DEF 14A of RBC Bearings INC, Jul 28, 2023

DEF 14A of RBC Bearings INC

Filed Jul 28, 2023 · FY20230001140361-23-036767

Open on EDGAR

  1. Proposal 1: Election of Directors

    Proposal 1: Election of Directors The Board currently is composed of eight directors serving staggered three-year terms and divided into Class I, Class II and Class III. This year the Class III directors are up for election and our Nominating and Governance Committee has nominated Dr. Michael J. Hartnett and Dolores J. Ennico for election at the annual meeting. Dr. Hartnett and Ms. Ennico are currently Class III directors and first joined the Board in 1992 and 2020, respectively. The Nominating and Governance Committee reviewed the qualifications of the nominees for election to this class and unanimously recommended to the Board that these nominees be submitted for election. We believe that each of our nominees has a reputation for integrity, honesty and adherence to high ethical standards. They each have demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of service to the Company and the Board.

  2. Proposal 1: Election of Directors

    | Dr. Michael J. Hartnett | Dr. Hartnett has been the Company’s President and Chief Executive Officer since 1992 and Chairman of the Board since 1993. Prior to that, Dr. Hartnett served as President and General Manager of our Industrial Tectonics Bearings Corporation, or ITB, subsidiary from 1990, following 18 years at The Torrington Company, one of the three largest bearings manufacturers in the U.S. While at The Torrington Company, Dr. Hartnett held the position of Vice President and General Manager of the Aerospace Business Unit and was, prior to that, Vice President of the Research and Development Division. Dr. Hartnett holds an undergraduate degree from the University of New Haven, a Master’s degree from Worcester Polytechnic Institute and a Doctoral degree in Applied Mechanics from the University of Connecticut. Dr. Hartnett has developed numerous patents, authored more than two dozen technical papers and is well known for his contributions to the field of tribology, the study of friction. Dr. Hartnett served as a director of ATC Technology Corporation, a publicly-owned third-party logistics and automotive aftermarket service provider, until 2010, and served as a director of Process Fab Inc., a private company in the business of precision manufacturing and related services, until 2014. | | Director since 1992 Age: 78 Committees: none | | | Skills and Expertise Dr. Hartnett provides the Board with significant leadership and executive experience. His proven leadership capability and his strong knowledge of the complex financial and operational issues facing mid-sized companies provides the Board with a unique and necessary perspective. | |

  3. Proposal 1: Election of Directors

    | Dolores J. Ennico | Ms. Ennico has been a director since 2020. She is currently the Principal of Canterbury Consulting, which provides strategic consulting services for various business initiatives. She was Chief Human Resources Officer of Olin Corporation from 2009 to 2018 and prior to that served Olin in a variety of capacities from 1974 including Vice President, Administration from 2004 to 2009, Director, Corporate Employee Relations from 2000 to 2004, and Director of Retail Marketing, Pool Chemicals from 1997 to 2000. Ms. Ennico is a member of the Board of Governors of the University of New Haven and a member of its Compensation Committee, is a member of the Advisory Council of Sacred Heart Academy in Hamden, Connecticut, and is a member of the Executive Committee of the Board of the Girl Scouts of Connecticut. She earned a Bachelor of Science degree in Microbiology and a Master of Science degree in Biochemistry from Southern Connecticut State University, and a Master of Business Administration degree from the University of New Haven. | | Director since 2020 Age: 70 Committees: Compensation Committee (Chair) Nominating and Governance Committee | | | Skills and Expertise Ms. Ennico’s vast experience in human capital management, including executive compensation, her C-suite experience with a Fortune 500 company, and her various board experiences, are valuable resources for the Board. | |

  4. Proposal 1: Election of Directors

    Directors are elected by a majority of the votes cast at the meeting. If elected at the meeting, each of Dr. Hartnett and Ms. Ennico would serve until the 2026 annual meeting and until a successor is duly elected and qualified, or until their resignation or removal. If any of Dr. Hartnett or Ms. Ennico should for any reason become unavailable to serve as a director prior to the annual meeting, the Board will (i) reduce the size of the Board to eliminate the position for which that person was nominated, (ii) nominate a new candidate in place of such person, in which case the proxy holders will vote for the new candidate, or (iii) leave the place vacant to be filled at a later time.

  5. Proposal 1: Election of Directors

    | | The Board recommends a vote FOR the election to the Board of Directors of the nominees identified above. |

  6. Proposal 1: Election of Directors

    | 06 | | 2023 Proxy Statement |

  7. Proposal 4: Advisory Vote on Executive Compensation

    | • | ensure that no problematic pay practices exist (e.g., benchmarking compensation above peers, re-pricing or backdating of stock options, excessive perquisites, or tax gross-ups), and |

  8. Proposal 4: Advisory Vote on Executive Compensation

    | • | Peer Group: The peer group in place as of the 2021 annual meeting was revised by removing ten companies (AAR, Astronics, CIRCOR International, Cognex, Esterline Technologies, FARO Technologies, FLIR Systems, Kulicke and Soffa Industries, MTS Systems and Teledyne Technologies), adding 11 companies (Altra Industrial Motion, BWX Technologies, Donaldson Company, Evoqua Water Technologies, ITT, Kratos Defense & Security, Mercury Systems, Regal Rexnord, Timken, Watts Water Technologies and Woodward), and retaining eight companies (Barnes Group, Crane, Curtiss-Wright, Franklin Electric, Graco, HEICO, Hexcel and Moog). The changes were made to recognize the Company’s significantly larger size and scope of business following our acquisition of Dodge Industrial in November 2021 while at the same time avoiding the inclusion in our peer group of “aspirational” peers. |

  9. Proposal 4: Advisory Vote on Executive Compensation

    | • | Equity-Based Compensation: The previous long-term equity incentive program for the CEO and COO, which each year awarded a specific number of shares of restricted stock |

  10. Proposal 4: Advisory Vote on Executive Compensation

    and stock options based on the Company’s performance in the prior fiscal year, was replaced with a new program consisting of one-year performance-based restricted stock awards and three-year performance-based stock awards that deliver a specific amount of compensation based on the Company’s performance in the relevant period, with the first awards under the one-year portion of the new program occurring in fiscal 2023 based on Company performance in fiscal 2022 and the first awards under the three-year portion of the new program to occur in fiscal 2026 based on Company performance for fiscal 2023, 2024 and 2025. This new program, which contains elements found in the equity incentive programs of our peer group, enables the Compensation Committee to predictably tie a particular amount of equity-based compensation to a particular Company performance level and avoid the possibility that our strong stock price could cause equity awards to be worth significantly more than the amount of compensation that the Compensation Committee intended. In addition, the new program marks the first time that a portion of CEO/COO compensation will be tied to a three-year performance cycle. Because the changes to the CEO and COO’s equity-based compensation program were made after the end of fiscal 2022, Dr. Hartnett and Mr. Bergeron had already earned awards under the old program for fiscal 2022 that would have been worth $16,838,389 and $7,372,114, respectively, but they agreed to forego those awards and instead receive awards under the one-year portion of the new program worth $5,985,000 and $2,344,192, respectively. As a result, Dr. Hartnett and Mr. Bergeron gave up $10,853,389 and $5,027,922, respectively, of equity-based compensation relating to fiscal 2022. Dr. Hartnett is the Company’s founder and has served as our CEO since 1992. Dr. Hartnett is widely regarded as a technology visionary and one of the industry’s most successful business executives. Under Dr. Hartnett’s leadership the Company’s revenues have grown from approximately $82 million in fiscal 1996 to approximately $1.47 billion in fiscal 2023. He is also one of our significant stockholders, owning approximately 1.5% of the outstanding common stock, directly aligning his interests with those of all our stockholders. The Compensation Committee believes Dr. Hartnett is extremely important to our success and that, given his role in our operations, strategy and growth, it is appropriate for Dr. Hartnett to receive competitive compensation that performs both retentive and incentivizing functions. See “Compensation Discussion and Analysis” and “Executive Compensation” below for additional information about our executive officer compensation program. This proposal gives our stockholders the opportunity to express their views on our named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named

  11. Director Compensation

    Director Compensation Non-employee members of the Board receive $50,000 per year, payable quarterly, and the Chairs of the Compensation and Audit Committees receive an additional $5,000 per year for serving in that capacity. Each non-employee director also receives an annual award of stock options and restricted stock for their services at the discretion of the Compensation Committee and upon approval of the Board. During fiscal 2023, each non-employee director was granted 1,000 stock options, which have an exercise price equal to the closing price of our common stock on the award date and vest over five years, and 1,500 shares of restricted stock, which vest over three years. Directors are entitled to reimbursement for reasonable out-of-pocket expenses incurred in connection with attendance at Board and committee meetings. The Compensation Committee reviews non-employee director compensation annually and recommends changes to the Board for approval. During fiscal 2023, the non-employee directors received the following compensation:

  12. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Option Awards ($)(1)(3) | Total ($) | | Michael H. Ambrose | 50,000 | 298,635 | 86,690 | 435,325 | | Richard R. Crowell | 55,000 | 298,635 | 86,690 | 440,325 | | Dolores J. Ennico | 53,750 | 298,635 | 86,690 | 439,075 | | Dr. Amir Faghri | 37,500 | 298,635 | 86,690 | 422,825 | | Dr. Steven H. Kaplan | 50,000 | 298,635 | 86,690 | 435,325 | | Edward D. Stewart | 50,000 | 298,635 | 86,690 | 435,325 |

