def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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Soliciting Material Pursuant to §240.14a-11(c) or §240.14a-12 |
METTLER-TOLEDO INTERNATIONAL INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Proxy
Statement
for
the
Annual
Meeting
of
Shareholders
2011
Mettler-Toledo
International Inc.
Mettler-Toledo
International Inc.
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Im Langacher 44
8606 Greifensee
Switzerland
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1900 Polaris Parkway
Columbus, Ohio 43240
USA
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March 15,
2011
Dear Fellow Shareholder:
You are cordially invited to attend the 2011 Annual Meeting of
Shareholders of Mettler-Toledo International Inc. to be held on
Wednesday, May 4, 2011, at 8:00 a.m. at the offices of
Fried, Frank, Harris, Shriver & Jacobson LLP on 375
Park Avenue (between 52nd and 53rd Streets),
36th Floor, New York, New York.
The Secretarys notice of the meeting and the proxy
statement which appear on the following pages describe the
matters to be acted upon at the meeting.
We have distributed a Notice of Internet Availability of Proxy
Materials to some shareholders instead of delivering paper
copies of the proxy materials. The Notice sent provides
information about accessing the proxy materials online and
describes the voting methods available to all shareholders.
Shareholders receiving the notice will also have the opportunity
to request a paper copy of the proxy materials through the
instructions provided. Any shareholders that do not receive the
notice will receive a paper copy of all proxy materials through
the mail. To change the way you receive proxy statements in the
future please make a request in the appropriate space on the
proxy card.
Please sign and return your proxy as soon as possible so that
your vote will be counted. You may also vote over the Internet
by following the instructions on your proxy card.
Sincerely yours,
Robert F. Spoerry
Chairman of the Board
Table of
Contents
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ii
Mettler-Toledo
International Inc.
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Time: |
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8:00 a.m. on Wednesday, May 4, 2011 |
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Place: |
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Fried, Frank, Harris, Shriver & Jacobson LLP, 375 Park
Avenue (between 52nd and 53rd Streets), 36th Floor New York, New
York |
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Items of Business: |
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1. To elect nine directors
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2. To ratify the appointment of
PricewaterhouseCoopers LLP as independent registered public
accounting firm
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3. Approval of the POBS Plus Incentive System for
Group Management
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4. Advisory vote on executive compensation
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5. Advisory vote on the frequency of the vote on
executive compensation
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6. To transact any other business properly brought
before the meeting
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Who Can Vote: |
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You can vote if you were a shareholder of record on
March 7, 2011 |
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Annual Report: |
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A copy of our 2010 Annual Report is enclosed |
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Date of Mailing: |
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On or about March 15, 2011 |
By order of the Board of Directors
James T. Bellerjeau
General Counsel and Secretary
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE ANNUAL MEETING TO BE HELD ON May 4, 2011:
This proxy statement and our 2010 Annual Report are available
at www.mt.com under About
Us / Investor Relations / Annual Reports and
Proxy Statements
(http://investor.mt.com).
Whether or not you plan to attend this annual meeting, please
complete the enclosed proxy card and promptly return it in the
accompanying envelope. You may also vote over the Internet
at
http://proxyonline.mt.com.
This proxy statement is furnished in connection with the
solicitation of proxies by Mettler-Toledo International Inc. on
behalf of the Board of Directors for the 2011 Annual Meeting of
Shareholders.
iii
ABOUT THE
MEETING AND VOTING
Proposals
to be Voted On
The following proposals will be voted on at the meeting. The
board has not received proper notice of, and is not aware of,
any additional business to be transacted at the meeting other
than as indicated below.
Proposals
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The election of nine directors for one-year terms
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The ratification of the appointment of PricewaterhouseCoopers
LLP as the companys independent registered public
accounting firm
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Approval of the POBS Plus Incentive System for Group Management
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Advisory vote on executive compensation
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Advisory vote on the frequency of the vote on executive
compensation
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We know of no other matter to be brought before the annual
meeting. If any other matter requiring a vote of the
shareholders should come before the meeting, it is the intention
of the persons named in the proxy to vote the proxies with
respect to any such matter in accordance with their reasonable
judgment.
Shareholders
Entitled to Vote
Each share of common stock outstanding as of the close of
business on March 7, 2011 (the record date), is
entitled to one vote at the annual meeting on each matter
properly brought before the meeting. As of the record date,
32,243,125 shares of common stock were outstanding.
A quorum needs to be present at the meeting in order to hold the
meeting. A quorum is a majority of the companys
outstanding shares of common stock as of the record date. Your
shares are counted as present at the meeting if you attend the
meeting and vote in person; vote by Internet; or properly return
a proxy card by mail. Abstentions shall also be counted in
determining whether a quorum is present.
If you do not provide a proxy or vote the shares yourself, your
shares will not be voted. Proxies that are signed and returned
but do not contain instructions will be voted FOR
the items of business described in the proxy.
How to
Vote
BY PROXY You may vote your shares by proxy. If
you vote your shares by proxy, you are legally designating
another person to vote the stock you own in accordance with your
desired vote. To vote by proxy, complete, sign and return the
enclosed proxy card by mail to the address stated on your proxy
card. You may also vote over the Internet at
http://proxyonline.mt.com.
IN PERSON You may vote your shares by attending the
meeting and voting your shares in person. The meeting is being
held at the offices of Fried, Frank, Harris, Shriver &
Jacobson LLP at the address indicated in the Notice to
Shareholders.
Even if you plan to attend the meeting, we encourage you to vote
your shares by proxy. This will enable us to receive votes in
advance of the meeting to ensure that a quorum (defined below)
is present for the meeting. If you vote by proxy and
subsequently decide to change your vote, you may revoke your
proxy at any time before the polls close at the meeting.
However, you may only do this by signing another proxy with a
later date, completing a written notice of revocation and
returning it to the address on the proxy card before the
meeting; or voting in person at the meeting.
Vote
Tabulation; Voting Results
The company appoints an independent inspector of election, who
also tabulates the voting results. The meetings voting
results will be disclosed promptly following the meeting in a
Form 8-K
filed with the Securities and Exchange Commission.
1
PROPOSAL ONE:
ELECTION OF DIRECTORS
The nominees for the Board of Directors are listed below. Each
nominee, if elected, will hold office until next years
annual meeting of shareholders and until their successors have
been duly elected and qualified. All nominees are currently
directors. The Board of Directors has no reason to believe that
any nominee would be unable or unwilling to serve if elected. In
the event that a nominee is unable to serve, the person
designated as proxyholder for the company will vote for the
remaining nominees and for such other person as the Board of
Directors may nominate.
Directors shall be elected by the affirmative vote of a majority
of the votes cast with respect to each director, provided that
if the number of nominees exceeds the number of directors to be
elected, directors shall be elected by the affirmative vote of a
plurality of the votes cast. Votes cast shall include votes for,
against or to withhold authority for a director. An abstention
shall not count as a vote cast with respect to a director. If an
incumbent director fails to be reelected by a majority vote when
such vote is required and offers to resign, and if that
resignation is not accepted by the Board of Directors, such
director shall continue to serve until the next annual meeting
and until his or her successor is duly elected, or his or her
earlier accepted resignation or removal. If a directors
resignation is accepted by the Board of Directors, or if a
nominee for director is not elected and the nominee is not an
incumbent director, then the Board of Directors, in its sole
discretion, may fill any resulting vacancy, or may decrease the
size of the Board of Directors, in each case pursuant to the
provisions of Sections 1 and 2 of Article II of the
companys by-laws.
Qualifications
of Director Nominees
The members of our Board of Directors have had diverse
backgrounds and experiences during the course of their careers.
These individual backgrounds and experiences better enable the
board to perform its duties.
Robert F. Spoerry is 55 years old and has
been a director since October 1996. Mr. Spoerry was
President and Chief Executive Officer of the company from 1993
to 2007. Mr. Spoerry has been Chairman of the Board of
Directors since May 1998 and served as Executive Chairman in
2008. Mr. Spoerry has a Masters in Mechanical Engineering
from the Federal Institute of Technology in Zurich, Switzerland,
and a Master of Business Administration from the University of
Chicago. Mr. Spoerry is also a Director of Conzzeta Holding
AG, Geberit AG, Holcim Ltd., Schaffner Holding AG and Sonova
Holding AG.
As the former President and CEO of the company, Mr. Spoerry
has long-standing experience in the global precision instrument
industry and a deep knowledge of the company, including its
organization, products, markets, customers and competitors. He
has a strong technical background and experience with
innovation-driven companies. Mr. Spoerry has broad
international experience across industries and businesses
relevant to the company, including by virtue of his service on
several other boards of directors.
Mr. Spoerry spends an average of one to two days per week
devoted to his service as Chairman of the Board. His deep
understanding of the company, its markets, customers and
competitors, which was developed over more than twenty years of
service, is a unique and valuable qualification that we believe
provides a substantial benefit to the company and its
shareholders. His service on five other public company boards
(which each typically take approximately twenty days per year)
has not affected his ability to fulfill his role as Chairman.
Wah-Hui Chu is 59 years old and has been a
director since January 2007 and serves on the Nominating and
Corporate Governance Committee. Mr. Chu has been Executive
Director and Chief Executive Officer of Next Media Limited since
October 2008. He was non-executive Chairman of PepsiCo
Internationals Asia Region from April 2007 to April 2008.
From March 1998 to March 2007 he was the President of PepsiCo
International China Beverages Business Unit.
Mr. Chu has a Masters in Business Administration from
Roosevelt University. Mr. Chu is also a Director of Li Ning
Company Limited.
Mr. Chu has extensive professional experience in management
positions at leading U.S. companies Asian businesses,
having spent 25 of the past 31 years in Asia with Quaker
Oats Company, H.J. Heinz Company, Whirlpool Corporation,
Monsanto Company and PepsiCo., Inc. For 20 of those
25 years in Asia, Mr. Chu had direct
2
PROPOSAL ONE:
ELECTION OF DIRECTORS
responsibilities over businesses in China, including building a
more than $1 billion business for PepsiCo. The company has
significant operations in Asia and is making significant
investments in Asia, particularly China, and a person with
Mr. Chus background will assist the company in this
regard.
Francis A. Contino is 65 years old and has
been a director since October 2004 and serves as Chairman of the
Audit Committee. Mr. Contino has been Managing Director of
FAC&B LLC since July 2008. He was a member of the
Management Committee, Executive Vice President and a member of
the Board of Directors of McCormick & Company, Inc.
from 1998 to 2008. He was Chief Financial Officer from 1998
through October 2007. In addition to his CFO responsibilities,
he was Executive Vice President responsible for Supply Chain
from 2002 to 2004 and responsible for Strategy from 2004 to
2008. Prior to joining McCormick, Mr. Contino was Managing
Partner of the Baltimore office of Ernst & Young.
Mr. Contino has extensive financial experience from his
background as a Certified Public Accountant, his
20-year
tenure as an Audit Partner at Ernst & Young, where he
served as coordinating partner for large multinational public
companies, and from his
10-year
service as the Chief Financial Officer of McCormick &
Company, a $3 billion public company. Mr. Contino is
considered one of the boards financial experts and serves
as Chairman of the Audit Committee. With his experience at
McCormick, Mr. Contino also brings valuable insights into
the food sector, which is a key end-user market for the company.
Olivier A. Filliol is 44 years old and has
been a director since January 2009. He has been President and
Chief Executive Officer of the Company since January 1,
2008. Mr. Filliol served as Head of Global Sales, Service
and Marketing of the Company from April 2004 to December 2007,
and Head of Process Analytics of the Company from June 1999 to
December 2007. From June 1998 to June 1999 he served as General
Manager of the Companys U.S. checkweighing
operations. Prior to joining the Company, he was a Strategy
Consultant with the international consulting firm
Bain & Company working in the Geneva, Paris and Sydney
offices. Mr. Filliol has a Masters and Ph.D. in Business
Administration from the University of St. Gallen, Switzerland,
and has completed executive education at the Business School of
Stanford University.
Mr. Filliol has broad experience across many of the
companys businesses. He led one of the companys
divisions over an eight year period and he was the principal
architect behind the companys growth initiative in sales
and marketing. He has particular strengths in both strategy
development and execution. As CEO of the company,
Mr. Filliol also brings the board the necessary insights
into understanding the global operations of the company.
Michael A. Kelly is 54 years old and has been
a director since July 2008 and serves on the Compensation
Committee. Mr. Kelly has been Executive Vice President,
Display and Graphics Business of 3M Company since October 2006.
Prior to this, he served in various management positions in the
U.S., Singapore, Korea and Germany since he joined 3M in 1981.
Mr. Kelly has completed executive education at The Wharton
School of the University of Pennsylvania.
In his role as the Executive Vice President of 3Ms Display
and Graphics Business, Mr. Kelly has global responsibility
for all operational and strategic elements of this
$4 billion business, including the Optical Systems, Traffic
Safety, Commercial Graphics, Architectural Markets, and Mobile
Device segments. Mr. Kellys business also has
responsibility for all film manufacturing for 3M. In running
this complex and highly technical set of global businesses,
Mr. Kelly has experience in several topics relevant to the
company, including strategic planning, restructuring, shifting
business focus to emerging markets, and operational matters
generally.
