8-KLeadership ChangesExhibits & Filings

DANAHER CORP /DE/ 8-K Report, Executive Changes (May 18, 2007)

Filed May 18, 2007For Securities:DHR

Summary

Danaher Corporation (DHR) filed an 8-K on May 18, 2007, reporting on key decisions made at their annual shareholder meeting on May 15, 2007. The primary focus of this filing is the approval of new executive compensation plans and an amendment to an existing deferred incentive program, all aimed at aligning executive interests with shareholder value and ensuring compliance with tax regulations, particularly Section 162(m) of the Internal Revenue Code. These new plans, the 2007 Stock Incentive Plan and the 2007 Executive Cash Incentive Compensation Plan, are designed to replace older plans and govern how executive and director compensation will be structured moving forward. They allow for various forms of awards, including stock options, restricted stock, and cash bonuses, contingent on the achievement of specific performance metrics. The EDIP Amendment, on the other hand, increases the number of shares available for issuance under the existing deferred compensation program, reflecting continued long-term incentive alignment.

Key Highlights

  • 1Shareholders approved the 2007 Stock Incentive Plan, replacing the 1998 Stock Option Plan. No further awards will be granted under the 1998 Plan.
  • 2The 2007 Stock Incentive Plan authorizes 12 million shares for issuance, with various award types including stock options, restricted stock, and stock appreciation rights.
  • 3The 2007 Executive Cash Incentive Compensation Plan was approved to replace the 2003 executive cash incentive plan.
  • 4Both new incentive plans are designed to comply with Section 162(m) of the Internal Revenue Code regarding "performance-based" compensation, requiring shareholder approval and specific performance metrics.
  • 5The EDIP Amendment increases the authorized shares for the Amended and Restated Executive Deferred Incentive Program from 1 million to 2 million.
  • 6Performance goals for both stock and cash incentive plans can be based on various financial metrics, including EPS, revenue, profitability, and strategic objectives.
  • 7Administration of these plans is overseen by the Compensation Committee, composed of non-employee directors meeting specific IRS criteria.

Frequently Asked Questions

The new 2007 Stock Incentive Plan and 2007 Executive Cash Incentive Compensation Plan are designed to incentivize and reward key executives and directors by linking their compensation to the company's performance and stock value. They also ensure that compensation awarded meets the requirements for "performance-based" compensation under Section 162(m) of the Internal Revenue Code, allowing for tax deductibility of compensation exceeding $1 million for covered employees.

The 2007 Stock Incentive Plan allows for the granting of various equity-based awards, including stock options, restricted stock, stock appreciation rights (SARs), restricted stock units, and other stock-based awards. These awards can be subject to time-based and/or performance-based vesting conditions.

The EDIP Amendment, approved by shareholders, increases the total number of Danaher common stock shares authorized for issuance under the Amended and Restated Executive Deferred Incentive Program (EDIP) from 1,000,000 to 2,000,000. It also includes provisions for proportional adjustments to this share limit in the event of certain nonreciprocal transactions that alter the per-share fair value of Danaher's stock.

Yes, awards under the 2007 Executive Cash Incentive Compensation Plan are subject to a cap of the lesser of $5,000,000 or the amount earned based on performance goals. Furthermore, all awards are contingent on Danaher achieving positive net income for the performance period, and the Compensation Committee retains discretion to reduce or eliminate awards.