CARLISLE COMPANIES INCORPORATED
13925 Ballantyne Corporate Place, Suite 400
Charlotte, North Carolina 28277
(704) 501-1100

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The 2007 Annual Meeting of Shareholders of Carlisle Companies Incorporated (the “Company”) will be held at the offices of the Company, 13925 Ballantyne Corporate Place, Suite 400, Charlotte, North Carolina on Friday, April 20, 2007, at 12:00 Noon for the following purposes:

1.                To elect three (3) directors.

2.                To transact any other business properly brought before the meeting.

Only shareholders of record at the close of business on February 23, 2007 will be entitled to vote whether or not they have transferred their stock since that date.

SHAREHOLDERS ARE URGED TO FILL IN, SIGN, DATE AND MAIL THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE.

 

Charlotte, North Carolina
March 1, 2007

PROXY STATEMENT

GENERAL

The enclosed Proxy is solicited by the Board of Directors.   The cost of proxy solicitation will be borne by the Company. In addition to the solicitation of proxies by use of the mails, officers and regular employees of the Company may devote part of their time to solicitation by facsimile, telephone or personal calls. Arrangements may also be made with brokerage houses and other custodians, nominees and fiduciaries for the forwarding of solicitation material to beneficial owners and for reimbursement of their out-of-pocket and clerical expenses incurred in connection therewith. Proxies may be revoked at any time prior to voting. See “Voting by Proxy and Confirmation of Beneficial Ownership” beginning on page 31.

The mailing address of the principal executive offices of the Company is Carlisle Companies Incorporated, 13925 Ballantyne Corporate Place, Suite 400, Charlotte, North Carolina 28277. The Company intends to mail this Proxy Statement and the enclosed Proxy, together with the 2006 Annual Report, on or about March 5, 2007. Upon written request mailed to the attention of the Secretary of the Company, at the address set forth above, the Company will provide without charge a copy of its 2006 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

VOTING SECURITIES

At the close of business on February 23, 2007, the Company had 31,038,389 shares of common stock (“Shares” or “Common Shares”) outstanding, all of which are entitled to vote. The Company’s Restated Certificate of Incorporation provides that each person who received Shares pursuant to the Agreement of Merger, dated March 7, 1986, which was approved by the shareholders of Carlisle Corporation and became effective on May 30, 1986, is entitled to five votes per Share. Persons acquiring Shares after May 30, 1986 (the effective date of the Merger) are entitled to one vote per Share until the Shares have been beneficially owned (as defined in the Restated Certificate of Incorporation) for a continuous period of four years. Following continuous ownership for a period of four years, the Shares are entitled to five votes per share. The actual voting power of each holder of Shares will be based on shareholder records at the time of the Annual Meeting. See “Voting by Proxy and Confirmation of Beneficial Ownership” beginning on page 31. In addition, holders of Shares issued from the treasury, other than for the exercise of stock options, before the close of business on February 23, 2007, the record date for determining shareholders entitled to vote at the Annual Meeting, will be entitled to five votes per share unless the Company’s Board of Directors (the “Board of Directors” or “Board”) determines otherwise at the time of authorizing such issuance.

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SECURITY OWNERSHIP

A.  Beneficial Owners.

The following table provides certain information as of December 31, 2006 with respect to any person who is known to the Company to be the beneficial owner of more than five percent (5%) of the Common Shares, the Company’s only class of voting securities. As defined in Securities and Exchange Commission Rule 13d-3, “beneficial ownership” means essentially that a person has or shares voting or investment decision power over shares. It does not necessarily mean that the person enjoyed any economic benefit from those shares. The information included in the table is from Schedules 13G as filed by (i) Franklin Resources, Inc. (ii) JPMorgan Chase & Co., (iii) Lord, Abbett & Co., LLC, and (iv) Cramer Rosenthal McGlynn, LLC.

(1)          Based on the referenced Schedule 13G filing, each listed reporting person has sole voting and dispositive power in respect of the Shares owned by such reporting person.

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B. Nominees, Directors and Officers

The following table provides information as of January 31, 2007, as reported to the Company by the persons and members of the group listed, as to the number and the percentage of Common Shares beneficially owned by:  (i) each director, nominee and executive officer named in the Summary Compensation Table on page 23; and (ii) all directors, nominees and current executive officers of the Company as a group.

Name of Director/Executive or
Number of Persons in Group				Number of Shares		Percentage
Donald G. Calder				37,184(a)(c)(f)			.12	%
Robin S. Callahan				13,830(f)(i)			.04	%
Paul J. Choquette, Jr.				15,132(f)			.05	%
Peter L.A. Jamieson				14,431(f)(k)			.05	%
Peter F. Krogh				12,439(f)(k)			.04	%
Richmond D. McKinnish				340,019(d)(e)(j)			1.09	%
Stephen P. Munn				297,298(b)(d)(e)			.96	%
Anthony W. Ruggiero				11,334(f)(k)			.04	%
Lawrence A. Sala				11,570(f)(k)			.04	%
Eriberto R. Scocimara				9,586(f)			.03	%
Magalen C. Webert				180,685(f)(g)(h)(k)			.59	%
John W. Altmeyer				124,214(d)(e)(j)			.40	%
Barry Littrell				33,032(d)(e)(j)			.11	%
Carol P. Lowe				33,923(d)(e)(j)			.11	%
Michael D. Popielec				60,472(d)(e)(j)			.20	%
17 Directors and current executive officers as a group				1,314,016(a)-(k)			4.16	%

(a)           Includes 3,000 Shares held by Mr. Calder’s wife. Mr. Calder disclaims beneficial ownership of these Shares.

(b)          Includes 5,200 Shares held by Mr. Munn’s wife. Mr. Munn disclaims beneficial ownership of these Shares.

(c)           Includes 7,317 Shares held by a trust as to which Mr. Calder is a trustee. Mr. Calder disclaims beneficial ownership of these Shares.

(d)          Includes Shares allocated to the accounts of the following executive officers participating in the Company’s Employee Incentive Savings Plan as of December 31, 2006:  Mr. McKinnish, 15,255 Shares; Mrs. Lowe, 661 Shares; Mr. Popielec, 206 Shares; Mr. Altmeyer, 4,430 Shares; Mr. Littrell, 1,282 Shares; and Mr. Munn, 656 Shares. Each participant in the Plan has the right to direct the voting of Shares allocated to his or her account. Shares are held by the trustee of the Employee Incentive Savings Plan in a commingled trust fund with beneficial interest allocated to each participant’s account.