Martin D. Madaus, Ph.D., is 51 years old
and has been a director since June 2009 and serves on the Audit
Committee. Dr. Madaus has been Executive Chairman of
Quanterix Corporation since November 2010. Quanterix is a
privately-held development stage diagnostics company seeking to
develop and commercialize blood tests that measure clinically
important proteins in blood. Prior to joining Quanterix,
Dr. Madaus was the President and Chief Executive Officer of
Millipore Corporation, a life sciences company serving the
bioscience research and biopharmaceutical manufacturing
industry, from November 2004 to July 2010, and Chairman from
March 2005 to July 2010, when Millipore was acquired by Merck
KGaA. Dr. Madaus provided consulting services to
3
PROPOSAL ONE:
ELECTION OF DIRECTORS
Merck from July 2010 to December 2010. Prior to joining
Millipore, he was at Roche Diagnostics Corporation where, as
President and Chief Executive Officer, he was responsible for
the North American operations. Dr. Madaus has a Doctor of
Veterinary Medicine from the University of Munich, Germany, and
a Ph.D. in veterinary medicine from the Veterinary School of
Hanover, Germany.
Dr. Madaus has more than twenty years of experience in the
diagnostics and life science industries. A significant portion
of the companys business relates to the life science
industry. As the former CEO of Millipore and Executive Chairman
of Quanterix, Dr. Madaus faces similar challenges as the
company. He can be helpful to the board and the CEO in analyzing
comparable issues he faces. Dr. Madaus is also considered
one of the boards financial experts.
Hans Ulrich Maerki is 64 years old and has
been a director since September 2002 and serves on the
Compensation and Nominating & Corporate Governance
Committees. Mr. Maerki was the Chairman of IBM
Europe/Middle East/Africa (EMEA) from August 2001 to March 2008.
From July 2003 to May 2005, Mr. Maerki was also the General
Manager of IBM EMEA. From 1996 to July 2001, Mr. Maerki was
General Manager of IBM Global Services, EMEA. Mr. Maerki
worked at IBM in various positions from 1973 to 2008.
Mr. Maerki has a Masters in Business Administration from
the University of Basel, Zurich. Mr. Maerki is also a
Director of ABB Ltd. and Swiss Re.
In his
35-year
tenure at IBM, including most recently running a business with
approximately $35 billion in revenue across 124 countries,
Mr. Maerki has made extensive contributions in addressing
service, software and other IT-related topics, and also has deep
experience in marketing and sales. These are areas of increasing
importance to the companys business, and as a result this
experience is very relevant. By virtue of his service on the
board of ABB, Mr. Maerki also has insight into the
industrial end-user market, which is another key market for the
company.
George M. Milne, Jr., Ph.D., is
67 years old and has been a director since September 1999
and serves as Chairman of the Nominating and Corporate
Governance Committee. Dr. Milne is a venture partner of
Radius Ventures, LLC. From 1970 to July 2002, Dr. Milne
held various management positions with Pfizer Corporation,
including most recently Executive Vice President, Pfizer Global
Research and Development and President, Worldwide Strategic and
Operations Management. Dr. Milne was also a Senior Vice
President of Pfizer Inc. and a member of the Pfizer Management
Council. He was President of Central Research from 1993 to July
2002 with global responsibility for Pfizers Human and
Veterinary Medicine Research and Development. Dr. Milne has
a Ph.D. in Organic Chemistry from the Massachusetts Institute of
Technology (MIT). Dr. Milne is a Director of Athersys Inc.
and Charles River Laboratories, Inc. and also serves on the
boards of several private companies and charitable
organizations. He was previously a director of Aspreva, Inc.,
Conor Medsystems, Inc. and MedImmune, Inc.
With his long tenure at Pfizer Corporation, his work as a
venture partner with Radius Ventures and through his service on
multiple life science boards, Dr. Milne has a deep
understanding of R&D processes and the services, tools and
technologies being used in the life sciences industry. The life
science industry is one of the companys most important
end-user markets and the board wishes to have members with broad
exposure to this industry. This helps the board understand
industry trends, and to assess product development and marketing
strategies.
Thomas P. Salice is 51 years old and has been
a director since October 1996 and serves on the Audit Committee
and as Chairman of the Compensation Committee. Mr. Salice
is a co-founder and principal of SFW Capital Partners, LLC, a
private equity firm. He has served as a Managing Member of SFW
Capital Partners since January 2005. From June 1989 to December
2004, Mr. Salice served in a variety of capacities with AEA
Investors, Inc., including Managing Director, President and
Chief Executive Officer and Vice-Chairman. Mr. Salice has a
Masters in Business Administration from Harvard University.
Mr. Salice is also a Director of Agdata, L.P. and Waters
Corporation. He has previously served on numerous other boards
including Agere Systems, CasTech
4
PROPOSAL ONE:
ELECTION OF DIRECTORS
Aluminum Group Inc., Dal-Tile International, Manchester
Tank & Equipment Co., Marbo, Inc. and Sovereign
Specialty Chemicals, Inc.
Mr. Salice has more than twenty years private equity
experience, including as an investor in the analytical tools and
related service sectors, which has given him extensive
operational, industry and strategic knowledge in key company
business areas. Mr. Salice led the team at AEA Investors in
the acquisition of the company in 1996 and has served on the
board since that time. Mr. Salice has in-depth experience
in strategic planning, corporate finance, capital structure,
investor relations, mergers and acquisitions, and other topics
that are relevant to the board. Mr. Salice is also
considered one of the boards financial experts.
The Board of Directors recommends that you vote FOR
the election of each of the directors listed above. Proxies
will be voted FOR each nominee unless otherwise
specified in the proxy.
5
BOARD OF
DIRECTORS GENERAL INFORMATION
Composition
of the Board; Board Leadership Structure
In accordance with the companys by-laws, the Board of
Directors consists of between five and ten directors, with the
exact number currently fixed at nine, including a Chairman, the
CEO and seven independent, outside directors. Each director
holds a one-year term until the next annual meeting of
shareholders. The board has three committees: (i) the Audit
Committee; (ii) the Compensation Committee; and
(iii) the Nominating and Corporate Governance Committee.
The primary tasks of the board include the oversight of the
companys strategy and governance matters, review of the
companys financial matters, and evaluation of how the
company executes against objectives. Managements tasks
include setting strategy and running the companys
operations. The company believes having a separate CEO and
Chairman allows the Chairman to function as an important liaison
between management and the board, helping ensure that the board
fulfils its oversight responsibilities.
To ensure the board has sufficient independence from management,
the board has also established a lead independent director (the
Presiding Director), who oversees executive sessions of the
non-management directors and all meetings of directors at which
the Chairman is not present. The Presiding Director also
coordinates with the Nominating and Corporate Governance
Committee relating to director nominations as described in the
Nominating and Corporate Governance Committee report below.
Mr. Salice is currently serving as the Presiding Director.
Corporate
Governance Guidelines
The board has established corporate governance guidelines that
contribute to the overall operating framework of the board and
the company. These guidelines cover topics including director
qualifications and the director nomination process, the
responsibilities of directors, including with respect to
leadership development and management succession, meetings of
non-management directors, and director compensation. The
guidelines are available on the companys website at
www.mt.com under About Us / Investor
Relations / Corporate Governance and are
available in print to any shareholder who requests them at the
address and phone number set forth above.
Responsibility
of the Board of Directors in Governance & Role in Risk
Oversight
It is the responsibility of the Board of Directors to establish
and monitor the companys internal governance practices and
work toward the long-term success of the company. The company
has adopted a code of business conduct and ethics, known as the
code of conduct. All actions of the companys Board of
Directors, executive officers (including the Chief Executive
Officer, Chief Financial Officer and Controller) and employees
are governed by the companys code of conduct. No waiver of
the code of conduct by an executive officer or director was
approved by the board in 2010. A copy of the code of conduct is
available at www.mt.com under About
Us / Investor Relations / Corporate
Governance and is available in print to any shareholder
who requests it. Shareholders may request copies free of charge
from Investor Relations, Mettler-Toledo International Inc.,
1900 Polaris Parkway, Columbus, OH 43240, USA, telephone +1
614 438 4748.
The board is involved in the oversight of the companys
risk management process as follows. Each year, the company
conducts an enterprise risk assessment under the supervision of
the Chief Financial Officer. The full board receives the results
of the assessment, including an evaluation of risks and a
description of actions taken by the company to mitigate risk.
The Audit Committee reviews the results in detail and reports on
its review to the board.
Compensation-Related
Risk
Management and the Compensation Committee have evaluated the
companys compensation programs generally at different
levels throughout the organization. Among other things, we
considered that for executives who have the largest potential
incentive compensation, a significant portion of total
compensation is comprised of stock options that vest over five
years and have a ten-year life, which drives emphasis on
long-term performance. We also considered the applicability of
the various situations described in Item 402(s) of
Regulation S-K.
We
6
BOARD OF
DIRECTORS GENERAL INFORMATION
concluded from our evaluation that risks arising from our
compensation policies and practices for our employees are not
reasonably likely to have a material adverse effect on the
company.
Minimum
Qualifications for Directors
Members of the Board of Directors must demonstrate integrity,
reliability, knowledge of corporate affairs, and an ability to
work well together. Diversity in business background, area of
expertise, gender and ethnicity are also considered when
selecting board nominees. Additional details are contained in
the companys corporate governance guidelines available at
www.mt.com under About Us / Investor
Relations / Corporate Governance.
Independence
of the Board
The board uses the following criteria in evaluating
independence: (i) independence under the rules of the
New York Stock Exchange; and (ii) no relationships
with the company (other than as a director or shareholder) or
only immaterial relationships. The independence criteria are
contained in the corporate governance guidelines available on
the companys website at www.mt.com under
About Us / Investor
Relations / Corporate Governance. The board
solicits information from directors as to any relationship the
director or his immediate family member has with the company
that might affect the directors independence. The board
also evaluates directors independence pursuant to current
New York Stock Exchange rules.
The Board of Directors has determined that the following types
of relationships are categorically immaterial:
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Commercial business relationships where METTLER TOLEDO buys from
or sells to companies where directors serve as employees, or
where their immediate family members serve as executive
officers, and where the annual purchases or sales are less than
the greater of $1 million or 2% of either companys
consolidated gross revenues.
|
In light of these criteria, the board has determined that
Messrs. Chu, Contino, Kelly, Madaus, Maerki, Milne and
Salice are independent under the rules of the New York Stock
Exchange and either have no relationships with the company
(other than as director and shareholder) or have only immaterial
relationships with the company. Mr. Spoerry, Chairman of
the Board, and Mr. Filliol, President and Chief Executive
Officer, are not independent under the rules of the New York
Stock Exchange, as they are employees of the company.
Meeting
of Non-Management Directors
The board schedules regular executive sessions for its
non-management members, typically as part of each board meeting.
The Presiding Director acts as chairman of these meetings.
Director
Attendance at Board Meetings and the Annual Meeting
The board expects that its members will attend all meetings of
the board and the annual meeting of shareholders. The Board of
Directors met four times in 2010. Each director attended at
least 75% of all board and committee meetings of which the
director is a member and all directors attended the 2010 annual
meeting of shareholders.
Policy
Limiting Director Service on Other Public Company Boards;
Director Resignation
The board has adopted a policy that directors may not serve on
more than six public company boards. The board also has a policy
that directors will offer their resignation upon a change in
professional position or in circumstances that might affect a
directors ability to serve on the board. In such
circumstances, the Nominating and Corporate Governance Committee
takes the lead on determining the appropriate course of action.
7
BOARD OF
DIRECTORS GENERAL INFORMATION
Director
Retirement Policy
The Board of Directors has adopted a retirement policy, pursuant
to which directors will retire immediately after the board
meeting that follows their 72nd birthday. In adopting the
policy, the Board of Directors considered the importance of
ensuring a mix of ages among board members and the balance of
continuity versus fresh perspectives.
Contacting
the Board of Directors
Interested parties, including shareholders, may contact the
Board of Directors, the Presiding Director individually or the
non-management directors as a group via: EMAIL to
PresidingDirector@mt.com; or REGULAR MAIL to
Mettler-Toledo International Inc., Im Langacher 44, 8606
Greifensee, Switzerland, Attention: Presiding Director.
Director
Compensation
The Chairman receives a salary and an option grant, participates
in the various Swiss personnel insurances (pension plan,
accident and disability insurance) and receives certain
miscellaneous benefits described below.
The other directors (except the CEO, Mr. Filliol, whose
compensation is described in the Compensation Discussion and
Analysis) are compensated by an annual cash retainer, committee
member fees, and per meeting fees for board and committee
meetings attended. Board members may also receive a $750 meeting
fee for performing interviews of board candidates. Directors are
reimbursed for traveling costs and other
out-of-pocket
expenses incurred in attending board and committee meetings.
Directors also receive an annual stock option grant and a grant
of restricted stock units. The following provides an overview of
the elements of 2010 director compensation:
|
|
|
|
|
Annual cash retainer
|
|
$
|
45,000
|
|
Fee per board meeting attended
|
|
$
|
1,000
|
|
Fee per committee meeting attended
|
|
$
|
750
|
|
Annual grant of stock options number granted
|
|
|
2,600
|
|
Annual grant of restricted stock units number granted
|
|
|
180
|
|
Annual grant of restricted stock units to the Presiding
Director number granted
|
|
|
280
|
|
Committee member fees:
|
|
|
|
|
Audit
|
|
$
|
10,000
|
|
Compensation
|
|
$
|
5,000
|
|
Nominating and Corporate Governance
|
|
$
|
3,000
|
|
Committee Chair fees (in addition to member fees):
|
|
|
|
|
Audit
|
|
$
|
10,000
|
|
Compensation
|
|
$
|
5,000
|
|
Nominating and Corporate Governance
|
|
$
|
3,000
|
|
8
BOARD OF
DIRECTORS GENERAL INFORMATION
The actual amounts paid to each director with respect to 2010
are set out in the following table.
