000 20.1520
All executive officers as a group... 342,000 23.9613
All other employees as a group...... 1,178,007 18.2224
</TABLE>
The Board of Directors recommends that its shareholders vote FOR the
amendment of the 1991 Stock Option Plan to authorize a 250,000 share increase
in the number of shares of Common Stock to be reserved for options thereunder
to 1,750,000. If the amendment is approved approximately 1,573,000 shares of
Common Stock would be subject to future issuance pursuant to issued, but
unexercised, options and future option grants under the 1991 Stock Option
Plan. Proxies received which contain no instructions to the contrary will be
voted FOR the amendment of the 1991 Stock Option Plan. The affirmative vote of
holders of shares of Common Stock having, in the aggregate, a majority of the
votes of all shares present or represented by proxy and entitled to be cast on
the proposed amendment is required for its approval.
FEDERAL INCOME TAX CONSEQUENCES
The rules governing the tax treatment of options and stock acquired upon the
exercise of options are quite technical. Therefore, the description of tax
consequences set forth below is necessarily general in nature and does not
purport to be complete. Moreover, statutory provisions are subject to change,
as their interpretations, and their application may vary in individual
circumstances. Finally, the tax consequences under applicable state and local
income tax laws may not be the same as under the federal income tax laws.
Incentive options granted pursuant to the 1991 Stock Option Plan are
intended to qualify as "Incentive Stock Options" within the meaning of Section
422 of the Internal Revenue Code. If the participant makes no disposition of
the shares acquired pursuant to exercise of an incentive option within one
year after the transfer of shares to such participant and within two years
from grant of the option, such participant will realize no taxable income as a
result of the grant or exercise of such option; any gain or loss that is
subsequently realized may be treated as long-term capital gain or loss, as the
case may be. Under theses circumstances, the Company will not be entitled to a
deduction for federal income tax purposes with respect to either the issuance
of such incentive options or the transfer of shares upon their exercise. Under
current law, long-term capital gain is generally subject to a maximum federal
income tax rate of 35%.
If shares subject to incentive options are disposed of prior to the
expiration of the above time periods, the participant will recognize ordinary
income in the year in which the disqualifying disposition occurs, the amount
of which will generally be the lesser of (i) the excess of the market value of
the shares on the date of exercise over the option price, or (ii) the gain
recognized on such disposition. Such amount will ordinarily be deductible
by the Company for federal income tax purposes in the same year, provided that
the Company satisfies certain
16
<PAGE>
federal income tax withholding requirements. In addition, the excess, if any,
of the amount realized on a disqualifying disposition over the market value of
the shares on the date of exercise will be treated as capital gain to the
participant.
A participant who acquires shares by exercise of a nonqualified option
generally realizes as taxable ordinary income, at the time of exercise, on the
difference between the exercise price and the fair market value of the shares
on the date of exercise. Such amount will ordinarily be deductible by the
Company in the same year, provided that the Company satisfies certain federal
income tax withholding requirements
OTHER INFORMATION
VOTING BY PROXY AND CONFIRMATION OF BENEFICIAL OWNERSHIP
To assure that shares will be represented at the meeting, please complete,
sign and return the enclosed proxy in the envelope provided for that purpose
whether or not you expect to attend. Shares represented by a valid Proxy will
be voted as specified.
Any shareholder, without affecting any vote previously taken, may revoke a
proxy by a later-dated proxy or by giving notice of revocation to the Company
in writing addressed to the Company at 160 Ben Burton Road, Bogart, Georgia
30622.
As described below, the number of votes that each shareholder will be
entitled to cast at the meeting will depend on when the shares were acquired
and whether or not there has been a change in beneficial ownership since the
date of acquisition, with respect to each of such holder's shares. Stock
dividend shares received pursuant to the Company's September 1993 2-for-1
stock split in the form of a 100% stock dividend shall be entitled the same
number of votes as the original shares with respect to which they were
distributed.
Yellow cards are being furnished to shareholders whose shares of Common
Stock are held by brokers or banks or in nominee name. Shareholders receiving
yellow cards are requested to confirm to the Company how many of the shares
they own as of December 27, 1996 were beneficially owned on or before December
27, 1992, entitling such shareholder to five votes per share, and how many
were acquired after December 27, 1992, entitling such shareholder to one vote
per share. IF NO CONFIRMATION OF BENEFICIAL OWNERSHIP IS RECEIVED FROM A
SHAREHOLDER AT LEAST THREE (3) BUSINESS DAYS PRIOR TO THE ANNUAL MEETING, IT
WILL BE DEEMED BY THE COMPANY THAT BENEFICIAL OWNERSHIP OF ALL SHARES WAS
EFFECTED AFTER DECEMBER 27, 1992, AND THE SHAREHOLDER WILL BE ENTITLED TO ONE
VOTE FOR EACH SHARE. If a shareholder provides incorrect information, he may
provide correct information at any time at least three (3) business days prior
to the voting of his shares at the Annual Meeting.
Blue proxy cards are being furnished to individual shareholders of record on
December 27, 1996 whose shares of Common Stock on the records of the Company
show the following:
(i)that such shareholder had beneficial ownership of such shares on or
before December 27, 1992, and there has been no change since that date,
thus entitling such shareholder to five votes for each share; or
(ii)that beneficial ownership of such shares was effected after December
27, 1992, thus entitling such shareholder to one vote for each share; or
(iii)that the dates on which beneficial ownership of such shares was
effected are such that such shareholder is entitled to five votes for some
shares and one vote for other shares.
Printed on the blue proxy card for each individual shareholder of record is
the number of shares of Common Stock for which he is entitled to cast five
votes each and/or one vote each, as the case may be, as shown on the records
of the Company.
17
<PAGE>
Shareholders are urged to review the number of shares shown on their blue
proxy cards in the five-vote and one-vote categories. If the number of shares
shown in a voting category is believed to be incorrect, the shareholder should
notify the Company in writing of that fact and either enclose such notice
along with his proxy card in the postage-paid, return envelope, or mail such
notice directly to the Company at the address indicated above. The shareholder
should identify the shares improperly classified for voting purposes and
provide information as to the date beneficial ownership was acquired by him.
Any such notification of improper classification of votes must be made at
least three (3) business days prior to the Annual Meeting or the shareholder
will be entitled at the Annual Meeting to the number of votes indicated on the
records of the Company.
In certain cases record ownership may change but beneficial ownership for
voting purposes does not change. The Certificate of Incorporation of the
Company states the exceptions where beneficial ownership is deemed not to have
changed upon the transfer of shares of Common Stock. Shareholders should
consult the pertinent provision of the Certificate of Incorporation attached
as Annex A for those exceptions.
By resolution duly adopted by the Board of Directors of the Company pursuant
to subparagraph (v) of Article 4, of paragraph B of the Certificate of
Incorporation, the following procedures have been adopted for use in
determining the number of votes to which a shareholder is entitled.