(e)           Includes Shares which the following executive officers have the right to acquire within sixty (60) days through the exercise of stock options issued by the Company:  Mr. McKinnish, 273,666 Shares; Mrs. Lowe, 29,666 Shares; Mr. Popielec, 52,666 Shares; Mr. Altmeyer, 100,334 Shares; Mr. Littrell, 28,000 Shares; and Mr. Munn, 121,666 Shares. Shares issued from the treasury of the Company pursuant to the exercise of stock options have one vote per share until such Shares have been held for a continuous period of four (4) years.

(f)             Includes Shares which the following non-management directors have the right to acquire within sixty (60) days through the exercise of stock options issued by the Company:  Mr. Calder, 3,334 Shares;

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Mrs. Callahan, 6,745 Shares; Mr. Choquette, 10,334 Shares; Mr. Jamieson, 5,334 Shares; Mr. Krogh, 10,334 Shares; Mr. Ruggiero, 8,334 Shares; Mr. Sala, 9,334 Shares; Mr. Scocimara, 5,334 Shares; and Mrs. Webert, 10,334 Shares. Shares issued from the treasury of the Company pursuant to the exercise of stock options have one vote per share until such Shares have been held for a continuous period of four (4) years.

(g)           Includes 1,000 Shares held by Mrs. Webert’s husband and 2,812 Shares held by Mrs. Webert’s children. Mrs. Webert disclaims beneficial ownership of these Shares.

(h)          Includes 147,058 Shares held by a limited partnership as to which Mrs. Webert is an indirect owner. Mrs. Webert disclaims beneficial ownership of these Shares.

(i)             Includes 85 Shares held by Mrs. Callahan’s husband. Mrs. Callahan disclaims beneficial ownership of these Shares.

(j)              Includes restricted Shares as follows:  Mr. McKinnish, 20,000 Shares; Mrs. Lowe, 3,500 Shares; Mr. Popielec, 6,500 Shares; Mr. Altmeyer, 3,750 Shares; and Mr. Littrell, 3,750 Shares. Restricted Shares have one vote per share until such Shares have been held for a continuous period of four (4) years.

(k)          The table does not include the following Share equivalent units (“Units”) credited to the directors under the Company’s Deferred Compensation Plan for Nonemployee Directors:  Mr. Jamieson, 5,026 Units; Mr. Krogh, 2,974 Units; Mr. Ruggiero, 1,700 Units; Mr. Sala, 1,982 Units; and Mrs. Webert, 2,458 Units. The value of the Units will be paid to the director in cash upon his or her termination of service.

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BOARD OF DIRECTORS

A. Election of Directors

The Company’s Restated Certificate of Incorporation provides for a classified Board of Directors under which the Board is divided into three classes of directors, each class as nearly equal in number as possible.

At the Annual Meeting three (3) directors are to be elected. The directors will be elected to serve for a three-year term until the 2010 Annual Meeting and until their successors are elected and qualified. Directors will be elected by a plurality of the votes cast. Only votes cast for a nominee will be counted, except that the accompanying Proxy will be voted for the three nominees in the absence of instructions to the contrary. Abstentions, broker non-votes, and instruction on the accompanying Proxy to withhold authority to vote for one or more of the nominees will result in the respective nominees receiving fewer votes than if the votes were cast for the respective nominees. For voting purposes, proxies requiring confirmation of the date of beneficial ownership received by the Board of Directors with such confirmation not completed so as to show which Shares beneficially owned by the shareholder are entitled to five votes will be voted with one vote for each Share. See “Voting by Proxy and Confirmation of Beneficial Ownership” beginning on page 31. In the event any nominee is unable to serve (an event management does not anticipate), the Proxy will be voted for a substitute nominee selected by the Board of Directors or the number of directors will be reduced.

The Board of Directors does not impose arbitrary term limits, but a director is required to submit his or her resignation at the Annual Meeting following the date when he or she reaches age 72.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” EACH OF THE FOLLOWING NOMINEES.

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Nominees for Election

The following table sets forth certain information relating to each nominee, as furnished to the Company by the nominee. Except as otherwise indicated, each nominee has had the same principal occupation or employment during the past five years.

						Position with Company, Principal Occupation, and
Name				Age		Other Directorships		Period of Serviceas Director(1)
Donald G. Calder				69		President of G.L. Ohrstrom & Co., Inc., a private investment firm. Director of Central Securities Corporation, Roper Industries, Inc., and Brown-Forman Corporation. Member of Audit, Corporate Governance and Nominating and Executive Committees of the Company.		December, 1984 to date.
Robin S. Callahan				60		Past General Manager, Distribution and Marketing of International Business Machines, a computer manufacturer and provider of information technology services. Member of Audit, Executive, Compensation (from February, 2006) and Pension and Benefits (through February, 2006) Committees of the Company.		May, 1998 to date.
Eriberto R. Scocimara				71		President, Chief Executive Officer and Director of Hungarian-American Enterprise Fund. Director of Quaker Fabrics Corporation, American Reprographics Company and Euronet Worldwide, Inc. Chairman of Compensation Committee and Member of Executive Committee of the Company.		July, 1970 to date.

(1)          Information reported includes service as a Director of Carlisle Corporation, the Company’s predecessor.

Directors With Unexpired Terms

The following table sets forth certain information relating to each director whose term has not expired, as furnished to the Company by the director. Except as otherwise indicated, each director has had the same principal occupation or employment during the past five years.

						Position with Company, Principal Occupation,		Period of Service asDirector(1);
Name				Age		and Other Directorships		Expiration
Paul J. Choquette, Jr				68		Chairman and Chief Executive Officer of Gilbane, Inc. the holding company for Gilbane Properties, Inc. and Gilbane Building Company, real estate development and construction management companies. Chairman of Corporate Governance and Nominating Committee and Member of Executive Committee of the Company.		April, 1991 to date. Term Expires 2009.