2010 Director
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
|
Stock
|
|
|
Option
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name
|
|
Paid in Cash
|
|
|
Awards(1)
|
|
|
Awards(1)
|
|
|
Earnings(3)
|
|
|
Compensation(2)
|
|
|
Total
|
|
|
Wah-Hui Chu
|
|
$
|
53,500
|
|
|
$
|
23,940
|
|
|
$
|
98,384
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
175,824
|
|
Francis A. Contino
|
|
|
72,000
|
|
|
|
23,940
|
|
|
|
98,384
|
|
|
|
|
|
|
|
|
|
|
|
194,324
|
|
Michael A. Kelly
|
|
|
57,750
|
|
|
|
23,940
|
|
|
|
98,384
|
|
|
|
|
|
|
|
|
|
|
|
180,074
|
|
Martin D. Madaus
|
|
|
62,000
|
|
|
|
23,940
|
|
|
|
98,384
|
|
|
|
|
|
|
|
|
|
|
|
184,324
|
|
Hans Ulrich Maerki
|
|
|
62,250
|
|
|
|
23,940
|
|
|
|
98,384
|
|
|
|
|
|
|
|
|
|
|
|
184,574
|
|
George M. Milne
|
|
|
56,500
|
|
|
|
23,940
|
|
|
|
98,384
|
|
|
|
|
|
|
|
|
|
|
|
178,824
|
|
Thomas P. Salice
|
|
|
75,750
|
|
|
|
37,240
|
|
|
|
98,384
|
|
|
|
|
|
|
|
|
|
|
|
211,374
|
|
Robert F. Spoerry
|
|
|
383,436
|
|
|
|
|
|
|
|
550,004
|
|
|
|
84,356
|
|
|
|
45,696
|
|
|
|
1,063,492
|
|
|
|
|
(1)
|
|
Represents the grant date fair
value of restricted stock unit awards and option awards,
respectively, computed in accordance with ASC 718
Compensation Stock Compensation (ASC
718). The valuation assumptions associated with such
awards are discussed in Note 12 to the companys
financial statements included in the
Form 10-K
for the fiscal year ending December 31, 2010.
|
At December 31, 2010, each director held unvested
restricted stock units and stock options (vested and unvested)
with respect to the following number of shares:
|
|
|
|
|
|
|
|
|
|
|
Restricted
|
|
Stock
|
|
|
Stock Units
|
|
Options
|
|
Wah-Hui Chu
|
|
|
684
|
|
|
|
16,684
|
|
Francis A. Contino
|
|
|
644
|
|
|
|
22,684
|
|
Michael A. Kelly
|
|
|
524
|
|
|
|
10,684
|
|
Hans Ulrich Maerki
|
|
|
644
|
|
|
|
28,684
|
|
Martin D. Madaus
|
|
|
344
|
|
|
|
5,984
|
|
George M. Milne
|
|
|
644
|
|
|
|
28,684
|
|
Thomas P. Salice
|
|
|
812
|
|
|
|
28,684
|
|
Robert F. Spoerry
|
|
|
|
|
|
|
324,490
|
|
|
|
|
(2)
|
|
Reflects miscellaneous benefits,
none of which individually exceeds $25,000 in value. These
benefits include a car allowance, expense allowance and
childrens allowance.
|
|
(3)
|
|
Represents the change in actuarial
present value of Mr. Spoerrys accumulated benefit
under the Mettler-Toledo Fonds pension plan, a Swiss cash
balance benefit plan, consisting of the companys
contributions to the plan on behalf of Mr. Spoerry.
|
9
BOARD OF
DIRECTORS OPERATION
The Board of Directors has three committees: the Audit
Committee, the Compensation Committee and the Nominating and
Corporate Governance Committee. Each committee has the authority
to engage advisors or consultants as it deems appropriate to
carry out its responsibilities. The membership and meetings of
the committees are described in the following table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominating &
|
|
|
|
|
|
|
Corporate
|
Name
|
|
Audit(1)
|
|
Compensation(2)
|
|
Governance
|
|
Wah-Hui Chu
|
|
|
|
|
|
|
|
|
|
|
X
|
|
Francis A. Contino
|
|
|
X
|
|
|
|
|
|
|
|
|
|
Michael A. Kelly
|
|
|
|
|
|
|
X
|
|
|
|
|
|
Hans Ulrich Maerki
|
|
|
|
|
|
|
X
|
|
|
|
X
|
|
Martin D. Madaus
|
|
|
X
|
|
|
|
|
|
|
|
|
|
George M. Milne
|
|
|
|
|
|
|
|
|
|
|
X
|
|
Thomas P. Salice
|
|
|
X
|
|
|
|
X
|
|
|
|
|
|
Total meetings in 2010
|
|
|
4
|
|
|
|
5
|
|
|
|
2
|
|
|
|
|
(1)
|
|
Messrs. Contino, Madaus and
Salice are each considered financial experts as
determined by the Board of Directors pursuant to the relevant
SEC definition, and all are independent. No Audit Committee
member serves on more than two other public company audit
committees. Our Chief Financial Officer, Chairman, Chief
Executive Officer and General Counsel attend Audit Committee
meetings at the request of the Audit Committee and give reports
to and answer inquiries from the Audit Committee.
|
|
(2)
|
|
No member of the Compensation
Committee was at any time during 2010 an officer or employee of
the company or any of its subsidiaries, and no interlocks exist
with respect to Compensation Committee members.
|
10
BOARD OF
DIRECTORS OPERATION
Committee
Charters
Each committee of the Board of Directors has a written charter,
setting forth the responsibilities of the committee in detail.
The charters are reviewed annually and updated to comply with
relevant regulations. The committee charters can be found on the
companys website at www.mt.com under About
Us / Investor Relations / Corporate
Governance and are available free of charge in print to
any shareholder who requests them. The primary functions of the
committees are as follows:
|
|
|
|
|
|
|
|
|
Nominating &
|
Audit
|
|
Compensation
|
|
Corporate Governance
|
|
Oversees the accounting and financial
reporting process of the company
|
|
Discharges the responsibilities of the
companys Board of Directors relating to compensation of
the companys executives
|
|
Identifies, screens and recommends
qualified candidates to serve as directors of the company
|
Assists with board oversight of the
integrity of the companys financial statements, and the
sufficiency of the independent registered public accounting
firms review of the companys financial statements
|
|
Reviews and monitors compensation
arrangements so that the company continues to retain, attract
and motivate quality employees
|
|
Advises the board on the structure and
membership of committees of the board
|
Assists with board oversight of the
performance of the companys internal audit function and
independent registered public accounting firm, and the
accounting firms qualifications and independence
|
|
Reviews an annual report on executive
compensation for inclusion in the companys proxy statement
|
|
Develops and recommends to the board
corporate governance guidelines applicable to the company
|
Assists with board oversight of the
companys compliance with legal and regulatory requirements
|
|
Reviews the Compensation Discussion and
Analysis included in the companys proxy statement
|
|
|
11
AUDIT
COMMITTEE REPORT
The Audit Committee assists the board in overseeing the
accounting and financial reporting processes of the company. The
Audit Committee operates pursuant to a written charter, a copy
of which can be found on the companys website at
www.mt.com under About Us / Investor
Relations / Corporate Governance. The committee
is responsible for overseeing the accounting and financial
reporting processes of the company and audits of the financial
statements of the company. In discharging its oversight role,
the Audit Committee discussed the audited financial statements
contained in the 2010 annual report separately with the
companys independent registered public accounting firm and
the companys management and reviewed the companys
internal controls and financial reporting.
The companys independent registered public accounting
firm, PricewaterhouseCoopers LLP (PwC), is
responsible for auditing the companys consolidated
financial statements as well as the companys internal
control over financial reporting. PwC issues opinions as to
(1) whether the financial statements present fairly, in all
material respects, the financial position, results of operations
and cash flows of the company and its subsidiaries in accordance
with accounting principles generally accepted in the United
States of America and (2) whether the company maintained,
in all material respects, effective control over financial
reporting.
Audited
Financial Statements
In reviewing the companys audited financial statements
with the independent registered public accounting firm, the
Audit Committee discussed with PwC the matters required to be
discussed by the Statement on Auditing Standards No. 61, as
amended and adopted by the Public Company Accounting Oversight
Board, and other matters including, without limitation:
|
|
|
|
|
PwCs responsibilities under generally accepted auditing
standards, including the nature and scope of their audits;
|
|
|
|
the written disclosures and confirming letter from PwC regarding
their independence required under the Independence Standards
Board Standard No. 1;
|
|
|
|
significant accounting policies, such as revenue recognition,
goodwill and other intangible assets, and income taxes;
|
|
|
|
management judgments and accounting estimates;
|
|
|
|
any material weaknesses or significant deficiencies in internal
controls over financial reporting; and
|
|
|
|
the extent of any significant accounting adjustments.
|
In reviewing the companys audited financial statements
with the companys management, the Audit Committee
discussed the same topics listed above with management,
including, without limitation, the process used by management in
formulating accounting estimates and the reasonableness of those
estimates.
Based on the review and discussions referred to above, the Audit
Committee recommended to the Board of Directors, and the board
approved, that the audited financial statements be included in
the companys Annual Report on
Form 10-K
for the year ended December 31, 2010.
Independent
Registered Public Accounting Firm Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Audit Fees
|
|
|
Audit-Related Fees
|
|
|
Tax Fees
|
|
|
All Other Fees
|
|
|
2010
|
|
$
|
2,968,000
|
|
|
$
|
233,000
|
|
|
$
|
446,000
|
|
|
$
|
3,000
|
|
2009
|
|
$
|
2,847,000
|
|
|
$
|
257,000
|
|
|
$
|
276,000
|
|
|
$
|
0
|
|
Audit Fees Represents fees for the audit of
the annual financial statements, including the Sarbanes-Oxley
§ 404 attestation opinion, and review of financial
statements included in quarterly reports on
Form 10-Q.
12
AUDIT
COMMITTEE REPORT
Audit-Related Fees The audit-related fees in
2010 and 2009 related primarily to due diligence work in
connection with acquisition transactions and services provided
in relation to our Blue Ocean program of information technology
investment.
Tax Fees The 2010 and 2009 tax fees were
primarily for tax compliance-related services.
Other Fees No significant other services were
performed by PwC for the company in 2010 or 2009.
The Audit Committee has determined that PwCs provision of
the services included in the categories Tax Fees and
Other Fees is compatible with maintaining PwCs
independence. All non-audit services were approved in advance by
the Audit Committee pursuant to the procedures described below.
Audit
Committee Approval of Non-Audit Services
The Audit Committee approves all non-audit services provided by
PwC in accordance with the following framework:
|
|
|
|
|
If the project is in an approved category and less than $50,000
in fees, it is considered pre-approved by the Audit Committee.
Specific projects in excess of this amount and any potential
projects not included in the pre-approval framework are
presented to the full Audit Committee for their advance approval.
|
|
|
|
On a quarterly basis, PwC reports all non-audit services outside
of the pre-approval framework to the Audit Committee and any
proposals for non-audit services in the upcoming quarter.
|
|
|
|
All non-audit fees are reviewed at least annually by the Audit
Committee.
|
The independent registered public accounting firm ensures that
all audit and non-audit services provided to the company have
been approved by the Audit Committee. Each year, the
companys management and the independent registered public
accounting firm confirm to the Audit Committee that every
non-audit service being proposed is permissible.
Independent
Registered Public Accounting Firm for 2011
The Audit Committee has appointed PwC as the companys
independent registered public accounting firm to audit and
report on the companys consolidated financial statements
for the fiscal year ending December 31, 2011 and to perform
such other services as may be required of them.
Respectfully submitted by the members of the
Audit Committee:
Francis A. Contino, Chairman
Martin Madaus
Thomas P. Salice
13
NOMINATING
AND CORPORATE GOVERNANCE COMMITTEE REPORT
The Nominating and Corporate Governance Committee assists the
board in identifying and recommending individuals to be
nominated for election to the Board of Directors by
shareholders. The Nominating and Corporate Governance Committee
operates pursuant to a written charter, a copy of which can be
found on the companys website at www.mt.com under
About Us / Investor
Relations / Corporate Governance. The committee
is responsible for advising the board on the structure and
membership of committees of the board as well as developing
corporate governance guidelines applicable to the operation of
the company. We describe below the process established by the
committee to nominate directors to the Board of Directors as
well as some of the recent corporate governance activities
undertaken by the committee.
Director
Nomination Process
When there is an actual or anticipated board vacancy, candidates
for the Board of Directors may be recommended by (i) any
member of the Nominating and Corporate Governance Committee,
(ii) other board members, (iii) third parties engaged
for that purpose by the committee,
and/or
(iv) the companys shareholders. The Nominating and
Corporate Governance Committee will consider candidates
recommended by shareholders and evaluate them in the same manner
as other candidates. Shareholders interested in recommending a
person to be a director of the company must make such
recommendation in writing. The recommendation must be forwarded
to the Secretary of the company at: Mettler-Toledo International
Inc., Im Langacher 44, 8606 Greifensee, Switzerland. Shareholder
recommendations must include the information and be sent within
the time-frames specified in the companys by-laws, a copy
of which can be obtained from the Secretary. Additional details
regarding minimum qualifications for director nominees can be
found in the corporate governance guidelines on the
companys website at www.mt.com under About
Us / Investor Relations / Corporate
Governance.
The Nominating and Corporate Governance Committee follows the
following process in nominating candidates for a position on the
companys Board of Directors.
|
|
|
|
(1)
|
The committee begins by working with the Presiding Director and
Chairman of the Board to determine the specific qualifications,
qualities and skills that are desired for potential candidates
to fill the vacancy on the board. The committee makes this
determination based upon the current composition of the board,
the specific needs of the company and the Minimum Qualifications
for Directors included in the corporate governance guidelines.