(i) The Company may accept the written and signed statement of a
shareholder to the effect that no change in beneficial ownership has
occurred during the period following December 27, 1992 and until the date
on which a determination is made of the shareholders of the Company who are
entitled to vote or take any other action at the Annual Meeting (December
27, 1996). Such statement may be abbreviated to state only the number of
shares as to which such shareholder is entitled to exercise five votes or
one vote.
(ii) In the event the General Counsel of the Company, in his sole
discretion, taking into account the standards set forth in the Company's
Certificate of Incorporation, deems any such statement to be inadequate or
for any reason deems it in the best interest of the Company to require
further evidence of the absence of change of beneficial ownership during
such period preceding the record date, he may require such additional
evidence and, until it is provided in form and substance satisfactory to
him, a change in beneficial ownership during such period shall be deemed to
have taken place.
(iii) Information supplementing that contemplated by paragraph (i) and
additional evidence contemplated by paragraph (ii) may be provided by a
shareholder at any time but must be furnished at least three business days
prior to any meeting of shareholders at which such shares are to be voted
for any change to be effective at such meeting.
INDEPENDENT AUDITORS
The firm of KPMG Peat Marwick LLP provides assorted accounting services to
the Company and served as the Company's independent auditors for 1996. One or
more representatives of KPMG Peat Marwick LLP are expected to be present at
the Annual Meeting and will be given the opportunity to make a statement, if
they so desire, and to respond to appropriate questions of shareholders in
attendance. Consistent with its customary practice, the Board of Directors
expects to appoint its independent auditors for fiscal 1997 following the
Annual Meeting.
18
<PAGE>
SHAREHOLDER PROPOSALS FOR PRESENTATION
AT THE 1997 ANNUAL MEETING
If a shareholder of the Company wishes to present a proposal for
consideration for inclusion in the Proxy Statement at the Annual Meeting
scheduled to be held on February 20, 1998, the proposal must be sent by
Certified Mail-Return Receipt Requested and must be received at the executive
offices of the Company, 160 Ben Burton Road, Bogart, Georgia 30622; Attn:
General Counsel, no later than October 17, 1997. All proposals must conform to
the rules and regulations of the Securities and Exchange Commission.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company knows of no other business which will be or is intended to be
presented to the meeting. Should any further business come before the meeting
or any adjourned meeting, it is the intention of the proxies named in the
enclosed Proxy to vote according to their best judgment.
By the Order of the Board of
Directors
/s/ Shanler D. Cronk
Shanler D. Cronk Secretary
Dated: January 7, 1997
19
<PAGE>
ANNEX A
SUBPARAGRAPH B OF ARTICLE 4 OF THE
CERTIFICATE OF INCORPORATION OF ROPER INDUSTRIES, INC.
B. (i) EACH OUTSTANDING SHARE OF COMMON STOCK SHALL ENTITLE THE HOLDER
THEREOF TO FIVE (5) VOTES ON EACH MATTER PROPERLY SUBMITTED TO THE
SHAREHOLDERS OF THE CORPORATION FOR THEIR VOTE, WAIVER, RELEASE OR OTHER
ACTION; EXCEPT THAT NO HOLDER OF OUTSTANDING SHARES OF COMMON STOCK SHALL BE
ENTITLED TO EXERCISE MORE THAN ONE (1) VOTE ON ANY SUCH MATTER IN RESPECT OF
ANY SHARE OF COMMON STOCK WITH RESPECT TO WHICH THERE HAS BEEN A CHANGE IN
BENEFICIAL OWNERSHIP DURING THE FOUR (4) YEARS IMMEDIATELY PRECEDING THE DATE
ON WHICH A DETERMINATION IS MADE OF THE SHAREHOLDERS OF THE CORPORATION WHO
ARE ENTITLED TO VOTE OR TO TAKE ANY OTHER ACTION.
(ii) A CHANGE IN BENEFICIAL OWNERSHIP OF AN OUTSTANDING SHARE OF COMMON
STOCK SHALL BE DEEMED TO HAVE OCCURRED WHENEVER A CHANGE OCCURS IN ANY PERSON
OR PERSONS WHO, DIRECTLY OR INDIRECTLY, THROUGH ANY CONTRACT, AGREEMENT,
ARRANGEMENT, UNDERSTANDING, RELATIONSHIP OR OTHERWISE HAS OR SHARES ANY OF THE
FOLLOWING:
(a) VOTING POWER, WHICH INCLUDES, WITHOUT LIMITATION, THE POWER TO VOTE
OR TO DIRECT THE VOTING POWER OF SUCH SHARE OF COMMON STOCK;
(b) INVESTMENT POWER, WHICH INCLUDES, WITHOUT LIMITATION, THE POWER TO
DIRECT THE SALE OR OTHER DISPOSITION OF SUCH SHARE OF COMMON STOCK;
(c) THE RIGHT TO RECEIVE OR TO RETAIN THE PROCEEDS OF ANY SALE OR OTHER
DISPOSITION OF SUCH SHARE OF COMMON STOCK; OR
(d) THE RIGHT TO RECEIVE OR TO RETAIN ANY DISTRIBUTIONS, INCLUDING,
WITHOUT LIMITATION, CASH DIVIDENDS, IN RESPECT OF SUCH SHARE OF COMMON
STOCK.
