8-KMaterial AgreementsOther EventsExhibits & Filings

AMETEK INC/ 8-K Report, Material Agreement (Apr 29, 2005)

Filed April 29, 2005For Securities:AME

Summary

This 8-K filing by AMETEK, Inc. (AME) reports on two key developments concerning its stock incentive plans. Firstly, it details the approval of an amendment to the 2002 Stock Incentive Plan by both the Board of Directors and stockholders. This amendment significantly increases the number of shares available for certain award types, such as restricted stock and stock appreciation rights, from 400,000 to 1,200,000, and also raises the maximum awardable shares per individual. Importantly, the total number of shares authorized under the 2002 Plan remains at 4,000,000. Secondly, the filing discloses a material definitive agreement: the grant of 350,000 restricted shares to CEO Frank S. Hermance. These shares have specific vesting conditions, including time-based criteria (April 26, 2011), involuntary termination without cause, death/disability, a change in control, or the stock price reaching $75.16 for five consecutive trading days. Additionally, AMETEK announced its decision to defer expensing stock options until January 1, 2006, taking advantage of SEC guidelines, rather than the previously considered July 1, 2005, date.

Key Highlights

  • 1AMETEK's 2002 Stock Incentive Plan amendment was approved by stockholders, increasing the share pool for certain awards.
  • 2The maximum number of shares awardable per individual under the 2002 Plan increased from 600,000 to 1,400,000.
  • 3The total number of shares authorized under the 2002 Plan remains 4,000,000; as of March 31, 2005, 1,729,180 shares had been granted.
  • 4CEO Frank S. Hermance was granted 350,000 restricted shares under the amended 2002 Plan.
  • 5Vesting of the CEO's restricted shares is contingent on time, continued employment, death/disability, termination without cause, change in control, or reaching a stock price of $75.16 for five consecutive days.
  • 6AMETEK will delay expensing stock options until January 1, 2006, utilizing SEC guidelines for compliance.
  • 7The financial impact of the CEO's restricted stock grant for 2005 is expected to be roughly offset by the tax savings from the delayed stock option expensing.

Frequently Asked Questions

The amendment was primarily to increase the maximum number of shares that can be awarded as restricted shares, stock appreciation rights, phantom stock awards, and phantom stock units from 400,000 to 1,200,000, and to raise the maximum shares awardable to any single individual from 600,000 to 1,400,000. The total number of shares available under the plan remains unchanged at 4,000,000.

The 350,000 restricted shares granted to CEO Frank S. Hermance will vest upon the earliest of: April 26, 2011 (provided he remains employed), his death or disability, his termination by the Company without cause, a 'Change in Control' event, or if AMETEK's common stock price closes at or above $75.16 for five consecutive trading days.

AMETEK is taking advantage of guidelines issued by the SEC, which amended the compliance date for expensing employee stock options under FASB Statement No. 123(R). This allows the company to defer expensing until January 1, 2006, instead of the originally required July 1, 2005.

For 2005, the estimated net income impact from recognizing the expense of the CEO's restricted stock award is expected to be roughly equivalent to the after-tax savings from delaying the expensing of stock options until January 1, 2006. This means the net effect on earnings for 2005 is expected to be largely neutral.