These state that the Board of Directors should be composed of
successful individuals who demonstrate integrity, reliability,
knowledge of corporate affairs, a general understanding of the
companys business, and an ability to work well together.
The committee considers diversity in business background, area
of expertise, gender and ethnicity. The committee also evaluates
longer-term board succession, taking into account the
demographics of respective board members.
|
|
|
(2)
|
The Nominating and Corporate Governance Committee, Presiding
Director and Chairman of the Board will then compile a list of
all candidates recommended to fill the vacancy on the board.
Candidates who meet the desired qualifications, qualities and
skills will be required to complete a questionnaire that
solicits information regarding the candidates background,
experience, independence and other information.
|
|
|
(3)
|
Members of the Nominating and Corporate Governance Committee,
the Presiding Director, the Chairman of the Board and, in
appropriate cases, other board members will interview those
candidates who have completed the questionnaire.
|
|
|
(4)
|
Following these interviews, the full Nominating and Corporate
Governance Committee considers the qualifications of each
candidate to ensure that each candidate meets the specific
qualities and skills that are desired. The committee will
forward to the Board of Directors for consideration a list of
candidates qualified for the position.
|
15
NOMINATING
AND CORPORATE GOVERNANCE COMMITTEE REPORT
With regard to the current board nominees, the Nominating and
Corporate Governance Committee has evaluated the qualifications
and contributions of each of the board nominees and has
recommended to the board that the nine current directors be
nominated for re-election.
Respectfully submitted by the members of the
Nominating and Corporate Governance Committee:
George M. Milne, Chairman
Wah-Hui Chu
Hans Ulrich Maerki
16
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Discussion and Analysis
The Compensation Committee oversees compensation of the
companys executive officers. In carrying out its duties,
the Compensation Committee receives information and
recommendations from the Chairman, the Head of Human Resources
and the Chief Executive Officer, and may consult with outside
compensation consultants as it deems appropriate. The
Compensation Committee has historically used the firm Pearl
Meyer & Partners to provide market surveys of
executive compensation in technology firms in comparable
industries (including scientific instrument firms), which are
considered in setting compensation levels.
The objectives of the companys executive compensation
programs are to:
|
|
|
|
|
Create a strong link between pay and
performance. The company sets challenging, objectively
measurable targets, and compensation is designed to reward
overachievement of those targets. At the same time, when
performance is only at or below target, compensation tends to be
below market.
|
|
|
|
To tie a significant portion of executive compensation to
shareholder value creation. The company does this in part by
linking long-term compensation to the companys long-term
performance. The annual cash incentive is also tied to
short-term metrics, including growth in earnings per share.
|
|
|
|
Align executives interests with those of the
companys shareholders through the equity ownership
guidelines described below.
|
|
|
|
Attract and retain the best talent. Total
compensation must be competitive in the global personnel market
in which we operate.
|
2010
Compensation Highlights
Our 2010 results, and accordingly 2010 executive compensation,
reflected our executives ability to successfully manage
the company through the economic downturn. In 2010, we grew
revenues by 14% and grew our net earnings by over 34%.
In light of these achievements, the key components of 2010
executive compensation were as follows:
|
|
|
|
|
Salaries Base salaries were reviewed and
adjusted based on salary survey data, local market conditions
and individual performance. Mr. Filliols base salary
was increased by 7%. The change in base salaries of the other
named executive officers was between 0% and 2%.
|
|
|
|
Annual Cash Incentives The average target
achievement for our named executive officers in 2010 was 121%,
resulting in incentive payments of between 113% and 155% of base
salary. In recent years, the average target achievement for
executive officers has ranged from 95% to approximately 125%,
resulting in cash incentives of between 23% and 155% of base
salary.
|
|
|
|
Long-Term Incentives The value of stock
options granted to our named executive officers in 2010
increased by between1% and 10% compared to 2009, reflecting both
survey data and the teams success in managing the business
in a difficult operating environment.
|
Compensation
Program Elements
The companys compensation program consists of three main
elements: base salary, an annual cash incentive and long-term
incentive compensation, and other elements of a smaller
magnitude. The majority of executive compensation is performance
based, and is paid in the form of the annual cash incentive and
long-term incentive compensation.
Our goal is to ensure that the three main elements of
compensation are carefully considered and fair, and that
executives are motivated to further the interests of
shareholders, both short-term and long-term.
17
COMPENSATION
DISCUSSION AND ANALYSIS
Each year the Compensation Committee separately reviews each of
the three elements, as well as total compensation, taking into
account the companys growth and performance, individual
executive performance, and developments in the markets in which
we compete for talent. In evaluating the competitiveness of the
companys executive compensation, the Compensation
Committee periodically conducts both broad based surveys of
executive compensation and surveys of the compensation of
executives in the instruments and electronics industries. In
2010, Pearl Meyer & Partners provided US-based survey
data using confidential surveys relating to CEO and senior
executive compensation at technology companies in comparable
industries, including scientific instruments firms, and similar
size firms to the company. They also provided data on peer
company CEO compensation at Ametek, Beckman Coulter, Bio-Rad
Laboratories, Millipore, Pall, PerkinElmer, Rockwell Automation,
Roper Industries, Teledyne Technologies and Waters. The
Compensation Committee also reviewed CEO compensation data from
certain Swiss industrial public companies of a similar size and
international organizational structure as the company.
Base
Salary
The companys goal is to pay average base salaries that are
approximately at or somewhat below the median. Based on broad
based and peer company surveys, we believe base salaries for
executive officers are generally slightly lower than those at
peer companies. Although a competitive base salary is necessary
and appropriate to attract and retain high quality talent, we
believe the majority of executive compensation should be paid in
ways that link pay with performance. We accomplish this through
the annual cash incentive and long-term incentives.
Changes
in 2010 Compensation
Based on its review of salary survey data referred to above,
local market conditions, and taking into account each
individuals performance, the Compensation Committee
increased the 2010 base salary for Mr. Filliol to CHF
882,750 and for Mr. de la Guéronnière to
Euro 151,592. The base salaries of the other officers were
unchanged. Based on the quality of leadership of
Mr. Filliol and the management team, and the overall
performance of the company, the committee believes
managements compensation is appropriate.
Annual
Cash Incentive
We link pay with performance through our cash incentive plan,
called POBS Plus. The purpose of the incentive plan is to
provide an incentive to key employees of the company to reward
them for driving the financial success of the company as
measured based on objective financial criteria. The incentive
plan is administered by the Compensation Committee. At the end
of each year, the Compensation Committee establishes the
performance targets on which each participants incentive
is based for the coming year. The financial targets used relate
closely to our annual plan and budget, which are approved by the
full Board of Directors each year. The targets are set taking
into account the economic environment, the health of the
companys end-user markets, and the challenges and
opportunities of the companys various businesses. See
2010 Performance Targets and Actual Target
Achievement below.
In addition, between 12 and 20 percent of the incentive for
each participant is based on individual objective performance
targets relating to the companys annual business
objectives. The Compensation Committee directly evaluates the
Chief Executive Officers performance on his individual
targets, and reviews the CEOs recommendation on the
individual target performance of the other executive officers.
After the conclusion of each year, the
18
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation Committee reviews the audited results of the
companys performance against each participants
performance targets and determines the incentive payment, if
any, earned by each participant.
Cash
Incentive Payment as % of Base Salary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Achievement vs. Target Levels
|
|
|
|
|
|
|
100%
|
|
|
130%
|
|
Name
|
|
<90%
|
|
|
(Target)
|
|
|
(Maximum)
|
|
|
Olivier A. Filliol
|
|
|
|
|
|
|
50
|
%
|
|
|
169
|
%
|
William P. Donnelly
|
|
|
|
|
|
|
45
|
%
|
|
|
158
|
%
|
Other Named Executive Officers
|
|
|
|
|
|
|
45
|
%
|
|
|
161
|
%
|
The plan provides that targets for 100% achievement should be
challenging and ambitious, but also realistic and attainable
such that it is possible to achieve and exceed them. If targets
are met total cash compensation is approximately equal to the
levels of peer companies. The impact of over- or under-achieving
targets on the annual incentive can be significant. The company
and Board of Directors therefore approach the target setting
process with care and consideration. We believe targets are set
consistently with the philosophy of the POBS Plus plan that they
be challenging and ambitious. In recent years the average target
achievement for executive officers has ranged from 95% to
approximately 125%, resulting in incentive payments of between
25% and 150% of base salary.
2010
Performance Targets and Actual Target Achievement
|
|
|
|
|
|
|
|
|
2010 Performance Targets
|
|
Target
|
|
|
Actual
|
|
|
Adjusted Non-GAAP Earnings Per Share(1)
|
|
$
|
6.03
|
|
|
$
|
6.94
|
|
Net Cash Flow(2)
|
|
|
247.9 million
|
|
|
|
279.9 million
|
|
Last 12 Months Inventory Turnover
|
|
|
5.30
|
|
|
|
4.75
|
|
Group Sales (at budgeted currency rates)
|
|
|
1,817.9 million
|
|
|
|
1,984.7 million
|
|
|
|
|
(1)
|
|
Excludes purchased intangible
amortization (net of tax) of $3.7 million, restructuring
charges (net of tax) of $3.6 million, a net discrete tax
benefit of $5.2 million and a loss (net of tax) of
$3.8 million associated with the sale of the companys
retail software business for in-store item and inventory
management solutions, offset in part by a benefit from
unrealized contingent consideration from a previous acquisition
(net of tax) of $1.2 million.
|
|
(2)
|
|
Represents cash flow from
operations less capital expenditures, tax payments and
restructuring payments of $11.1 million.
|
The 2010 performance relative to targets resulted in the
following incentive payments as a percent of base salary under
the POBS Plus plan for 2010:
|
|
|
|
|
Mr. Filliol
|
|
|
155
|
%
|
Mr. Donnelly
|
|
|
127
|
%
|
Mr. Caratsch
|
|
|
129
|
%
|
Mr. de la Guéronnière
|
|
|
113
|
%
|
Mr. Widmer
|
|
|
146
|
%
|
Long-Term
Incentives
Another method we have historically used to link pay with
performance is awarding stock options, which we believe aligns
managements long-term interests with those of the
companys shareholders. Our stock options (including those
granted in 2010) typically vest over five years, 20% per
year, starting on the first anniversary of the date of grant. In
2008, we granted certain performance options that will vest in
five years if the company meets certain EPS growth targets.
Options generally have a term of ten years, except for certain
grants to Swiss residents having terms of ten and a half years.
19
COMPENSATION
DISCUSSION AND ANALYSIS
In determining the size of each named executive officers
stock option grants, the Compensation Committee evaluates the
relative importance of the individuals job, the
contribution and performance of the individual, their years of
service and their total compensation, as well as competitive
information about equity as described above relative to each
individual. In 2010, this analysis led to the grant of stock
options with the grant date fair values each as described in the
table Grant of Plan-Based Awards.
The Compensation Committee believes that past performance is
just one factor to take into account in determining the size of
future awards.
Option
Grant Practices and Policy
The Compensation Committee approves all option
grants. Option grants are typically made once each year on
the date of the Compensation Committee meeting at which the
overall annual compensation review takes place (typically in
late October or early November each year). The Compensation
Committee meeting dates are set up to two years in advance, and
the option grants are made on the meeting date. This is
typically shortly before the announcement of the companys
earnings. In the past, the Committee has also made initial
grants to individual executive officers at the time they started
serving as executive officers. All options have an exercise
price equal to the closing price of the companys shares on
the New York Stock Exchange on the date of grant.
Equity
Ownership Guidelines
The Compensation Committee feels it is important for senior
executives to have a significant portion of their ongoing
compensation tied to the interests of shareholders. In 2009, the
Compensation Committee implemented equity ownership guidelines
for directors and executive officers that call for the
individuals to accumulate equity ownership as follows:
|
|
|
|
|
Category
|
|
Value of Equity Ownership Required
|
|
|
Directors
|
|
|
5x cash retainer
(5x salary for Chairman
|
)
|
CEO
|
|
|
5x base salary
|
|
CFO
|
|
|
3x base salary
|
|
Other executive officers
|
|
|
2x base salary
|
|
The following types of equity will count towards the ownership
requirement: shares held directly, vested and unvested
restricted stock units (if any), and the
in-the-money
value of vested stock options. Individuals have a five-year
period to meet the ownership requirement, running from July 2009
for all current directors and officers. Prospectively the
five-year period will run from the date of promotion or date of
election to the board. If an individual does not meet the
requirement within the relevant time periods, the Compensation
Committee has the discretion not to make further equity grants
to that person. If an individual has met their requirement but
subsequently falls below due to a drop in share price, they will
have 24 months to rebuild their ownership, subject to
Compensation Committee discretion. As of June 30, 2010, all
directors and officers who had been serving with the company for
more than three years had already met their equity ownership
target.
Share
Purchase Plan
To help encourage executives to be direct shareholders, the
board approved the Mettler-Toledo 2007 Share Purchase Plan
on November 1, 2007. Under the plan, executive officers may
purchase company shares using all or a portion of their cash
incentive payable under the POBS Plus plan, subject to approval
of the Compensation Committee. The issue price for shares under
the plan will be equal to the New York Stock Exchange closing
price on the date of issuance, which occurs before March 15 of
each year. All shares issued pursuant to the plan are restricted
for a period of five years from the date of issuance, during
which time they may not be sold, assigned, transferred or
otherwise disposed of, nor may they be pledged or otherwise
hypothecated, except in the case of death or disability. Shares
purchased under the plan are disclosed in footnote 3 of the
Summary Compensation Table below.