(iii) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING SECTION (ii) OF THIS
SUBPARAGRAPH B, THE FOLLOWING EVENTS OR CONDITIONS SHALL BE DEEMED TO INVOLVE
A CHANGE IN BENEFICIAL OWNERSHIP OF A SHARE OF COMMON STOCK:
(a) IN THE ABSENCE OF PROOF TO THE CONTRARY PROVIDED IN ACCORDANCE WITH
THE PROCEDURES SET FORTH IN SECTION (v) OF THIS SUBPARAGRAPH B, A CHANGE IN
BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE OCCURRED (1) WHENEVER AN
OUTSTANDING SHARE OF COMMON STOCK IS TRANSFERRED OF RECORD INTO THE NAME OF
ANY OTHER PERSON AND (2) UPON THE ISSUANCE OF SHARES IN A PUBLIC OFFERING;
(b) IN THE CASE OF AN OUTSTANDING SHARE OF COMMON STOCK HELD OF RECORD IN
THE NAME OF A CORPORATION, GENERAL PARTNERSHIP, LIMITED PARTNERSHIP, VOTING
TRUSTEE, BANK, TRUST COMPANY, BROKER, NOMINEE OR CLEARING AGENCY, IF IT HAS
NOT BEEN ESTABLISHED PURSUANT TO THE PROCEDURES SET FORTH IN SECTION (v) OF
THIS SUBPARAGRAPH B THAT THERE HAS BEEN NO CHANGE IN THE PERSON OR PERSONS
WHO OR THAT DIRECT THE EXERCISE OF THE RIGHTS REFERRED TO IN CLAUSES (ii)
(a) THROUGH (ii) (d), INCLUSIVE, OF THIS SUBPARAGRAPH B WITH RESPECT TO
SUCH OUTSTANDING SHARE OF COMMON STOCK DURING THE PERIOD OF FOUR (4) YEARS
IMMEDIATELY PRECEDING THE DATE ON WHICH A DETERMINATION IS MADE OF THE
SHAREHOLDERS OF THE CORPORATION ENTITLED TO VOTE OR TO TAKE ANY OTHER
ACTION (OR SINCE FEBRUARY 12, 1992 FOR ANY PERIOD ENDING ON OR BEFORE
FEBRUARY 12, 1992), THEN A CHANGE IN BENEFICIAL OWNERSHIP OF SUCH SHARE OF
COMMON STOCK SHALL BE DEEMED TO HAVE OCCURRED DURING SUCH PERIOD;
(c) IN THE CASE OF AN OUTSTANDING SHARE OF COMMON STOCK HELD OF RECORD IN
THE NAME OF ANY PERSON AS A TRUSTEE, AGENT, GUARDIAN OR CUSTODIAN UNDER
A-1
<PAGE>
THE UNIFORM GIFTS TO MINORS ACT AS IN EFFECT IN ANY JURISDICTION, A CHANGE
IN BENEFICIAL OWNERSHIP SHALL BE DEEMED TO HAVE OCCURRED WHENEVER THERE IS
A CHANGE IN THE BENEFICIARY OF SUCH TRUST, THE PRINCIPAL OF SUCH AGENT, THE
WARD OF SUCH GUARDIAN, THE MINOR FOR WHOM SUCH CUSTODIAN IS ACTING OR IN
SUCH TRUSTEE, AGENT, GUARDIAN OR CUSTODIAN; OR
(d) IN THE CASE OF OUTSTANDING SHARES OF COMMON STOCK BENEFICIALLY OWNED
BY A PERSON OR GROUP OF PERSONS WHO, AFTER ACQUIRING, DIRECTLY OR
INDIRECTLY, THE BENEFICIAL OWNERSHIP OF FIVE PERCENT (5%) OF THE
OUTSTANDING SHARES OF COMMON STOCK, FAILS TO NOTIFY THE CORPORATION OF SUCH
OWNERSHIP WITHIN TEN (10) DAYS AFTER SUCH ACQUISITION, A CHANGE IN
BENEFICIAL OWNERSHIP OF SUCH SHARES OF COMMON STOCK SHALL BE DEEMED TO
OCCUR ON EACH DAY WHILE SUCH FAILURE CONTINUES.
(iv) NOTWITHSTANDING ANY OTHER PROVISION IN THIS SUBPARAGRAPH B TO THE
CONTRARY, NO CHANGE IN BENEFICIAL OWNERSHIP OF AN OUTSTANDING SHARE OF COMMON
STOCK SHALL BE DEEMED TO HAVE OCCURRED SOLELY AS A RESULT OF:
(a) ANY EVENT THAT OCCURRED PRIOR TO FEBRUARY 12, 1992 OR PURSUANT TO THE
TERMS OF ANY CONTRACT (OTHER THAN A CONTRACT FOR THE PURCHASE AND SALE OF
SHARES OF COMMON STOCK CONTEMPLATING PROMPT SETTLEMENT), INCLUDING
CONTRACTS PROVIDING FOR OPTIONS, RIGHTS OF FIRST REFUSAL AND SIMILAR
ARRANGEMENTS, IN EXISTENCE ON FEBRUARY 12, 1992 AND TO WHICH HOLDER OF
SHARES OF COMMON STOCK IS A PARTY; PROVIDED, HOWEVER, THAT ANY EXERCISE BY
AN OFFICER OR EMPLOYEE OF THE CORPORATION OR ANY SUBSIDIARY OF THE
CORPORATION OF AN OPTION TO PURCHASE COMMON STOCK AFTER FEBRUARY 12, 1992
SHALL, NOTWITHSTANDING THE FOREGOING AND CLAUSE (iv) (f) HEREOF, BE DEEMED
A CHANGE IN BENEFICIAL OWNERSHIP IRRESPECTIVE OF WHEN THAT OPTION WAS
GRANTED TO SAID OFFICER OR EMPLOYEE;
(b) ANY TRANSFER OF ANY INTEREST IN AN OUTSTANDING SHARE OF COMMON STOCK
PURSUANT TO A BEQUEST OR INHERITANCE, BY OPERATION OF LAW UPON THE DEATH OF
ANY INDIVIDUAL, OR BY ANY OTHER TRANSFER WITHOUT VALUABLE CONSIDERATION,
INCLUDING, WITHOUT LIMITATION, A GIFT THAT IS MADE IN GOOD FAITH AND NOT
FOR THE PURPOSE OF CIRCUMVENTING THE PROVISIONS OF THIS ARTICLE FOURTH;
(c) ANY CHANGES IN THE BENEFICIARY OF ANY TRUST, OR ANY DISTRIBUTION OF
AN OUTSTANDING SHARE OF COMMON STOCK FROM TRUST, BY REASON OF THE BIRTH,
DEATH, MARRIAGE OR DIVORCE OF ANY NATURAL PERSON, THE ADOPTION OF ANY
NATURAL PERSON PRIOR TO AGE EIGHTEEN (18) OR THE PASSAGE OF A GIVEN PERIOD
OF TIME OR THE ATTAINMENT BY ANY NATURAL PERSON OF A SPECIFIC AGE, OR THE
CREATION OR TERMINATION OF ANY GUARDIANSHIP OR CUSTODIAL ARRANGEMENT;
(d) ANY APPOINTMENT OF A SUCCESSOR TRUSTEE, AGENT, GUARDIAN OR CUSTODIAN
WITH RESPECT TO AN OUTSTANDING SHARE OF COMMON STOCK IF NEITHER SUCH
SUCCESSOR HAS NOR ITS PREDECESSOR HAD THE POWER TO VOTE OR TO DISPOSE OF
SUCH SHARE OF COMMON STOCK WITHOUT FURTHER INSTRUCTIONS FROM OTHERS;
(e) ANY CHANGE IN THE PERSON TO WHOM DIVIDENDS OR OTHER DISTRIBUTIONS IN
RESPECT OF AN OUTSTANDING SHARE OF COMMON STOCK ARE TO BE PAID PURSUANT TO
THE ISSUANCE OR MODIFICATION OF A REVOCABLE DIVIDEND PAYMENT ORDER;
(f) ANY ISSUANCE OF A SHARE OF COMMON STOCK BY THE CORPORATION OR ANY
TRANSFER BY THE CORPORATION OF A SHARE OF COMMON STOCK HELD IN TREASURY