 

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						Position with Company, Principal Occupation,		Period of Service as Director (1);
Name				Age		and Other Directorships		Expiration
Peter L.A. Jamieson				68		Director of Jardine Strategic Holdings, Ltd., a holding company which makes long-term strategic investments. Past Director of Robert Fleming Holdings Limited, an investment banking firm. Member of Audit, Compensation and Pension and Benefits Committees of the Company.		January, 1996 to date. Term Expires 2008.
Peter F. Krogh				70		Dean Emeritus and Distinguished Professor, School of Foreign Service, Georgetown University. Director of Credit Suisse Mutual Funds. Chairman of Pension and Benefits Committee and Member of Compensation and Corporate Governance and Nominating Committees of the Company.		May, 1995 to date. Term Expires 2008.
Richmond D. McKinnish				57		Chief Executive Officer, since February, 2001; President since March, 2000; Executive Vice President from March, 1999 to March, 2000.		February, 2001 to date. Term Expires 2008.
Stephen P. Munn				64		Chairman of the Board, since January, 1994; Chief Executive Officer from September, 1988 to February, 2001, of the Company. Chairman of Executive Committee of the Company.		September, 1988 to date. Term Expires 2009.
Anthony W. Ruggiero				65		Past Executive Vice President and Chief Financial Officer of Olin Corporation, a metals and chemicals manufacturer and distributor. Director of Olin Corporation. Chairman of Audit Committee and Member of Executive, ited Pension and Benefits (from February, 2006), and Compensation (through February, 2006) Committees of the Company. Mr. Ruggiero has completed several director education courses accredited by Institutional Shareholder Services.		August, 2001 to date. Term Expires 2008.
Lawrence A. Sala				44		Chairman, President and Chief Executive Officer of Anaren, Inc., manufacturer of microwave electronic components and subsystems for satellite and defense electronics, and telecommunications. Director of Anaren, Inc. Member of Audit, Corporate Governance and Nominating and Pension and Benefits Committees of the Company.		September, 2002 to date. Term Expires 2009.

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Magalen C. Webert

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Private investor. Member of Pension and Benefits, Audit (through February, 2006) and Corporate Governance and Nominating (from February, 2006) Committees of the Company.

May, 1999 to date. Term Expires 2009.

(1)          Information reported includes service as a Director of Carlisle Corporation, the Company’s predecessor.

B. Meetings of the Board and Certain Committees

During 2006, the Board of Directors of the Company held seven (7) meetings and had five (5) standing Committees:  (i) Executive, (ii) Audit, (iii) Compensation, (iv) Pension and Benefits and (v) Corporate Governance and Nominating.

The Executive Committee has the authority to exercise all powers of the Board of Directors between regularly scheduled Board meetings. During 2006, the Executive Committee did not meet.

The Audit Committee has the sole authority to appoint and terminate the engagement of the independent auditors of the Company and its subsidiaries. The functions of the Audit Committee also include reviewing the arrangements for and the results of the auditors’ examination of the Company’s books and records, internal accounting control procedures, the activities and recommendations of the Company’s internal auditors, and the Company’s accounting policies, control systems and compliance activities. During 2006, the Audit Committee held ten (10) meetings.

The Compensation Committee administers the Company’s incentive programs and decides upon annual salary adjustments and discretionary bonuses for various employees of the Company, including the executive officers. During 2006, the Compensation Committee held three (3) meetings.

The Pension and Benefits Committee monitors the performance of the Company’s pension and benefits programs. During 2006, the Pension and Benefits Committee met twice.

The functions of the Corporate Governance and Nominating Committee include developing and maintaining a set of corporate governance guidelines, leading the search for individuals qualified to become members of the Board and recommending such individuals be nominated by the Board to be presented for shareholder approval at the Company’s annual meetings, reviewing the Board’s committee structure and recommending to the Board for its approval directors to serve as members of each committee, evaluating the performance of the chief executive officer, discussing succession planning and recommending a new chief executive officer if a vacancy occurs. During 2006, the Corporate Governance and Nominating Committee held three (3) meetings.

C. Remuneration of Directors

Chairman of the Board of Directors.   Stephen P. Munn is employed by the Company, and he serves as the Chairman of the Board of Directors and its Executive Committee. The Compensation Committee of the Board of Directors determines in its discretion the base salary and bonus payable to Mr. Munn and any stock-based awards made to him for his services to the Company. The Compensation Committee bases its compensation decision for Mr. Munn in part on a report from the Corporate Governance and Nominating Committee.

The Company and Mr. Munn have entered into a severance benefit agreement that provides in the event of a termination of his employment within three (3) years of a change of control (other than due to his death or disability or after he attains age 65), he will be entitled to receive one year’s compensation, including bonus, retirement benefits equal to the benefits he would have received had he completed one additional year of employment, continuation of all life, accident, health, savings, and other fringe benefits for one year, and relocation assistance. The amount that would be payable to Mr. Munn under his

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severance benefit agreement assuming a change of control occurred on December 31, 2006 and he terminated his employment would be $900,000. In addition, the agreement provides that Mr. Munn would become fully vested in all outstanding stock options. As of December 31, 2006, Mr. Munn held non-vested options to purchase 6,667 Shares at an option exercise price $68.86.

Mr. Munn also entered into a retirement agreement with the Company in 2001 when he ceased serving as chief executive officer. Under the retirement agreement, Mr. Munn will receive the following benefits from the Company during his retirement:  (i) continued medical insurance to Mr. Munn and his wife at the premium rates then in effect for active employees, (ii) $450,000 in group term life insurance, (iii) a pension benefit of $33,333 per month for the life of Mr. Munn and his wife, and (iv) reimbursement of club dues and management fees of approximately $25,000 per year until age 65.

Nonemployee Directors.   The Company pays an annual fee of $35,000 to each director who is not a member of management. The annual fee is determined by the Board of Directors. Each non-management director may elect to receive the entire annual fee in cash or one-half of the fee in cash and the other half in Shares with a market value equal to that amount. In addition, a $5,000 annual attendance fee is paid to each non-management director who attends at least 75% of the aggregate of (i)the total number of Board of Directors meetings which he or she is eligible to attend, and (ii) all meetings of committees of the Board on which the director serves. During 2006, each non-management director attended at least 75% of such meetings and received the $5,000 annual attendance fee.