20
COMPENSATION
DISCUSSION AND ANALYSIS
Swiss
Pension Plan
The Swiss-based executive officers (Messrs. Filliol,
Caratsch and Widmer) participate in a Swiss pension plan called
Mettler-Toledo Fonds, which is a cash balance benefit (or
pension) plan. Each year we contribute to the plan 22% of each
participating named executive officers covered
salary. The covered salary for pension purposes is equal
to 77.27% of the individuals target salary (consisting of
the base salary plus the cash incentive earned at 100% target
achievement) and was capped by Swiss law at a maximum of CHF
820,800 in 2010 and 2009 and CHF 795,600 in 2008. Individual
employees may also make their own direct contributions to the
plan from their own funds. Amounts in the plan bear interest
depending on the annual performance of the pension plan,
including certain minimum amounts as set by Swiss law.
Retirement benefits are paid in the form of a lump-sum payment
when the employee reaches the normal retirement age under the
plan of 65.
Tax
Treatment
Section 162(m) of the Internal Revenue Code prohibits the
company from deducting compensation in excess of $1 million
paid to certain employees, generally its CEO and its three other
most highly compensated executive officers (excluding the CFO),
unless that compensation qualifies as performance-based
compensation. We maintain flexibility to balance the need to
fairly compensate the companys executive officers with the
companys ability to deduct compensation pursuant to
Section 162(m).
Tax
Equalization Agreements (Swiss Executives)
The company is a party to tax equalization agreements with
Messrs. Filliol, Caratsch and Widmer, who are
non-U.S. citizens
and
non-U.S. residents
and who pay income tax on their earnings in Switzerland. The
individuals do not receive any cash benefit from the agreements,
the principle of which is to leave the employee in exactly the
same position (i.e., no better and no worse off) than if they
had not become subject to incremental U.S. taxation on a
portion of their income. Under the tax equalization agreements,
the company has agreed to pay taxes borne by these executives in
respect of incremental taxation being due in the United States
by virtue of their work for the company there. Because the
individuals are left no better and no worse off than had they
not become subject to U.S. taxation, the Compensation
Committee does not believe it is appropriate to take into
account the U.S. taxes paid by the company under the tax
equalization agreements when determining the employees
compensation each year. In cases where the individuals
Swiss taxes are lower as a result of the company having paid
these U.S. tax amounts, the individual may need to make a
payment to the company under the tax equalization agreement.
Employment
Agreements
The company is a party to employment agreements with each of the
named executive officers. These agreements provide for a base
salary subject to adjustment and participation in our cash
incentive plan and other employee benefit plans. Each agreement
prohibits the executive from competing with the company for a
period of 12 months after termination of employment. The
agreements may be terminated without cause by either party on
12 months notice (six months notice for Messrs.
de la Guéronnière and Widmer), during which periods
the executive is entitled to full compensation under the
agreement, including payment of base salary, target cash
incentive, and continuation of benefits.
21
COMPENSATION
DISCUSSION AND ANALYSIS
The equity compensation arrangements are separately described in
the sections below entitled Grants of Plan-Based
Awards and Outstanding Equity Awards at Fiscal
Year-End. The operation of the employment agreements in
the context of a termination or a change in control is
separately described below under Payments Upon Termination
or Change in Control.
Summary
Compensation Table(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
Base
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive Plan
|
|
|
Compensation
|
|
|
All Other
|
|
|
|
|
Name and Principal
|
|
|
|
|
Salary
|
|
|
Awards
|
|
|
Awards
|
|
|
Compensation
|
|
|
Earnings
|
|
|
Compensation
|
|
|
Total
|
|
Position
|
|
Year
|
|
|
($)
|
|
|
($)
|
|
|
($)(2)
|
|
|
($)(3)
|
|
|
($)(4)
|
|
|
($)(5)
|
|
|
($)
|
|
|
Olivier A. Filliol
|
|
|
2010
|
|
|
$
|
846,194
|
|
|
|
|
|
|
$
|
2,545,118
|
|
|
$
|
1,310,417
|
|
|
$
|
173,098
|
|
|
$
|
104,173
|
|
|
$
|
4,979,001
|
|
President and Chief
|
|
|
2009
|
|
|
|
790,836
|
|
|
|
|
|
|
|
2,312,091
|
|
|
|
274,420
|
|
|
|
173,098
|
|
|
|
(4,860
|
)
|
|
|
3,545,586
|
|
Executive Officer
|
|
|
2008
|
|
|
|
718,942
|
|
|
|
|
|
|
|
4,343,150
|
|
|
|
691,981
|
|
|
|
167,784
|
|
|
|
45,439
|
|
|
|
5,967,206
|
|
William P. Donnelly
|
|
|
2010
|
|
|
|
375,000
|
|
|
|
|
|
|
|
949,973
|
|
|
|
477,413
|
|
|
|
n.a.
|
|
|
|
32,899
|
|
|
|
1,835,285
|
|
Chief Financial Officer
|
|
|
2009
|
|
|
|
375,000
|
|
|
|
|
|
|
|
903,969
|
|
|
|
122,850
|
|
|
|
n.a.
|
|
|
|
36,943
|
|
|
|
1,438,763
|
|
|
|
|
2008
|
|
|
|
375,000
|
|
|
|
|
|
|
|
1,784,298
|
|
|
|
299,362
|
|
|
|
n.a.
|
|
|
|
36,042
|
|
|
|
2,494,702
|
|
Thomas Caratsch
|
|
|
2010
|
|
|
|
293,328
|
|
|
|
|
|
|
|
399,969
|
|
|
|
378,071
|
|
|
|
72,305
|
|
|
|
3,730
|
|
|
|
1,147,403
|
|
Head of Laboratory
|
|
|
2009
|
|
|
|
293,328
|
|
|
|
|
|
|
|
381,732
|
|
|
|
66,527
|
|
|
|
71,951
|
|
|
|
26,784
|
|
|
|
840,321
|
|
|
|
|
2008
|
|
|
|
287,577
|
|
|
|
|
|
|
|
745,122
|
|
|
|
135,880
|
|
|
|
70,888
|
|
|
|
28,277
|
|
|
|
1,267,743
|
|
Marc de la Guéronnière(6)
|
|
|
2010
|
|
|
|
201,024
|
|
|
|
|
|
|
|
475,081
|
|
|
|
227,137
|
|
|
|
53,712
|
|
|
|
102,520
|
|
|
|
1,059,473
|
|
Head of European
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Organizations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Urs Widmer
|
|
|
2010
|
|
|
|
322,661
|
|
|
|
|
|
|
|
385,022
|
|
|
|
470,214
|
|
|
|
79,536
|
|
|
|
69,752
|
|
|
|
1,327,185
|
|
Head of Industrial
|
|
|
2009
|
|
|
|
322,661
|
|
|
|
|
|
|
|
381,732
|
|
|
|
76,374
|
|
|
|
79,536
|
|
|
|
15,195
|
|
|
|
875,497
|
|
|
|
|
2008
|
|
|
|
322,661
|
|
|
|
|
|
|
|
965,213
|
|
|
|
166,977
|
|
|
|
79,146
|
|
|
|
59,313
|
|
|
|
1,539,309
|
|
|
|
|
(1)
|
|
All amounts shown were paid in
Swiss francs, except amounts paid to Mr. Donnelly and U.S.
tax equalization payments, which were paid in U.S. dollars, and
amounts paid to Mr. de la Guéronnière, which were paid
in Euros. For purposes of this table, all amounts paid in
Swiss francs were converted to U.S. dollars at a rate of
CHF 1.0432 to $1.00, and amounts paid in Euros were converted to
U.S. dollars at a rate of EUR 0.7541 to $1.00, in each case the
respective average exchange rate in 2010.
|
|
(2)
|
|
Represents the aggregate grant date
fair value of stock option awards for each individual computed
in accordance with ASC 718. The valuation assumptions
associated with such awards are discussed in Note 12 to the
companys financial statements included in the
Form 10-K
for the fiscal year ending December 31, 2010. The 2008
figures reflect two grants made in that year for all officers.
In connection with Mr. Filliol becoming the CEO, the
Compensation Committee approved a one-time grant of performance
options made on January 3, 2008. The regular annual grant
of options was made on November 6, 2008.
|
|
(3)
|
|
Amounts shown are the annual cash
incentive earned under the companys POBS Plus incentive
plan. Pursuant to the Share Purchase Plan described above,
Mr. Filliol purchased company shares with a portion of the
incentive as follows: CHF 360,938 for 2008 and CHF 286,275 for
2009.
|
|
(4)
|
|
Represents the change in actuarial
present value of each individuals accumulated benefit
under the Mettler-Toledo Fonds pension plan, a Swiss cash
balance benefit plan, consisting of the companys
contributions to the plan on behalf of each individual. In the
case of Mr. de la Guéronnière, represents the
companys contributions to the French pension plan.
|
|
(5)
|
|
Includes tax equalization payments
and other miscellaneous benefits as set out below. As described
in the Compensation Discussion and Analysis above, the
individuals do not receive any cash benefit from the tax
equalization payments. The principle of the tax equalization is
to leave the employee in exactly the same position (i.e., no
better and no worse) than if they had not become subject to U.S.
taxation on a portion of their income. As such, the Compensation
Committee does not believe it is appropriate to include these
tax equalization amounts when determining the employees
compensation each year. Negative amounts represent payments by
the individual to the company, for example as a result of lower
Swiss taxes being due by virtue of the U.S. tax payments.
|
Miscellaneous personal benefits, none of which individually
exceeds $25,000 in value unless otherwise stated, include car
allowances, expense allowances, tax return preparation, and the
value of meals in the company cafeteria. In
Mr. Donnellys case, they also include the
companys matching payments under its 401(k) plan, access
to a company-rented apartment in Columbus in lieu of hotel
accommodations
22
COMPENSATION
DISCUSSION AND ANALYSIS
and the dollar value of life
insurance premiums paid by the company. In Mr. de la
Guéronnières case, benefits in 2010 include a
housing allowance of $45,803 and a schooling allowance of
$31,341.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax
|
|
|
Miscellaneous
|
|
Name
|
|
Year
|
|
|
Equalization
|
|
|
Benefits
|
|
|
Olivier A. Filliol
|
|
|
2010
|
|
|
|
76,316
|
|
|
|
27,857
|
|
|
|
|
2009
|
|
|
|
(35,343
|
)
|
|
|
30,483
|
|
|
|
|
2008
|
|
|
|
13,858
|
|
|
|
31,491
|
|
William P. Donnelly
|
|
|
2010
|
|
|
|
n.a.
|
|
|
|
32,899
|
|
|
|
|
2009
|
|
|
|
n.a.
|
|
|
|
36,943
|
|
|
|
|
2008
|
|
|
|
n.a.
|
|
|
|
36,042
|
|
Thomas Caratsch
|
|
|
2010
|
|
|
|
(17,513
|
)
|
|
|
21,243
|
|
|
|
|
2009
|
|
|
|
(6,129
|
)
|
|
|
32,913
|
|
|
|
|
2008
|
|
|
|
3,975
|
|
|
|
24,302
|
|
Marc de la Guéronnière
|
|
|
2010
|
|
|
|
n.a.
|
|
|
|
102,520
|
|
Urs Widmer
|
|
|
2010
|
|
|
|
45,633
|
|
|
|
24,119
|
|
|
|
|
2009
|
|
|
|
(8,962
|
)
|
|
|
24,157
|
|
|
|
|
2008
|
|
|
|
34,819
|
|
|
|
24,494
|
|
|
|
|
(6)
|
|
Mr. de la Guéronnière
became an executive officer in December 2010.
|
Grants of
Plan-Based Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
|
|
|
Grant
|
|
|
|
Estimated Future Payouts
|
|
|
|
|
|
Awards:
|
|
|
|
|
|
Date Fair
|
|
|
|
Under Non-Equity Incentive
|
|
|
|
|
|
Number of
|
|
|
Exercise or
|
|
|
Value of
|
|
|
|
Plan Awards(1)
|
|
|
|
|
|
Securities
|
|
|
Base Price
|
|
|
Stock and
|
|
|
|
[POBS Plus Cash Incentive]
|
|
|
|
|
|
Underlying
|
|
|
of Option
|
|
|
Option
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Grant Date
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
|
|
Name
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(2)
|
|
|
(#)
|
|
|
($/Sh)
|
|
|
($)(3)
|
|
|
Olivier A. Filliol
|
|
|
0
|
|
|
$
|
423,097
|
|
|
$
|
1,433,284
|
|
|
|
11/3/2010
|
|
|
|
67,260
|
|
|
$
|
133.00
|
|
|
$
|
2,545,118
|
|
William P. Donnelly
|
|
|
0
|
|
|
|
168,750
|
|
|
|
590,625
|
|
|
|
11/3/2010
|
|
|
|
25,105
|
|
|
$
|
133.00
|
|
|
|
949,973
|
|
Thomas Caratsch
|
|
|
0
|
|
|
|
131,998
|
|
|
|
470,792
|
|
|
|
11/3/2010
|
|
|
|
10,570
|
|
|
$
|
133.00
|
|
|
|
399,969
|
|
Marc de la Guéronnière
|
|
|
0
|
|
|
|
90,461
|
|
|
|
322,643
|
|
|
|
11/3/2010
|
|
|
|
12,555
|
|
|
$
|
133.00
|
|
|
|
475,081
|
|
Urs Widmer
|
|
|
0
|
|
|
|
145,197
|
|
|
|
517,871
|
|
|
|
11/3/2010
|
|
|
|
10,175
|
|
|
$
|
133.00
|
|
|
|
385,022
|
|
|
|
|
(1)
|
|
Represents the range of cash
incentive payments possible under the companys POBS Plus
incentive plan in respect of the 2010 fiscal year. The maximum
incentive possible is 169.4% of base salary for
Mr. Filliol, 157.5% for Mr. Donnelly, and 160.5% of
base salary for the other named officers. The target cash
incentive is 50% of base salary for Mr. Filliol and 45% of
base salary for the other named officers. The actual incentive
earned in each year is included in the Summary
Compensation Table above.