  13. Director Compensation

    | (1) The amounts represent the fair market value on the date of grant of restricted shares and non-qualified stock options granted during the fiscal year. The fair market value of restricted shares is calculated using the closing stock price on the date of issuance ($206.19) multiplied by the number of shares. The fair market value of stock options is calculated using the Black-Scholes model, which determined a fair value of $94.16 per option. For information about the assumptions that we used in the Black-Scholes model, refer to Notes 2 and 17 to the financial statements included in our Annual Report on Form 10-K for fiscal 2023. As the above values represent values as of the date of grant, they do not reflect the actual value that will be received at the time the restricted shares vest or the options are exercised, which value will depend on market conditions at that time. |

  14. Director Compensation

    | (2) The total number of restricted shares held by each director as of the end of fiscal 2023 was: Mr. Ambrose – 3,000; Mr. Crowell – 3,000; Ms. Ennico – 3,000; Dr. Faghri – 1,500; Dr. Kaplan – 3,000; Mr. Stewart – 3,000. |

  15. Director Compensation

    | (3) The total number of stock options held by each director as of the end of fiscal 2023 was: Mr. Ambrose – 3,000; Mr. Crowell – 4,000; Ms. Ennico – 3,000; Dr. Faghri – 1,000; Dr. Kaplan – 4,800; Mr. Stewart – 5,000. |

  16. Director Compensation

    | | 2023 Proxy Statement | 15 |

  17. Director Compensation

    | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS |

  18. Director Compensation

    Since the start of fiscal 2023 the Company has not been a party to, nor have we proposed, any transaction or series of similar transactions in which the amount exceeds $120,000 and in which any director, executive officer, holder of more than 5% of our common stock or any member of the immediate family of any of the foregoing persons had or will have a direct or indirect material interest, other than employment agreements and other compensation arrangements that are described in “Executive Compensation” below. The Company’s directors and executive officers are subject to annual related-party certifications and the Code of Ethics requires that an employee or director avoid placing themself in a position in which their personal interests could interfere in any way with the interests of the Company. While the Company has various controls in place to identify potential related-party transactions, we do not have a formal policy regarding the Board’s review and approval of related party transactions. We have not made payments to directors other than as described in “Board of Directors and Corporate Governance—Director Compensation” above. We have not made any loans to any director or officer nor have we purchased any shares of our common stock from any director or officer, other than the repurchase of shares from officers at fair market value to cover (i) the exercise price of stock options and (ii) taxes relating to the vesting of shares of restricted stock and exercise of stock options.

  19. Director Compensation

    | PRINCIPAL STOCKHOLDERS |

  20. Director Compensation

    The following table sets forth information known to the Company regarding beneficial ownership of the Company’s common stock, as of July 1, 2023, by each director, each of our named executive officers, and by all of our directors and executive officers as a group. Information in the table is derived from SEC filings made by such persons under Section 16(a) of the Exchange Act and other information received by the Company.

  21. Directors and Officers

    Directors and Officers

  22. Directors and Officers

    | Name of Beneficial Owner | Amount and Nature of Beneficial Ownership(1)(2) | Percent of Class(3) | | Michael J. Hartnett | 440,204 | 1.5% | | Michael H. Ambrose | 8,000 | * | | Daniel A. Bergeron | 226,381 | * | | Richard R. Crowell | 33,270 | * | | Dolores J. Ennico | 6,700 | * | | Dr. Amir Faghri | 2,900 | * | | Dr. Steven H. Kaplan | 10,700 | * | | Edward D. Stewart | 27,283 | * | | Patrick S. Bannon | 41,776 | * | | Richard J. Edwards | 18,020 | * | | Robert M. Sullivan | 26,580 | * | | All directors and executive officers as a group (12 persons) | 846,372 | 2.9% |

  23. Directors and Officers

    | (1) Each person in this table has sole voting and dispositive power with respect to their shares. None of these shares are held in margin accounts or pledged or otherwise available to a lender as security. |

  24. Directors and Officers

    | (2) Includes the following unissued shares that are subject to stock options that are exercisable within 60 days of July 1, 2023: Dr. Hartnett – 146,757; Mr. Ambrose – 800; Mr. Bergeron – 119,446; Mr. Crowell – 2,000; Ms. Ennico – 1,000; Dr. Faghri – 200; Dr. Kaplan – 2,800; Mr. Stewart – 3,000; Mr. Bannon – 29,400; Mr. Edwards – 5,800; Mr. Sullivan – 16,800; all directors and executive officers as a group – 329,505. |

  25. Directors and Officers

    | (3) Based on 29,057,145 shares of common stock outstanding as of July 1, 2023 plus the 329,505 unissued option shares of each person referred to in footnote (2). |

  26. Directors and Officers

    *Less than 1.0%.

  27. Directors and Officers

    | 16 | | 2023 Proxy Statement |

  28. Delinquent Section 16(a) Reports

    | Michael H. Ambrose | Mr. Ambrose has been a director since 2019. He currently serves as Vice Chairman of the Board of Governors of the University of New Haven. Prior to his retirement in April 2023 from Sikorsky Aircraft, a Lockheed Martin Company, he held leadership positions in all areas of complex aerospace design, manufacturing operations, and program management including Vice-President of Enterprise Business Transformation (2021-2023), Chief Engineer and Vice President of Engineering and Technology (2017-2021), Vice President of Aircraft Design and Manufacturing Engineering (2011-2017), Vice President of International Government Programs (2008-2011), and General Manager and Director of Precision Machining Operations (2005-2008). Prior to that Mr. Ambrose held positions of increased responsibility at Sikorsky in various engineering disciplines including design, manufacturing, and system engineering. Among his responsibilities and accomplishments at Sikorsky, he led organizations of over 3,500 engineers and 800 factory employees. He was also co-chair of the Sikorsky senior safety board, with responsibility for air worthiness. He has been recognized by Lockheed Martin as an executive champion for diversity and inclusion. Mr. Ambrose holds a Bachelor of Science degree in Mechanical Engineering from the University of New Haven and a Master of Science degree in Engineering Management from the Massachusetts Institute of Technology. He has been awarded two U.S. patents and was inducted into the Connecticut Academy of Scientists and Engineers in 2019. | | Director Joined RBC in 2019 Age: 61 | |

  29. Delinquent Section 16(a) Reports

    | Richard R. Crowell | Mr. Crowell has been a director since 2002. Mr. Crowell is a Managing Partner of Vance Street Capital LLC, a private equity investment firm he founded in 2007. Previously he was the President of Aurora Capital Group, a private equity investment firm he co-founded in 1991. Prior to establishing Aurora, Mr. Crowell was a Partner and President of Acadia Partners, a New York-based investment fund. From 1983 to 1987, he was a Managing Director, Corporate Finance for Drexel Burnham Lambert. He serves on the Board of Visitors of the University of California at Los Angeles Anderson School of Management. Mr. Crowell is a director of Micronics, Inc. and Jet Parts Aviation, all of which are private companies in the businesses of filtration products, aerospace parts, precision manufacturing, engineered solutions, and related services. Mr. Crowell earned a Bachelor of Arts degree from the University of California at Santa Cruz and a Master of Business Administration degree from UCLA’s Anderson School. His extensive financial experience qualifies him as an “audit committee financial expert.” Mr. Crowell brings broad business, financial and executive leadership experience to the Board developed through his leadership roles at Vance Street Capital LLC, Aurora Capital Group LLC, Acadia Partners and Drexel Burnham Lambert. He has extensive experience with a number of precision manufacturing and aerospace companies. In addition, Mr. Crowell’s experience in private investment enables him to bring a valuable investor’s view to the Board and his relationships across the financial community strengthen the Company’s access to capital markets. His board memberships provide deep understanding of trends in the precision manufacturing and aerospace sectors, both of which present ongoing challenges and opportunities for the Company. | | Director Joined RBC in 2002 Age: 68 | |

  30. Delinquent Section 16(a) Reports

    | Dolores J. Ennico | Ms. Ennico has been a director since 2020. She is currently the Principal of Canterbury Consulting, which provides strategic consulting services in various business initiatives. She was Chief Human Resources Officer of Olin Corporation from 2009 to 2018 and prior to that served Olin in a variety of capacities from 1974 including Vice President, Administration from 2004 to 2009, Director, Corporate Employee Relations from 2000 to 2004, and Director of Retail Marketing, Pool Chemicals from 1997 to 2000. Ms. Ennico is a member of the Board of Governors of the University of New Haven and a member of its Compensation Committee, is a member of the Advisory Council of Sacred Heart Academy in Hamden, Connecticut, and is a member of the Executive Committee of the Board of the Girl Scouts of Connecticut. She earned a Bachelor of Science degree in Microbiology and a Master of Science degree in Biochemistry from Southern Connecticut State University, and a Master of Business Administration degree from the University of New Haven. Ms. Ennico’s vast experience in human capital management, including executive compensation, and her C-suite experience with a Fortune 500 company are valuable resources for the Board. | | Director Joined RBC in 2020 Age: 70 | |