The Company also pays an annual fee to each non-management director for service on the Board’s Committees. Each member of the Executive Committee (other than Mr. Munn, the Company’s Chairman during 2006 and the Chairman of the Committee) and the Audit Committee received an annual fee of $15,000. The annual fee paid to each member of the Compensation, Pension and Benefits and Corporate Governance and Nominating Committees was $5,000. The Chairman of each Committee received an additional annual fee of $10,000.

In addition to the annual retainer and committee and meeting fees, each nonemployee director is eligible to participate in the Nonemployee Director Equity Plan. The Nonemployee Director Equity Plan provides for the grant of stock options, stock appreciation rights, restricted shares or other stock-based awards to nonemployee directors. The Board administers the Plan and has the discretionary authority to make all award decisions under the Plan. At the meeting of the Board of Directors held in February, 2006, the Board of Directors awarded each director an award of options to purchase 2,000 Shares at an option exercise price of $68.86, the market price of the Shares as of the award date. The options will vest and become exercisable in three equal annual installments beginning with the date of grant, or if earlier, upon a change in control of the Company or the date the director ceases to serve due to death, disability or retirement. The options will expire ten years following the date of grant or, if earlier, one year from the date the director ceases to serve due to death, disability, retirement or a change in control of the Company or 90 days from the date the director ceases to serve for any other reason.

The Company also maintains a Deferred Compensation Plan for Nonemployee Directors. Under the Deferred Compensation Plan, each nonemployee director of the Company is entitled to defer up to 100% of the cash fees otherwise payable to him or her. Each participant can direct the “deemed investment” of his or her account among the different investment funds offered by the Company from time to time. The investment options include (i) a fixed rate fund and (ii) Share equivalent units. All amounts credited to a participant’s account under the Deferred Compensation Plan are 100% vested and generally will be paid or commence to be paid after the participant terminates service as a director. At the participant’s election, payments can be made in a lump sum or in quarterly installments. Payments under the Deferred Compensation Plan are made in cash from the Company’s general assets. For the period January 1, 2006 to December 31, 2006, the fixed rate fund accrued interest at five and one-half percent (5.5%) per annum and the aggregate interest accrued for all participants in the Deferred Compensation Plan was $42,755.

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The Board of Directors has adopted stock ownership guidelines for nonemployee directors. The guidelines require nonemployee directors to own Shares and/or Share equivalent units under the Deferred Compensation Plan having a market value equal to $175,000 (five times the annual retainer fee) within five years of his or her becoming a director. All directors were in compliance with the ownership guidelines as of December 31, 2006.

The Company does not make payments (or have any outstanding commitments to make payments) to director legacy programs or similar charitable award programs.

The following table summarizes the compensation paid to the Chairman and each nonemployee director for his or her service to the Board and its committees during 2006:

Director Compensation Table

(1)          The following directors received a portion of their annual fee in Shares:  Mr. Choquette—206 Shares, Mr. Krogh—103 Shares and Mr. Sala—103 Shares.

(2)          The value of the option awards shown in the table is equal to the expense reported for financial reporting purposes in 2006 (before reflecting forfeitures). Note 11 to the Company’s consolidated financial statements included in the 2006 Annual Report on Form 10-K contains more information about the Company’s accounting for stock-based compensation arrangements.

(3)          As of December 31, 2006, the directors held options to acquire Shares granted to them under the Company’s stock-based compensation plans as follows:

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(4)          The full grant date fair value of the option awards shown in the table for the listed directors is as follows:  Mr. Calder—$38,440, Mrs. Callahan—$38,440, Mr. Choquette—$38,440, Mr. Jamieson—$38,440, Mr. Krogh—$38,440, Mr. Munn—$192,200, Mr. Ruggiero—$38,440, Mr. Sala—$38,440, Mr. Scocimara—$38,440 and Mrs. Webert—$38,440. Note 11 to the Company’s consolidated financial statements included in the 2006 Annual Report on Form 10-K contains more information about the Company’s accounting for stock-based compensation arrangements.

(5)          Includes (i) $10,000 for Company matching contributions to the Company’s Employee Incentive Savings Plan, (ii) $18,013 for reimbursement of financial management fees, (iii) $6,360 for reimbursement of country club dues, and (iv) $5,461 for personal use of Company aircraft. The $5,461 represents the incremental cost to the Company for personal travel based on the cost of fuel, trip-related maintenance, crew travel expenses, on-board catering, landing fees and similar variable costs. Since the Company-owned aircraft is used almost exclusively for business travel, fixed costs that do not change based on usage, such as pilots’ salaries, the purchase costs of the aircraft and the cost of the maintenance not related to the personal use, are not included.

(6)          Mr. Munn is also an executive officer of the Company. The $900,000 represents salary of $525,000 and a bonus of $375,000. Since 2003, Mr. Munn has been eligible for an annual pension benefit of $400,000. Mr. Munn has elected to forego this benefit. The Compensation Committee has taken into account Mr. Munn’s election to forego his pension benefit in determining his salary and bonus.

D. Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s executive officers and directors, and persons who beneficially own more than ten percent (10%) of the Company’s equity securities, to file reports of security ownership and changes in such ownership with the Securities and Exchange Commission (the “SEC”). Executive officers, directors and greater than ten-percent beneficial owners also are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms they file. Based solely upon a review of copies of such forms and written representations from its executive officers and directors, the Company believes that all Section 16(a) filing requirements were complied with on a timely basis during and for 2006.

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E. Corporate Governance Matters

Independence   The Board recognizes the importance of director independence. Under the rules of the New York Stock Exchange, to be considered independent, the Board must determine that a director does not have a direct or indirect material relationship with the Company. Moreover, a director will not be independent if, within the preceding three (3) years: (i) the director was employed by the Company or receives $100,000 per year in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service, (ii) the director was a partner of or employed by the Company’s independent auditor, (iii) the director is part of an interlocking directorate in which an executive officer of the Company serves on the compensation committee of another company that employs the director, (iv) the director is an executive officer or employee of another company that makes payments to, or receives payments from, the Company for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million or 2% of such other company’s consolidated gross revenues, or (v) the director had an immediate family member in any of the categories in (i) – (iv).