|
|
(2)
|
|
Each of the option awards was made
under the Mettler-Toledo International Inc. 2004 Equity
Incentive Plan. The grants vest in five equal annual
installments starting on the first anniversary of the date of
grant.
|
|
(3)
|
|
The grant date fair value of the
options of $37.84 per share has been computed in accordance with
ASC 718 using the Black-Scholes option pricing model, based
upon the following assumptions: estimated time until exercise of
five years; a risk-free interest rate of 1.17%; a volatility
rate of 30%; and a zero dividend yield. The Black-Scholes option
pricing model is only one method of valuing options. The actual
value of the options may significantly differ, and depends on
the excess of the market value of the common stock over the
exercise price at the time of exercise.
|
23
COMPENSATION
DISCUSSION AND ANALYSIS
Outstanding
Equity Awards at Fiscal Year-End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards(1)
|
|
|
Stock Awards(2)
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Market
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Value of
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
|
|
Units of
|
|
|
Units of
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
|
|
|
Stock That
|
|
|
Stock That
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Grant
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
Date
|
|
|
(#)
|
|
|
($)
|
|
|
Olivier A. Filliol
|
|
|
30,000
|
|
|
|
0
|
|
|
$
|
46.20
|
|
|
|
6/1/2001
|
|
|
|
12/1/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
0
|
|
|
$
|
45.91
|
|
|
|
10/31/2001
|
|
|
|
4/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
0
|
|
|
$
|
33.23
|
|
|
|
11/7/2002
|
|
|
|
5/6/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
0
|
|
|
$
|
37.56
|
|
|
|
8/27/2003
|
|
|
|
2/27/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
0
|
|
|
$
|
37.56
|
|
|
|
8/27/2003
|
|
|
|
2/27/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
0
|
|
|
$
|
47.95
|
|
|
|
10/28/2004
|
|
|
|
4/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
55,000
|
|
|
|
0
|
|
|
$
|
52.37
|
|
|
|
11/3/2005
|
|
|
|
5/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
36,000
|
|
|
|
9,000
|
|
|
$
|
68.06
|
|
|
|
11/2/2006
|
|
|
|
5/2/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
40,080
|
|
|
|
26,720
|
|
|
$
|
105.11
|
|
|
|
11/1/2007
|
|
|
|
11/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
66,800
|
|
|
$
|
112.37
|
|
|
|
1/3/2008
|
|
|
|
1/3/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
44,000
|
|
|
|
66,000
|
|
|
$
|
73.69
|
|
|
|
11/6/2008
|
|
|
|
11/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
16,620
|
|
|
|
66,480
|
|
|
$
|
90.76
|
|
|
|
10/28/2009
|
|
|
|
10/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
67,260
|
|
|
$
|
133.00
|
|
|
|
11/03/2010
|
|
|
|
11/03/2020
|
|
|
|
|
|
|
|
|
|
William P. Donnelly
|
|
|
12,500
|
|
|
|
0
|
|
|
$
|
45.91
|
|
|
|
10/31/2001
|
|
|
|
4/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
0
|
|
|
$
|
37.56
|
|
|
|
8/27/2003
|
|
|
|
8/27/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
|
|
|
|
0
|
|
|
$
|
37.56
|
|
|
|
8/27/2003
|
|
|
|
8/27/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
0
|
|
|
$
|
47.95
|
|
|
|
10/28/2004
|
|
|
|
10/28/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
55,000
|
|
|
|
0
|
|
|
$
|
52.37
|
|
|
|
11/3/2005
|
|
|
|
11/3/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
36,000
|
|
|
|
9,000
|
|
|
$
|
68.06
|
|
|
|
11/2/2006
|
|
|
|
11/2/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
18,150
|
|
|
|
12,100
|
|
|
$
|
105.11
|
|
|
|
11/1/2007
|
|
|
|
11/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
27,500
|
|
|
$
|
112.37
|
|
|
|
1/3/2008
|
|
|
|
1/3/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
18,040
|
|
|
|
27,060
|
|
|
$
|
73.69
|
|
|
|
11/6/2008
|
|
|
|
11/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
6,498
|
|
|
|
25,992
|
|
|
$
|
90.76
|
|
|
|
10/28/2009
|
|
|
|
10/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
25,105
|
|
|
$
|
133.00
|
|
|
|
11/03/2010
|
|
|
|
11/03/2020
|
|
|
|
|
|
|
|
|
|
Thomas Caratsch(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
240
|
|
|
$
|
36,290
|
|
|
|
|
3,000
|
|
|
|
4,500
|
|
|
$
|
112.37
|
|
|
|
1/3/2008
|
|
|
|
1/3/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
12,000
|
|
|
$
|
112.37
|
|
|
|
1/3/2008
|
|
|
|
1/3/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
7,200
|
|
|
|
10,800
|
|
|
$
|
73.69
|
|
|
|
11/6/2008
|
|
|
|
11/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
2,744
|
|
|
|
10,976
|
|
|
$
|
90.76
|
|
|
|
10/28/2009
|
|
|
|
10/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
10,570
|
|
|
$
|
133.00
|
|
|
|
11/03/2010
|
|
|
|
11/03/2020
|
|
|
|
|
|
|
|
|
|
Marc de la Guéronnière
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
220
|
|
|
$
|
33,266
|
|
|
|
|
5,520
|
|
|
|
3,680
|
|
|
$
|
105.11
|
|
|
|
11/1/2007
|
|
|
|
11/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
13,750
|
|
|
$
|
112.37
|
|
|
|
1/3/2008
|
|
|
|
1/3/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
7,800
|
|
|
|
11,700
|
|
|
$
|
73.69
|
|
|
|
11/6/2008
|
|
|
|
11/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
3,105
|
|
|
|
12,420
|
|
|
$
|
90.76
|
|
|
|
10/28/2009
|
|
|
|
10/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
12,555
|
|
|
$
|
133.00
|
|
|
|
11/03/2010
|
|
|
|
11/03/2020
|
|
|
|
|
|
|
|
|
|
Urs Widmer
|
|
|
15,000
|
|
|
|
0
|
|
|
$
|
45.91
|
|
|
|
10/31/2001
|
|
|
|
4/30/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
0
|
|
|
$
|
37.56
|
|
|
|
8/27/2003
|
|
|
|
2/27/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000
|
|
|
|
0
|
|
|
$
|
47.95
|
|
|
|
10/28/2004
|
|
|
|
4/28/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
|
|
|
0
|
|
|
$
|
52.37
|
|
|
|
11/3/2005
|
|
|
|
5/3/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
22,000
|
|
|
|
5,500
|
|
|
$
|
68.06
|
|
|
|
11/2/2006
|
|
|
|
5/2/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
11,010
|
|
|
|
7,340
|
|
|
$
|
105.11
|
|
|
|
11/1/2007
|
|
|
|
11/1/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
16,050
|
|
|
$
|
112.37
|
|
|
|
1/3/2008
|
|
|
|
1/3/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
13,500
|
|
|
$
|
73.69
|
|
|
|
11/6/2008
|
|
|
|
11/6/2018
|
|
|
|
|
|
|
|
|
|
|
|
|
2,744
|
|
|
|
10,976
|
|
|
$
|
90.76
|
|
|
|
10/28/2009
|
|
|
|
10/28/2019
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
10,175
|
|
|
$
|
133.00
|
|
|
|
11/03/2010
|
|
|
|
11/03/2020
|
|
|
|
|
|
|
|
|
|
24
COMPENSATION
DISCUSSION AND ANALYSIS
|
|
|
(1)
|
|
Each of the options vests ratably
over five years starting from the first anniversary of the date
of grant, except certain options granted in 2003, which vested
on the first and second anniversary of the date of grant, and
the January 3, 2008 grants, which will vest in full on
March 1, 2013, provided the company has achieved at
least 15% compound annual growth in its fully diluted earnings
per share (subject to certain defined adjustments) over the
five-year period January 1, 2008 through December 31,
2012.
|
|
(2)
|
|
Mr. Caratsch received a grant
of 600 restricted stock units in November 2007 and Mr. de la
Guéronnière received a grant of 1,100 restricted stock
units in November 2006 and 1,000 restricted stock units in
November 2005, in each case prior to their becoming an executive
officer. The restrictions on these RSUs lapse ratably over five
years from the first anniversary of the date of grant. The
market value figure shown in the Stock Awards column is
calculated using the closing share price of $151.21 on
December 31, 2010.
|
|
(3)
|
|
Of the January 3, 2008 option
grants made to Mr. Caratsch, 12,000 are the
above-referenced performance options. The remaining 7,500
options were granted in connection with Mr. Caratsch
becoming an executive officer, and vest ratably over five years
starting from the first anniversary of the date of grant.
|
Option
Exercises and Stock Vested in Fiscal 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
|
Shares
|
|
|
|
Shares
|
|
|
|
|
Acquired
|
|
Value Realized
|
|
Acquired
|
|
Value Realized
|
|
|
on Exercise
|
|
on Exercise
|
|
on Vesting
|
|
on Vesting
|
Name
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
Olivier A. Filliol
|
|
|
20,000
|
|
|
$
|
1,886,805
|
|
|
|
|
|
|
|
|
|
William P. Donnelly
|
|
|
6,250
|
|
|
|
591,402
|
|
|
|
|
|
|
|
|
|
Thomas Caratsch
|
|
|
|
|
|
|
|
|
|
|
120
|
|
|
$
|
15,851
|
|
Marc de la Guéronnière
|
|
|
16,000
|
|
|
|
1,683,770
|
|
|
|
420
|
|
|
$
|
56,080
|
|
Urs Widmer
|
|
|
25,000
|
|
|
|
1,444,352
|
|
|
|
|
|
|
|
|
|
Pension
Benefits(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Present
|
|
Payments
|
|
|
|
|
of Years
|
|
Value of
|
|
During
|
|
|
|
|
of Credited
|
|
Accumulated
|
|
Last Fiscal
|
|
|
|
|
Service
|
|
Benefit
|
|
Year
|
Name
|
|
Plan Name
|
|
(#)
|
|
($)(2)
|
|
($)
|
|
Olivier A. Filliol
|
|
Mettler-Toledo Fonds
|
|
|
12
|
|
|
|
4,579,284
|
|
|
|
0
|
|
William P. Donnelly
|
|
n.a.
|
|
|
n.a.
|
|
|
|
n.a.
|
|
|
|
n.a.
|
|
Thomas Caratsch
|
|
Mettler-Toledo Fonds
|
|
|
3
|
|
|
|
1,695,111
|
|
|
|
0
|
|
Marc de la Guéronnière
|
|
ARRCO/AGIRC
|
|
|
9
|
|
|
|
n.a.
|
|
|
|
0
|
|
Urs Widmer
|
|
Mettler-Toledo Fonds
|
|
|
26
|
|
|
|
4,947,633
|
|
|
|
0
|
|
|
|
|
(1)
|
|
The Swiss-based executive officers
(Messrs. Filliol, Caratsch and Widmer) participate in a
Swiss pension plan called Mettler-Toledo Fonds, which is a form
of cash balance benefit (or pension) plan. Each year we
contribute to the plan 22% of each participating named executive
officers covered salary. The covered salary
for pension purposes is equal to 77.27% of the individuals
target salary (consisting of the base salary plus the cash
incentive earned at 100% target achievement) and was capped by
Swiss law at a maximum of CHF 820,800 in 2010 and 2009 and CHF
795,600 in 2008. Mr. de la Guéronnière participates in
the French pension system, which is a type of contributory
pension plan under which pensions are calculated on the basis of
points acquired according to contributions made by
the employer and employee during the employment period.
|
|
(2)
|
|
Swiss franc amounts have been
converted to U.S. dollars at a rate of CHF 0.9407 to $1.00, and
Euros at EUR 0.7546 to $1.00, the respective exchange rate on
December 31, 2010. Individual employees may also make their
own direct contributions to the plan from their own funds. Of
the amounts shown, the named officers have individually
contributed the following amounts: Mr. Filliol
$2.8 million, Mr. Caratsch $1.4 million and
Mr. Widmer $2.7 million.
|
25
COMPENSATION
DISCUSSION AND ANALYSIS
Payments
Upon Termination or Change in Control
Pursuant to their employment agreements described above, each of
the named executive officers may be terminated after giving the
requisite notice. In the event of certain terminations, the
executives are entitled to receive full compensation during the
notice period.
The following table reflects payments that would have been made
to the named executive officers if they had been terminated on
various grounds, assuming that notice of termination was given
on December 31, 2010. The actual amounts to be paid out can
only be determined at the time of any such executives
termination of employment. This table does not include
information about any contracts, agreements, plans or
arrangements to the extent they do not discriminate in scope,
terms or operation in favor of executive officers and that are
available generally to all salaried employees.
