~BALT01A:43427:1:|02/28/95
4807-400024
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 2 )
Filed by the registrant |X |
Filed by a party other than the registrant | |
Check the appropriate box:
| | Preliminary proxy statement
| X| Definitive proxy statement
| | Definitive additional materials
| | Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
T. ROWE PRICE ASSOCIATES,
INC.
(Name of Registrant as Specified in Charter)
Alvin M. Younger, Jr.,
Secretary
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
|X | $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-
6(i)(1), or 14a-6(i)(2).
| | $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
| | Fee computed on the table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
| | Check box if any part of the fee is offset as provided
by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
Identify the previous filing by registration statement
number, or the form or schedule and the date of its
filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
YOUR VOTE IS IMPORTANT-PleaseIMPORTANT - Please execute and return the
enclosed proxy promptly, whether or not you plan to attend
the T. Rowe Price Associates, Inc. Annual Meeting of Stockholders.
T. ROWE PRICE
[CORPORATE LOGO]
T. ROWE PRICE ASSOCIATES, INC.
100 East Pratt Street
Baltimore, Maryland 21202
Notice Of Annual Meeting Of StockholdersNOTICE OF ANNUAL MEETING OF STOCKHOLDERS
April 6, 199517, 1997
Notice is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of T. Rowe Price Associates, Inc. (the "Company") will be held at 100the
Renaissance Harborplace Hotel, 202 East Pratt Street, 12th Floor, Baltimore, Maryland,
21202, on Thursday, April 6, 1995,17, 1997, at 10:00 a.m. for the following purposes:
(1) To elect elevenfifteen directors of the Company; (2) To consider and
act upon a proposed charter amendment
to increase the authorized Common Stock of the Company;
(3) To consider and act upon a proposed charter amendment
to authorize a class of undesignated Preferred Stock;
(4) To consider and act upon a proposed performance-linked
Executive Incentive Compensation Plan;
(5) To consider and act upon a proposed 1995 Director Stock
Option Plan; and
(6)(2) To consider and act upon such other business as may properly come
before the meeting.Meeting or any adjournments or postponements thereof.
February 6, 199514, 1997 was fixed by the Board of Directors as the record date
for determination of stockholders entitled to notice of and to vote at the
meetingMeeting or any adjournments or postponements thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Alvin M. Younger, Jr.
Secretary
Baltimore, Maryland
March 1, 19957, 1997
PROXY STATEMENT
INTRODUCTION
This proxy statement and the accompanying proxy are furnished to
stockholders of T. Rowe Price Associates, Inc. (the "Company") in connection
with the solicitation of proxies by the Company's Board of Directors to be used
at the annual meetingAnnual Meeting of stockholdersStockholders (the "Meeting") described in the
accompanying notice and at any adjournments or postponements thereof. The
purpose of the meetingMeeting is to elect directors of the Company to consider and act upon amendments to
the Company's charter to increase the authorized Common Stock of
the Company and to authorize an undesignated class of Preferred
Stock, to consider and act upon a proposed performance-linked
Executive Incentive Compensation Plan, to consider and act upon a
proposed 1995 Director Stock Option Plan, and to consider and
act upon such other business as may properly come before the meeting.Meeting or any
adjournments or postponements thereof. This proxy statement and the accompanying
notice of annual meeting and proxy and the Company's annual report to
stockholders containing the Company's financial statements for the year ended
December 31, 1996 are first being sent to stockholders on or about March 1, 1995.7,
1997.
The record of stockholders entitled to notice of and to vote at the annual meetingMeeting
was taken as of the close of business on February 6, 1995.14, 1997. At that date there
were outstanding and entitled to vote 28,620,23957,752,569 shares of Common Stock, par
value $.20 per share.share, held by approximately 2,600 stockholders of record. All
share and per-share information included in this proxy statement has been
adjusted for the two-for-one stock split effective at the close of business on
April 30, 1996. In the election of directors, each share is entitled to cast one
vote for each director to be elected; cumulative voting is not permitted. For all matters except the
election of directors, each share is entitled to one vote.
Directors are elected by a plurality of the votes cast by the holders of shares
of Common Stock at a meeting at which a quorum is present. For purposes of the
election of directors, abstentions and broker non-votes are not considered to be
votes cast and do not affect the plurality vote required for directors. For any
matter that may come before the meeting other than the election of directors,
each share is entitled to one vote. The proposed charter amendments require the affirmative vote of a
majority of the total number of shares of Common Stock
outstanding, and the proposed compensation plans require the
affirmative vote of a majority of the votes cast. In the
discussion of each of these proposals included in this proxy
statement, the effect of abstentions and broker non-votes is
discussed.foregoing notwithstanding, Article
EIGHTH, Section 3 of the charter of the Company limits the voting rights of
certain persons and groups owning in excess of 15% of the Company's Common
Stock. The Company does not believe that such provision will be applicable to
any stockholders at the 1995 annual meeting,Meeting, but will apply such provision if circumstances
require.
The cost of soliciting proxies and preparing the proxy materials will be
borne by the Company. In order to ensure that sufficient shares of Common Stock
are represented at the meeting,Meeting, the Company has retained the services of
Georgeson & Company, Inc. to assist it in soliciting proxies for a fee of $8,000$5,000
plus reimbursement for out-of-pocket expenses. In addition, theThe Company also will request
securities brokers, custodians, nominees, and fiduciaries to forward
solicitation material to the beneficial owners of stock held of record and will
reimburse them for their reasonable out-of-pocket expenses in forwarding such
solicitation material. In addition to solicitation of proxies by Georgeson &
Company, Inc., proxies may be solicited personally or by telephone or telegram
by directors, officers, and employees of the Company or its subsidiaries without
additional compensation to them.
The Board of Directors has selected George J. Collins andJames S. Riepe, George A. Roche and M.
David Testa to act as proxies with full power of substitution. Any stockholder
executing a proxy has the power to revoke the proxy at any time before it is
voted.voted by delivering to the Secretary of the Company a notice of revocation or a
duly executed proxy bearing a later date. This right of revocation is not
limited or subject to compliance with any formal procedure. Any stockholder may
attend the meetingMeeting and vote in person whether or not the stockholder has
previously given a proxy.
Stockholder proposals intendedproxy, as long as the stockholder has filed a written notice
of revocation with the Secretary. All notices of revocation should be sent to
be presented at the 1996
annual meeting must be received byattention of the Company for inclusion in
the Company's proxy statement and proxy relating to that meeting
by November 2, 1995.Secretary: Alvin M. Younger, Jr., T. Rowe Price
Associates, Inc., 100 East Pratt Street, Baltimore, MD 21202.
ELECTION OF DIRECTORS
TheEffective at the time of the Meeting, the number of directors will be
increased to 15 persons, and the entire Board of Directors of the Company will be elected to
hold office until the next annual meeting of stockholders and until their
respective successors are elected and have qualified. All elevenof the nominees except
Brian C. Rogers currently serve as directors of the Company. Mr. Rogers now
serves as a managing director of the Company.
It is intended that all properly executed proxies received in time to be
duly presented at the Meeting, unless otherwise indicated, will be voted forFOR the
election of the persons named in the following table, to serve until the next
annual meeting of stockholders and until their respective successors are duly
elected
and have qualified. If any nominee should become unable or unwilling to serve,
the proxies will be voted forFOR the election of such person as may be designated
by the Board of Directors to replace such nominee.
Information Concerning Nominees
The following table presents information concerning persons nominated by
the Board of Directors for election as directors of the Company. Except asUnless
otherwise indicated, the nominees have been officers of the organizations named
below as their principal occupations or of affiliated organizations for more
than five years. Positions of the nominees as trustees, directors, or principal
officers of the T. Rowe Price Mutual Funds (including those Funds organized as
trusts and referred to herein as the "Price Funds") and of certain other
affiliated registered investment companies are also indicated. Stock ownership
information is reported as of the record date.
2
Age, principal occupation, directorships with public
companies, Name of Nominee and beneficial ownership of Common Stock
Name of Nominee (percent of class)
Thomas H. Broadus, Jr. Mr. Broadus is 57 years old and has
been a director of the Company since 1979, a managing director
since 1989, a vice president between 1971 and 1989, and an
employee since 1966. He is president and a director of the Blue
Chip Growth Fund and a trustee of the Equity Income Fund.
341,702 shares (1.17%) (6)- --------------- ------------------
George J. Collins Mr. Collins is 5456 years old and has been a director of
the Company since 1980, president and chief executive
officer since 1984, a managing director since 1989, a
vice president between 1975 and 1984, and an employee
since 1971. He is a director or trustee of 1920 equity and
fixed income funds within the Price Funds. Of these, he
is chairman of 14 funds and
president of one fund. (1)10 funds. (2)(4)(5)
905,4601,872,520 shares (3.09%(3.16%) (7)(6)
James E. Halbkat, Jr. Mr. Halbkat is 6062 years old and has been a director of
the Company since 1979. He is President of U.S. Monitor
Corporation, a provider of public response systems.
(1)(3)(4)(5)
12,00026,000 shares * Carter O. Hoffman Mr. Hoffman is 67 years old and has been
a director of the Company since 1973, a managing director since
1989, a senior vice president between 1980 and 1989, a vice
president between 1966 and 1980, and an employee since 1961. He
is chairman of the Prime Reserve Fund and a director of two other
Price Funds.