OTHER THAN IN A PUBLIC OFFERING THEREOF, UNLESS OTHERWISE DETERMINED BY THE
BOARD OF DIRECTORS AT THE TIME OF AUTHORIZING SUCH ISSUANCE OR TRANSFER;
A-2
<PAGE>
(g) ANY GIVING OF A PROXY IN CONNECTION WITH A SOLICITATION OF PROXIES
SUBJECT TO THE PROVISIONS OF SECTION 14, OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, AND THE RULES AND REGULATIONS THEREUNDER PROMULGATED;
(h) ANY TRANSFER, WHETHER OR NOT WITH CONSIDERATION, AMONG INDIVIDUALS
RELATED OR FORMERLY RELATED BY BLOOD, MARRIAGE OR ADOPTION ("RELATIVES") OR
BETWEEN A RELATIVE AND A PERSON CONTROLLED BY ONE OR MORE RELATIVES WHERE
THE PRINCIPAL PURPOSE FOR THE TRANSFER IS TO FURTHER THE ESTATE TAX
PLANNING OBJECTIVES OF THE TRANSFEROR OR OF RELATIVES OF THE TRANSFEROR;
(i) ANY APPOINTMENT OF A SUCCESSOR TRUSTEE AS A RESULT OF THE DEATH OF
THE PREDECESSOR TRUSTEE (WHICH PREDECESSOR TRUSTEE SHALL HAVE BEEN A
NATURAL PERSON);
(j) ANY APPOINTMENT OF A SUCCESSOR TRUSTEE WHO OR WHICH WAS SPECIFICALLY
NAMED IN A TRUST INSTRUMENT PRIOR TO FEBRUARY 12, 1992; OR
(k) ANY APPOINTMENT OF A SUCCESSOR TRUSTEE AS A RESULT OF THE
RESIGNATION, REMOVAL OR FAILURE TO QUALIFY OF A PREDECESSOR TRUSTEE OR AS A
RESULT OF MANDATORY RETIREMENT PURSUANT TO THE EXPRESS TERMS OF A TRUST
INSTRUMENT; PROVIDED, THAT LESS THAN FIFTY PERCENT (50%) OF THE TRUSTEES
ADMINISTERING ANY SINGLE TRUST WILL HAVE CHANGED (INCLUDING IN SUCH
PERCENTAGE THE APPOINTMENT OF THE SUCCESSOR TRUSTEE) DURING THE FOUR (4)
YEAR PERIOD PRECEDING THE APPOINTMENT OF SUCH SUCCESSOR TRUSTEE.
(v) FOR PURPOSES OF THIS SUBPARAGRAPH B, ALL DETERMINATIONS CONCERNING
CHANGES IN BENEFICIAL OWNERSHIP, OR THE ABSENCE OF ANY SUCH CHANGE, SHALL BE
MADE BY THE BOARD OF DIRECTORS OF THE CORPORATION OR, AT ANY TIME WHEN THE
CORPORATION EMPLOYS A TRANSFER AGENT WITH RESPECT TO THE SHARES OF COMMON
STOCK, AT THE CORPORATION'S REQUEST, BY SUCH TRANSFER AGENT ON THE
CORPORATION'S BEHALF. WRITTEN PROCEDURES DESIGNED TO FACILITATE SUCH
DETERMINATIONS SHALL BE ESTABLISHED AND MAY BE AMENDED, FROM TIME TO TIME, BY
THE BOARD OF DIRECTORS. SUCH PROCEDURES SHALL PROVIDE, AMONG OTHER THINGS, THE
MANNER OF PROOF OF FACTS THAT WILL BE ACCEPTED AND THE FREQUENCY WITH WHICH
SUCH PROOF MAY BE REQUIRED TO BE RENEWED. THE CORPORATION AND ANY TRANSFER
AGENT SHALL BE ENTITLED TO RELY ON ANY AND ALL INFORMATION CONCERNING
BENEFICIAL OWNERSHIP OF THE OUTSTANDING SHARES OF COMMON STOCK COMING TO THEIR
ATTENTION FROM ANY SOURCE AND IN ANY MANNER REASONABLY DEEMED BY THEM TO BE
RELIABLE, BUT NEITHER THE CORPORATION NOR ANY TRANSFER AGENT SHALL BE CHARGED
WITH ANY OTHER KNOWLEDGE CONCERNING THE BENEFICIAL OWNERSHIP OF OUTSTANDING
SHARES OF COMMON STOCK.
(vi) IN THE EVENT OF ANY STOCK SPLIT OR STOCK DIVIDEND WITH RESPECT TO THE
OUTSTANDING SHARES OF COMMON STOCK, EACH SHARE OF COMMON STOCK ACQUIRED BY
REASON OF SUCH SPLIT OR DIVIDEND SHALL BE DEEMED TO HAVE BEEN BENEFICIALLY
OWNED BY THE SAME PERSON FROM THE SAME DATE AS THAT ON WHICH BENEFICIAL
OWNERSHIP OF THE OUTSTANDING SHARE OR SHARES OF COMMON STOCK, WITH RESPECT TO
WHICH SUCH SHARE OF COMMON STOCK WAS DISTRIBUTED, WAS ACQUIRED.
(vii) EACH OUTSTANDING SHARE OF COMMON STOCK, WHETHER AT ANY PARTICULAR TIME
THE HOLDER THEREOF IS ENTITLED TO EXERCISE FIVE (5) VOTES OR ONE (1) VOTE,
SHALL BE IDENTICAL TO ALL OTHER SHARES OF COMMON STOCK IN ALL RESPECTS, AND
TOGETHER THE OUTSTANDING SHARES OF COMMON STOCK SHALL CONSTITUTE A SINGLE
CLASS OF SHARES OF THE CORPORATION.
A-3
<PAGE>
APPENDIX A
[PROPOSED]
ROPER INDUSTRIES, INC.
AMENDED 1991 STOCK OPTION PLAN
I. PURPOSES
Roper Industries, Inc. (the "Company") desires to afford certain directors,
key employees, consultants and other employees of the Company and its
subsidiaries who are responsible for the continued growth of the Company an
opportunity to acquire a proprietary interest in the Company, and thus to
create in such persons interest in and a greater concern for the welfare of
the Company.
The stock options offered pursuant to this 1991 Stock Option Plan (the
"Plan") are a matter of separate inducement and are not in lieu of any salary
or other compensation for services.
The Company, by means of the Plan, seeks to retain the services of persons
now holding employment positions and to secure the services of persons capable
of filling such positions.
The options granted under the Plan may be designated as either incentive
stock options ("Incentive Options") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or options that do not
meet the requirements for Incentive Options ("Non- Qualified Options") but the
Company makes no warranty as to the qualification of any option as an
Incentive Option.
II. AMOUNT OF STOCK SUBJECT TO THE PLAN
The total number of shares of common stock of the Company which may be
purchased pursuant to the exercise of options granted under the Plan shall not
exceed, in the aggregate, 1,750,000 shares of the authorized common stock,
$.0l par value, per share, of the Company (the "Shares").