  31. Delinquent Section 16(a) Reports

    | Dr. Steven H. Kaplan | Dr. Kaplan has been a director since 2018. He has been the president of the University of New Haven since 2004 and has led the University through a period of remarkable growth and development. In 2015, in recognition of his contributions to transforming the University, Dr. Kaplan was presented the Chief Executive Leadership Award by the Council for Advancement and Support of Education (CASE) District I. He also was named “Businessman of the Year” by Business New Haven magazine in 2008. Dr. Kaplan was awarded the 2011 William M. Burke Presidential Award for Experiential Education by the National Society for Experiential Education. Previously, Dr. Kaplan was chancellor and professor of English at the University of Virginia's College at Wise. Dr. Kaplan began his teaching career in 1982 as an Instructor of English at the University of Maryland, European Division. From 1985 to 1989, he served as Visiting Lecturer in American Studies at Eberhard-Karls Universität, Tübingen, Germany, one of the oldest and most highly regarded universities in Europe. After completing his doctoral studies at Eberhard-Karls Universität, he returned to the U.S. to teach English at the University of Southern Colorado. Dr. Kaplan also served as Dean of Arts and Humanities at the State University of New York at Buffalo and as Dean of the College of Liberal Arts and Sciences at Butler University. In addition to earning his Ph.D. in Comparative Literature at Eberhard-Karls Universität, Dr. Kaplan holds a Master of Arts degree (with a concentration in philosophy, German and English) from Eberhard-Karls Universität and a Bachelor of Arts degree from the University of California at Los Angeles. This knowledge and chief executive experience allows Dr. Kaplan to provide the Company with a wealth of valuable international executive experience and a perspective that provides the Board a critical resource for management. His association with U.S. companies and global academia provides the Company with a valuable state of the art executive management resource. | | Director Joined RBC in 2018 Age: 70 | |

  32. Delinquent Section 16(a) Reports

    | Edward D. Stewart | Mr. Stewart has been a director since 2013. Mr. Stewart is the former Chairman of the Board of ATC Technology Corporation, a then-publicly-held third-party logistics services provider, and has served on other company boards and audit committees. Mr. Stewart has many years of financial and operational experience with General Electric Company including as Executive Vice President of GE Capital and Chief Financial Officer of a number of other GE businesses. Mr. Stewart formerly served as a member of the Board of Directors of Nordstrom fsb, a formerly wholly-owned subsidiary of Nordstrom, Inc., and a member of its Audit and Investment Committees. Mr. Stewart earned a Bachelor of Arts degree in Economics from Tufts University. His extensive financial experience qualifies him as an “audit committee financial expert.” In addition, his service as a director of other publicly-traded and private companies is a valuable resource to the Board. | | Director Joined RBC in 2013 Age: 80 | |

  33. Delinquent Section 16(a) Reports

    | What We Do | What We Don’t Do | | • Annual say-on-pay vote • Performance-driven compensation philosophy • Balance compensation with both short- and long-term incentives using multiple performance measures • Set challenging quantitative performance measures • Rigorous stock ownership guidelines for executive officers • Retain independent compensation consultants • Use an appropriate peer group selected based on a range of factors • Maintain a clawback policy on all incentive compensation • Use double-trigger provisions in the event of a change in control • Engage regularly with stockholders on executive compensation • Limited perquisites | • No employment agreements, other than for the CEO and COO • No guaranteed bonuses or salary increases • No re-pricing or backdating of options • No share recycling under long-term incentive plans • No excessive severance and/or change-in-control provisions • No tax “gross-ups” |

  34. Performance Metrics and the Use of Adjusted EBITDA

    Performance Metrics and the Use of Adjusted EBITDA Adjusted EBITDA (i.e., our consolidated operating income plus depreciation, amortization and equity-based incentive compensation, as adjusted for various unusual or non-recurring items) is the core measure used to assess Company operating performance under the variable pay program applicable to our executive officers. The Company and Compensation Committee believe that adjusted EBITDA is the most appropriate measure of operating performance for a number of reasons, and that, of the various performance metrics we could use under our variable pay program, adjusted EBITDA most closely aligns with our stockholders’ interests. The Compensation Committee uses adjusted EBITDA performance to determine the variable compensation of the CEO and COO. Their annual performance bonuses are based solely on adjusted EBITDA performance; achievement of the adjusted EBITDA plan goal results in annual bonuses equal to 150% and 90% of base salary, respectively, while no bonuses are earned for achieving less than 80% of the plan goal. Adjusted EBITDA is also one of the two metrics used to determine the size of the CEO and COO’s awards under the long-term equity incentive program, requiring minimum performance of 75% of the plan goal to earn stock awards. We continue to believe quite strongly that adjusted EBITDA is the most appropriate metric and that its use as the primary performance metric is a significant driver for our outstanding results and stock performance.

  35. Performance Metrics and the Use of Adjusted EBITDA

    | • | Our motivation in selecting performance metrics is to choose the metric that most accurately captures our performance as a company and the value that we are generating for our stockholders. We strongly believe that adjusted EBITDA is that metric. |

  36. Performance Metrics and the Use of Adjusted EBITDA

    | • | Adjusted EBITDA is the foundation on which all of our business units run. Over the years we have developed a strong focus and discipline around cash management and capital allocation from the top of the organization to the bottom. We continue to apply this focus in operating the Company today. |

  37. Performance Metrics and the Use of Adjusted EBITDA

    | • | Adjusted EBITDA allows management, investors and others to evaluate and compare the Company’s core operating results, including return on capital and operating efficiencies, from period to period by removing the impact of the Company’s capital structure (interest expense from our outstanding debt), asset base (depreciation and amortization), tax consequences, other non-operating items, and share-based compensation. |

  38. Performance Metrics and the Use of Adjusted EBITDA

    | • | Adjusted EBITDA is the measure that guides the Company, through managing cash flow, operating cost and efficiency, and capital allocation, during periods of economic downturn and inhibits the manipulation of operating performance through excessive leverage or capital expenditures, the impact of which are more problematic during periods of economic downturn. |

  39. Performance Metrics and the Use of Adjusted EBITDA

    | • | Adjusted EBITDA is a key driver for debt covenants. |

  40. Performance Metrics and the Use of Adjusted EBITDA

    | • | We use adjusted EBITDA for business planning purposes, to run the business, for capital allocation decisions, and to evaluate and price potential acquisitions. |

  41. Performance Metrics and the Use of Adjusted EBITDA

    | • | In addition to its use by management, we also believe adjusted EBITDA is a measure widely used by securities analysts, investors, and others to evaluate the financial performance of the Company and other companies in our industry. |

  42. Performance Metrics and the Use of Adjusted EBITDA

    | • | We view adjusted EBITDA as the most reliable bellwether of how well we are converting the Company’s revenue into value for our stockholders. |

  43. Performance Metrics and the Use of Adjusted EBITDA

    We have relied on adjusted EBITDA as our primary performance metric since our IPO in 2005, when our stock entered the market at $14.50 per share. On July 11, 2023, our stock closed at $220.98 per share. While our proxy statements in past years have referred to “EBITDA” rather than “adjusted EBITDA,” the measure has always included adjustments for various unusual or non-recurring items so use of the word “adjusted” this year is only to make the term more descriptive and not to imply any additional adjustments that wouldn’t have been reflected in the measure in previous years. We have considered alternatives to the use of adjusted EBITDA, such as TSR (i.e., total stockholder return). We recognize that many companies use TSR as a performance metric under their compensation programs, and that its use is familiar to, and might be welcomed by, some stockholders. However, some of the feedback we have received from our stockholders during previous investor outreach programs recommended against using TSR, and upon considering how TSR would apply to RBC, we identified a number of challenges, particularly relating to the selection of an appropriate peer group with respect to TSR. Incorporating TSR as a performance metric would also be a major change to our organization and could disrupt how we run the business and achieve the results we have over the last several years. Nevertheless, our TSR has been quite strong at 87.4% for the last five years and 1,518.8% for the period since our IPO. See “Operating Performance Highlights” below. In addition to adjusted EBITDA, since 2018 we have used ROIC (i.e., return on invested capital) as a metric for determining a portion of the size of the CEO and COO’s awards under the equity incentive program. ROIC is defined as adjusted operating income (AOI) divided by equity plus debt less cash. AOI is defined as operating income adjusted to eliminate the effects of asset impairments, restructurings, acquisitions, divestitures, various unusual or non-recurring items, plant closing costs, and the cumulative effect of tax or accounting changes, as determined in accordance with U.S. GAAP, as applicable. Prior to fiscal 2023 AOI was tax effected but for fiscal 2023 and thereafter AOI was not and will not be tax effected. The use of ROIC as a performance metric came out of investor feedback that we received in 2017 as well as our belief that ROIC captures not just profitability but whether the magnitude of profitability is appropriate for the investments made. ROIC can also be compared across companies and industries and provides a closer link to key drivers of value creation. We also believe that ROIC works in close synergy with our primary metric of adjusted EBITDA.

  44. Performance Metrics and the Use of Adjusted EBITDA

    | | 2023 Proxy Statement | 23 |

  45. Compensation Governance Policies

    Our stock-ownership program requires the accumulation of stock over a five-year period following the date the person becomes subject to stock-ownership requirements. Executive officers who experience a change in base salary have three years from the date of such change to achieve the new level of ownership. Ownership credit is given for restricted stock but not for stock options. The Compensation Committee reviews compliance with these guidelines on an annual basis. The full text of the Company’s Stock Ownership Guidelines is filed as Exhibit 10.1 to our Current Report on Form 8-K dated June 17, 2013. Deductibility of Executive Compensation. Section 162(m) of the Internal Revenue Code generally disallows a tax deduction to a public corporation for compensation over $1,000,000 paid in any fiscal year to its named executive officers. In the past, the Company was able to rely on an exemption to this deductibility limitation with respect to compensation that qualified as “performance-based.” However, that exemption is no longer available to the Company. The deductibility of compensation is one of many factors that the Compensation Committee takes into consideration when designing the Company’s executive compensation program, but the Committee does not have a policy to limit executive compensation to that deductible under Section 162(m).