213,600 shares * (8)(7)
Henry H. Hopkins Mr. Hopkins is 5254 years old and has been a director of the
Company since 1987, a managing director since 1989, a vice
president between 1976 and 1989, and an employee since
1972.
310,884643,768 shares (1.06%(1.09%) (8)
James A.C. Kennedy Mr. Kennedy is 43 years old, has been a director of the
Company since 1996, director of the Equity Research
Division of the Company since 1987, a managing director
of the Company since 1990, a vice president between 1981
and 1990, and an employee since 1978. He is a director
of the Mid-Cap Growth Fund and president of New Age Media
Fund, Inc.
671,160 shares (1.13%) (9)
John H. Laporte Mr. Laporte is 51 years old, has been a director of the
Company since 1996, a managing director of the Company
since 1989, a vice president between 1978 and 1989, and
an employee since 1976. He is a director of nine equity
funds within the Price Funds. Of these, he is chairman of
three funds and president of four funds.
1,019,732 shares (1.72%) (10)
Richard L. Menschel Mr. Menschel is 63 years old and has been a director of
the Company since 1995. He is a limited partner of The
Goldman Sachs Group, L.P., an investment banking firm. (3)
4,000 shares * (11)
(see notesfootnotes on page 4)6-7)
3
William T. Reynolds Mr. Reynolds is 48 years old, has been a director of the
Company since 1996, director of the Fixed Income Division
since 1994, a managing director of the Company since 1990,
a vice president between 1983 and 1990, and an employee
since 1981. He is a director or trustee of 10 fixed
income funds within the Price Funds. He serves as
chairman of four of these funds. He also is president of
the High Yield Fund.
488,044 shares * (12)
James S. Riepe Mr. Riepe is 5153 years old and has been a director of the
Company since 1981, a managing director since 1989, a vice-presidentvice
president between 1981 and 1989, and director of the
investment services divisionInvestment Services Division and an employee since 1981.
He is chairman of four of the 3742 Price Funds on which he
serves as a director or trustee and is chairman of New Age
Media Fund, Inc., and
is president and a director of CUNA Mutual Funds, Inc. He is also a director of Rhone-Poulenc
Rorer, Inc., a pharmaceuticals company.
(1)(2)
684,139(4)
1,380,978 shares (2.34%(2.33%) (10)(13)
George A. Roche Mr. Roche is 5355 years old and has been a director of the
Company since 1980, chief financial officer since 1984,
a managing director since 1989, a vice president between
1973 and 1989, and an employee since 1968. Mr. Roche is
the chief executive officer-designate of the Company. He
is president and a director of the New Era Fund and serves
as a director of two other Price funds. (1)(2)
702,396(4)
1,483,192 shares (2.40%(2.50%) (11)(14)
Brian C. Rogers Mr. Rogers is 41 years old, is a nominee for director, and
has been a managing director of the Company since 1991, a
vice president between 1985 and 1991, and an employee
since 1982. He is president of the Equity Income Fund and
Value Fund.
439,482 shares * (15)
John W. Rosenblum Mr. Rosenblum is 5153 years old and has been a director of
the Company since 1991. He is Dean of the Jepson School
of Leadership Studies at the University of Richmond. From
1993 to 1996, he was the Tayloe Murphy Professor at the
Darden Graduate School of Business Administration ("the Darden(the
"Darden School"), University of Virginia, and was Dean of
(see footnotes on page 6-7)
4
the Darden School from 1983 to 1993. He is also a
director of Chesapeake Corporation, a manufacturer of paper
products; Cadmus Communications Corp., a provider of printing and
communication services; Comdial Corp., a manufacturer of telephone
systems for businesses; and Cone Mills Corporation, a textiles
producer. producer; and Providence Journal Company, a publisher of
newspapers and owner of broadcast television stations.
(1)(3)(4)
1,000 10,000 shares * (16)
Robert L. Strickland Mr. Strickland is 6365 years old and has been a director of
the Company since 1991. He is Chairman of Lowe's
Companies, Inc., a retailer of specialty home supplies,
and is a director of Hannaford Bros. Co., a food retailer.
(1)(2)(3)(4)
2,000
12,000 shares * (17)
M. David Testa Mr. Testa is 5052 years old and has been a director of the
Company since 1981, a managing director since 1989, a vice
president between 1976 and 1989, and an employee since
1972. Mr. Testa has also served as chairman of Rowe
Price-Fleming International, Inc. since 1979.1982. He is
chairman and president of the Growth Stock Fund and
president and a director of the Institutional Equity SeriesFunds
and Equity Series. He is also a director or trustee of
1315 other Price Funds. HeFunds and serves as chairman of five of
these Funds. (1)(2)(4)(5)
369,697778,974 shares (1.26%(1.31%) (12)(18)
Philip C. Walsh Mr. Walsh is 7375 years old and has been a director of the
Company since 1987. He is a consultant to Cyprus
Amax Mineralsretired mining industry
executive. (3)(5)
12,000 shares * (19)
Anne Marie Mrs. Whittemore is 50 years old and has been a director
Whittemore of the Company since 1995. She is a partner in the successor by merger to Cyprus Minerals
Company. law
firm of McGuire, Woods, Battle & Boothe, L.L.P. and serves
as a director of Owens & Minor, Inc., a distributor of
medical and surgical supplies; USF&G Corporation,
an insurance company; the James River Corporation of
Virginia, a manufacturer of paper products; and Albemarle
Corporation, a manufacturer of specialty chemicals. (1)(3)(4)(5)
2,000
(4,400 shares * (20)
(see footnotes on page 6-7)
5
Beneficial ownership
of Common Stock by all
directors and executive
officers as a group
(22(18 persons) 5,782,6419,795,346 shares (19.74%(16.53%) (13)(21)
* Indicates holdings of less than 1 percent.
(see notes on page 4)
(1) Member of the Audit Committee of the Board of Directors.
(2) Member of the Executive Committee of the Board of Directors.
(2) Member of the Management Committee of the Board of
Directors.
(3) Member of the AuditExecutive Compensation Committee of the Board of Directors.
(4) Member of the Executive CompensationManagement Committee of the Board of Directors.
(5) Member of the Nominating Committee of the Board of Directors.
(6) Includes 20,800141,200 shares which may currently be acquired by Mr. BroadusCollins within 60
days upon the exercise of stock options. Also includes 20,000 shares held by a charitable foundation of which Mr.
Broadus is an executive officer, 75,904 shares owned by family
members, and 24,000 shares held in trusts for members of Mr.
Broadus's immediate family. Does not include an aggregate of
140,000 shares held in trusts for family members of two other
directors of the Company of which trusts Mr. Broadus is a
co-trustee. Mr. Broadus disclaims beneficial ownership of all
shares held in trusts.
(7) Includes 39,800 shares which may currently be acquired
by Mr. Collins upon the exercise of stock options. Also includes
67,602135,204 shares
owned by a family member and as to which Mr. Collins disclaims
beneficial ownership.
(8)(7) Includes 14,000 shares owned by a family member and as
to which Mr. Hoffman disclaims beneficial ownership.
(9) Includes 45,4008,000 shares which may currently be acquired by Mr. Halbkat within 60 days
upon the exercise of stock options.
(8) Includes 120,800 shares which may be acquired by Mr. Hopkins within 60 days
upon the exercise of stock options.
(9) Includes 201,912 shares which may be acquired by Mr. Kennedy within 60 days
upon the exercise of stock options.
(10) Includes 27,600181,700 shares which may currently be acquired by Mr. RiepeLaporte within 60 days
upon the exercise of stock options. Also includes 20,000100,000 shares owned by a
member of Mr. Riepe'sLaporte's family and 70,00076,992 shares held in trusts for members
of Mr. Laporte's family, as to which Mr. Laporte disclaims beneficial
ownership.
(11) Includes 4,000 shares which may be acquired by Mr. Menschel within 60 days
upon the exercise of stock options.
(12) Includes 103,600 shares which may be acquired by Mr. Reynolds within 60
days upon the exercise of stock options. Also includes 10,550 shares owned
by members of Mr. Reynolds' family, as to which Mr. Reynolds disclaims
beneficial ownership.
(13) Includes 106,400 shares which may be acquired by Mr. Riepe within 60 days
upon the exercise of stock options. Also includes 180,000 shares held by or
in trusts for members of Mr. Riepe's family, as to which Mr. Riepe
disclaims beneficial ownership. Also includes
42,000ownership, and 82,000 shares held in a charitable
foundation of which Mr. Riepe
is a trustee and as tofor which Mr. Riepe has voting and disposition power.
(11)(14) Includes 19,20082,800 shares which may currently be acquired by Mr. Roche within 60 days
upon the exercise of stock options, and 200,000400,000 shares held by or in trusts
for members of Mr. Roche's family and as to which Mr. Roche disclaims
beneficial ownership.
(12)6
(15) Includes 27,300236,768 shares which may currently be acquired by Mr. Rogers within 60 days
upon the exercise of stock options.
(16) Includes 8,000 shares which may be acquired by Mr. Rosenblum within 60 days
upon the exercise of stock options.
(17) Includes 8,000 shares which may be acquired by Mr. Strickland within 60
days upon the exercise of stock options.