Shares which may be acquired under the Plan may be either authorized but
unissued Shares or Shares of issued stock held in the Company's treasury, or
both, at the discretion of the Company. If and to the extent that options
granted under the Plan expire or terminate without having been exercised, new
options may be granted with respect to the Shares covered by such expired or
terminated Options, provided that the grant and the terms of such new options
shall in all respects comply with the provisions of the Plan.
<PAGE>
Except as provided in Article XX, the Company may, from time to time during
the period beginning December 18, 1991 (the "Effective Date"), and ending
December 17, 2001 (the "Termination Date"), grant options to certain
directors, key employees, consultants and employees under the terms
hereinafter set forth.
III. ADMINISTRATION
The Board of Directors of the Company (the "Board of Directors") shall
designate from among its members an option committee (the "Committee") to
administer the Plan. The Committee shall consist of no fewer than three (3)
members of the Board of Directors, each of whom shall be a "disinterested
person" within the meaning of Rule 16b-3 (or any successor rule or regulation)
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). A majority of the members of the Committee shall constitute a
quorum, and the act of a majority of the members of the Committee shall be the
act of the Committee. Any member of the Committee may be removed at any time,
either with or without cause, by resolution adopted by a majority of the Board
of Directors, and any vacancy on the Committee may at any time be filled by
resolution adopted by a majority of the Board of Directors.
Any or all powers and functions of the Committee may at any time and from
time to time be exercised by the Board of Directors; provided, however, that,
with respect to the participation in the Plan by persons who are members of
the Board of Directors, such powers and functions of the Committee may be
exercised by the Board of Directors only if, at the time of such exercise, all
of the members of the Board of Directors acting in the particular matter, are
"disinterested persons" within the meaning of Rule 16b-3 (or any successor-
rule or regulation) promulgated under the Exchange Act.
Subject to the express provisions of the Plan, the Board of Directors or the
Committee, as the case may be, shall have authority, in its discretion, to
determine the persons to whom options shall be granted, the time when such
options shall be granted, the number of Shares which shall be subject to each
option, the purchase price of each share which shall be subject to each
option, the period(s) during which such options shall be exercisable (whether
in whole or in part) and the other terms and provisions thereof. In
determining the employees to whom options shall be granted and the number of
Shares for which options shall be granted to each person, the Board of
Directors or the Committee, as the case may be, shall consider the length of
service, the amount of earnings, and the responsibilities and duties of such
person.
Subject to the express provisions of the Plan, the Board of Directors or the
Committee, as the case may be, also shall have authority to construe the Plan
and options granted thereunder, to amend the Plan and options granted
thereunder, to prescribe, amend and rescind rules and regulations relating to
the Plan, to determine the terms and provisions of the respective options
(which need not be identical) and to make all other determinations necessary
or advisable for administering the Plan. The Board of Directors or the
Committee, as the case may be, also shall have the authority to require, in
its discretion, as a condition of the granting of any such option, that the
optionee agree (i) not to sell or otherwise dispose of Shares acquired
pursuant to the option for a period of
<PAGE>
six (6) months following the date of acquisition of such Shares and (ii) that
in the event of termination of service of the optionee with the Company or any
subsidiary of the Company, other than as a result of dismissal without cause,
such optionee will not, for a period to be fixed at the time of the grant of
the option, enter into any other employment or participate directly or
indirectly in any other business or enterprise which is competitive with the
business of the Company or any subsidiary of the company, or enter into any
employment in which such optionee will be called upon to utilize special
knowledge obtained through service with the Company or any subsidiary of the
Company.
The determination of the Board of Directors or the Committee as the case may
be, on matters referred to in this Article III shall be conclusive.
The Board of Directors or the Committee, as the case may be, may employ such
legal counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion received from any
such counsel or consultant and any computation received from any such
consultant or agent. Expenses incurred by the Board of Directors or the
Committee in the engagement of such counsel, consultant or agent shall be paid
by the Company. No member or former member of the Committee or of the Board of
Directors shall be liable for any action or determination made in good faith
with respect to the Plan or any option granted hereunder.
IV. ELIGIBILITY
Options may be granted only to directors, key employees, consultants and
employees of the Company and its subsidiaries who are not members of the
Committee.
An Incentive Option shall not be granted to any person who, at the time the
option is granted, owns stock of the Company or any subsidiary or parent of
the Company possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any subsidiary or
parent of the Company unless (i) the option price is at least one hundred ten
percent (110%) of the fair market value per share (as defined in Article VI)
of the stock subject to the option and (ii) the option is not exercisable
after the fifth anniversary of the date of grant of the option. In determining
stock ownership of an employee, the rules of Section 424(d) of the Code shall
be applied, and the Board of Directors or the Committee, as the case may be,
may rely on representations of fact made to it by the employee and believed by
it to be true.
V. MAXIMUM ALLOTMENT OF INCENTIVE OPTIONS
If the aggregate fair market value of stock with respect to which Incentive
Options are exercisable for the first time by an employee during any calendar
year (under all stock option plans of the Company and any parent or any
subsidiary of the Company) exceeds $ 1 00,000, any options which otherwise
qualify as Incentive Options, to the extent of the excess, will be treated as
Non- Qualified Options.
<PAGE>
VI. OPTION PRICE AND PAYMENT
The price per Share under any option granted hereunder shall be such amount
as the Board of Directors or the Committee, as the case may be, shall
determine but, in the case of an Incentive Option, such price shall not be
less than one hundred percent (100%) of the fair market value of the Shares
subject to such option, as determined in good faith by the Board of Directors
or the Committee, as the case may be, at the date the option is granted.
If the Shares are listed on a national securities exchange in the United
States on the date any option is granted, the fair market value per Share
shall be deemed to be the average of the high and low quotations at which such
Shares are sold on such national securities exchange in the United States on
the date next preceding the date upon which the option is granted, but if the
Shares are not traded on such date, or such national securities exchange is
not open for business on such date, the fair market value per Share shall be
determined as of the closest preceding date on which such exchange shall have
been open for business and the Shares were traded. If the Shares are listed on
more than one national securities exchange in the United States on the date
any such option is granted, the Committee shall determine which national
securities exchange shall be used for the purpose of determining the fair
market value per Share. If the Shares are not listed on a national securities
exchange, but are reported on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the fair market value per share shall
be deemed to be the average of the high bid and low asked prices on the date
next preceding the date upon which the option is granted as reported by
NASDAQ.
For purposes of this Plan, the determination by the Board of Directors or
the Committee, as the case may be, of the fair market value of a Share shall
be conclusive.
Upon the exercise of an option granted hereunder, the Company shall cause
the purchased Shares to be issued only when it shall have received the full
purchase price for the Shares in cash; provided, however, that in lieu of
cash, the holder of an option may, if and to the extent the terms of such
option so provide and to the extent permitted by applicable law, exercise an
option in whole or in part, by delivering to the Company shares of common
stock of the Company (in proper form for transfer and accompanied by all
requisite stock transfer tax stamps or cash in lieu thereof) owned by such
holder having a fair market value equal to the cash exercise price applicable
to that portion of the option being exercised by the delivery of such Shares.