The Board has determined that nine (9) of the Company’s eleven (11) directors are independent under these standards. The independent directors are as follows:  Donald G. Calder, Robin S. Callahan, Paul J. Choquette, Jr., Peter L.A. Jamieson, Peter F. Krogh, Anthony W. Ruggiero, Lawrence A. Sala, Eriberto R. Scocimara and Magalen C. Webert. The other two directors are Richmond D. McKinnish, the Company’s current President and Chief Executive Officer and Stephen P. Munn, the Company’s former Chief Executive Officer who currently serves as Chairman of the Board.

In addition, each of the directors serving on the Audit, Compensation, Corporate Governance and Nominating, and Pension and Benefits Committees are independent under the standards of the New York Stock Exchange.

The Board has adopted a policy concerning the review, approval and monitoring of transactions involving the Company and “related persons” (directors and executive officers or their immediate family members, or shareholders owning five percent (5%) or greater of the Company’s outstanding Shares). The policy covers any transaction exceeding $120,000 in which the related person has a direct or indirect material interest. Related person transactions must be approved by the Corporate Governance and Nominating Committee which will approve the transaction only if it determines that the transaction is in the best interests of the Company.

Meetings of Nonemployee Directors.   At the conclusion of each of the regularly scheduled Board meetings, the independent directors of the Board meet in executive session without management and elect a director among them to preside at the executive meeting.

Statement of Corporate Governance Guidelines and Principles.   The Company has adopted a Statement of Corporate Governance Guidelines and Principles and has published the Statement on its website: www.carlisle.com. The Company will provide without charge a copy of the Statement to any shareholder upon written request mailed to the attention of the Company’s Secretary at 13925 Ballantyne Corporate Place, Suite 400, Charlotte, North Carolina 28277.

Charters.   The Company has adopted Charters for each of its Audit, Compensation, Pension and Benefits and Corporate Governance and Nominating Committees and has published the Charters on its website: www.carlisle.com. The Company will provide without charge a copy of the Charters to any shareholder upon written request mailed to the attention of the Company’s Secretary at 13925 Ballantyne Corporate Place, Suite 400, Charlotte, North Carolina 28277.

Code of Ethics.   The Company’s Business Code of Ethics is published on its website: www.carlisle.com. The Company will provide without charge a copy of the Business Code of Ethics to any

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shareholder upon written request mailed to the attention of the Company’s Secretary at 13925 Ballantyne Corporate Place, Suite 400, Charlotte, North Carolina 28277.

Communications with Board of Directors.   Any security holder may communicate with the Board of Directors or with the non-management directors as a group by writing to the Company’s Secretary at Carlisle Companies Incorporated, 13925 Ballantyne Corporate Place, Suite 400, Charlotte, North Carolina 28277, Attention:  Secretary. Any written communication will be forwarded to the Board for its consideration.

Directors are not required to attend the Company’s Annual Meeting of Shareholders and none of the directors attended last year’s Annual Meeting.

Nomination Process.   At its February, 2003 meeting, the Board established a Corporate Governance and Nominating Committee. The Committee’s Charter is published on the Company’s website: www.carlisle.com. All directors serving on the Committee are “independent” under the standards established by the New York Stock Exchange.

As more fully described in its Charter, the Corporate Governance and Nominating Committee assists the Board by identifying individuals qualified to be directors and recommending such individuals be nominated by the Board for election to the Board by the shareholders. Director nominees should possess the highest personal and professional integrity, ethics and values, and be committed to representing the long-term interests of the Company’s shareholders. Nominees should also have outstanding business, financial, professional, academic or managerial backgrounds and experience. Each nominee must be willing to devote sufficient time to fulfill his or her duties, and should be committed to serve on the Board for an extended period of time. Prior to accepting an invitation to serve on another public company board, directors must advise the Corporate Governance and Nominating Committee and the Committee will determine whether such service will create a conflict of interest and/or prevent the director from fulfilling his or her responsibilities.

The source of director candidates may include:  other directors, management, third-party search firms and security holders. Security holders may submit director recommendations to the Corporate Governance and Nominating Committee by writing to the Company’s Secretary at Carlisle Companies Incorporated, 13925 Ballantyne Corporate Place, Suite 400, Charlotte, North Carolina 28277, Attention: Secretary. The writing should include whatever supporting material the security holder considers appropriate and should address the director nominee characteristics described in the immediately preceding paragraph and must be received at least 120 days prior to the applicable Annual Meeting. The Company has not retained a third-party search firm to identify candidates at this time, but may do so in the future in its discretion.

COMPENSATION OF EXECUTIVE OFFICERS

A. Introduction

The executive officer compensation information in this section is presented in a completely new format this year. The new format is required by revised executive compensation disclosure rules adopted by the Securities and Exchange Commission (“SEC”) in August 2006. The new format includes a Compensation Discussion and Analysis or “CD&A” section that explains the Company’s executive officer compensation policy, the material elements of the compensation paid to the Company’s executive officers under the policy and how the Company determined the amount paid.

Several disclosure tables follow the CD&A. The first table, the Summary Compensation Table, provides a summary of the total compensation earned by the Company’s principal executive officer, principal financial officer and the three most highly compensated executive officers other than the principal executive officer and principal financial officer (the “named executives”). The tables following

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the Summary Compensation Table provide additional information about the elements of compensation presented in the Summary Compensation Table. Most of the tables include extensive explanatory footnotes to help shareholders understand the information shown in the tables. This year, as the Company transitions to the new compensation disclosure format, the Summary Compensation Table includes information only for 2006. The Summary Compensation Table in the proxy statement for the 2008 annual shareholders meeting will include information for 2006 and 2007. The Summary Compensation Table in the proxy statement for each annual meeting thereafter will include information for three years.

B. The Role of the Compensation Committee

The Compensation Committee of the Board of Directors reviews and administers the Company’s compensation policies and practices for the Chief Executive Officer of the Company, the Chairman of the Board of Directors and all other executive officers of the Company. The Compensation Committee currently has four members, all of whom are independent, nonemployee directors.