(18) Includes 89,300 shares which may be acquired by Mr. Testa within 60 days
upon the exercise of stock options, and 80,000120,000 shares held in trusts for
members of Mr. Testa's family and as to which Mr. Testa disclaims
beneficial ownership.
(13)(19) Includes 678,4928,000 shares which may currentlybe acquired by Mr. Walsh within 60 days
upon the exercise of stock options.
(20) Includes 4,000 shares which may be acquired by Mrs. Whittemore within 60
days upon the exercise of stock options.
(21) Includes 1,516,644 shares which may be acquired by all directors and
executive officers as a group within 60 days upon the exercise of stock
options.
Unless otherwise indicated in the foregoing notes, the individuals named
above have sole voting and disposition powers over the shares beneficially owned
by them.
Information Regarding the Board of Directors and CertainIts Committees
During 1994,1996, there were sixseven meetings of the Board of Directors of the
Company. Each director attended at least 75% of the combined total number of
meetings of the Board and Board committees of which he or she was a member. The
Board of Directors of the Company has an Audit Committee, Executive Committee,
Executive Compensation Committee, and a Nominating Committee.
The Audit Committee meets with the Company's independent accountants to
review whether satisfactory accounting procedures are being followed by the
Company and whether internal accounting controls are adequate, to inform itself
with regard to non-audit services performed by the independent accountants, and
to review fees charged by the independent accountants. The Audit Committee also
recommends to the Board of Directors the selection of independent accountants.
The directors designated in note (3)
above(1) on the previous page are members of the
Audit Committee, which met on four
occasions.three occasions during 1996.
The Executive Committee functions in the interval between meetings of the
Board of Directors to approve matters requiring formal action by or on behalf of
the Board of Directors, which actions are thereafter reported to the entire
Board for ratification. The Executive Committee also possesses the authority to
7
exercise all of the powers of the Board of Directors in the interval between
meetings, except as limited by law. The directors designated in note (2) on page
5 are members of the Executive Committee, which approved one matter by unanimous
written consent in lieu of a meeting during 1996.
As described in the report of the Executive Compensation Committee, the
Executive Compensation Committee establishes the compensation for certain
executive officers of the Company and generally reviews benefits and
compensation for all officers and employees. It also administers the Company's
stock optionincentive and stock purchase plans.plans and the Company's Executive Incentive
Compensation Plan. The directors designated in note (4) above(3) on page 5 are members of
thisthe Executive Compensation Committee andwhich met five times.eight times during 1996.
The Nominating Committee advises the Board of Directors with respect to the
selection and nomination of individuals to serve as directors of the Company.
The directors designated in note (5) on the previous page 5 are members of the Nominating
Committee andwhich met on two occasions.one occasion in 1996. Nominations for director which are
presented to the Nominating Committee by stockholders are considered in light of
the needs of the Company, as well as the nominee's individual knowledge,
experience, and background.
Compensation Committee Interlocks and Insider Participation
During 1996, Philip C. Walsh (Chairman), James E. Halbkat, Jr., Richard L.
Menschel, John W. Rosenblum, Robert L. Strickland, and Anne Marie Whittemore
served as members of the Executive Compensation Committee. None of these
directors are officers or employees of the Company. No executive officer of the
Company is a director or executive officer of any other corporation that has a
director or executive officer who is also a director of the Company or board
committee member.
Mr. Menschel is a limited partner of The Goldman Sachs Group, L.P., an
investment banking firm. During 1996, Goldman, Sachs & Co. performed services
for the Company, including securities brokerage services. Mr. Menschel did not
share in any payment for these services.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table. The following table sets forth certain
information concerning the compensation for the last three completed fiscal
years of the chief executive officer and the four executive officers of the
Company who, in addition to the chief executive officer, received the highest
compensation during 1994.
SUMMARY COMPENSATION TABLE
Long-Term All Other
Annual Compensation(1) Compensation Awards Compensation (4)
Name and Securities Underlying
Principal Position Year Salary Bonus (2) Options Granted(#)(3)
________________ _____ ______ ________ ___________________
George J. Collins 1994 $325,000 $1,250,000 -0- $22,500
President, Chief Exec- 1993 290,008 750,000 35,000 30,000
utive Officer and 1992 265,000 500,000 12,000 30,000
Managing Director
James S. Riepe 1994 275,000 1,250,000 -0- 22,500
Managing Director 1993 248,750 750,000 30,000 30,000
1992 230,000 500,000 24,000 30,000
George A. Roche 1994 275,000 1,250,000 -0- 22,500
Chief Financial Officer 1993 248,750 750,000 30,000 30,000
and Managing Director 1992 230,000 500,000 24,000 30,000
M. David Testa 1994 275,000 1,250,000 300,000 26,625
Managing Director 1993 248,750 750,000 30,000 33,731
1992 230,000 500,000 24,000 33,450
Brian C. Rogers 1994 250,000 810,000 25,000 26,250
Managing Director 1993 220,833 400,000 24,000 33,312
1992 190,000 350,000 30,000 32,8501996.
8
SUMMARY COMPENSATION TABLE
Long-Term All Other
Annual Compensation (1) Compensation Awards Compensation(4)
----------------------- ------------------- ---------------
Name and Securities Underlying
Principal Position Year Salary Bonus (2) Options Granted (#)(3)
- ------------------ ---- ------ --------- ----------------------
George J. Collins 1996 $325,000 $1,500,000 -0- $24,000
President, Chief Exec- 1995 325,000 1,300,000 -0- 24,000
utive Officer and 1994 325,000 1,250,000 -0- 22,500
Managing Director
James S. Riepe 1996 275,000 1,500,000 -0- 22,500
Managing Director 1995 275,000 1,300,000 200,000 22,500
1994 275,000 1,250,000 -0- 22,500
George A. Roche 1996 275,000 1,500,000 -0- 24,000
Chief Financial Offic- 1995 275,000 1,300,000 200,000 24,000
er and Managing 1994 275,000 1,250,000 -0- 22,500
Director
M. David Testa 1996 275,000 1,500,000 -0- 26,625
Managing Director 1995 275,000 1,300,000 -0- 26,625
1994 275,000 1,250,000 600,000 26,625
James A.C. Kennedy 1996 250,000 1,200,000 50,000 26,625
Managing Director 1995 250,000 900,000 50,000 26,625
1994 237,500 700,000 34,000 26,438
(1) No officer named in the Summary Compensation Table received any perquisites
and other personal benefits, securities or property, the aggregate amount
of which exceeded the lesser of either $50,000 or 10% of the total annual
salary and bonus reported for 19941996 in the Summary Compensation Table.
(2) Bonuses are generallyfor 1996 and 1995 were paid pursuant to the Company's Executive
Incentive Compensation Plan. For 1994, bonuses were determined by the
Executive Compensation Committee based upon individual, group and corporate
performance and are allocated and paid at year end.performance. Bonuses are discretionary and vary significantly from year to year and among
eligible employees. In recent years, bonuses have
comprised a significant portion of compensation. Payment of the
portion of the 1994 cash bonus payable to each person named in
the Summary Compensation Table that would not be deductible in
1994 has been deferred until such time as these payments are
fully deductible for federal income tax purposes or the Executive
Compensation Committee otherwise determines to effect these
payments. See "Report of the Executive Compensation Committee."
(3) The number of shares subject to options have been adjusted in accordance
with the terms of the options for the two-for-one stock split effective at
the close of business on NovemberApril 30, 1993.1996.
(4) Included in other compensation is a $22,500 $30,000
and $30,000 contribution for 1994, 1993each of 1996,
1995 and 1992, respectively,1994 for each of the named individuals to the Company's
tax-qualified profit sharing plan, which provides retirement benefits based
on the investment performance of each participant's account under the plan.
Also includes $4,125, $3,731$1,500 in directors fees paid by a wholly owned subsidiary of
the Company to each of Mr. Collins and $3,450Mr. Roche in 1996 and 1995; $4,125
in employer matching contributions under the Company's 1986 Employee Stock
Purchase Plan for Mr. Testa for 1994, 1993each of 1996, 1995 and 1992,
respectively,1994; and $3,750, $3,312$4,125,
$4,125, and $2,850$3,938 in employer matching contributions under the Company's
1986 Employee Stock Purchase Plan for Mr. RogersKennedy for 1996, 1995 and 1994,
1993 and 1992, respectively.
9
Option Grants Table. The following table sets forth certain information
relating to options granted to purchase shares of Common Stock of the Company.
Options generally become exercisable inon the first through fifth anniversaries of
the date of grant, with the exception of the 1994 option award to Mr. Testa and
the 1995 option awards to Mr. Roche and Mr. Riepe, which become exercisable on
the third through fifth anniversaries of the date of grant. TheIn December 1995,
the Executive Compensation Committee (the "Committee") adopted amendments to all
existing option agreements under the Company's 1986, 1990 and 1993 Stock
Incentive Plans provideproviding that such options and any options granted in the
rightfuture to exercise options may be acceleratedcurrent option holders will become exercisable in full for a period of
one year following certain specified changes in control of the Company or
approval by the Company.