The fair market value of the stock so delivered shall be determined as of the
date immediately preceding the date on which the option is exercised, or as
may be required in order to comply with or to conform to the requirements of
any applicable laws or regulations.
<PAGE>
VII. USE OF PROCEEDS
The cash proceeds of the sale of Shares subject to the options granted
hereunder are to be added to the general funds of the Company and used for its
general corporate purposes as the Board of Directors shall determine,
VIII. LOANS, LOAN GUARANTEES AND INSTALLMENT PAYMENTS
In order to assist an optionee (including an optionee who is an officer or
director of the Company or any subsidiary of the Company) in the acquisition
of shares of Common Stock pursuant to options granted under the Plan, the
Board of Directors or the Committee, as the case may be, may authorize, at
either the time of the grant of an option or the time of the acquisition of
Common Stock pursuant to the option; (i) the extension of a loan to the
optionee by the Company, (ii) the payment by the optionee of the purchase
price, if any, for the Common Stock in installments, or (iii) the guarantee by
the Company or a subsidiary of the Company of a loan obtained by the optionee
from a third party. The terms of any loans, guarantees or installment
payments, including the interest rate and terms of repayment, will be subject
to the discretion of the Board of Directors or the Committee, as the case may
be. Loans, installment payments and guarantees may be granted without
security, the maximum credit available being the purchase price, if any, of
the Common Stock acquired plus the maximum federal and state income and
employment tax liability which may be incurred in connection with the
acquisition. In no event, however, may the amount of any loan exceed the
amounts allowable to the loan to such individual for the purposes stated
hereunder as provided by any regulation of the United States Treasury or other
State or Federal statute.
IX. TERM OF OPTIONS AND LIMITATIONS ON THE RIGHT OF EXERCISE
Unless the Board of Directors or the Committee, as the case may be, shall
determine otherwise (in which event the instrument evidencing the option
granted hereunder shall so specify), any option granted hereunder shall be
exercisable during a period of not more than ten (10) years from the date of
grant of such option.
The Board of Directors or the Committee, as the case may be, shall have the
right to accelerate, in whole or in part, from time to time, conditionally or
unconditionally, rights to exercise any option granted hereunder.
To the extent that an option is not exercised within the period of
exercisability specified herein, it shall expire as to the then unexercised
part.
<PAGE>
X. EXERCISE OF OPTIONS
Options granted under the Plan shall be exercised by the optionee as to all
or part of the Shares covered thereby by the giving of written notice of the
exercise thereof to the Corporate Secretary of the Company and the stock
transfer agent for the Company at the principal business office of the
Company, specifying the number of Shares to be purchased and specifying a
business day not more than fifteen (I 5) days from the date such notice is
given, for the payment of the purchase price against delivery of the Shares
being purchased. Subject to the terms of Articles XV, XVI, XVII and XVIII or
any other terms or conditions of any options grant deemed advisable in the
administration of the grant by the Board of Directors or the Committee, as the
case may be, the Company shall cause certificates for the Shares so purchased
to be delivered to the optionee, against payment of the full purchase price,
on the date specified in the notice of exercise.
XI. NONTRANSFERABILITY OF OPTIONS
An option granted hereunder shall not be transferable, whether by operation
of law or otherwise, other than by will or the laws of descent and
distribution, and any option granted hereunder shall be exercisable, during
the lifetime of the holder, only by such holder.
XII. TERMINATION OF EMPLOYMENT
Upon termination of employment of any employee with the Company or any
subsidiary of the Company any option previously granted to such employee,
unless otherwise specified by the Board of Directors or the Committee, as the
case may be, shall, to the extent not theretofore exercised, terminate and
become null and void, provided that:
(a) if the employee shall die while in the employ of the Company or any
subsidiary of the Company or during either the three (3) month or one (1) year
period, whichever is applicable, specified in clause (b) below at a time when
such employee was entitled to exercise an option as herein provided, the legal
representative of such employee, or such person who acquired such option by
bequest or inheritance or by reason of the death of the employee, may, not
later than one (1) year from the date of death, exercise such option, to the
extent not theretofore exercised, in respect of any or all of such number of
Shares as specified by the Board of Directors or the Committee, as the case
may be, in such option grant; and
<PAGE>
(b) if the employment of any employee to whom such option shall have been
granted shall terminate by reason of the employee's retirement (at such age or
upon such conditions as shall be specified by the Board of Directors or the
Committee, as the case may be), disability (as described in Section 22(e)(3)
of the Code) or dismissal by the employer other than for cause (as defined
below), and while such employee is entitled to exercise such option as herein
provided, such employee shall have the right to exercise such option so
granted, to the extent not theretofore exercised, in respect of any or all of
such number of Shares as specified by the Board of Directors or the Committee,
as the case may be, in such option at any time up to and including (i) three
(3) months after the date of such termination of employment in the case of
termination by reason of retirement or dismissal other than for cause and (ii)
one (1) year after the date of termination of employment in the case of
termination by reason of disability.
In no event, however, shall any person be entitled to exercise any option
after the expiration of the period of exercisability of such option as
specified therein.
If an employee voluntarily terminates his or her employment, or is
discharged for cause, any options granted hereunder and any interest of the
employee in such option shall, unless otherwise specified by the Board of
Directors or the Committee, as the case may be, in the option, forthwith
terminate with respect to any unexercised portion thereof.
Notwithstanding any other provision of this Article XII, if the employment
of any employee with the Company or any subsidiary of the Company is
terminated, whether voluntarily or involuntarily, within a one-year period
following a change in the ownership or effective control of the Company
(within the meaning of Section 28OG(b)(2)(A)(i) and while such employee is
entitled to exercise an option as herein provided, other than a termination of
such employment by the Company or any subsidiary of the Company for cause,
such employee shall have the right to exercise all or any portion of such
option at any time up to and including three (3) months after the date of such
termination of employment, at which time such option shall cease to be
exercisable.
If an option granted hereunder shall be exercised by the legal
representative of a deceased employee or former employee, or by a person who
acquired an option granted hereunder by bequest or inheritance or by reason of
the death of any employee or former employee, written notice of such exercise
shall be accompanied by a certified copy of letters testamentary or equivalent
proof of the right of such legal representative or other person to exercise
such option.