The Company’s financial accounting group supports the Compensation Committee’s work by providing information reports to the Compensation Committee. In addition, the Compensation Committee has engaged Mercer Human Resource Consulting, Inc. to:

·       Update the comparable company peer group the Compensation Committee uses to analyze executive officer compensation;

·       Analyze the compensation earned by the Company’s executive officers using data from the peer group as well as published and proprietary surveys;

·       Analyze the performance of the Company and the peer group;

·       Evaluate the linkage of pay and performance;

·       Make recommendations to strengthen the alignment of pay and performance and to improve the competitiveness of executive officer compensation; and

·       Prepare a report summarizing all analyses and recommendations and attend the Compensation Committee’s annual December meeting to present the report.

Finally, the Compensation Committee bases its compensation decisions for both the Chairman and the Chief Executive Officer of the Company in part on a report from the Corporate Governance and Nominating Committee.

C. Compensation Discussion and Analysis

Compensation Philosophy

The Compensation Committee has adopted an executive compensation policy that rewards executives if the Company achieves its operational, financial and strategic goals and for building shareholder value. For this reason, the compensation paid to executives under the policy is highly performance-based, with the largest potential portion of an executive’s total compensation being annual bonus and stock-based awards that reflect the actual performance of the Company. The material elements of the total compensation paid to executives each year under the Company’s policy are (i) base salary, (ii) annual cash bonus and stock-based awards, and (iii) retirement, health and welfare and other benefits. While each element of compensation paid to executive officers is significant, the annual cash bonus and stock-based awards have the potential to be the largest amounts of the total compensation paid to executive officers.

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The Compensation Committee intends for the compensation earned by executive officers to be commensurate with performance and competitive with the compensation paid to executives at comparable durable goods manufacturing companies. Competitive for this purpose generally means total annual compensation that is within a broad middle range (from the 30th to 60th percentile) of the total annual compensation paid to executives by the comparable companies.

The following fourteen publicly-traded companies were included in the comparable company group the Committee used to review and make compensation decisions for 2006:  Dover Corp., Goodrich Corporation, York International Corporation, Teleflex Incorporated, Cooper Tire & Rubber Company, Harsco Corporation, Pentair, Inc. Kennametal Inc., Crane Co., Amphenol Corporation, Walter Industries, Inc., Roper Industries, Inc., Omnova Solutions Inc. and SPX Corporation.

Base Salaries

Base salaries provide a baseline level of compensation to executive officers. Base salaries are not linked to the performance of the Company, because they are intended to compensate executives for carrying out the day-to-day duties and responsibilities of their positions.

The Compensation Committee reviews and adjusts base salary levels in February each year. During the review and adjustment process, the Compensation Committee considers:

·       individual performance;

·       the duties and responsibilities of each executive officer position;

·       the relationship of executive officer pay to the base salaries of senior officers and other employees of the Company; and

·       whether the base salary levels are competitive when compared to compensation paid to executives at comparable durable goods manufacturing companies.

The Committee increased the base salaries of all the named executives for 2006. Mr. McKinnish and Mrs. Lowe each received an increase of $50,000 based on the Committee’s review of their individual performance and base salary trends in the comparable company group. Mr. Altmeyer and Mr. Littrell received larger increases ($72,700 and $81,875, respectively) based on the Committee’s evaluation of their duties and responsibilities as Group Presidents of large operating segments of the Company, their individual performance and base salary trends in the comparable company group. Mr. Popielec’s base salary was increased by $15,000, a smaller increase that reflected his employment by the Company in September 2005, shortly before the February 2006 base salary adjustments.

Annual Cash Bonus Awards

The Compensation Committee also makes bonus awards to the named executives at its February meeting each year. In general, the Committee does not award bonuses to executive officers under a pre-established plan or formula. Instead, the Committee makes bonus awards based on its review of the individual performance of the executives and the financial performance of the Company during the preceding year. The Committee believes that awarding bonuses in this manner keeps executives focused on making decisions that are in the long-term best interests of the Company and its shareholders and not for the purpose of achieving a pre-established performance level over a shorter term.

The only exception to the Committee’s general philosophy of awarding bonuses on a purely discretionary basis after the end of each year is the procedure for determining Mr. McKinnish’s bonus award. Mr. McKinnish participates in the Senior Management Incentive Compensation Plan of Carlisle

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Companies Incorporated (the “Incentive Plan”), and any annual cash bonus paid to Mr. McKinnish is awarded under the terms of the Incentive Plan. The Incentive Plan ensures that the bonuses paid to Mr. McKinnish will be “performance-based compensation” under Section 162(m) of the Internal Revenue Code that is fully deductible by the Company for federal income tax purposes.

The Incentive Plan requires the Compensation Committee to adopt at the beginning of each year an objective, performance-based formula for determining the maximum bonus award that Mr. McKinnish may receive for the year. After the end of the year, the Compensation Committee determines the maximum amount that may be awarded to Mr. McKinnish under the formula and exercises its discretion to set the actual amount of the bonus award based on its review of the performance of the Company and Mr. McKinnish. The formula adopted by the Committee for 2006 provided that Mr. McKinnish could receive a maximum bonus equal to 2% of the Company’s 2006 consolidated net income from continuing operations or $3,545,720.

At its February 2007 meeting, the Compensation Committee made cash bonus awards to the named executives for 2006 in the amounts shown in the Summary Compensation Table that follows this CD&A. In addition to their individual performance, the Committee took into account the extent to which the Company achieved management goals given to the named executives at the beginning of the year.

The management goals for Mr. McKinnish and Ms. Lowe and the Company’s achievement of the goals were as follows:

·       Year-over-year earnings per share growth from continuing operations:  
Goal:        13.1% to 17.7% 
Actual:     32%

·       Return on beginning equity from continuing operations:           
Goal:        18% to 21%        
Actual:     24.2%

·       Organic sales growth:          
Goal:        150% of the percentage growth of the United States national gross domestic

                                product (approximately 4.8% for 2006)
Actual:     14.6%

·       Improvement in earnings before interest and taxes margin:       
Goal:        40 basis points    
Actual:     116 basis points

·       Cash flow from operations (excluding impact from the Company’s securitization program):            
Goal:        $140 million       
Actual:     $157 million

·       Increase management resources for corporate business development, treasury and investor relations:           
In 2006, the Company recruited and employed a new Treasurer and Director of Investor Relations and a new Vice President of Business Development.