Any decisionBoard of Directors of certain transactions leading to changes in
control, subject to the ability of the Committee to rescind such acceleration of
exercisability for a specified period following any triggering event. In
addition, the Company's stock option plans provide the Committee with broad
discretion to accelerate options held by executive officers
will be made in the sole discretionexercisability of the Executive Compensation
Committee on such terms and conditions as this Committee
determines to be appropriate under the circumstances.options.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
Number of Potential Realizable Value at
Securities Percent of Assumed Annual Rates
of Stock Price
Underlying Total Options Exercise or
Appreciation for Option Term (2)
____________________________________
Options Granted in Base Price Expiration
Name Granted (#) Fiscal Year (Per Share)(1) Date 0%(3) 5% 10%
George J. Collins 0 0 N/A N/A $0 $ 0 $ 0
James S. Riepe 0 0 N/A N/A 0 0 0
George A. Roche 0 0 N/A N/A 0 0 0
M. David Testa 300,000 24.4 $32.25 11/10/04 0 6,084,600
15,419,400
Brian C. Rogers 25,000 2.0 32.25 11/10/04 0 507,050
1,284,950
The 5% and 10% assumed rates of stock price appreciation
used to calculate potential gains to optionees are mandated by
the rules of the Securities and Exchange Commission. To put these
hypothetical gains into perspective, the following additional
information is being provided.
Number of Potential Realizable Value at
Securities Percent of Assumed Annual Rates of Stock Price
Underlying Total Options Exercise or Appreciation for Option Term (2)
___________________________________
Options Granted in Base Price Expiration
Name Granted (#) Fiscal Year (Per Share)(1) Date 0%(3) 5% 10%
All Stockholders(4) N/A N/A N/A N/A 0 $582,319,443
$1,475,695,431
Potential Gain to
Named Executives as a
Percentage of Potential
All Stockholders Gain N/A N/A N/A N/A N/A 1.13% 1.13%
Number of Percent of Potential Realizable Value at As-
Securities Total Options sumed Annual Rates of Stock Price
Underlying Granted to Exercise or Appreciation for Option Term (2)
Options Employees in Base Price Expiration
Name Granted (#) Fiscal Year (Per Share)(1) Date 5% 10%
- ---- ----------- ----------- -------------- ---- -- ---
George J. Collins 0 0% N/A N/A $0 $0
James S. Riepe 0 0% N/A N/A 0 0
George A. Roche 0 0% N/A N/A 0 0
M. David Testa 0 0% N/A N/A 0 0
James A.C. Kennedy 50,000 2.65% $36.00 11/17/06 1,132,000 2,868,500
(1) Options were granted at 100% of fair market value on the date of grant.
(2) The dollar amounts set forth under these columns are the result of
calculations of assumed annual rates of stock price appreciation from
November 11, 199418, 1996 (the date of grant of the 19941996 option awards) to November
10, 200417, 2006 (the date of expiration of such options) of 0%, 5%, and 10%, the
latter two assumed rates
being required under the rules of the Securities and Exchange
Commission. Based on these assumed annual rates of stock price appreciation
of 0%, 5%, and 10%, respectively, the Company's stock price at November 10, 200417, 2006 is projected
to be $32.25,
$52.532,$58.64 and $83.648,$93.37, respectively. These assumptions are not intended
to forecast future appreciation of the Company's stock price. Indeed, the
Company's stock price may increase or decrease in value over the time
period set forth above. The potential realizable value computation does not
take into account federal or state income tax consequences of option
exercises or sales of appreciated stock.
(3) Optionees will not realize value under their 1994
option grants without a stock price appreciation which will
benefit all stockholders.
(4) The number of shares subject to options granted in 1994
is not included in the number of shares outstanding used to
calculate potential realizable value at the assumed annual rates
of stock price appreciation of 0%, 5%, and 10%, respectively.10
Aggregated Option Exercises and Fiscal Year-End Option Values Table. The
following table sets forth certain information concerning the exercise of stock
options, the number of unexercised options and the value of unexercised options
at the end of 19941996 for the executive officers whose compensation is reported in
the Summary Compensation Table. Value is considered to be, in the case of
exercised options, the difference between the exercise price and the market
price on the date of exercise, and, in the case of unexercised options, the
difference between the exercise price and market price on December 31, 1994.1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
Number of Secur-
ities Underlying Value of Unexercised
Unexercised Options "In-the-Money" Options
at December 31, 1994 at December 31, 1994
Shares Acquired Value (Exercisable/ (Exercisable/
Name on Exercise (1) Realized Unexercisable) (1)
Unexercisable) (2)
George J. Collins N/A N/A 39,800/47,200
$627,725/$360,150
James S. Riepe 4,800 $110,700 27,600/56,000
275,250/530,000
George A. Roche 8,600 153,525 19,200/56,000
166,050/530,000
M. David Testa 11,100 250,219 27,300/356,000
295,881/530,000
Brian C. Rogers 11,000 222,375 94,800/88,000
1,553,438/709,312
Number of Secur-
ities Underlying Value of Unexercised
Unexercised Options "In-the-Money" Options
at December 31, 1996 at December 31, 1996
Shares Acquired Value (Exercisable/ (Exercisable/
Name Upon Exercise (1) Realized Unexercisable) (1) Unexercisable) (2)
George J. Collins 0 $0 141,200/32,800 $4,958,825/$988,050
James S. Riepe 8,000 294,000 106,400/233,600 3,490,150/4,509,100
George A. Roche 11,200 352,400 82,800/233,600 2,666,950/4,509,100
M. David Testa 8,300 298,800 89,300/633,600 2,891,650/17,459,100
James A.C. Kennedy 16,000 344,500 201,912/130,000 7,037,898/2,233,550
(1) All share and per share figures have been adjusted in accordance with the
terms of the options for the two-for-one stock split effective at the close
of business on NovemberApril 30, 1993.1996.
(2) An "In-the-Money" option is an option for which the option price of the
underlying stock is less than the market price at December 31, 1994,1996,
and all of the value shown reflects stock price appreciation since the
granting of the option. The closing market price of the Common Stock
was $43.50 per share on December 31, 1996.
11
Compensation of Directors. Directors who are also officers do not receive
directors' fees. Each independent director received a $50,000 retainer for his 19941996
services as a director and memberboard committee member.
Pursuant to the 1995 Directors Stock Option Plan approved by stockholders
on April 6, 1995, each of Messrs. Halbkat, Menschel, Rosenblum, Strickland and
Walsh and Mrs. Whittemore received options to purchase 4,000 shares of Common
Stock at $28.50 per share (the last reported sale price on April 25, 1996; the
various committeesnumber of options and price has been adjusted to reflect the two-for-one stock
split effective at the close of business on which he serves.
Executive Compensation Committee Interlocks and Insider
Participation
During 1994, Philip C. Walsh (Chairman), James E. Halbkat,
Jr., John W. Rosenblum, and Robert L. Strickland served as
membersApril 30, 1996).
Report of the Executive Compensation Committee. No director or
executive officer of the Company is a director or executive
officer of any other corporation that has a director or executive
officer who is also a director or board committee member of the
Company.
REPORT OF THE EXECUTIVE COMPENSATION COMMITTEECommittee
The Executive Compensation Committee of the Board of Directors (the
"Committee"), comprised solelycomposed during 1996 of all of the Company's independent
directors, named below, is responsible to the Board and by extension to the stockholders for:
(i) determination of the compensation of the chief executive officer and the
other managing directors who are also members of the Company's Management
Committee (collectively, the "Senior Executive Officers") as well as theany other
officers of the Company who are also directors;members of the Company's Board of Directors; (ii)
administration of the Company's Executive Incentive Compensation Plan (the
"Incentive Plan"); (iii) administration of the Company's stock incentive plans as required by Rule 16b-3 under the Securities
Exchange Act of 1934;plans;
and (iii)(iv) review and approval of the compensation policies and general levels of
compensation for the Company's remaining managing directors and other key-employees,key
employees, for whom individual compensation decisions are made by a
management-level compensation committee.
The Committee recognizeshas acknowledged since its inception that the investment
management and securities industries are highly competitive and that experienced
professionals have significant career mobility. Its members believe that the
ability to attract, retain, and provide appropriate incentives for the highest
quality professional personnel is essential to retain the Company's competitive
position in the mutual fund and investment management industry, and thereby
to provide for the long-term success of the Company in
the interests of its stockholders.Company.
The Committee believes that competitive levels of cash compensation,
together with equity incentive programs that are consistent with stockholder
interests, are necessary for the motivation and retention of the Company's
professional personnel. The Company's compensation programs are keyed to
achievement, as determined by the Committee, of short- and long-term performance
goals.
During 1994,1996, base salaries for each of the individuals named in the table
on page 5__ (the "Named Officers") were unchanged from the annual levels established during 1993 (which levels, in the
case of each of the Senior Executive Officers, had not previously
been changed since the Company's initial public offering in
1986).prior year. Consistent
with compensation practices generally applied in the investment management and
12
other financial services industries with which the Company competes for talent,
base salaries for the Named Officers are intended to form a relatively low
percentage (substantially below 50%) of total cash compensation. The annual discretionary cash bonus has been the
principal means of rewarding the Named Officers for individual
and group performance and, in recent years, has beencompensation with the major
componentportion of cash compensation.
Atcompensation intended to be derived from payments made under the
Incentive Plan, provided, of course, that the performance goals established
under the Incentive Plan are met.