  46. Compensation Process and Components

    | Outside Compensation Advisor | Assists the Compensation Committee when the Committee deems it necessary. During fiscal 2023 assisted in the modification of the Company’s peer group, provided new peer group compensation data to the Committee, and assisted with the design of the new equity incentive program for the CEO and COO implemented in June 2022. | | As selected and retained by the Compensation Committee from time to time. Most recently F.W. Cook. | |

  47. Base Salary

    | • | The terms of the officer’s employment agreement in the case of the CEO and COO; |

  48. Base Salary

    | • | Peer group data; |

  49. Base Salary

    | • | Competitive positioning against market; |

  50. Annual Performance Bonuses

    Annual Performance Bonuses Cash performance bonuses are paid to the executive officers each year depending on Company performance and, in the case of executive officers other than the CEO and COO, individual performance. The bonuses for the CEO and COO are prescribed in their employment agreements, which were first put in place several years ago. The CEO or COO’s bonus for a particular year equals their base salary multiple that corresponds to the Company’s performance level against its adjusted EBITDA plan goal for the year. The Compensation Committee believes that these bonuses incentivize the CEO and COO to deliver the best possible short-term performance while still maintaining a focus on long-term performance though the other elements of their compensation program. For details regarding how the performance bonuses payable to the executive officers are determined each year, see “Executive Compensation—Compensation Program Components and Pay Outcomes for Fiscal 2023—Annual Performance Bonuses” below.

  51. Long-Term Equity Incentive Awards

    Long-Term Equity Incentive Awards Executive officers typically receive an annual award of restricted stock and/or stock options based on criteria that are described under “Executive Compensation—Compensation Program Components and Pay Outcomes for Fiscal 2023—Long-Term Equity Incentive Awards” below. Historically, the CEO and COO received restricted stock and stock options based on formulas tied to the Company’s performance against its adjusted EBITDA and ROIC plans for the prior year. In fiscal 2023 the Compensation Committee made changes to the equity awards to the CEO and COO to provide better incentives for them to deliver long-term performance, tying a portion of the awards to three-year performance cycles. The Committee also decided that, in order to have greater predictability of the amount of compensation delivered to the CEO and COO through equity awards, the size of the awards should be tied to a base salary multiple rather than to a number of shares as had been the Company’s practice in the past. The Committee believes the changes implemented in fiscal 2023 to the CEO and COO’s equity incentive award program more closely align our compensation program with best practices and stockholder expectations.

  52. Long-Term Equity Incentive Awards

    | | 2023 Proxy Statement | 25 |

  53. Maintaining a Compensation Peer Group

    Maintaining a Compensation Peer Group The Compensation Committee compares the Company’s senior management compensation levels with those of companies in a group of peer companies selected by the Compensation Committee based on a number of criteria including industry focus, and company scope measured through market capitalization, headcount and financial performance. The Compensation Committee believes that this customized approach is preferable to an algorithmic GICS code approach to selecting a peer group, which lacks the precision and ability to take into account unique circumstances that we believe are crucial to devising a fairly representative peer group, particularly since we are smaller than many of our competitors in the marketplace. In 2022, the Compensation Committee conducted a comprehensive review of our compensation peer group with the assistance of F.W. Cook, the Compensation Committee’s independent advisor. The review was undertaken because of the significant increase in the Company’s size and scope of business due to our November 2021 acquisition of Dodge Industrial, as well as to avoid the inclusion in our peer group of “aspirational” peers. This was one of our most significant peer group changes, given the size of the acquisition. Given our recent changes to the peer group, the same peer group was utilized in 2023.

  54. Maintaining a Compensation Peer Group

    | Peer Group(1) | | | | Barnes Group BWX Technologies Curtiss-Wright Donaldson Company Franklin Electric | Graco HEICO Hexcel ITT Kratos Defense & Security | Mercury Systems Moog Regal Rexnord Timken Watts Water Technologies Woodward |

  55. Maintaining a Compensation Peer Group

    | (1) When the peer group was first established, it included Altra Industrial Motion, Crane, and Evoqua Water Technologies, which were subsequently removed because they were acquired, split or went private. |

  56. Maintaining a Compensation Peer Group

    Our peer group includes companies in the industrial machinery, aerospace & defense, and electrical components and equipment industries.

  57. Maintaining a Compensation Peer Group

    | 26 | | 2023 Proxy Statement |

  58. Maintaining a Compensation Peer Group

    | Stockholder Engagement and 2022 Say-on-Pay Results |

  59. Maintaining a Compensation Peer Group

    The Company is committed to maintaining a dialogue with our stockholders to understand their principles and priorities in executive compensation. Toward that end, the Company has reached out to its stockholders periodically to discuss executive remuneration, explain the basis for our decisions, and invite stockholder feedback regarding our compensation program. The Compensation Committee has then used this feedback when evaluating our compensation program design.

  60. Feedback Received

    | • | Most acknowledged the changes to the long-term incentive program implemented in June 2022 and viewed them as a positive step. |

  61. Feedback Received

    | • | Three stockholders expressed concern regarding the one-year performance period portion of the long-term incentive program. |

  62. Feedback Received

    | • | Two participants indicated that increased disclosure regarding the long-term incentive program would be preferred. |

  63. Responses to 2022 Stockholder Feedback

    | Feedback Themes | Specific Stockholder Feedback | RBC Board Response | | Long-term incentive plan | • Request for increased disclosure on LTI targets • Would prefer longer performance period | • The Board considered this but determined that disclosing the targets would place the Company at a competitive disadvantage and could cause substantial harm • The Board reaffirms its commitment to look into options to address this in the future |

  64. Responses to 2022 Stockholder Feedback

    The following graph shows the relationship between revenue CAGR and adjusted EBITDA CAGR for the Company versus our peer average from fiscal 2019 through fiscal 2023. This reflects substantial revenue growth across our business through the expansion of our industrial business and the addition of Dodge. Importantly, the expansion of our profitability (adjusted EBITDA) occurred at a growth rate beyond revenue, reflecting our ability to improve margins as we build the business. The following graph details our Total Shareholder Return (TSR) as compared to our peer group average over the last five years. Our TSR exceeded the peer group average by more than 25% over this period, driven by the strong operating performance reflected above. The above information indicates historical results only and is not necessarily indicative of future results.

  65. Responses to 2022 Stockholder Feedback

    The NEOs’ primary compensation elements are base salary, annual cash performance bonuses, and long-term equity incentive awards in the form of restricted stock and/or stock options. In addition, the NEOs participate in our various employee benefit plans and receive certain perquisites. Details of the NEOs’ compensation and outcomes for fiscal 2023 are described below.

  66. Annual Performance Bonuses

    Annual Performance Bonuses Under the Company’s annual incentive compensation plan, the Company pays performance-based annual cash bonuses based on performance for the fiscal year then completed.

  67. CEO and COO

    | | CEO and COO Annual Bonus | | | Percentage of Adjusted EBITDA to Plan | CEO Bonus | COO Bonus | | Less than 80.0% | No bonus | No bonus | | 80.0% to 89.9% | 75% of Base Salary | 45% of Base Salary | | 90.0% to 99.9% | 100% of Base Salary | 60% of Base Salary | | 100.0% to 109.9% | 150% of Base Salary | 90% of Base Salary | | 110.0% to 119.9% | 200% of Base Salary | 120% of Base Salary | | 120.0% or higher | 250% of Base Salary | 150% of Base Salary |

  68. Fiscal 2023 Performance Bonus Payouts

    Fiscal 2023 Performance Bonus Payouts The adjusted EBITDA goal for fiscal 2023 performance bonuses was set at $402.2 million in accordance with the Company’s operating plan for the year, market conditions and other economic factors. Actual adjusted EBITDA for fiscal 2023 was $433.9 million, which equated to 107.9% of the plan goal. Based on this performance, the Compensation Committee approved the following annual incentive plan payments and discretionary bonuses for fiscal 2023:

  69. Fiscal 2023 Performance Bonus Payouts

    | | Performance Bonus | Discretionary Bonus | Total Bonus | Bonus as a Percentage of Base Salary | | Dr. Michael J. Hartnett | $1,425,000 | NA | $1,425,000 | 150% | | Daniel A. Bergeron | 549,000 | NA | 549,000 | 90% | | Patrick S. Bannon | 150,000(1) | - | 150,000 | 52% | | Richard J. Edwards | 235,463(2) | - | 235,463 | 65% | | Robert M. Sullivan | NA | 138,000 | 138,000 | 60% |

  70. Fiscal 2023 Performance Bonus Payouts

    | (1) Based on achievement of the following performance to target goal under his performance bonus plan: 101% of part 1; 100% of part 2; 39% of part 3. |

  71. Fiscal 2023 Performance Bonus Payouts

    | (2) Based on achievement of the following performance to target goal under his performance bonus plan: 110% of part 1; 100% of part 2; 33% of part 3. |

  72. Long-Term Equity Incentive Awards

    Long-Term Equity Incentive Awards The Company makes equity awards under its long-term incentive plans, which plans have been approved by the Company’s stockholders. These plans provide for grants of stock options, restricted stock and other types of equity awards for directors, executive officers and other key employees of the Company. See “Equity Incentive Plans” below. All long-term incentives settle in equity providing for strong-stockholder alignment and strong long-term Company performance. In determining the size of the 2023 long-term incentive grants, the Committee considers market practice, stockholder interest, retention, the portion of pay at risk, and the Company’s long-term business strategy, rewarding executives for their contribution to revenue and efficient use of capital.