The Committee evaluated the performance of Messrs. Popielec, Altmeyer and Littrell by reviewing their contribution to the Company’s achievement of the consolidated corporate goals described above and the 2006 performance of the operating groups for which they were responsible, including the following:

Mr. Popielec—Group President, Diversified Components (consists of the “motion control systems” business reported under the Specialty Products segment, the “specialty trailer” business reported under the

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Transportation Products segment and the “high-performance wire and cable,” the “refrigerated truck bodies”  and “foodservice products” businesses reported under the General Industry (“all other”)  segment):

·       17.5% increase in sales;

·       38% increase in net earnings;

·       Improvement in earnings before interest and taxes margin of 160 basis points to 10.4%; and

·       Successful integration of recent acquisitions.

Mr. Altmeyer—Group President, Construction Materials (consists of the “construction materials” business reported under the Construction Materials segment):

·       28% increase in sales;

·       Earnings before interest and taxes margin of 15.4%;

·       Continued ramp-up of production at new thermoplastic polyolefin  (TPO) plant in Utah; and

·       Successful start-up of new insulation plants in Utah and Pennsylvania.

Mr. Littrell—Group President, Industrial Components (consists of the “tire and wheel” and “power transmission belt” businesses reported under the Industrial Components segment):

·       2.2% increase in sales despite softness in consumer outdoor power equipment market;

·       Improvement in earnings before interest and taxes margin of 50 basis points to 7.9%;

·       Net income of $35.2 million;

·       Increase in power transmission belt production in China; and

·       Recruited and employed new president of the power transmission belt business.

Stock-Based Awards

The Compensation Committee follows procedures that are substantially similar to the bonus award procedures for making stock-based awards to executive officers. The Committee makes annual stock-based awards one time each year at the Committee’s regularly-scheduled February meeting. All stock-based awards are made under the Company’s Executive Incentive Program which imposes the restrictions described below on the terms of the awards. The number of shares included in stock-based awards is not determined under a pre-established formula. Instead, as is the case with bonus awards, all stock-based awards are discretionary based on the Committee’s review of the individual performance of the executives and the financial performance of the Company during the preceding year.

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In February 2006, the Committee awarded stock options and restricted Shares to the named executives in the amounts shown in the Summary Compensation Table and the Grants of Plan-Based Awards Table that follows this CD&A. The Committee awarded options to encourage the named executives to increase shareholder value over the term of the options. The Committee included restricted Shares in the awards not only to encourage the named executives to increase shareholder value but also to remain employed with the Company over the vesting period of the restricted Shares. In addition to each executive officer’s individual performance, the Committee took into account in connection with its stock-based award decisions the following Company performance information for 2005:

·       the Company’s continuing operations performed favorably in 2005 against prior year sales (+10.5%), earnings (+20.5%);

·       the Company’s Share price outperformed the S&P 500 Composite Index and the Peer Group Index over the last three and five year periods; and

·       quarterly dividends to shareholders increased 6.67%.

The Company’s Executive Incentive Program contains certain restrictions on the terms of all stock-based awards. For example, all stock options must be granted with an option exercise price that is equal to or greater than the fair market value of the Shares on the date of award. The Program also expressly prohibits re-setting the option exercise price of stock options. These restrictions insure that any options awarded under the Program will have value to the executives only if the market price of the Shares increases after the date of the award. The Program further requires that restricted Share awards must be subject to a restriction period of at least two (2) years during which the Shares are subject to a substantial risk of forfeiture and may not be transferred. Finally, the Program provides an annual limit on the size of awards. No executive may receive in any one fiscal year period an award of options to acquire more than 100,000 Shares or an award of more than 30,000 Restricted Shares.

The Compensation Committee has never manipulated the timing of stock-based awards to take advantage of non-public information. The Committee is aware that the February meeting during which it makes annual stock-based awards precedes the date the Company releases its fourth quarter and annual financial results. The Committee is also aware that the release will usually affect the market value of the Company’s stock and the underlying value of the stock-based awards made to executives at the February meeting. The Committee makes its award decisions in each instance only after carefully reviewing the information to be released about the Company’s fourth quarter and annual financial results and all other material nonpublic information. The Committee believes that executives will not necessarily gain over the long run from the short term benefit of a positive release since the Company’s stock price fluctuates over time and because all of the awards have multi-year vesting schedules and stock options have historically been held for several years prior to exercise. In addition, any gain from a positive benefit in some years will be offset by earnings releases in other years that negatively affect the market value of the Shares.

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The Compensation Committee believes that ownership of the Company’s common stock by executive officers aligns their interests with those of the Company’s shareholders, enhances retention of executives by providing them an opportunity to accumulate a meaningful ownership interest in the Company and focuses executives on building shareholder value over the long term. Therefore, the Committee has adopted a stock ownership policy for the Company’s executive officers, including the named executives. The stock ownership levels under the policy are set forth below. Each executive is required to achieve his or her ownership level by December 31, 2011.

Tier		Executives		Guideline (Shares)				Guideline (Value)(1)			Guideline (Multiple of Salary)
I		CEO			57,000			$	4,560,000		Approximately 5 times
II		Group Presidents			18,000			$	1,440,000		Approximately 3 times
III		Corporate Vice Presidents			7,500			$	600,000		Approximately 2 times
IV		Division Presidents			3,500 - 6,500			$	280,000 - $520,000	0	Approximately 2 times

(1)          Based on an assumed $80 value of the Shares.

Retirement and Other Benefits

The Company sponsors the Employee Incentive Savings Plan (the “Savings Plan”), a tax-qualified Code Section 401(k) retirement savings plan, for the benefit of substantially all of its non-union employees, including the named executives. The Savings Plan encourages saving for retirement by enabling participants to save on a pre-tax basis and by providing Company matching contributions.

The Company also sponsors the Retirement Plan for Employees of Carlisle Corporation (the “Retirement Plan”), a tax-qualified retirement plan, that provides retirement income to eligible employees following their retirement from the Company. The table below shows the lump sum present value of the annual annuity benefit earned by the named executives under the Retirement Plan for their credited service through December 31, 2006.