The Incentive Plan, recommended by the Board of Directors and approved by
stockholders in 1995, establishes a pool (the "Incentive Pool") which relates
incentives to the Company's Income before Income Taxes and Minority Interests
for that year ("Adjusted Earnings"), subject to a requirement that a threshold
ratio of net income to average stockholders' equity (the "Threshold ROE") is
attained. The Incentive Pool, subject to reduction based on the Threshold ROE
target, is computed as follows: (1) for Adjusted Earnings up to $25 million, 5%
of Adjusted Earnings; (2) for Adjusted Earnings above $25 million to $50
million, an additional 7% of Adjusted Earnings; and (3) for Adjusted Earnings
above $50 million, an additional 8% of Adjusted Earnings. Thus, the Incentive
Plan establishes a maximum cumulative Incentive Pool of $3,000,000 plus 8% of
Adjusted Earnings over $50 million. For purposes of the Incentive Plan,
Threshold ROE for the year is the ratio of annual net income (excluding the
effect of extraordinary items under generally accepted accounting principles) to
average stockholders' equity for the year. The Threshold ROE that must be
attained to permit the maximum cumulative Incentive Pool to be payable under the
Incentive Plan is 20%. If the Company's Threshold ROE is less than 20% but at
least 10%, for each full percentage point shortfall the maximum cumulative
Incentive Pool is reduced by five percentage points. If the Company's Threshold
ROE falls below 10%, there shall be no Incentive Pool, and no bonus payment will
be made from the Incentive Pool for that fiscal year.
As contemplated by the Incentive Plan, the Committee at the outset of 1994,1996
designated six executive officers (the chief executive officer, the Company's Boardthree other
Senior Executive Officers, and two other managing directors) as eligible to
participate in the Plan for 1996. The Committee also determined that each
particular participant would be eligible to receive a specified maximum
percentage of Directorsthe available Incentive Pool, which percentages varied among the
participants. In accordance with the Incentive Plan, the Committee reviewed the
requirements established a specific earnings target relative to three years
average growth ratesby the Plan for determining incentive awards and a corresponding target bonus pool
available foralso
determined and certified that each of the Plan's performance goals had been
satisfied before it approved and permitted payment of bonuses pursuant to a significant numberthe
Plan. Hence, the Committee expects that all payments pursuant to the Incentive
Plan will be deductible in accordance with Section 162(m) of the Company's professional staff. AtInternal
Revenue Code of 1986, as amended, and all other compensation payable to the
endNamed Executive Officers for 1996 performance similarly will be deductible.
The Committee determined to award each of the year, theSenior Executive Officers
incentive compensation in an amount of the aggregate bonus pool was substantially increased
above the initial target bonus pool to reflect the fact that the
Company's performance during the year substantially exceeded the
initial earnings target.
The Executive Compensation Committee first determined the
portion of the aggregate bonus pool to be made available to the
persons (otherless than the Named Officers) eligible to receive
awards from the aggregate bonus pool. The Committee then
determined individual bonus awards for the Named Officersmaximum amount that would be
made available frompermitted to be paid under the remainderIncentive Plan for 1996. In making its
13
determinations, the Committee noted that the Company had achieved record
revenues, earnings, and earnings per share and had attained a return on equity
substantially in excess of the aggregate bonus
pool. In making bonus awards to all participants, the Company and
theThreshold ROE. The Committee recognized that market and competitive forces
require compensation levels for a significant percentage of the
Company's investment and other professional staff sufficient to
prevent loss of promising personnel to direct competitors or
other participants in the investment and financial services
markets.
In addition to its primary consideration of the quantitative
factors described above, the Executive Compensation Committeealso gave significant
consideration to a series of specific, qualitative performance factors that it
believed reflected the Senior Executive and Named Officers' performance but were
not capable of precise measurement. The qualitative factors were considered for purposes
of determining both the aggregate amount of the bonus pool to be
made available as well as individual bonus awards. For 1994, the
principal qualitative factors which the Committee assessed in
determining the incentive compensation of the Senior Executive
Officers includedmeasurement, including relative investment performance,
marketing effectiveness, management of corporate assets, expense control, and
corporate infrastructure development. These qualitative
factors were not accorded specific weightings, and were applied
by the Executive Compensation Committee as appropriate to take
into account the responsibilities of the Senior Executive
Officers. The Committee determined that the Senior
Executive and Named Officers as a teameach had demonstrated outstandingsuperior long-term management
performance in these areas. In making its decision to award payments under the
viewIncentive Plan that are less than the maximum amounts permitted, the Committee
took into consideration the Company's historical compensation policies as well
as financial industry compensation trends. The Committee also noted, as it has
done in the past, that it could determine to award payment of a greater portion
or all of the Committee, thisincentive pool in a year when the Company's financial performance
could have justifiedmight not be as strong as it has been in 1996 and recent years in order to
maintain a significant
further increase in the bonus pool overcompetitive compensation structure and above the amount
previously determined due to the strong quantitative performance,
but the Committee determined to make no further upward
adjustments. In the case of Mr. Rogers, the principal factor
weighed was the superior investment performance of the portfolios
for which Mr. Rogers was responsible.
In light of the decision to recommend for stockholder
approval a performance-based incentive plan for years beginning
in 1995, as described on pages 13 to 15, the Committee determined
to defer payment of the portion of the cash bonus payable to each
of the Named Officers that would be non-deductible in 1994 until
such time as these payments are fully deductible or the Committee
otherwise determines to effect the payments. Assuming stockholder
ratification of this incentive plan, the deferred portion of the
1994 bonus will be paid in 1995. Thus, no portion of compensation
payable to the Named Executive Officers for 1994 performance is
expected to be non-deductible.thus retain key personnel.
In establishing the compensation of the Named Officers, the Committee took
into account the fact that the four Senior Executive Officers constituted the Company's senior management
team during 1994 and thus1996 had
broad Company-wide management responsibilities as well as line operating
responsibilities. Each of these individuals has been a member of the Company's
Management Committee since 1984. A larger base salary for Mr. Collins reflected
the additional responsibilities inherent in his position as chief executive officer.Chief Executive
Officer. The levels of 1994 bonus
compensation reflected attainment by the Company of record
operating income and earnings per share, in each case
substantially in excess of initial targets, as well as
consistently favorable performance relative to specific
qualitative performance factors discussed above. Subject to the
considerations regarding the long-term contributions of Mr. Testa
described below, the four Senior Executive Officers were viewed as making generally
equivalent Company-wide contributions to 19941996 performance. In the case of Mr.
Rogers,Kennedy, the Executive Compensation Committee took into consideration Mr. Kennedy's contribution as
head of the Company's Equity Research Division to the Company's strong domestic
equity investment performance and growth in assets under management during 1996.
The Committee noted that many investment professionals, including certain senior
portfolio managers who were not designated as participants in the Plan for 1996
and are compensated under other incentive compensation programs and
arrangements, also were significant contributors to this performance.
In 1996, the Committee determined not to make stock option awards to any of
the Senior Executive Officers, in part so that the 1996 stock option awards
could be directed to a broad number of officers and employees as a means of
further aligning their interests with those of the Company's Equity Income
Fund,stockholders and
increasing the potential ownership of whichactive employees and managers. Consistent
with this objective, Mr. Rogers is the chief portfolio manager, and the
fact that this fund is one of the largest of the Price Funds andKennedy received an important contributoroption to Company revenues.
In recent years, equity incentive awards in the form of
stock option grants have been directed primarily to officers
including certain managing directors other than the Senior
Executive Officers. Individual awards have been based on
evaluation of the same individual and group performance goals
that form the basis of bonus awards. Preliminary option
determinations for key employees other than managing directors
are made by a management-level compensation committee, subject to
review and approval by the Executive Compensation Committee.
In 1994, the Executive Compensation Committee made a stock
option award to Mr. Testa covering 300,000purchase 50,000 shares of
Common Stock at the closing Nasdaqan exercise price on the date of grant ($32.25$36.00 per share). This option award was significantly greater than prior
option awards and was made, on the basis of past performance, to
provide Mr. Testa with a strong incentive to continue to provide
the Company with similar contributions for the foreseeable
future. In making this award, the Executive Compensation
Committee specifically recognized the unique contribution of Mr.
Testa over a long number of years to the creation, growth, and
leadership of the Company's international investment management
business, which was a major contributor to the Company's
investment management asset and revenue growth in 1994 and a very
significant contributor in recent prior years.share.
The Committee also
considered Mr. Testa's significant contributions to leadership in
restructuring the Company's equity management function, which has
enjoyed consistently favorable investment performance recently.
In order to minimize the dilutive effect of option awards, the
Executive Compensation Committee made no option awards during
1994 to the other Senior Executive Officers.
In making this option award, the Committee's intention, in
recognizing superior past long-term performance, was to provide
an additional incentive to Mr. Testa to continue this performance
for a significant period in the future and to reinforce the
Company's policies to base compensation awards to its executive
officers largely on performance. To solidify the link of the
award to Mr. Testa to long-term future performance, Mr. Testa's
option award, which expires in November 2004, becomes exercisable
in three equal annual installments commencing in November 1997.
This three-year delay before initial vesting commences is longer
than the vesting period established for other stock option grants
awarded in recent years.
In determining option awards, the Executive Compensation
Committee receives the advice of its independent compensation
consultants concerning option award practices of other public
companies, including companies which compete with the Company for
talent.