  73. Equity Incentive Program for CEO and COO

    Equity Incentive Program for CEO and COO The Compensation Committee equity incentive program for the CEO and COO is composed of (i) one-year performance-based restricted stock awards and (ii) three-year performance-based unrestricted stock awards. The value of the grants is equal to the pre-established base salary multiple that corresponds with our level of performance against pre-established financial metrics: adjusted EBITDA and ROIC. The entirety of the long-term plan is based on performance against those metrics. The one-year performance-based restricted stock grant accounts for 70% of the target value of the equity incentive program and the three-year performance-based unrestricted stock award makes up the remaining 30% of the target value. One-Year Performance-Based Restricted Stock Component. The one-year component of the program provides the CEO and the COO with two awards of restricted stock each year based two-thirds on the prior fiscal year’s adjusted EBITDA and one-third on ROIC performance against the plans for such fiscal year. The number of shares awarded equals (i) the officer’s base salary at the end of the fiscal year multiplied by the base salary multiple that corresponds to the Company’s level of performance to the plan, divided by (ii) RBC’s closing stock price on the award date. One-third of the shares will vest and cease to be restricted on each of the first, second and third anniversaries of the award date. The vesting feature is intended to be an employee retention tool as well as to provide strong alignment between the interest of the executives and stockholders. The criteria for determining the awards to the CEO and COO are as follows:

  74. Equity Incentive Program for CEO and COO

    | | CEO and COO One-Year Adjusted EBITDA-Based Awards | | | Percentage of Adjusted EBITDA to Plan | CEO Base Salary Multiples | COO Base Salary Multiple | | Less than 75.0% | 0.0 | 0.0 | | 75.0% to 84.9% | 1.4 | 0.7 | | 85.0% to 94.9% | 2.1 | 1.1 | | 95.0% to 104.9% (target) | 2.8 | 1.8 | | 105.0% to 114.9% | 3.85 | 1.85 | | Over 114.9% | 5.25 | 3.25 |

  75. Equity Incentive Program for CEO and COO

    | | 2023 Proxy Statement | 33 |

  76. Equity Incentive Program for CEO and COO

    | | CEO and COO One-Year ROIC-Based Awards | | | | | ROIC as % of Plan(1) | CEO Target Award Multiple(1) | COO Target Award Multiple(1) | | Threshold | -0.75% | 0.7 | 0.4 | | Target | 0.00% | 1.4 | 0.8 | | Maximum | +0.75% | 2.8 | 1.6 |

  77. Equity Incentive Program for CEO and COO

    | (1) In between is straight line. |

  78. Equity Incentive Program for CEO and COO

    For fiscal 2023 the Compensation Committee established adjusted EBITDA and ROIC targets of $402.2 million and 6.64%, respectively. Based on our actual results of $433.9 million of adjusted EBITDA (107.9% of plan) and ROIC of 7.88% (1.24% above plan), in June 2023 Dr. Hartnett was awarded 31,665 shares of restricted stock having an aggregate award date value of $6,317,484 (6.65 times base salary), and Mr. Bergeron was awarded 10,548 shares of restricted stock having an aggregate award date value of $2,104,431 (3.45 times base salary). Three-Year Performance-Based Unrestricted Stock Component. The three-year component of the program provides the CEO and the COO with two awards of stock each year based two-thirds on the Company’s adjusted EBITDA and one-third on ROIC performance for the prior three fiscal years against the plans established at the beginning of such three fiscal-year period. The number of shares awarded equals (i) the officer’s base salary at the end of the three fiscal-year period multiplied by the base salary multiple that corresponds to the Company’s level of performance to plan, divided by (ii) RBC’s closing stock price on the award date. The shares will be unrestricted, meaning that they will be fully vested on the award date, which will be sometime in the fiscal year following the end of the three-year period. The criteria for determining the awards to the CEO and COO are as follows:

  79. Equity Incentive Program for CEO and COO

    | | CEO and COO Three-Year Adjusted EBITDA-Based Awards | | | Percentage of adjusted EBITDA to Plan | CEO Base Salary Multiples | COO Base Salary Multiple | | Less than 75.0% | 0.0 | 0.0 | | 75.0% to 84.9% | 0.6 | 0.3 | | 85.0% to 94.9% | 0.9 | 0.6 | | 95.0% to 104.9% (target) | 1.2 | 0.8 | | 105.0% to 114.9% | 1.65 | 1.0 | | Over 114.9% | 2.25 | 1.25 |

  80. Equity Incentive Program for CEO and COO

    | | CEO and COO Three-Year ROIC-Based Awards | | | | | ROIC as % of Plan(1) | CEO Target Award Multiple(1) | COO Target Award Multiple(1) | | Threshold | -0.75% | 0.3 | 0.2 | | Target | 0.00% | 0.6 | 0.3 | | Maximum | +0.75% | 1.2 | 0.7 |

  81. Equity Incentive Program for CEO and COO

    | (1) In between is straight line. |

  82. Equity Incentive Program for CEO and COO

    Because the first three-year plan for this component of the long-term incentive program was established for fiscal years 2023, 2024 and 2025, the first awards to the CEO and COO under the three-year component will not occur until fiscal 2026 based on Company performance for that three-year period. Thereafter, awards will occur annually based on performance for the three-year period then ended. Performance Targets for Future Awards. Future awards to be made to the CEO and COO under the one-year and three-year components of the performance-based equity program will be based on performance against the Company’s adjusted EBITDA and ROIC plans established by the Compensation Committee. The Committee has decided that we will not disclose those targets in advance because adjusted EBITDA is the key metric for our performance and disclosure of our targets would provide our competitors insight into our business strategy and could cause us substantial harm.

  83. Equity Incentive Program for CEO and COO

    | 34 | | 2023 Proxy Statement |

  84. Long-Term Equity Incentive Awards for Fiscal 2023

    Long-Term Equity Incentive Awards for Fiscal 2023 The Compensation Committee approved the following awards under the long-term equity incentive plans in fiscal 2024 for performance in fiscal 2023:

  85. Long-Term Equity Incentive Awards for Fiscal 2023

    | | Restricted Stock Fair Value(1) | Stock Options Fair Value(1) | | Dr. Michael J. Hartnett | $6,317,484 | - | | Daniel A. Bergeron | 2,104,431 | - | | Patrick S. Bannon | 199,510 | $181,381 | | Richard J. Edwards | 199,510 | 181,381 | | Robert M. Sullivan | 598,530 | 453,453 |

  86. Long-Term Equity Incentive Awards for Fiscal 2023

    | (1) The fair market of restricted shares is calculated using the closing stock price on the date of issuance ($199.51) multiplied by the number of shares. The fair market value of stock options is calculated using the Black-Scholes model, which determined a fair value of $90.69 per option. For information about the assumptions that we used in the Black-Scholes model, refer to Notes 2 and 17 to the financial statements included in our Annual Report on Form 10-K for fiscal 2023. As the above values represent values as of the date of grant, they do not reflect the actual value which will be received at the time the restricted shares vest or the options are exercised, which value will depend on market conditions at that time. |

  87. Long-Term Equity Incentive Awards for Fiscal 2023

    Important Note About Equity-Based Compensation Data. The information regarding long-term equity incentive awards presented in the CEO Compensation Mix chart above and the Summary Compensation and Pay Versus Performance tables below relates to awards made in fiscal 2023 based on fiscal 2022 performance, while the information provided above regarding the awards made in fiscal 2024 based on fiscal 2023 performance will be presented in the CEO Compensation Mix chart and Summary Compensation and Pay Versus Performance tables appearing in next year’s proxy statement.

  88. Long-Term Equity Incentive Awards for Fiscal 2023

    | Benefits and Perquisites |

  89. Long-Term Equity Incentive Awards for Fiscal 2023

    In addition to the core elements of executive compensation outlined above (i.e., base salary, performance-based annual cash bonus, and equity awards under the long-term equity incentive plans), NEOs are eligible for certain additional benefits, perquisites and plans, as described below.