Section 401(a)(17) of the Code limits the amount of annual compensation that tax-qualified plans like the Company’s Savings Plan and Retirement Plan may take into account for purposes of determining contributions and benefits. The limit for 2006 was $220,000 and it is subject to adjustment annually for cost of living increases. To ensure that all participants receive equivalent retirement benefits that are not affected by Internal Revenue Code limits that are subject to change from time to time, the Company maintains an unfunded supplemental pension plan to provide benefits to Retirement Plan participants whose benefits are limited by Section 401(a)(17) of the Code and to certain employees who were employed on or after January 1, 2005 and are not eligible to participate in the Retirement Plan. The table below also shows the lump sum present value of the annual annuity benefit earned by the named executives under the supplement plan.

The Company does not maintain a supplemental plan to make up for any Savings Plan benefits that are limited by Section 401(a)(17) of the Code or any other Code imposed benefit limits.

The named executives also participate in group health, life and other welfare benefit plans on the same terms and conditions that apply to other employees. The named executives do not receive better insurance programs, vacation schedules or holidays or have access to other perquisites such as company cars, lodging, executive dining rooms or executive parking places. In 2006, there was no personal use of the Company aircraft by any of the named executive officers.

The Company does not maintain any non-qualified deferred compensation plans that would allow executives to elect to defer receipt (and taxation) of their base salaries and bonuses.

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Post Termination of Employment Benefits

The Company has not entered into employment agreements with any executive officers that provide severance or other benefits following their resignation, termination, retirement, death or disability, except for agreements with certain executive officers (including all of the named executives) that provide severance benefits in the event of a termination of their employment following a change of control of the Company.

The agreements provide that the executives will not, in the event of the commencement of steps to effect a change of control (defined generally as an acquisition of 20% or more of the outstanding voting Shares or a change in a majority of the Board of Directors), voluntarily leave the employ of the Company until the potential acquirer of the Company or control of the Company has terminated his or its efforts to effect a change of control or until a change of control has occurred. The Company believes that these agreements protect the interests of the Company’s shareholders by providing financial incentives to executives to represent the best interests of the Company and its shareholders during the periods immediately preceding and following a change of control.

In the event of any termination of an executive’s employment (including due to the executive’s resignation) within three (3) years of a change of control (other than due to the executive’s death or disability or after the executive attains age 65), the executive will be entitled to receive three years’ compensation, including bonus, retirement benefits equal to the benefits the executive would have received had he or she completed three additional years of employment, continuation of all life, accident, health, savings, and other fringe benefits for three years, and relocation assistance. (The three year benefit period is reduced if the executive terminates within three years of the date the executive would attain age 65). In addition, the agreements provide that the executive will become fully vested in all outstanding stock option and restricted Share awards.

All of the agreements provide that if any benefits to be provided under the agreements would cause the any payments or benefits to be considered “parachute payments” that would be nondeductible by the Company under Section 280G of the Code, the payments or benefits will be reduced to the maximum permissible deductible amount under Code Section 280G. Section 280G of the Code defines “parachute payments” as payments which (i) are compensatory in nature, (ii) are made to or for the benefit of a shareholder, officer or highly compensated individual, (iii) are contingent on a change in ownership or effective control (or change in ownership of a substantial portion of assets) of a corporation, and (iv) together with other parachute payments have an aggregate present value of at least 3 times the average annual compensation earned by the recipient of the payment over the 5 years preceding the date of the change in control.

The following table shows the amounts that would have been payable to the named executive officers if a change of control of the Company had occurred on December 31, 2006 and the named executives’ employment was terminated without cause immediately thereafter:

		Severance Benefit
		Gross Severance Benefit Payable under the Severance Benefit Agreement					Reduction in Value of Severance Benefit to Comply with Code Section 280G Limitation(1)					Estimated Value of Continued Participation in  Health and other Welfare Benefit Plans					Stock Options(2)					Restricted Stock(3)			Excess Parachute Payment Excise Tax Gross-up(1)					Total
Mr. McKinnish			$	8,100,000				$	(2,759,650	)			$	30,000				$	449,870			$	1,570,000			$	0			$	7,390,220
Mrs. Lowe			$	1,875,000				$	(1,209,859	)			$	30,000				$	64,270			$	157,000			$	0			$	916,411
Mr. Popielec			$	2,445,000				$	(1,325,930	)			$	30,000				$	389,460			$	510,250			$	0			$	2,048,780
Mr. Altmeyer			$	3,600,000				$	(891,836	)			$	30,000				$	128,530			$	157,000			$	0			$	3,023,694
Mr. Littrell			$	2,325,000				$	(819,275	)			$	30,000				$	77,120			$	157,000			$	0			$	1,769,845

 

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(1)             The agreements prohibit the payment of any benefits that would exceed the limit on parachute payments under Section 280G of the Internal Revenue Code. The agreements further provide that the severance benefit otherwise payable under the agreements will be reduced to the extent necessary to comply with the Code Section 280G limitation. Therefore, none of the benefits under the agreements will be subject to the excise tax on excess parachute payments.

(2)             Value (based on the closing market price of the Company’s common stock on December 29, 2006) of unvested in-the-money stock options that would become vested upon a change of control of the Company.

(3)             Value (based on the closing market price of the Company’s common stock on December 29, 2006) of unvested shares of restricted stock that would become vested upon a change of control of the Company.

Internal Revenue Code Section 162(m)

Section 162(m) of the Code limits the amount of compensation paid to the named executives in any one fiscal year that may be deducted by the Company for federal income tax purposes. The deduction limitation is currently $1 million. “Performance-based compensation” paid under a plan that has been approved by the Company’s shareholders is not subject to the deduction limitation.

The Company’s Executive Incentive Program has been approved by the Company’s shareholders, and the compensation attributable to stock option awards under the program should qualify as “performance-based” compensation that is fully deductible and not subject to the Code Section 162(m) deduction limit. Compensation attributable to restricted Share awards under the program that vest based on continued employment with the Company is subject to the deduction limit.

The Company’s shareholders have also approved the Senior Management Incentive Compensation Plan of Carlisle Companies Incorporated and the bonuses that have been awarded to Mr. McKinnish under that plan should also qualify as “performance-based” compensation. Some of the bonuses paid to the other named executives for 2006 were subject to the deduction limitation under Section 162(m) of the Code. The Compensation Committee will designate those named executives as additional participants in the Incentive Plan for 2007 to ensure their future bonuses are fully deductible.

The Committee has not adopted a formal policy that requires all compensation paid to the named executives to be fully deductible.

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