As noted above, the Executive Compensation Committee
determined during 1994 to design a bonus plan for years
commencing January 1, 1995 that is intended to permit full
deductibility of compensation to Named Officers. As a result, the
Company's proposed Executive Incentive Compensation Plan,
included on pages 13 to 15 of this proxy statement, has been
recommended to stockholders for approval at the 1995 annual
meeting.
The Executive Compensation Committee has compared the Company's compensation levels to relevant
publicly available data for the investment management, securities, and other
financial service industries and has found the Company's compensation levels to
be competitive. Certain of these companies are included in the CRSP Total Return
14
Index for Nasdaq Financial Stocks shown in the Stock Performance Chart which
follows this report.follows. The Company believes it competes for executive talent with a large
number of investment management, securities, and other financial services
companies, some of which are privately owned and others of which have
significantly larger market capitalizationscapitalization than the Company. The practice of the
Company and the Executive
Compensation Committee is to review available compensation data from a large
universe of financial services companies. The Executive Compensation Committee receives the assistance
of an independent compensation consulting firm in reviewing and
analyzing this data and determiningcomparing executive
compensation and policies.policies of the Company with those of other public companies,
including companies which compete with the Company for talent. The Committee's
goal is to maintain compensation programs which are competitive and, where performance justifies,
above industry compensation averages.within the
financial services industry.
The Executive Compensation Committee believes that 19941996 compensation levels
disclosed in this proxy statement are reasonable and appropriate in light of the
veryCompany's strong results
relative to the Company's financial and qualitative performance
targets.performance.
Philip C. Walsh, Chairman
James E. Halbkat, Jr.
Richard L. Menschel
John W. Rosenblum
Robert L. Strickland
___________Anne Marie Whittemore
STOCK PERFORMANCE CHART
As part of the proxy statement disclosure requirements mandated by the
Securities and Exchange Commission, the Company is required to provide a
five-year comparison of the cumulative total stockholder return on its Common
Stock with that of a broad equity market index and either a published industry
index or a Company-constructed peer group index.
The following chart compares the yearly percentage change in the cumulative
total stockholder return on the Company's Common Stock during the five years
ended December 31, 19941996 with the cumulative total return on the CRSP Total
Return Index for the Nasdaq Stock Market (US Companies), the CRSP Total Return
Index for Nasdaq Financial Stocks, the S&P 500 Index, and the S&P 500Mid-Cap Index.
The comparison assumes $100 was invested on December 31, 19891991 in the Company's
Common Stock and in each of the foregoing indices and the reinvestment of dividends.that all dividends were
reinvested.
There can be no assurance as to future trends in the cumulative total
return of the Company's Common Stock or of the following indices. The Company
does not make or endorse any predictions as to future stock performance.
15
INSERT LINEGRAPH with TABLE- GRAPH PLOT POINTS
- --------------------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
- --------------------------------------------------------------------------------
T. Rowe Price
Associates, Inc. $100 $103 $134 $141 $235 $421
CRSP Total Return Index
for the Nasdaq Stock 100 116 134 131 185 227
Market (US Companies) (1)
CRSP Total Return Index
for Nasdaq Financial 100 143 166 167 243 311
Stocks (1)
S&P 500 Index (2) 100 108 118 120 165 203
S&P Mid-Cap Index (3) 100 112 128 123 161 192
(1) The CRSP Total Return Index for the Nasdaq Stock Market (US Companies) is
an index comprising all domestic common shares traded on the Nasdaq
National MarketMarket(R) and the Nasdaq Small-Cap
Market.SmallCap Marketsm. The CRSP Total Return
Index for Nasdaq Financial Stocks is an index comprising all financial
company American Depository Receipts, domestic common shares and foreign
common shares traded on the Nasdaq National MarketMarket(R) and the Nasdaq
Small-Cap Market,SmallCap Marketsm, and represents SIC Codes 60 through 67. The Company will
provide the names of companies included in this index upon the written
request of any stockholder. Such request should be directed to the
secretary of the Company. These indices were prepared for Nasdaq by the
Center for Research in Securities Prices ("CRSP") at the University of
Chicago and distributed to Nasdaq-listed companies to assist them in
complying with proxy rule disclosure requirements. The Company has not
independently verified the computation of these total return indices.
(2) Total return performance for the S&P 500 Index provided by Standard &
Poor's.
PROPOSED CHARTER AMENDMENTS TO INCREASE AUTHORIZED COMMON STOCK
AND CREATE A CLASS OF UNDESIGNATED PREFERRED STOCK
The Board of Directors of the Company has adopted
resolutions declaring advisable and recommending to the Company's
stockholders for their approval two separate amendments to the
Company's charter. The first amendment provides(3) Total return performance for the increase
of the authorized shares of Common Stock from 48,000,000 shares
to 100,000,000 shares. The second amendment provides for the
creation of a class of 20,000,000 shares of undesignated
Preferred Stock which would be subject to classification and
reclassificationS&P Mid-Cap Index provided by the Board of Directors without stockholder
approval. The text of the proposed amendments is included in the
form of Articles of Amendment attached hereto as Exhibit A.
The terms of the proposed class of Preferred Stock provides
that the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption thereof (collectively, the
"Limitations and Restrictions") may be determined by the Board of
Directors of the Company prior to the issuance of such stock. As
such, the Board of Directors of the Company will, in the event of
the approval of this proposal by the Company's stockholders, be
entitled to authorize the creation and issuance of 20,000,000
shares of Preferred Stock in one or more series with such
Limitations and Restrictions as may be determined in the Board's
sole discretion, with no further authorization by stockholders
required for the creation and issuance thereof.
The additional shares of Common Stock and Preferred Stock
could be issued, in many cases without stockholder approval, for
a variety of corporate purposes including the raising of
additional capital to support expansion of the Company's growth,
either through internally-generated growth or through
acquisitions, and stock issuances in connection with the
acquisition of other business organizations, employee incentive
plans, stock splits and recapitalizations of the Company's
capital structure. Management of the Company is cognizant of the
trends toward consolidation in the investment management industry
and believes there may be enhanced prospects for growth through
acquisition in the future. Consistent with these trends, the
Company from time to time reviews various acquisition prospects
and periodically engages in discussions regarding such possible
acquisitions. Currently, the Company is not a party to any
agreements or understandings regarding any material acquisitions
that would require issuance of any shares authorized by the
proposed charter amendments. In addition, acquisitions involving
stock issuances above certain enumerated thresholds would require
stockholder approval under applicable rules of the Nasdaq Stock
Market and in some circumstances Maryland law.
The Board of Directors is required to make any determination
to issue shares of Common Stock or Preferred Stock based on its
judgment as to the best interests of the stockholders and the
Company. Although the Board of Directors has no present intention
of doing so, it could issue shares of Common Stock or Preferred
Stock that could, depending on the terms of such series, make
more difficult or discourage an attempt to obtain control of the
Company by means of merger, tender offer, proxy contest or other
means. When, in the judgment of the Board of Directors, this
action will be in the best interest of the stockholders and the
Company, such shares could be used to create voting or other
impediments or to discourage persons seeking to gain control of
the Company. Such shares could be privately placed with
purchasers favorable to the Board of Directors in opposing such
action. The Board of Directors could also authorize holders of a
series of Preferred Stock to vote either separately as a class or
with the holders of the Company's Common Stock on any merger,
sale or exchange of assets by the Company or any other
extraordinary corporate transaction. The issuance of new shares
could also be used to dilute the stock ownership of a person or
entity seeking to obtain control of the Company should the Board
of Directors consider the action of such entity or person not to
be in the best interests of the stockholders and the Company. In
addition, the shares of Preferred Stock could be issued if the
Board of Directors were to adopt a stockholder rights plan in
order to protect stockholders in the event of an unsolicited
attempt to acquire the Company which the Board of Directors does
not believe to be in the best interests of the Company's
stockholders. The Company has no present plans to issue shares of
Preferred Stock or to adopt a stockholder rights plan.
Accordingly, the terms of any Preferred Stock subject to this
proposal cannot be stated or estimated with respect to any or all
of the Preferred Stock authorized.
Recommendation of the Board of Directors; Vote Required
The Board of Directors believes the increase in the
authorized Common Stock and the creation of the Preferred Stock
are in the best interests of the Company and its stockholders and
has declared the amendments advisable. Stockholders are required
under Securities and Exchange Commission rules to consider the
two amendments separately. The Board of Directors recommends a
vote "FOR" the amendment to the Company's charter to increase
from 48,000,000 to 100,000,000 shares the authorized Common Stock
and "FOR" the amendment to the Company's charter to authorize
20,000,000 shares of a new class of undesignated Preferred Stock.
The affirmative vote of a majority of the total number of shares
of Common Stock outstanding will be required for adoption of each
of the two amendments. Abstentions and broker non-votes will have
the effect of a vote against each of the amendments. The
proposals are independent such that failure to adopt one proposal
will not affect adoption of the other proposal.
PROPOSED EXECUTIVE INCENTIVE COMPENSATION PLAN
On February 13, 1995, the Executive Compensation Committee
recommended to the Board of Directors adoption of the Executive
Incentive Compensation Plan (the "Incentive Plan"). The Board of
Directors adopted the Incentive Plan on February 13, 1995,
subject to stockholder approval. The following is the text of the
Incentive Plan:
Purpose and Effects of Incentive Plan. The Incentive Plan is
intended to assure that the cash compensation of the chief
executive officer ("CEO") and the other executive officers whose
compensation is required to be reported in the Company's annual
proxy statement will be fully deductible for federal income tax
purposes, notwithstanding the $1,000,000 annual limitation on
certain types of compensation imposed by Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). The
Incentive Plan ties directly the incentive compensation payable
to the CEO and certain other executive officers to attainment of
specific financial performance targets. Thus, incentive
compensation payments will be further aligned with the interests
of all stockholders.