  90. Perquisite Programs

    | Employment Agreements and Change-in-Control and Severance Arrangements |

  91. Employment Agreements With CEO and COO

    Employment Agreements With CEO and COO In June 2022, the Company and Dr. Hartnett entered into a new employment agreement that amended and restated his prior employment agreement entered into in 2017. The new agreement has an initial term expiring on March 31, 2024 and automatically renews thereafter for successive 12-month periods unless either party gives 90 days’ notice of nonrenewal. The agreement provides, among other things, for a base salary of $950,000 per year and that Dr. Hartnett is solely eligible for a formulaic annual performance bonus based on achievement of an adjusted EBITDA performance goal, with no eligibility for any discretionary annual performance bonus, as discussed under “Compensation Program Components and Pay Outcome for Fiscal 2023—Annual Performance Bonus” above. Dr. Hartnett’s base salary is to be reviewed annually and can be increased, but not decreased, as the Board determines. The agreement also sets forth the terms under which Dr. Hartnett is to receive awards under the Company’s long-term incentive plans, certain severance benefits, and the various perquisites he is to receive. The agreement contains a non-competition provision prohibiting Dr. Hartnett from competing against the Company during the term of the employment agreement and for two years thereafter without our prior written consent. A copy of Dr. Hartnett’s employment agreement is filed as Exhibit 10.1 to our Current Report on Form 8-K dated June 9, 2022. In June 2022, the Company and Mr. Bergeron entered into a new employment agreement that amended and restated his prior employment agreement entered into in 2017. The new agreement has an initial term expiring on March 31, 2024 and automatically renews thereafter for successive 12-month periods unless either party gives 90 days’ notice of nonrenewal. The agreement provides, among other things, for a base salary of $610,000 per year and that Mr. Bergeron is solely eligible for a formulaic annual performance bonus based on achievement of an adjusted EBITDA performance goal, with no eligibility for any discretionary annual performance bonus, as discussed under “Compensation Program Components and Pay Outcome for Fiscal 2023—Annual Performance Bonus” above. Mr. Bergeron’s base salary is to be reviewed annually and can be increased, but not decreased, as the Board determines. The agreement also sets forth the terms under which Mr. Bergeron is to receive awards under the Company’s long-term incentive plans, certain severance benefits, and the various perquisites he is to receive. The agreement contains a non-competition provision prohibiting Mr. Bergeron from competing against the Company during the term of the employment agreement and for two years thereafter without our prior written consent. A copy of Mr. Bergeron’s employment agreement is filed as Exhibit 10.2 to our Current Report on Form 8-K dated June 9, 2022. The other executive officers do not have employment agreements and are employed “at will.”

  92. Change-in-Control Arrangements

    Change-in-Control Arrangements Change-in-control compensation arrangements generally protect income for key executives who would likely be involved in decisions regarding and/or successful implementation of merger/acquisition activity and who are at risk for job loss if a takeover of the Company were to occur. We believe it is in the best interests of the Company and our stockholders to have such an agreement with our CEO, COO and certain other executive officers in order (i) for the Board to be able to receive and rely upon the executive’s advice and counsel as to the best interests of the Company and our stockholders without concern that they might be distracted or influenced by the personal uncertainties and

  93. Change-in-Control Arrangements

    | 36 | | 2023 Proxy Statement |

  94. Change-in-Control Arrangements

    risks created by merger/acquisition proposals or threats, and (ii) to encourage them to remain with the Company and to continue to devote full attention to the Company’s business. Each of Dr. Hartnett’s and Mr. Bergeron’s employment agreements provides that in the event of his employment is terminated within 24 months after a change in control of the Company (i.e. a double trigger event), he will be entitled to (i) severance equal to (x) 250% of his annual base salary plus (y) 250% of his annual performance bonus at the target base salary multiple, (ii) a bonus equal to his annual performance bonus at the maximum base salary multiple prorated for the portion of the fiscal year prior to the termination date, and (iii) continued participation in the Company’s welfare benefit programs (at the Company’s expense) for 18 months after his termination. The Company has entered into a change-in-control letter agreements with each of Messrs. Bannon and Edwards that provides that if his employment is terminated under certain circumstances within 24 months after a change in control of the Company, he will be entitled to (i) severance equal to (x) 150% of his annual base salary plus (y) 150% of his annual performance bonus at the target level, and (ii) a bonus equal to his annual performance bonus at the maximum level prorated for the portion of the fiscal year prior to the termination date. In addition, he will be entitled to continue participating in the Company’s welfare benefit programs for up to 18 months following his termination. The letter agreement also commits him to remain employed with the Company in the event of a tender or exchange offer and includes a non-compete covenant for 12 months following his termination following a change in control. The form of the change-in-control letter agreement is filed as Exhibit 10.1 to our Form 10-Q filed February 1, 2010. Mr. Sullivan does not have a change-in-control letter agreement. In addition, the restricted stock held by the executive officers contain change-in-control provisions. If an executive officer is terminated without cause within 18 months after a change in control, all restricted stock will vest on the termination date. In addition, if there is a change in control of the Company or similar event, the Compensation Committee may, in its discretion, provide for the vesting of a participant’s restricted stock and unvested stock options on such terms and conditions as the Committee deems appropriate. The table below summarizes the executive benefits and payments that would have been due to the NEOs upon termination of employment occurring on April 1, 2023 following a change in control:

  95. Change-in-Control Arrangements

    | | Michael J. Hartnett | Daniel A. Bergeron | Richard J. Edwards | Patrick S. Bannon | Robert M. Sullivan | | Severance Payment | $5,937,500 | $2,897,500 | $869,400 | $687,463 | NA | | Bonus | 2,375,000 | 915,000 | 326,025 | 257,799 | NA | | Other Payments | 43,328 | 52,297 | 15,117 | 58,145 | NA | | Vested Stock Options | 9,637,224 | 4,073,549 | 825,260 | 1,793,230 | NA | | Vested Restricted Stock | 17,172,449 | 7,617,718 | 1,163,650 | 2,001,478 | $1,117,104 | | Total | $35,165,501 | $15,556,064 | $3,199,452 | $4,798,115 | $1,117,104 |

  96. Change-in-Control Arrangements

    | | 2023 Proxy Statement | 37 |

  97. Severance Other Than Following a Change in Control

    Severance Other Than Following a Change in Control The employment agreements of the CEO and COO provide them with severance if their employment ends, other than following a change in control. No other executive officer has a similar arrangement. The following table summarizes the executive benefits and payments that would have been due to the CEO and COO if their employment had ended on April , 2023 other than following a change in control (giving effect to their new employment agreements):

  98. Severance Other Than Following a Change in Control

    | | Michael J. Hartnett | Daniel A. Bergeron | | Death or Disability/Termination Without Cause(1)(2) | | | | Base Salary | $950,000 | $610,000 | | Bonus | 2,375,000 | 915,000 | | Other Payments | 538,814 | 90,342 | | Vested Stock Options | 9,637,224 | 4,073,549 | | Vested Restricted Stock | 17,172,449 | 7,617,718 | | Long-Term Stock Award | 570,000 | NA | | Total | $31,243,487 | $13,306,609 | | Termination With Cause/Voluntary Resignation(3) | | | | Base Salary | $475,000 | NA | | Other Payments | 424,612 | NA | | Total | $899,612 | NA |

  99. Severance Other Than Following a Change in Control

    | (1) The employment agreement provides that if his employment ends due to his death, disability or termination by the Company without cause, he will (i) receive (x) a lump-sum payment equal to his then-base salary for the period from the termination date through the end of the term of the employment agreement and (y) his annual performance bonus at the maximum base salary multiple prorated for the portion of the fiscal year prior to the termination date, and (ii) be entitled to the continuation of certain benefits until the end of the term of the employment agreement. For purposes of the foregoing, the end of the term of the employment agreement will be March 31, 2024 unless the agreement has automatically renewed, in which case the end of the term will be the end of the then-current 12-month renewal period. |

  100. Severance Other Than Following a Change in Control

    | (2) The employment agreement also provides that if his employment ends due to his death, disability, termination by the Company without cause, or the Company giving him notice of nonrenewal prior to March 31, 2024 or the end of any subsequent renewal period, all his restricted stock and unvested stock options will vest, and in the case of Dr. Hartnett’s employment agreement, he will receive a grant of a pro rata portion of the shares that would be issuable under the three-year portion of his equity incentive program for any three-year performance cycles that are then open (at the base salary multiple for the plan target goals). |

  101. Severance Other Than Following a Change in Control

    | (3) Dr. Hartnett’s employment agreement provides that if he is terminated for cause or he voluntarily resigns, he will be entitled to his base salary and continuation of certain benefits set forth in his employment agreement for six months following the date of his termination. |

  102. Severance Other Than Following a Change in Control

    | 38 | | 2023 Proxy Statement |

  103. Severance Other Than Following a Change in Control

    | Compensation Tables |

  104. Summary Compensation

    | Name and Principal Position | Fiscal Year | Salary ($)(1) | Bonus ($)(2) | Stock Awards ($)(3) | Option Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($) | Total ($) | | Michael J. Hartnett Chairman, President and CEO | 2023 | 950,000 | NA | 5,984,946 | NA | 1,425,000 | 90,271(5) | 8,450,217 | | | 2022 | 900,000 | NA | 10,364,286 | 5,820,840 | 2,250,000 | 69,237 | 19,404,363 | | | 2021 | 631,937 | NA | 3,725,036 | 2,900,431 | 1,550,040 | 87,557 | 8,895,001 | | Daniel A. Bergeron Vice President and COO | 2023 | 610,000 | NA | 2,344,192 | NA | 549,000 | 37,401(6) | 3,540,593 | | | 2022 | 574,219 | NA | 4,979,000 | 2,680,650 | 868,220 | 28,680 | 9,130,769 | | | 2021 | 449,479 | NA | 1,769,128 | 1,021,593 | 661,500 | 35,138 | 3,936,838 | | Patrick S. Bannon Vice President and General Manager | 2023 | 286,443 | - | 199,100 | 172,896 | 150,000 | 9,820 | 818,259 | | | 2022 | 272,575 | 58,285 | 398,320 | 382,950 | 41,715 | 5,448 | 1,159,293 | | | 2021 | 239,885 | 24,450 | 687,200 | 738,750 | 125,550 | 8,846 | 1,824,681 | | Richard J. Edwards Vice President and General Manager | 2023 | 362,250 | - | 398,200 | 345,793 | 235,463 | 23,302(7) | 1,365,008 | | | 2022 | 343,375 | - | 398,320 | 382,950 | 310,545 | 23,371 | 1,458,561 | | | 2021 | 273,153 | 29,400 | - | - | 120,600 | 22,991 | 446,144 | | Robert M. Sullivan Vice President and CFO | 2023 | 230,000 | 138,000 | 398,200 | 345,793 | NA | 9,090 | 1,121,083 | | | 2022 | 205,000 | 206,000 | 199,160 | 382,950 | NA | 5,392 | 998,502 | | | 2021 | 148,672 | 100,000 | 343,600 | 492,500 | NA | 4,768 | 1,089,540 |

  105. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table sets forth information regarding (i) potential awards to the NEOs in fiscal 2023 under the Company’s annual performance plan and (ii) awards to the NEOs in fiscal 2023 under the Company’s equity incentive plans. Note that awards of equity made during fiscal 2023 were based on Company performance in fiscal 2022; awards made during fiscal 2024 based on Company performance in fiscal 2023 are described under “Compensation Program Components and Pay Outcomes for Fiscal 2023—Long-Term Equity Incentive Awards” above.