For the purposes of the Plan, the term "for cause" shall mean (i) with
respect to an employee who is a party to a written agreement with, or,
alternatively, participates in a compensation or benefit plan of the Company
or any subsidiary of the Company, which agreement or plan contains a
definition of "for cause or cause" (or words of like import) for purposes of
termination of employment thereunder by the Company or such subsidiary of the
Company, "for cause" or "cause" as defined in the most recent of such
agreements or plans, or (ii) in all other cases, as determined by the
Committee or the Board of Directors, as the case may be, in its sole
discretion, (a) the willful commission by an employee of a criminal or other
act that causes or will probably cause
<PAGE>
substantial economic damage to the Company or a substantial injury to the
business reputation of the Company; (b) the commission by an employee of an
act of fraud in the performance of such employee's duties on behalf of the
Company or any subsidiary of the Company; or (c) the continuing willful
failure of an employee to perform the duties of such employee to the Company
or any subsidiary of the Company (other than such failure resulting from the
employee's incapacity due to physical or mental illness) after written notice
thereof (specifying the particulars thereof in reasonable detail) and a
reasonable opportunity to be heard and cure such failure are given to the
employee by the Board of Directors or the Committee, as the case may be. For
purposes of the Plan, no act, or failure to act, on the employee's part shall
be considered "willful" unless done or omitted to be done by the employee not
in good faith and without reasonable belief that the employee's action or
omission was in the best interest of the Company or a subsidiary of the
Company.
For the purposes of the Plan, an employment relationship shall be deemed to
exist between an individual and a corporation if, at the time of the
determination, the individual was an employees or such corporation for
purposes of Section 422(a) of the Code. If an individual is on military, sick
leave or other bona fide leave of absence such individual shall be considered
an "employee" for purposes of the exercise of an option and shall be entitled
to exercise such option during such leave if the period of such leave does not
exceed 90 days, or, if longer, so long as the individual's right to
reemployment with the Company is guaranteed either by statute or by contract.
If the period of leave exceeds ninety (90) days, the employment relationship
shall be deemed to have terminated on the ninety-first (91st) day of such
leave, unless the individual's right to re-employment is guaranteed by statute
or contract.
A termination of employment shall not be deemed to occur by reason of (i)
the transfer of an employee from employment by the Company to employment by a
subsidiary of the Company or (ii) the transfer of an employee from employment
by a subsidiary of the Company to employment by the Company or by another
subsidiary of the Company.
XIII. ADJUSTMENT OF SHARES, EFFECT OF CERTAIN TRANSACTIONS
In the event of any change in the outstanding Shares through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split,
split-up, split-off, spin-off, combination of shares, exchange of shares, or
other like change in capital structure of the Company, an adjustment shall be
made to each outstanding option such that each such option shall thereafter be
exercisable for such securities, cash and/or other property as would have been
received in respect of the Shares subject to such option had such option been
exercised in full immediately prior to such change, and such an adjustment
shall be made successively each time any such change shall occur. The term
"Shares" shall after any such change refer to the securities, cash and/or
property then receivable upon exercise of an option. In addition, in the event
of any such change, the Board of Directors or the Committee, as the case may
be, shall make any further adjustment as may be appropriate to the maximum
number of Shares subject to the Plan, the maximum number of Shares for which
options may be granted to any
<PAGE>
one employee, and the number of Shares and price per Share subject to
outstanding options as shall be equitable to prevent dilution or enlargement
of rights under such options, and the determination of the Board of Directors
or the Committee, as the case may be, as to these matters shall be conclusive.
Notwithstanding the foregoing, (i) each such adjustment with respect to an
Incentive Option shall comply with the rules of Section 424(a) of the Code,
and (ii) in no event shall any adjustment be made which would render any
Incentive Option granted hereunder other than an incentive stock option for
purposes of Section 422 of the Code without the consent of the grantee.
XIV. RIGHT TO TERMINATE EMPLOYMENT
The Plan shall not impose any obligation on the Company or any subsidiary of
the Company to continue the employment of any holder of an option and it shall
not impose any obligation on the part of any holder of an option to remain in
the employ of the Company or of any subsidiary thereof.
XV. PURCHASE FOR INVESTMENT
Except as hereafter provided, the holder of an option granted hereunder
shall, upon any exercise thereof, execute and deliver to the Company a written
statement, in form satisfactory to the Company, in which such holder
represents and warrants that such holder is purchasing or acquiring the Shares
acquired thereunder for such holder's own account, for investment only and not
with a view to the resale or distribution thereof, and agrees that any
subsequent offer for sale or sale or distribution of any such Shares shall be
made only pursuant to either (a) a Registration Statement on an appropriate
form under the Securities Act of 1933, as amended (the "Securities Act"),
which Registration Statement has become effective and is current with regard
to the Shares being offered or sold, or (b) a specific exemption from the
registration requirements of the Securities Act, but in claiming such
exemption the holder shall, prior to any offer for cash or sale of such
Shares, obtain a prior favorable written opinion, in form and substance
satisfactory to the Company, from counsel for or approved by the Company, as
to the applicability of such exemption thereto. The foregoing restriction
shall not apply to (i) issuances by the Company so long as the Shares being
issued are registered under the Securities Act and a prospectus in respect
thereof is current or (ii) reofferings of Shares by affiliates of the Company
(as defined in Rule 405 or any successor rule or regulation promulgated under
the Securities Act) if the Shares being reoffered are registered under the
Securities Act and a prospectus in respect thereof is current.
XVI. ISSUANCE OF CERTIFICATES. LEGENDS: PAYMENT OF EXPENSES
Upon any exercise of an option which may be granted hereunder and payment of
the purchase price, a certificate or certificates for the Shares as to which
the option has been exercised shall be issued by the Company
<PAGE>
in the name of the person exercising the option and shall be delivered to or
upon the order of such person or persons.
The Company may endorse such legend or legends upon the certificates for
Shares issued upon exercise of an option granted hereunder and may issue such
"stop transfer" instructions to its transfer agent in respect of such Shares
as, in its discretion, it determines to be necessary or appropriate to (i)
prevent a violation of, or to perfect an exemption from, the registration
requirements of the Securities Act, (ii) implement the provisions of the Plan
and any agreement between the Company and the optionee or grantee with respect
to such Shares, or (iii) permit the Company to determine the occurrence of a
disqualifying disposition, as described in Section 421(b) of the Code, of
Shares transferred upon exercise of an Incentive Option granted under the
Plan.
The Company shall pay all issue or transfer taxes with respect to the
issuance or transfer of Shares upon exercise of an option, as well as all fees
and expenses necessarily incurred by the Company in connection with such
issuance or transfer, except fees and expenses which may be necessitated by
the filing or amending of a Registration Statement under the Securities Act,
which fees and expenses shall be borne by the recipient of the Shares unless
such Registration Statement has been filed by the Company for its own
corporate purposes (and the Company so states) in which event the recipient of
the Shares shall bear only such fees and expenses as are attributable solely
to the inclusion of the Shares he or she receives in the Registration
Statement, provided that the Company shall have no obligation to include any
shares in any Registration Statement.
All Shares issued as provided herein shall be fully paid and non-assessable
to the extent permitted by law.