Participation. The Participants in the Incentive Plan shall
be the CEO, the members of the Company's Management Committee,
and certain other executive officers of the Company designated at
the outset of the fiscal year by the Executive Compensation
Committee of the Board of Directors (the "Committee"), which
Committee is comprised solely of independent directors. At
February 13, 1995, the Company had 18 managing directors, seven
(7) of whom have been designated by the Executive Compensation
Committee to be Participants. Amounts payable from the Incentive
Pool (computed in accordance with the following paragraph)
established under the Incentive Plan are in addition to, and not
in substitution for, base salaries, which are reviewed by the
Committee annually at approximately mid-year. Unless otherwise
determined by the Executive Compensation Committee in its sole
discretion (which may be made on a case-by-case basis), the CEO
and each member of the Management Committee are eligible to
receive annual bonuses from the Incentive Pool only. Other
Participants will be eligible for other incentive compensation
based upon the operating performance and enumerated qualitative
factors, as evaluated by the Executive Compensation Committee
with the input of management, of the business unit for which such
Participant is responsible, in addition to amounts payable from
the Incentive Pool.
Establishment of Incentive Pool under the Incentive Plan.
The Incentive Plan establishes a maximum Incentive Pool payable
to the Participants under the Incentive Plan in the aggregate for
any fiscal year of the Company. The Incentive Pool is determined
under the formula described below which relates incentives to the
Company's annual Income before Income Taxes and Minority
Interests for that year ("Adjusted Earnings"), subject to a
requirement that a threshold ratio of net income to average
stockholders' equity for the fiscal year (the "Threshold ROE") is
attained. The Incentive Pool, subject to reduction if required by
the next paragraph, will be computed on a cumulative basis as
follows: (1) for Adjusted Earnings up to $25 million, 5% of
Adjusted Earnings will be available under the Incentive Pool,
establishing a maximum Incentive Pool of $1,250,000; (2) for
Adjusted Earnings above $25 million to $50 million, an additional
7% of Adjusted Earnings will be available under the Incentive
Pool, establishing a maximum cumulative Incentive Pool of
$3,000,000; and (3) for Adjusted Earnings above $50 million, an
additional 8% of Adjusted Earnings will be available under the
Incentive Pool, establishing a maximum cumulative Incentive Pool
of $3,000,000 plus 8% of Adjusted Earnings over $50 million.
The ROE is defined under the Incentive Plan as the ratio of
annual net income (excluding the effect of extraordinary items
under generally accepted accounting principles) to average
stockholders' equity for the year. The Threshold ROE that must be
attained to permit the maximum cumulative Incentive Pool to be
fully payable under the Incentive Plan is 20%. If the Company's
ROE for the fiscal year is less than 20% but at least 10%, for
each full percentage point shortfall the maximum cumulative
Incentive Pool is reduced by five percentage points. Thus, if the
ROE is 15%, three-quarters (75%) of the maximum cumulative
Incentive Pool shall be payable, and if the ROE is 10%, one-half
(50%) of the maximum cumulative Incentive Pool shall be payable.
If the Company's ROE falls below 10% for any fiscal year, there
shall be no Incentive Pool and no bonus payment will be made from
the Incentive Pool for that fiscal year.
Payments under the Incentive Plan. The maximum share of the
Incentive Pool payable to any Participant is limited to 40%. The
actual amount paid from the Incentive Pool for any fiscal year
may be less but not greater than the maximum amount available for
payment from the Incentive Pool, based on the formula for that
year, and the Executive Compensation Committee shall have sole
and exclusive discretion to reduce the share or amount payable to
any Participant from the Incentive Pool.
Prior to the payment of any amounts from the Incentive Pool
for any fiscal year, the Executive Compensation Committee shall
certify in writing (to the extent required by, and as defined in,
any applicable IRS Regulations) that the Threshold ROE and
Adjusted Earnings goals and any other material terms used to
determine amounts payable from the Incentive Pool were in fact
satisfied. For this purpose, approved minutes of the Executive
Compensation Committee shall be treated as a written
certification and no other separate written certification shall
be required. All amounts payable from the Incentive Pool shall be
paid in cash as soon as practicable after such certification.
The Incentive Plan permits the Executive Compensation
Committee to make a determination that the Threshold ROE and
Adjusted Earnings have been attained so as to permit payment of
awards under the Incentive Plan, in whole or in part, prior to
the conclusion of the year. For these purposes, the Executive
Compensation Committee is permitted to rely on the Company's most
recently available internal interim financial statements
(containing such adjustments and accruals as are required under
generally accepted accounting principles), which may be adjusted,
if and to the extent permitted by applicable law, regulations and
interpretations, to take into account the Company's projected
results of operations for the remainder of the year based on
available data concerning assets under management in mutual fund
and investment advisory accounts and other appropriate
adjustments.
The actual amounts that will be paid to Participants from
the Incentive Pool for 1995 and future years are not currently
determinable, as such amounts will depend upon the Company's
results of operations and return on average equity and the
Executive Compensation Committee's determination of the share or
amount of the maximum cumulative Incentive Pool to be paid to
each Participant. Similarly, since the Incentive Plan was not in
effect for 1994 or prior years, it is not possible to determine
the amounts under the Incentive Plan which would have been
received by the Participants from a hypothetical Incentive Pool
for 1994 or prior years. For 1994, the maximum amount payable to
any single Participant would have been approximately $3.5 million
and the amount payable to each Participant, assuming equal
incentive awards utilizing the entire Incentive Pool to five
participants, would have been approximately $1.7 million. The
bonus awards for 1994 performance and prior years since the
Company's initial public offering have been considerably less
than the amounts payable had the Incentive Plan been in place for
those years.
Amendments or Termination. The Incentive Plan may be amended
or terminated at any time at the sole discretion of the Board of
Directors. No amendment of the Incentive Plan may increase the
amount available under the Incentive Pool or increase the
allocation of benefits between Participants from the Incentive
Pool without the requirement of a vote of the stockholders. The
Incentive Plan will automatically terminate in the event of the
repeal of Section 162(m) of the Code or other change in the law
that would eliminate the requirement for a written,
performance-based plan to provide full deductibility of incentive
payments for federal income tax purposes.
Recommendation of the Board of Directors; Vote Required
The Board of Directors recommends a vote "FOR" approval of
the Incentive Plan. The affirmative vote of a majority of the
votes cast at the meeting will be required to approve the
Incentive Plan. Accordingly, abstentions and broker non-votes
will not be considered to be votes cast and will have no effect
on the outcome of the matter.
PROPOSED 1995 DIRECTOR STOCK OPTION PLAN
The Company's 1995 Director Stock Option Plan (the "Director
Plan") was approved by the Board of Directors on February 13,
1995, subject to stockholder approval. A copy of the Director
Plan is attached hereto as Exhibit B, and the following summary
description is qualified by reference to the Director Plan. The
purpose of the Director Plan is to provide Non-Employee Directors
with an equity interest in the Company in order to attract and
retain well-qualified individuals to serve as Non-Employee
Directors and to further align the interests of Non-Employee
Directors of the Company with those of the stockholders of the
Company.
Number of Shares
The Director Plan provides that 70,000 shares of the
Company's Common Stock, which number is subject to adjustment to
reflect certain subsequent stock changes such as stock dividends,
stock splits, and share exchanges, will be available for the
granting of stock options at the times contemplated by the
Director Plan to Non-Employee Directors of the Company. If an
option expires before its exercise, the shares may again be
subject to options.
Administration; Eligibility
The Director Plan shall be administered by the Board of
Directors of the Company; provided that, in administering the
Director Plan, the Board of Directors shall have no discretion
regarding the price, timing, or amount of options to be granted
under the Director Plan. Only persons who are not employees of
the Company or any of its affiliates or subsidiaries
("Non-Employee Directors") are eligible to participate in the
Director Plan.
Stock Options
The stock options to be granted under the Director Plan are
not qualified under any section of the Code ("non-qualified
options") and will be granted at 100% of the fair market value of
the underlying Common Stock on the date of grant.
As to each Non-Employee Director in office as of April 6,
1995, the Director Plan provides for the grant of an option to
purchase 4,000 shares of Common Stock at the close of business on
April 6, 1995 and an option to purchase 2,000 shares of Common
Stock at the close of business on the last Thursday of the month
during each succeeding year in which the annual meeting of
stockholders is held, subject to a maximum individual award of
options to purchase 10,000 shares of Common Stock. All current
directors have been in office for at least three years, and this
initial award recognizes, in part, prior service and
contributions.
As to each subsequently elected Non-Employee Director, the
Director Plan provides for the grant of an option to purchase
2,000 shares of Common Stock as of the close of business on the
date of the first regular meeting of directors held on or after
the Director's initial election, and an option to purchase 2,000
shares of Common Stock at the close of business on the last
Thursday of the month during each succeeding year in which the
annual meeting of stockholders is held, subject to a maximum
individual award of options to purchase 10,000 shares of Common
Stock.