  106. Grants of Plan-Based Awards

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Stock Option Awards ($)(2) | | | | Threshold ($) | Target ($) | Maximum ($) | | | | | | Michael J. Hartnett | | 712,500(3) | 1,425,000(4) | 2,375,000(5) | | | | | | | 6/3/22 | | | | 30,060 | - | 199.10 | 5,984,946 | | Daniel A Bergeron | | 274,500(6) | 549,000(7) | 915,000(8) | | | | | | | 6/3/22 | | | | 11,774 | - | 199.10 | 2,344,192 | | Patrick S. Bannon | | 68,746(9) | 171,866(10) | 257,799(11) | | | | | | | 6/3/22 | | | | 1,000 | 2,000 | 199.10 | 371,996 | | Richard J. Edwards | | 86,940(9) | 217,350(10) | 326,025(11) | | | | | | | 6/3/22 | | | | 2,000 | 4,000 | 199.10 | 743,993 | | Robert M. Sullivan | | NA | NA | NA | | | | | | | 6/3/22 | | | | 2,000 | 4,000 | 199.10 | 743,993 |

  107. Grants of Plan-Based Awards

    | (1) See “Compensation Program Components and Pay Outcomes for Fiscal 2023—Annual Performance Bonuses” above for a description of the annual performance plans for the NEOs. |

  108. Grants of Plan-Based Awards

    | (2) The Grant Date Fair Value of restricted stock awards is based on the $199.51 closing price of our common stock on the grant date. |

  109. Grants of Plan-Based Awards

    | (3) Equals 75% of base salary if adjusted EBITDA performance is 80% of plan. |

  110. Grants of Plan-Based Awards

    | (4) Equals 150% of base salary if adjusted EBITDA performance is 100% of plan. |

  111. Grants of Plan-Based Awards

    | (5) Equals 250% of base salary if adjusted EBITDA performance is 120% of plan. For fiscal 2023, adjusted EBITDA performance was 107.9% of plan. |

  112. Grants of Plan-Based Awards

    | (6) Equals 45% of base salary if adjusted EBITDA performance is 80% of plan. |

  113. Grants of Plan-Based Awards

    | (7) Equals 90% of base salary if adjusted EBITDA performance is 100% of plan. |

  114. Grants of Plan-Based Awards

    | (8) Equals 150% of base salary if adjusted EBITDA performance is 120% of plan. For fiscal 2023, adjusted EBITDA performance was 107.9% of plan. |

  115. Grants of Plan-Based Awards

    | (9) Equals 15% of base salary if the metrics for parts 1, 2 and 3 of the bonus are (i) less than 80% of plan, (ii) less than 100% of plan, and (iii) 100% of plan, respectively. |

  116. Grants of Plan-Based Awards

    | (10) Equals 60% of base salary if the metric for part 1 of the bonus is 100% of plan. |

  117. Grants of Plan-Based Awards

    | (11) Equals 90% of base salary if the metric for part 1 of the bonus is 120% of plan. |

  118. Grants of Plan-Based Awards

    | 40 | | 2023 Proxy Statement |

  119. Outstanding Equity Awards at End of Fiscal 2023

    Outstanding Equity Awards at End of Fiscal 2023 As of the end of fiscal 2023 the NEOs held the following equity awards:

  120. Outstanding Equity Awards at End of Fiscal 2023

    | | Option Awards | | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Michael J. Hartnett | 9,496 | - | - | 72.94 | 7/8/23 | 9,034(2) | 2,102,483 | | | 32,000 | - | - | 99.64 | 6/27/24 | 34,693(3) | 8,074,102 | | | 15,200 | 15,200(2) | - | 132.12 | 6/7/25 | 30,060(4) | 6,995,864 | | | 15,200 | 30,400(3) | - | 143.92 | 6/3/26 | - | - | | | 11,779 | 35,335(4) | - | 137.44 | 6/2/27 | - | - | | | 15,200 | 60,800(5) | - | 199.16 | 6/3/28 | - | - | | Daniel A. Bergeron | 30,000 | - | - | 99.64 | 6/27/24 | 4,291(2) | 998,644 | | | 28,000 | 7,000(2) | - | 132.12 | 6/7/25 | 16,667(3) | 3,878,911 | | | 21,000 | 14,000(3) | - | 143.92 | 6/3/26 | 11,774(4) | 2,740,163 | | | 8,297 | 12,446(4) | - | 137.44 | 6/2/27 | - | - | | | 7,000 | 28,000(5) | - | 199.16 | 6/3/28 | - | - | | Patrick S. Bannon | 4,000 | - | - | 126.56 | 2/1/25 | 1,000(2) | 232,730 | | | - | 2,000(2) | - | 132.12 | 6/7/25 | 2,000(3) | 465,460 | | | 9,000 | 6,000(3) | - | 143.92 | 6/3/26 | 3,000(4) | 698,190 | | | 6,000 | 9,000(4) | - | 137.44 | 6/2/27 | 1,600(5) | 372,368 | | | 1,000 | 4,000(5) | - | 199.16 | 6/3/28 | 1,000(6) | 232,730 | | | - | 2,000(6) | - | 199.10 | 6/3/29 | - | - | | Richard J. Edwards | - | 2,000(2) | - | 132.12 | 6/7/25 | 600(2) | 139,638 | | | - | 4,000(3) | - | 143.92 | 6/3/26 | 800(3) | 186,184 | | | - | 4,000(5) | - | 199.16 | 6/3/28 | 1,600(5) | 372,368 | | | - | 4,000(6) | - | 199.10 | 6/3/29 | 2,000(6) | 465,460 | | Robert M. Sullivan | 800 | – | - | 99.64 | 6/27/24 | 100(2) | 23,273 | | | 2,000 | 1,000(2) | - | 132.12 | 6/7/25 | 400(3) | 93,092 | | | 2,800 | 2,800(3) | - | 143.92 | 6/3/26 | 1,500(4) | 349,095 | | | 4,000 | 6,000(4) | - | 137.44 | 6/2/27 | 800(5) | 186,184 | | | 1,000 | 4,000(5) | - | 199.16 | 6/3/28 | 2,000(6) | 465,460 | | | - | 4,000(6) | - | 199.10 | 6/3/29 | - | - |

  121. Outstanding Equity Awards at End of Fiscal 2023

    | (1) These amounts are based on the closing price of our common stock on March 31, 2023, the last business day of fiscal 2023. |

  122. Outstanding Equity Awards at End of Fiscal 2023

    | (2) Vest in June 2023. |

  123. Outstanding Equity Awards at End of Fiscal 2023

    | (3) Vest in one-half increments in June 2023 and June 2024. |

  124. Outstanding Equity Awards at End of Fiscal 2023

    | (4) Vest in one-third increments in June 2023, June 2024 and June 2025. |

  125. Outstanding Equity Awards at End of Fiscal 2023

    | (5) Vest in one-fourth increments in June 2023, June 2024, June 2025 and June 2026. |

  126. Outstanding Equity Awards at End of Fiscal 2023

    | (6) Vest in one-fifth increments in June 2023, June 2024, June 2025, June 2026 and June 2027. |

  127. Outstanding Equity Awards at End of Fiscal 2023

    | | 2023 Proxy Statement | 41 |

  128. Option Exercises and Stock Vested in Fiscal 2023

    Option Exercises and Stock Vested in Fiscal 2023 The following table sets forth information regarding the NEOs’ exercises of stock options and vesting of restricted stock during fiscal 2023:

  129. Option Exercises and Stock Vested in Fiscal 2023

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Michael J. Hartnett | 10,504 | 1,923,501 | 43,729 | 8,580,909 | | Daniel A. Bergeron | 40,000 | 7,478,497 | 20,956 | 4,112,365 | | Patrick S. Bannon | 12,000 | 1,336,158 | 3,400 | 667,696 | | Richard J. Edwards | 23,000 | 2,483,637 | 1,400 | 277,206 | | Robert M Sullivan | - | - | 1,000 | 195,055 |