XVII. WITHHOLDING TAX
The Company may require an employee exercising a Non-Qualified Option or
disposing of Shares acquired pursuant to the exercise of an Incentive Option
in a disqualifying disposition (within the meaning of Section 421(b) of the
Code) to reimburse the corporation that employs such employee for any taxes
required by any government to be withheld or otherwise deducted and paid by
such corporation in respect of the issuance or disposition of Shares. In lieu
thereof, the corporation that employs such employee shall have the right to
withhold the amount of such taxes from any other sums due or to become due
from such corporation to the employee upon such terms and conditions as the
Board of Directors or the Committee, as the case may be, shall prescribe.
<PAGE>
XVIII. LISTING OF SHARES AND RELATED MATTERS
If at any time the Board of Directors shall determine in its discretion that
the listing, registration or qualification of the Shares covered by the Plan
upon any national securities exchange or any state or federal law or the
consent or approval of any governmental regulatory body, is necessary or
desirable as a condition of, or in connection with, the sale or purchase of
Shares under the Plan, no Shares shall be issued unless and until such
listing, registration, qualification, consent or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Board of Directors.
XIX. AMENDMENT OF THE PLAN
The Board of Directors may, from to time, amend the Plan, provided that no
amendment shall be made, without the approval of the shareholders of the
Company, that will (i) increase the total number of Shares reserved for
options under the Plan (other than an increase resulting from an adjustment
provided for in Article XIII), (ii) reduce the exercise price of any Incentive
Option granted hereunder below the price required by Article VI, (iii) modify
the provisions of the Plan relating to eligibility, or (iv) materially
increase the benefits accruing to participants under the Plan. The Board of
Directors or the Committee, as the case may be, shall be authorized to amend
the Plan and the options granted hereunder to permit the Incentive Options
granted hereunder to qualify as incentive stock options within the meaning of
Section 422 of the Code. The rights and obligations under any option granted
before amendment of the Plan or any unexercised portion of such option shall
not be adversely affected by amendment of the Plan or the option without the
consent of the holder of the option.
XX. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors may at any time suspend or terminate the Plan. The
Plan, unless sooner terminated by action of the Board of Directors, shall
terminate at the close of business on the Termination Date. An option may not
be granted while the Plan is suspended or after it is terminated. Rights and
obligations under any option granted while the Plan is in effect shall not be
altered or impaired by suspension or termination of the Plan, except upon the
consent of the person to whom the option was granted. The power of the Board
of Directors or the Committee, as the case may be, to construe and administer
any options granted prior to the termination or suspension of the Plan under
Article III nevertheless shall continue after such termination or during such
suspension.
XXI. GOVERNING LAW
The Plan, such options as may be granted thereunder and all related matters
shall be governed by, and construed and enforced in accordance with, the laws
of the State of Delaware.
<PAGE>
XXII. PARTIAL INVALIDITY
The invalidity or illegality of any provision herein shall not be deemed to
affect the validity of any other provision.
XXIII. EFFECTIVE DATE
The Plan shall become effective at 5:00 P.M., New York City time, on the
Effective Date; provided, however, that if the Plan is not approved by a vote
of the shareholders of the Company at an annual meeting or any special meeting
or by unanimous written consent within twelve (12) months before or after the
Effective Date, the Plan and any options granted thereunder shall terminate.
<PAGE>
[BLUE]
ROPER INDUSTRIES, INC.
This proxy for the 1997 Annual Meeting of Shareholders is Solicited on Behalf
of the Board of Directors
The undersigned instructs that this Proxy be voted as marked.
-------------------------------------------
------------------------------------
Signature of Shareholder(s)
Please sign your name as it appears on
this Proxy. In case of multiple or joint
ownership, all should sign. When signing
as attorney, executor, administrator,
trustee or guardian, give full title as
such.
Dated ,1997
(Continued on Reverse Side)
<PAGE>
LOGO
[YELL0W]
ROPER INDUSTRIES, INC.
This proxy for the 1997 Annual Meeting of Shareholders is Solicited on Behalf
of the Board of Directors
VOTING CONFIRMATION
Please provide the number of shares beneficially owned for each category as of
December 27, 1996.
shares beneficially owned ON or BEFORE December 27, 1992 entitled to
five votes each.
shares beneficially owned and acquired AFTER December 27, 1992 entitled
to one vote each.
If no confirmation is provided, all shares voted will be entitled to one vote
each.
The undersigned instructs that this Proxy
be voted as marked.
------------------------------------
Dated ,1997 ------------------------------------
(continued on reverse side) Signature of Shareholder(s)
Please sign your name as it appears on
this Proxy, in case of joint ownership,
all should sign. When signing as attorney,
executor, administrator, trustee or
guardian, give full title as such.
<PAGE>
[401K]
[WHITE]
LOGO
ROPER INDUSTRIES, INC.
EMPLOYMENT RETIREMENT SAVING PLAN PARTICIPANT VOTING PREFERRED FOR THE 1997
ANNUAL MEETING OF SHAREHOLDERS
The undersigned instructs the Plan Trustee
of his/her preference that the shares of
Roper Industries, Inc. Common Stock in the
Plan's Roper Stock Fund allocated to
him/her as of the Annual Meeting record
date be voted as indicated.
------------------------------------
Signature of Plan Participant
Please sign your name as it appears on
this Proxy.
Dated ,1997 ------------------------------------
(Continued on Reverse Side) Social Security No.
<PAGE>
LOGO
UNLESS OTHERWISE SPECIFIED BELOW, THIS PROXY WILL BE VOTED (I) FOR THE ELECTION
AS DIRECTORS OF THE NOMINEES LISTED BELOW.
At the Annual Meeting of Shareholders of Roper Industries, Inc. to be held on
February 14, 1997 at 12 noon at its corporate offices at 160 Ben Burton Road,
Bogart, Georgia 30622 and all meeting adjournments, Derrick N. Key and Zane E.
Metcalf and each of them are authorized to represent me and vote my shares on
the following:
1. The election of four (4) Directors. The nominees are:
E. Douglas Kenna, George L. Ohrstrom, Jr., Eriberto R. Scocimara, Georg Graf
Schall-Riaucour.
[_] For all nominees listed above.
[_] For all nominees listed above except those selected nominees written on
the line below:
----------------------------------------------------------------------
(INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name on the line provided above).
[_] WITHHOLD AUTHORITY to vote for all nominees listed above.
2. To approve the proposed amendment of the Certificate of Incorporation of the
Company to increase the number of shares of Common Stock to 80,000,000:
[_] FOR [_] AGAINST [_] ABSTAIN
3. To approve the proposed amendment of the 1991 Stock Option Plan to authorize
a 250,000 share increase in the number of shares of Common Stock to be
reserved for options thereunder.
[_] FOR [_] AGAINST [_] ABSTAIN
4. In their discretion, the proxies are authorized to vote upon any other
matter that may properly come before this meeting.
[_] FOR [_] AGAINST [_] ABSTAIN