Potential
Payments Upon Termination or Change in Control(1)
|
|
|
|
|
|
|
|
|
|
|
For Cause/Death/
|
|
|
Not For Cause/For
|
|
|
|
Disability/Retirement
|
|
|
Good Reason/
|
|
Name
|
|
(2)
|
|
|
All Other(3)
|
|
|
Olivier A. Filliol
|
|
|
|
|
|
|
|
|
Base Salary
|
|
$
|
0
|
|
|
$
|
846,194
|
|
Cash Incentive
|
|
|
0
|
|
|
|
423,097
|
|
Pension
|
|
|
0
|
|
|
|
173,098
|
|
Benefits
|
|
|
0
|
|
|
|
22,431
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
0
|
|
|
|
1,464,821
|
|
William P. Donnelly
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
0
|
|
|
|
375,000
|
|
Cash Incentive
|
|
|
0
|
|
|
|
168,750
|
|
Pension
|
|
|
0
|
|
|
|
10,694
|
|
Benefits
|
|
|
0
|
|
|
|
10,000
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
0
|
|
|
|
564,444
|
|
Thomas Caratsch
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
0
|
|
|
|
293,328
|
|
Cash Incentive
|
|
|
0
|
|
|
|
131,998
|
|
Pension
|
|
|
0
|
|
|
|
72,305
|
|
Benefits
|
|
|
0
|
|
|
|
15,817
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
0
|
|
|
|
513,448
|
|
Marc de la Guéronnière
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
0
|
|
|
|
100,512
|
|
Cash Incentive
|
|
|
0
|
|
|
|
45,230
|
|
Pension
|
|
|
0
|
|
|
|
26,856
|
|
Benefits
|
|
|
0
|
|
|
|
49,154
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
0
|
|
|
|
221,752
|
|
Urs Widmer
|
|
|
|
|
|
|
|
|
Base Salary
|
|
|
0
|
|
|
|
161,331
|
|
Cash Incentive
|
|
|
0
|
|
|
|
72,599
|
|
Pension
|
|
|
0
|
|
|
|
39,768
|
|
Benefits
|
|
|
0
|
|
|
|
7,908
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
0
|
|
|
|
281,606
|
|
|
|
|
(1)
|
|
In all termination scenarios, the
named executive officer retains vested amounts in the
companys pension plans these amounts are
described in the Present Value of Accumulated
Benefit column of the Pension Benefits table above. In a
change in control situation, unless
|
26
COMPENSATION
DISCUSSION AND ANALYSIS
|
|
|
|
|
otherwise provided in an option
agreement, all unvested outstanding options will accelerate and
become fully exercisable. For purposes of the table below, we
assume that all outstanding options accelerate and become fully
exercisable as of December 31, 2010 (and that unvested
restricted stock units vest in the case of Mr. Caratsch and
Mr. de la Guéronnière). The expense associated with
this acceleration is the same as absent a change in control, but
would be incurred by the company earlier than over the normal
course of the vesting period. The value of the named executive
officers unvested stock options (and unvested restricted
stock units of Mr. Caratsch and Mr. de la
Guéronnière) as of December 31, 2010 is as
follows (calculated as the difference between the share price on
that date of $151.21 and the respective exercise price):
|
|
|
|
|
|
|
|
Value of
|
|
|
Accelerated
|
|
|
Unvested Stock
|
Name
|
|
Options
|
|
Olivier A. Filliol
|
|
$
|
14,934,495
|
|
William P. Donnelly
|
|
|
6,500,330
|
|
Thomas Caratsch
|
|
|
2,370,345
|
|
Marc de la Guéronnière
|
|
|
2,623,364
|
|
Urs Widmer
|
|
|
3,314,387
|
|
|
|
|
(2)
|
|
The named executive officers are
not entitled to any additional compensation from the company or
any additional option vesting upon a termination for cause or
termination relating to disability or upon death or retirement.
In a termination for cause, each employee forfeits vested as
well as unvested stock options.
U.S.-based
employees have company-provided life insurance paying one time
their annual compensation (up to $500,000) upon the
employees death during employment. In
Mr. Donnellys case, the insured amount is $500,000.
|
|
(3)
|
|
In all other terminations
(including not for cause or for good reason), the individual is
entitled to base salary, the cash incentive and certain benefits
for the contractual notice period in their respective employment
agreement. Pursuant to the operation of our equity plans
applicable to all employees, the individual is also entitled to
additional option vesting during the notice period.
|
27
COMPENSATION
COMMITTEE REPORT
The Compensation Committee assists the board in reviewing and
monitoring the compensation of the companys executives.
The Compensation Committee operates pursuant to a written
charter, a copy of which can be found on the companys
website at www.mt.com under About
Us / Investor Relations / Corporate
Governance.
The Compensation Committee is responsible for establishing
compensation arrangements that allow the company to retain,
attract and motivate highly qualified employees. The
Compensation Committee reviews the companys total
compensation budget, and sets the annual compensation of the
companys executive officers, including the Chief Executive
Officer. It also evaluates and sets the compensation of the
directors. In carrying out its duties, the Compensation
Committee receives input and recommendations from the Chairman,
Head of Human Resources and the Chief Executive Officer
regarding the amount and form of executive and director
compensation.
The Compensation Committee also makes periodic use of
compensation consultants. In 2010, Pearl Meyer &
Partners provided US-based survey data using confidential
surveys relating to CEO and senior executive compensation at
technology companies in comparable industries, including
scientific instruments firms, and of similar size firms to the
company. They also provided data on peer company CEO
compensation at Ametek, Beckman Coulter, Bio-Rad Laboratories,
Millipore, Pall, PerkinElmer, Rockwell Automation, Roper
Industries, Teledyne Technologies and Waters. The Compensation
Committee also reviewed CEO compensation data from certain Swiss
industrial public companies of a similar size and international
set up as the company.
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis contained in
this Proxy Statement. On the basis of such review and
discussions, the Compensation Committee recommended to the Board
of Directors, and the board approved, that the Compensation
Discussion and Analysis be included in this Proxy Statement.
Respectfully submitted by the members of the Compensation
Committee:
Thomas P. Salice, Chairman
Michael A. Kelly
Hans Ulrich Maerki
28
PROPOSAL THREE:
APPROVAL OF THE POBS PLUS INCENTIVE SYSTEM FOR GROUP
MANAGEMENT
You are being asked to re-approve the material terms of the
companys POBS Plus Incentive System for Group Management
(the Incentive Plan), which has been in operation in
substantially the same form for over a decade.
Description
of the Incentive Plan
The purpose of the Incentive Plan is to provide a cash incentive
to certain key employees of the company to reward them for
driving the financial success of the company as measured based
on objective financial criteria. There are currently ten
employees eligible to participate in the Incentive Plan.
Criteria for participation in the Incentive Plan are:
(i) the performance of key management functions which can
significantly influence and contribute to the overall success of
the company and (ii) leadership skills and high
professional competence.
The Incentive Plan is administered by the Compensation Committee
of the Board of Directors. At the end of each year, the
Compensation Committee establishes the performance targets on
which each participants incentive is based for the coming
year. The financial targets used relate closely to our annual
plan and budget, which are approved by the full Board of
Directors each year, and may be based upon any one or more of
the following financial criteria:
|
|
|
|
|
earnings per share;
|
|
|
|
cash flow;
|
|
|
|
operating profit of business areas;
|
|
|
|
sales of the company
and/or its
business areas;
|
|
|
|
inventory turnover of the company
and/or its
business areas; and
|
|
|
|
days sales outstanding of business areas.
|
In addition, each participant has individual objective
performance targets relating to the companys annual
business objectives, which make up between 10 and
20 percent of their total targets. After the conclusion of
each year, the Compensation Committee reviews the audited
results of the companys performance against each
participants performance targets and determines the
incentive payment, if any, earned by each participant.
The Incentive Plan provides for payment of a cash incentive to
participants calculated by reference to the performance targets.
Below 90% target achievement no payment is made. For each
participant, a cash incentive is payable following achievement
of more than 90% of the target level. For each full percentage
point of target achievement above 90% and up to a maximum of
120% for individual performance targets and 130% for the company
performance targets, a cash incentive of from 2.5% to 7.5% of
the base salary of the participant is payable, for a total
maximum potential cash incentive of between 100% and 300% of
base salary. Within the first 90 days of each year, the
percentage of base salary between 2.5% and 7.5% to be used in
calculating the cash incentive is established individually for
each participant by the Compensation Committee.
For illustration purposes, here is how the Incentive Plan
operated in 2010 for the named executive officers. At 100%
target achievement, the incentive was 50% of base salary for
Mr. Filliol, and 45% of base salary for the other executive
officers. The maximum potential cash incentive possible was
earned at 130% target achievement (120% for individual
performance targets), and was 169% of base salary for
Mr. Filliol, 158% of base salary for Mr. Donnelly, and
161% of base salary for the other executive officers. The
maximum cash incentive that could have been paid to any
participant under the Incentive Plan in 2010 was
$1.4 million, reflecting the maximum incentive achievable
by Mr. Filliol. The actual cash incentives paid are set out
above in the Compensation Discussion and Analysis under the
Annual Cash Incentive section.
In no event may an incentive greater than $2.5 million be
paid under the Incentive Plan. In case of termination of a
participant during the first half of a fiscal year, the cash
incentive is generally paid pro rata on the basis of 95% target
achievement. In case of termination of employment of a
participant during the second half of a fiscal year,
29
PROPOSAL THREE:
APPROVAL OF THE POBS PLUS INCENTIVE SYSTEM FOR GROUP
MANAGEMENT
target achievement is measured at the end of the year and the
cash incentive is paid on a pro rata basis. The Incentive Plan
may be amended or terminated at any time by the Board of
Directors of the Company.
The plan provides that targets for 100% achievement should be
challenging and ambitious, but also realistic and attainable
such that it is possible to achieve and exceed them. If targets
are met total cash compensation is approximately equal to the
levels of peer companies. The impact of over- or under-achieving
targets on the annual incentive can be significant. The company
and Board of Directors therefore approach the target setting
process with care and consideration. We believe targets are set
consistently with the philosophy of the POBS Plus plan that they
be challenging and ambitious. In recent years the average target
achievement for executive officers has ranged from 95% to
approximately 125%, resulting in cash incentives of between 23%
and 155% of base salary.
The Board of Directors recommends that you vote FOR
approval of the companys POBS Plus Incentive System
for Group Management.
30
PROPOSAL FOUR:
ADVISORY VOTE ON EXECUTIVE COMPENSATION
Under the Dodd-Frank Wall Street Reform and Consumer Protection
Act enacted in July 2010 (the Dodd-Frank Act), the
shareholders of the company are entitled to vote at the annual
meeting to approve the compensation of the companys named
executive officers, as disclosed in this proxy statement
pursuant to Item 402 of
Regulation S-K
under the Securities Act and the Exchange Act.
As described more fully in the Compensation Discussion and
Analysis section of this proxy statement and accompanying tables
and narratives, our compensation program consists of three main
elements: base salary, an annual cash incentive and long-term
incentive compensation. Our goal is to ensure that the three
main elements of compensation are carefully considered and fair,
and that executives are motivated to further the interests of
shareholders, both short and long-term. The company has in the
past sought approval from shareholders regarding the incentive
plans that we use to motivate, retain and reward our executives.
Those incentive plans, including the POBS Plus Incentive System
for Group Management and the 2004 Equity Incentive Plan, make up
a majority of the pay that the company provides to our
executives.
We have a long track record of delivering superior results for
our shareholders. In the ten year period ending
December 31, 2010, the companys total return to
shareholders has been 278%, compared with 115% for the S&P
500 and 123% for companies in SIC Code 3826 (Laboratory
Analytical Instruments). Our executive compensation programs
have played a material role in our ability to drive strong
financial results and attract and retain a highly qualified team
to run the company.
We believe our executive compensation programs are transparent,
consistent with current best practices, appropriately
benchmarked to peers and effective in supporting our company and
our business objectives.
|
|
|
|
|
Our compensation programs are substantially tied to the
achievement of key business objectives and to long-term
shareholder returns.
|
|
|
|
Performance is objectively measured.
|
|
|
|
Targets are set at challenging levels.
|
|
|
|
Stock options granted to executives have a ten-year term and
vest over five years, which helps management focus on
sustainable and long-term value creation.
|
|
|
|
We carefully monitor the compensation of executives from
companies of similar size and complexity to help us to ensure
our programs are within the range of market practices.
|
The company seeks your advisory vote on our executive
compensation programs. We ask that you support the compensation
of our named executive officers as disclosed in the Compensation
Discussion and Analysis section and the accompanying tables and
narratives contained in this proxy statement. Because your vote
is advisory, it will not be binding on the Board of Directors.
However, the board will review the voting results and take such
results into consideration when making future decisions
regarding executive compensation. Accordingly, we will ask our
shareholders to vote FOR the following resolution at
the annual meeting:
RESOLVED, that the compensation paid to the companys
named executive officers, as disclosed pursuant to Item 402
of
Regulation S-K,
including the Compensation Discussion and Analysis, compensation
tables and narrative discussion, is hereby APPROVED.
The Board of Directors recommends that you vote FOR
the approval of the compensation of our named executive
officers as disclosed in this proxy statement pursuant to the
compensation and disclosure rules of the Securities and Exchange
Commission.
31
PROPOSAL FIVE:
ADVISORY VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE
COMPENSATION
The Dodd-Frank Act also requires us, not less frequently than
once every six years, to provide our shareholders a separate
non-binding advisory vote on the frequency of submission to
shareholders of a Say on Pay advisory vote on the
compensation of our named executive officers, as disclosed
pursuant to the Securities and Exchange Commissions
compensation and disclosure rules, such as Proposal Four.
Accordingly, we are asking shareholders to vote on whether the
advisory vote should occur every three years, every two years or
every year. We ask that you vote for a frequency of every three
years (a triennial period) for the future advisory vote on the
compensation of our executive officers.