  130. Option Exercises and Stock Vested in Fiscal 2023

    | (1) Based on the closing price of our common stock on the date of exercise. |

  131. Option Exercises and Stock Vested in Fiscal 2023

    | (2) Based on the closing price of our common stock on the date of vesting. |

  132. Non-Qualified Deferred Compensation

    Non-Qualified Deferred Compensation The following table sets forth information regarding the NEOs’ deferral of compensation through contributions to our SERP during fiscal 2023:

  133. Non-Qualified Deferred Compensation

    | Name | Executive Contributions in Last Fiscal Year ($)(1) | Registrant Contributions in Last Fiscal Year ($)(2) | Aggregate Earnings in Last Fiscal Year ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last Fiscal Year End ($) | | Michael J. Hartnett | - | - | (37,818) | - | 852,862 | | Daniel A. Bergeron | - | - | (141,298) | - | 1,648,722 | | Patrick S. Bannon | 43,573 | - | (22,676) | - | 575,596 | | Richard J. Edwards | 33,640 | - | (24,005) | - | 457,994 | | Robert M. Sullivan | 21,800 | - | (8,745) | - | 156,086 |

  134. Non-Qualified Deferred Compensation

    | (1) These amounts are included in the “Salary” column in the Summary Compensation table. |

  135. Non-Qualified Deferred Compensation

    | (2) These amounts are included in the “All Other Compensation” column in the Summary Compensation table. |

  136. Non-Qualified Deferred Compensation

    | (3) Appreciation (depreciation) and earnings (loss) on the NEO’s account under the SERP. |

  137. Non-Qualified Deferred Compensation

    | 42 | | 2023 Proxy Statement |

  138. Non-Qualified Deferred Compensation

    | Pay Versus Performance |

  139. Non-Qualified Deferred Compensation

    As required by the Pay Versus Performance (PVP) regulations adopted by the SEC and in effect for the first time for this proxy statement, the following Pay Versus Performance table provides information about compensation for our NEOs for each of fiscal 2023, 2022 and 2021 (the “Covered Years”). The PVP table also provides information about the results for certain financial performance measures during the Covered Years. In reviewing this information, there are a few important things to consider:

  140. Non-Qualified Deferred Compensation

    | • | The information in columns (b) and (d) comes directly from the Summary Compensation table (SCT) in this proxy statement without adjustment. |

  141. Non-Qualified Deferred Compensation

    | • | As required by the PVP regulations, we describe the information in columns (c) and (e) as “compensation actually paid” (CAP) to the applicable NEOs, but these CAP amounts do not necessarily reflect compensation that our NEOs actually earned for their service in the Covered Years. Instead, CAP is a calculation involving a combination of realized pay (for cash amounts and some equity award amounts) and realizable or accrued pay (primarily for pension benefits and other equity awards). |

  142. Non-Qualified Deferred Compensation

    | • | The PVP regulations require that we choose a peer group or index for purposes of TSR comparisons, and we have chosen the S&P 400 Industrials Sector (the “PVP Peer Index”) for this purpose. |

  143. Non-Qualified Deferred Compensation

    | • | As required by the PVP regulations, we provide information about our cumulative TSR, cumulative PVP Peer Index TSR and U.S. GAAP net income results (the “External Measures”) during the Covered Years in the PVP table, but we did not actually base any compensation decisions for the NEOs on, or link any NEO pay to, the External Measures. |

  144. Non-Qualified Deferred Compensation

    The Company is required to designate one financial metric as the “Company-Selected Measure,” or the most important financial measure that demonstrates how the Company sought to link 2023 executive pay to performance. For 2023, the Company has selected adjusted EBITDA. However, the Company believes that all of the metrics designated in the “Important Financial Performance Measures” section below are important drivers of Company performance.

  145. Non-Qualified Deferred Compensation

    | | 2023 Proxy Statement | 43 |

  146. Pay Versus Performance(1)

    Pay Versus Performance(1)

  147. Pay Versus Performance(1)

    | | | | | | Value of initial fixed $100 Investment based on: | | | | | Fiscal Year (a) | Summary Compensation Table “SCT” Total for PEO (b) | Compensation Actually Paid to PEO (c)(2) | Average Summary Compensation Table Total for non-PEO NEOs (d) | Average Compensation Actually Paid to non-PEO NEOs (e)(2) | Total Shareholder Return (f)(3) | PVP Peer Index Total Shareholder Return (g)(3) | Net Income (h)(4) | Adjusted EBITDA (i)(5) | | 2023 | $8,450,217 | $14,352,594 | $1,711,236 | $2,881,245 | $211.6 | $209.7 | $166.7 | $433.9 | | 2022 | $19,404,363 | $18,435,256 | $3,186,781 | $2,963,462 | $177.8 | $201.6 | $54.7 | $266.5 | | 2021 | $8,895,001 | $31,906,739 | $1,824,301 | $6,267,222 | $180.1 | $195.7 | $90.1 | $174.3 |

  148. Pay Versus Performance(1)

    | (1) Dr. Michal J. Hartnett was our principal executive officer (PEO) for each of the Covered Years. In this disclosure, we refer to our NEOs other than Dr. Hartnett as our “other NEOs.” Daniel A. Bergeron, Patrick S. Bannon, Richard J. Edwards, and Robert M. Sullivan were our other NEOs for each of the Covered Years. |

  149. Pay Versus Performance(1)

    | (2) For each Covered Year, in determining the CAP for our PEO and the average CAP for our other NEOs, we deducted or added back the following amounts from or to the total amounts of compensation reported in column (b) and column (d) for such Covered Year: |

  150. Pay Versus Performance(1)

    | Item and Value Added (or Deducted) | 2023 | 2022 | 2021 | | For Dr. Hartnett: | | | | | - change in actuarial present value of pension benefits, as reported in SCT for Covered Year | - | - | - | | + service cost of pension benefits, as calculated for Covered Year | - | - | - | | + prior service cost of pension benefits, as calculated for Covered Year | - | - | - | | - SCT “Stock Awards” column value | (5,984,946) | (10,364,286) | (3,725,036) | | - SCT “Option Awards” column value | - | (5,820,840) | (2,900,431) | | +/- adjusted amount for applicable stock/option awards, as calculated for Covered Year | 11,887,323 | 15,216,019 | 29,637,205 | | + the Covered Year-end fair value of equity awards granted in (and still outstanding as of the end of) the Covered Year | 6,995,864 | 16,179,662 | 11,090,134 | | +/- the change in fair value of equity awards granted in prior Covered Years (and still outstanding as of the end of the Covered Year) | 4,844,811 | (827,571) | 15,484,735 | | + the vesting date fair value of equity awards granted and vested in the Covered Year | - | - | - | | +/- the change in fair value of equity awards granted in prior Covered Years that vested in the Covered Year | 46,648 | (136,072) | 3,062,336 | | - prior the Covered Year-end fair value of equity awards granted in prior Covered Years that were forfeited in the Covered Year | - | - | - | | + dividends/earnings paid or accrued on equity awards during or for the Covered Year (if not otherwise included in CAP) | - | - | - | | Total Added (or Deducted): | 5,902,377 | (969,107) | 23,011,738 | | For the Other NEOs (on Average): | | | | | - change in actuarial present value of pension benefits, as reported in SCT for Covered Year | - | - | - | | + service cost of pension benefits, as calculated for Covered Year | - | - | - | | + prior service cost of pension benefits, as calculated for Covered Year | - | - | - | | - SCT “Stock Awards” column value | (834,923) | (1,493,700) | (699,982) | | - SCT “Option Awards” column value | (216,121) | (957,375) | (563,211) | | +/- adjusted amount for applicable stock/option awards, as calculated for Covered Year | 2,221,053 | 2,227,756 | 5,706,114 | | + the Covered Year-end fair value of equity awards granted in (and still outstanding as of the end of) the Covered Year | 1,255,428 | 2,454,000 | 2,119,836 |

  151. Pay Versus Performance(1)

    | 44 | | 2023 Proxy Statement |

  152. Pay Versus Performance(1)

    | Item and Value Added (or Deducted) | 2023 | 2022 | 2021 | | +/- the change in fair value of equity awards granted in prior Covered Years (and still outstanding as of the end of the Covered Year) | 905,016 | (176,169) | 3,002,575 | | + the vesting date fair value pf equity awards granted and vested in the Covered Year | - | - | - | | +/- the change in fair value of equity awards granted in prior Covered Years that vested in the Covered Year | 60,609 | (50,075) | 583,703 | | - prior the Covered Year-end fair value of equity awards granted in prior Covered Years that were forfeited in the Covered Year | - | - | - | | + dividends/earnings paid or accrued on equity awards during or for the Covered Year (if not otherwise included in CAP) | - | - | - | | Total Added (or Deducted): | 1,170,009 | (223,319) | 4,442,921 |

  153. Pay Versus Performance(1)

    | (3) TSR assumes an initial investment of $100 on March 30, 2020 in RBC common stock for our cumulative TSR and in the PVP Peer Index for the PVP Peer Index cumulative TSR, based on market prices at the end of each fiscal year through and including April 1, 2023, and reinvestment of dividends. |

  154. Pay Versus Performance(1)

    | (4) Dollars in millions. |

  155. Pay Versus Performance(1)

    | (5) Adjusted EBITDA is calculated based on the Company’s net income as used for external reporting purposes adjusted to exclude various items that are reflected in externally reported net income. See Appendix B for a reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure. Dollar values are in millions. |

  156. Equity Compensation Plan Information

    | CEO Pay Ratio |