The advisory vote on executive compensation is important to the
company. We appreciate the past shareholder approval of our
incentive pay programs, which have historically occurred on a
five year cycle. This has served the company and shareholders
well, ensuring an alignment between compensation and our
financial performance. Setting a three year period for the
advisory vote will enhance shareholder communication by
providing a way for the company to obtain information on
investor views about our executive compensation philosophy. An
advisory vote every three years is an effective timeframe to
allow the company to engage with shareholders to understand the
vote results and respond to shareholder feedback.
This vote is advisory, and will not be binding on the company,
our Board of Directors or our Compensation Committee. Although
the Board of Directors will consider the voting results, it may
ultimately decide that it is in the best interests of our
shareholders and the company to hold an advisory vote on
executive compensation more or less frequently than the option
approved by our shareholders. You may cast your vote for your
preferred frequency by indicating your choice that future Say on
Pay Proposals should be submitted to shareholders every three
years, every two years or every year, or you may choose to
abstain from voting on this issue, in response to the resolution
set forth below:
RESOLVED, that whichever of the three frequency choices
of: every three years, every two years or every year receives
the most shareholder votes will be considered the
shareholders preferred frequency in regard to how often a
Say on Pay Proposal should be submitted to the
shareholders in future company proxy statements prepared in
connection with our annual meeting.
If no voting specification (for every three years, every two
years, every year or an abstention from voting) is made, your
vote will count as a vote FOR a frequency of every
three years for the future non-binding shareholder vote on the
compensation of our named executive officers.
32
SHARE
OWNERSHIP
This table shows how much of the companys common stock is
owned by directors, executive officers and owners of more than
5% of the companys common stock as of the record date
March 7, 2011 (December 31, 2010 in the case of 5%
shareholders):
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Shares Beneficially Owned(1)
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Name of Beneficial Owner
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Number
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Percent
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5% Shareholders:
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FMR LLC
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3,929,676
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12.2
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%
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82 Devonshire Street
Boston, MA 02109
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BlackRock Inc.
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2,416,920
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7.5
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%
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40 East
52nd
Street
New York, NY 10022
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Columbia Wanger Asset Management
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2,240,500
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6.9
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%
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227 West Monroe Street, Suite 3000
Chicago, IL 60606
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Baron Capital Group
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2,230,748
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6.9
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%
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767 Fifth Avenue,
49th Floor
New York, NY 10153
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Direct
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Indirect(2)
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Total
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Number
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Percent
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Directors:
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Robert F. Spoerry(3)
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370,191
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238,691
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608,882
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1.9
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%
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Wah-Hui Chu
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982
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6,926
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7,908
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*
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Francis A. Contino
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3,182
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12,926
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16,108
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*
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Olivier A. Filliol
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16,279
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366,700
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382,979
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1.2
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%
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Michael A. Kelly
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202
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2,726
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2,928
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*
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Martin D. Madaus
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682
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846
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1,528
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*
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Hans Ulrich Maerki
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682
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18,926
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19,608
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*
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George M. Milne
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6,682
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18,926
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25,608
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*
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Thomas P. Salice
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184,932
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18,926
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203,858
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*
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Named Executive Officers:
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William P. Donnelly(4)
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54,507
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219,938
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274,445
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*
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Thomas Caratsch
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530
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11,444
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11,974
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*
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Marc de la Guéronnière
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10,641
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16,425
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27,066
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*
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Urs Widmer
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8,913
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134,754
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143,667
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*
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All Directors and Executive Officers as a Group
(16 persons):
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662,187
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1,151,451
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1,813,638
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5.4
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%
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*
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The percentage of shares of common
stock beneficially owned does not exceed one percent of the
outstanding shares.
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(1)
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Calculations of percentage of
beneficial ownership are based on 32,243,125 shares of
common stock outstanding on March 7, 2011. Information
regarding 5% shareholders is based solely on Schedule 13Gs
filed by the holders. For the directors and officers, the
calculations assume the exercise by each individual of all
options for the purchase of common stock held by such individual
that are exercisable within 60 days of the date hereof.
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(2)
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Represents shares subject to stock
options that are exercisable within 60 days.
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(3)
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Includes 17,778 shares held by
Mr. Spoerrys spouse.
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(4)
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Includes 3,230 shares held by
Mr. Donnellys children.
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33
ADDITIONAL
INFORMATION
Compensation
Committee Interlocks and Insider Participation
The Compensation Committee is comprised of Messrs. Kelly,
Maerki and Salice, none of whom were officers or employees of
the company or its subsidiaries or had any relationship
requiring disclosure by the company under Item 404 of the
Securities and Exchange Commissions
Regulation S-K
during 2010. No interlocking relationship exists between the
members of Mettler-Toledos Board of Directors or the
Compensation Committee and the board of directors or
compensation committee of any other company, nor has any such
interlocking relationship existed in the past.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires the companys executive officers and directors,
and persons who own more than ten percent of a registered class
of the companys equity securities, to file reports of
ownership and changes in ownership with the Securities and
Exchange Commission (the SEC) and The New York Stock
Exchange. Executive officers, directors and greater than 10%
shareholders are required by SEC regulation to furnish us with
copies of all Section 16(a) forms they file. Based on our
review of the copies of such forms received by us, or written
representations from certain reporting persons, we believe that
in the last fiscal year, all filing requirements applicable to
our executive officers and directors and greater than 10%
shareholders were complied with.
Availability
of
Form 10-K
and Annual Report to Shareholders
The companys Annual Report to shareholders for the fiscal
year ended December 31, 2010, including financial
statements, accompanies this proxy statement. The Annual Report
is not to be regarded as proxy soliciting material or as a
communication by means of which any solicitation is to be made.
The Annual Report will be available on the companys
website at www.mt.com under About
Us / Investor Relations / Annual
Report. Upon written request, the company will furnish,
without charge, to each person whose proxy is being solicited a
copy of the Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010, as filed with
the SEC. Requests in writing for copies of any such materials
should be directed to Investor Relations, Mettler-Toledo
International Inc., 1900 Polaris Parkway, Columbus, Ohio
43240-2020,
USA, telephone +1 614 438 4748.
Electronic
Delivery of Annual Report and Proxy Statement
If you wish to receive future annual reports, proxy statements
and other materials and shareholder communications
electronically via the Internet, please follow the directions on
your proxy card for requesting such electronic delivery. An
election to receive materials electronically will continue until
you revoke it. You will continue to have the option to vote your
shares by mail or via the Internet.
How to
Submit Shareholder Proposals
Shareholders may present proposals which may be proper subjects
for inclusion in the proxy statement and for consideration at an
annual meeting. To be considered, proposals must be submitted on
a timely basis. We must receive proposals for next years
annual meeting no later than November 15, 2011. Proposals
and questions related thereto should be submitted in writing to
the Secretary of the company. Proposals may be included in the
proxy statement for next years annual meeting if they
comply with certain rules and regulations promulgated by the SEC
and in connection with certain procedures described in our
by-laws, a copy of which may be obtained from the Secretary of
the company. Any proposal submitted outside the processes of
these rules and regulations will be considered untimely for the
purposes of
Rule 14a-4
and
Rule 14a-5.
Expenses
of Solicitation
The cost of soliciting proxies will be borne by the company. In
addition to the solicitation of proxies by use of the mail, some
of our officers, directors and regular employees, none of whom
will receive additional compensation
34
ADDITIONAL
INFORMATION
therefore, may solicit proxies in person or by Internet or other
means. As is customary, we will, upon request, reimburse
brokerage firms, banks, trustees, nominees and other persons for
their
out-of-pocket
expenses in forwarding proxy materials to their principals.
Delivery
of Documents to Shareholders Sharing an Address
If you are the beneficial owner, but not the record holder, of
shares of METTLER TOLEDO stock, your broker, bank or other
nominee may only deliver one copy of this proxy statement and
our 2010 annual report to multiple shareholders who share an
address unless that nominee has received contrary instructions
from one or more of the shareholders. We will deliver promptly,
upon written or oral request, a separate copy of this proxy
statement and our 2010 annual report to a shareholder at a
shared address to which a single copy of the documents was
delivered. A shareholder who wishes to receive a separate copy
of the proxy statement and annual report should submit this
request by writing to Investor Relations, Mettler-Toledo
International Inc., 1900 Polaris Parkway, Columbus, OH 43240,
USA or by calling +1 614 438 4748. Shareholders sharing an
address who are receiving multiple copies of proxy materials and
annual reports and who wish to receive a single copy of such
materials in the future should contact their broker, bank or
other nominee to request that only a single copy of each
document be mailed to all shareholders at the shared address in
the future.
Other
Matters
We know of no other matter to be brought before the annual
meeting. If any other matter requiring a vote of the
shareholders should come before the meeting, it is the intention
of the persons named in the proxy to vote the proxies with
respect to any such matter in accordance with their reasonable
judgment.
35
YOUR VOTE IS IMPORTANT. PLEASE VOTE TODAY.
We encourage you to
take advantage of Internet or telephone voting.
Both are available 24 hours a day, 7 days a week.
Internet and telephone voting is available through 11:59 PM Eastern Time the day prior to the
shareholder meeting date.
Mettler-Toledo International Inc.
INTERNET
http://www.proxyvoting.com/mtd
Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site.
OR
TELEPHONE
1-866-540-5760
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.
To vote by mail, mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if
you marked, signed and returned your proxy card.
WO#
91508-1
▼ FOLD AND DETACH HERE ▼
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3 AND 4, AND A VOTE OF 3 YEARS FOR ITEM 5.
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Please mark your votes as indicated in this example |
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x |
ITEM
NO. 1. - ELECTION OF DIRECTORS
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FOR |
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AGAINST |
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ABSTAIN |
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FOR |
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AGAINST |
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ABSTAIN |
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FOR |
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AGAINST |
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ABSTAIN |
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1.1 Robert F. Spoerry |
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1.6 Martin D. Madaus |
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ITEM NO. 2. APPROVAL
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM. |
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1.2 Wah-Hui Chu
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o |
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1.7 Hans Ulrich Maerki |
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o |
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ITEM NO. 3. APPROVAL OF THE POBS PLUS INCENTIVE SYSTEM FOR GROUP MANAGEMENT.
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1.3 Francis A. Contino |
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1.8 George M. Milne |
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o |
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ITEM NO. 4. ADVISORY VOTE ON EXECUTIVE
COMPENSATION.
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o |
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o |
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1.4 Olivier A. Filliol |
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o |
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1.9 Thomas P. Salice |
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o |
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o |
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3 years |
2 years |
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1 year |
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Abstain |
1.5 Michael A. Kelly |
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o |
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o |
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ITEM NO. 5. ADVISORY VOTE ON THE FREQUENCY OF
THE ADVISORY VOTE ON
EXECUTIVE COMPENSATION.
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PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE |
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Receipt is hereby acknowledged of the Mettler-Toledo International Inc. Notice of Meeting and Proxy Statement. |
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Mark Here for Address Change or Comments SEE REVERSE |
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o |
NOTE. Please sign
exactly as name appears
hereon. Joint owners
should each sign. When
signing as an attorney,
executor, administrator,
trustee or guardian,
please give full title as
such. Corporate and
partnership proxies
should be signed by an
authorized person
indicating the persons
title.
You can now access your Mettler-Toledo
International Inc. account online.
Access your Mettler-Toledo International Inc. account
online via Investor ServiceDirect® (ISD).
BNY Mellon Shareowner Services, the transfer agent for Mettler-Toledo International Inc., now
makes it easy and convenient to get current information on your shareholder account.
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View account status
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View payment history for dividends |
View certificate history
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Make address changes |
View book-entry information
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Obtain a duplicate 1099 tax form |
Visit us on the web at http://www.bnymellon.com/shareowner/equityaccess
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
Investor ServiceDirect®
Available 24 hours per day, 7 days per week
TOLL FREE NUMBER: 1-800-370-1163
Choose
MLinkSM for fast, easy and secure 24/7 online access to your future
proxy materials, investment plan statements, tax documents and more. Simply
log on to Investor ServiceDirect® at www.bnymellon.com/shareowner/equityaccess
where step-by-step instructions will prompt you through enrollment.
You can view the 2010 Annual Report to Stockholders and the 2011
Proxy Statement on the internet at http://proxyonline.mt.com
▼ FOLD AND DETACH HERE ▼
PROXY
METTLER-TOLEDO INTERNATIONAL INC.
Proxy for Annual Meeting of Shareholders
May 4, 2011
This proxy is solicited on behalf of Mettler-Toledo International Inc.s Board of Directors
The undersigned hereby appoints Robert F. Spoerry and William P. Donnelly, and each of
them, proxies for the undersigned, with full power of substitution, to represent and to vote all
shares of Mettler-Toledo International Inc. common stock which the undersigned may be entitled to
vote at the 2011 Annual Meeting of Shareholders of Mettler-Toledo International Inc. to be held in
New York, New York on Wednesday, May 4, 2011 at 8:00 a.m., or at any adjournment thereof, upon the
matters set forth on the reverse side and described in the accompanying proxy statement and upon
such other business as may properly come before the meeting or any adjournment thereof.
Please mark this proxy as indicated on the reverse side to vote on any item. If you wish to
vote in accordance with the Board of Directors recommendations, please sign the reverse side; no
boxes need to be checked. IF THIS PROXY IS SIGNED BUT NO SPECIFICATION IS MADE, THE PROXY SHALL BE
VOTED FOR ITEMS 1, 2, 3 AND 4, AND VOTED 3 YEARS FOR ITEM 5 in their discretion, and the appointed
proxies are authorized to vote upon such other business as may properly come before the meeting.
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Address Change/Comments (Mark the corresponding box on the reverse side) |
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BNY MELLON SHAREOWNER SERVICES P.O. BOX 3550 SOUTH HACKENSACK, NJ 07606-9250
(continued and to be signed on other side) |
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