Each option granted under the Plan shall become exercisable
in full one year after the initial grant, but shall not be
exercisable as to any shares prior thereto. Upon exercise, the
option price is to be paid in full in cash, in shares of the
Company's Common Stock previously owned by the option holder or
acquired upon option exercises having a market value on the date
of exercise equal to the aggregate option price, or in a
combination thereof. No stock option may be exercised after the
earlier to occur of: (i) the expiration of 10 years after the
date such option was granted; or (ii) five years after a
Non-Employee Director ceases to be a Director for any reason,
during which period any installments of options which first
become exercisable may thereafter be exercised. In the case of
death, the option may be exercised by a deceased Director's
estate or heirs for such five year period.
Amendments; Term of Plan
This Director Plan may be amended, suspended, terminated or
reinstated, in whole or in part, at any time by the Board of
Directors; provided, however, that any provisions of this
Director Plan regarding the amount and price of options to be
awarded to Non-Employee Directors and the timing of awards, or
that may be deemed to set forth a formula that determines the
amount, price, and timing of awards, may not be amended more than
once every six months, other than to comport with any changes in
the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules under such statutes; and, provided further,
however, that no such amendment shall become effective without
the approval of the stockholders of the Company to the extent
stockholder approval is required in order to comply with Rule
16b-3 of the Securities Exchange Act of 1934, as amended. No
option may be granted under the Plan after April 30, 2002.
Federal Income Tax Consequences
The following is a general summary of the current Federal
income tax treatment of the non-qualified stock options, to be
granted under the Director Plan based upon the current provisions
of the Code and regulations promulgated thereunder. No tax
consequences result from the grant of the option. An option
holder who exercises a non-qualified stock option with cash will
generally realize compensation taxable as ordinary income in an
amount equal to the difference between the option price and the
fair market value of the shares on the date of exercise, and the
Company will be entitled to a deduction from income in the sale
amount. The option holder's basis in such shares will be the fair
market value on the date exercised and, upon disposition of the
shares, the option holder will recognize capital gain or loss,
either long-term or short-term, depending on the holding period
of the shares.
Recommendation of the Board of Directors; Vote Required
The Board of Directors recommends a vote "FOR" approval of
the Director Plan. The affirmative vote of a majority of the
votes cast at the meeting will be required to approve the
Director Plan. Accordingly, abstentions and broker non-votes will
not be considered to be votes cast and will have no effect on the
outcome of the matter.Standard &
Poor's.
CERTAIN OWNERSHIP OF THE COMPANY'S COMMON STOCK
A Schedule 13G dated February 8, 1995 states that Ariel
Capital Management, Inc. ("Ariel"), an investment advisor
registered under the Investment Advisers ActThe Company has no knowledge at this time of 1940,any individual or entity
owning, beneficially owns 1,640,340 sharesor otherwise, 5% or more of the Company'soutstanding Common Stock or approximately 5.74% of the shares outstanding on that date.
The Schedule states that these shares are owned by various
investment advisory clients of Ariel and were acquired in the
ordinary course of business and not for the purpose of changing
or influencing control of
the Company. The address of Ariel is
307 North Michigan Avenue, Chicago, Illinois 60601.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Mr. Peter Van Dyke, a Managing Director of the Company,
acquired indirect beneficial ownership of 4,000 shares of Common
Stock on February 4, 1994 as a result of his appointment as
co-trustee of a revocable trust for the benefit of his mother.
Through inadvertence, this event was not reported on a Form 3
until October 11, 1994.
SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors, pursuant to the recommendation of its Audit
Committee, has selected Price Waterhouse LLP, independent accountants, to
examine the financial statements of the Company for the year 1995.1997 fiscal year. This
firm has served as independent accountants of the Company since 1985. A partner
16
of the firm will be present at the annual meeting and available to respond to
appropriate questions, and will have an opportunity to make a statement if he
desires to do so.
In 1994,1996, Price Waterhouse performed various professional services for the
Company, including completion of the examination of financial statements of the
Company for 1993,1995, preliminary work on the examination for 1994,1996, and preparation
of corporate tax returns. Price Waterhouse also examines the financial
statements of approximately 46% of the Price Funds as well as other sponsored
investment products.
The Audit Committee of the Board of Directors of the Company approved the
audit services provided by Price Waterhouse and the related fees and took into
consideration the non-audit services provided by Price Waterhouse. The Committee
considered the possible effect of these non-audit services on the independence
of Price Waterhouse and concluded that there was no material effect upon theirthe
firm's independence.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the 1998 annual meeting
must be received by the Company for inclusion in the Company's proxy statement
and proxy relating to that meeting by November 7, 1997.
OTHER MATTERS
The Board of Directors of the Company knows of no other matters to be
presented for action at the meeting other than those mentioned above. However,
if any other matters properly come before the meeting, it is intended that the
persons named in the accompanying proxy will vote on such other matters in
accordance with their judgment of the best interests of the Company.
___________
Exhibit A17
T. ROWE PRICE ASSOCIATES INC.
ARTICLES OF AMENDMENTRevocable Proxy Solicited on Behalf of the Board of Directors
THE UNDERSIGNED STOCKHOLDER of T. Rowe Price Associates, Inc., a Maryland corporation,
having its principal office in Baltimore City, Maryland (which is
hereinafter called hereby
appoints James S. Riepe, George A. Roche and M. David Testa the "Corporation"), hereby certifies to the
State Department of Assessmentslawful attorneys
and Taxation of Maryland that:
FIRST: Article SIXTHproxies of the charterundersigned with full power of substitution to vote, as
designated on the Corporation is
hereby amended to read in its entirety as follows:
SIXTH: (a) The total number ofreverse side, all shares of stock of all
classes which the Corporation has authority to issue is
120,000,000 shares of capital stock (par value $.20 per share),
amounting in aggregate par value to $24,000,000, of which
100,000,000 shares (par value $.20 per share), amounting in
aggregate par value to $20,000,000 are classified as "Common
Stock" and 20,000,000 shares (par value $.20 per share) amounting
in aggregate par value to $4,000,000 are classified as "Preferred
Stock."
(b) The following is a description of the preferences,
conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and
conditions of redemption of the Common Stock and the Preferred
Stock of the Corporation:
COMMON STOCK
(1) The Common Stock shall not be subject to classification
or reclassification by the Board of Directors, and shall have the
rights and terms hereinafter specified, subject to the terms of
any other stock provided in the charter pursuant to
classification or reclassification by the Board of Directors or
otherwise in accordance with law.
(2) Subject to the provisions of Article EIGHTH Section (3)
of the charter of the Corporation, each share of Common Stock
shall have one vote, and, except as otherwise provided in respect
of any Preferred Stock, the exclusive voting power for all
purposes shall be vested in the holders of the Common Stock.
(3) Subject to the provisions of law and any preferences of
any Preferred Stock, dividends, including dividends payable in
shares of another class of the Corporation's stock, may be paid
on the Common Stock of the Corporation
at such time and in such
amounts as the Board of Directors may deem advisable.
(4) In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the
holders of the Common Stock shall be entitled, after payment or
provision for payment of the debts and other liabilities of the
Corporation and the amount to which the holders of any Preferred
Stock shall beundersigned is entitled to share ratablyvote at the Annual Meeting of Stockholders
to be held on Thursday, April 17, 1997, at 10:00 a.m., at the Renaissance
Harborplace Hotel, 202 East Pratt Street, Baltimore, Maryland 21202, and at any
and all adjournments and postponements thereof with respect to the matters set
forth on the reverse side and described in the remaining net
assetsNotice of Annual Meeting and
Proxy Statement dated March 7, 1997, receipt of which is hereby acknowledged.
This Proxy, when properly completed and returned, will be voted in the
Corporation.
PREFERRED STOCK
(5) The Boardmanner directed herein by the undersigned stockholder. IF NO DIRECTION IS GIVEN,
THIS PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED ON THE REVERSE SIDE AND, IN
THE DISCRETION OF THE PROXY HOLDER, ON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING AND AT ANY ADJOURNMENTS AND POSTPONEMENTS THEREOF.
(continued and to be dated and signed on the reverse side)
18
(continued from reverse side)
(1) ELECTION OF DIRECTORS
[ ] FOR the election of Directors shall haveall nominees listed below
[ ] WITHHOLD authority to classifyvote for all nominees listed below
[ ] EXCEPTIONS (To withhold authority for any individual nominee
listed below, mark the "Exceptions" box and reclassifystrike a line
through that nominee's name.)
Nominees: George J. Collins, James E. Halbkat, Jr., Henry H.
Hopkins, James A.C. Kennedy, John H. Laporte, Richard L.
Menschel, William T. Reynolds, James S. Riepe, George A.
Roche, Brian C. Rogers, John W. Rosenblum, Robert L.
Strickland, M. David Testa, Philip C. Walsh and Anne Marie
Whittemore
(2) IN THEIR DISCRETION, the proxies are authorized to vote upon such
other business as may properly come before the meeting and at any
unissued shares of Preferred Stock by fixing
or altering in any one or more respects from time to time before
issuance the preferences, conversion or other rights, voting
powers, restrictions, limitationsadjournments and postponements thereof.
Please date and sign exactly as to dividends, qualifications
or terms or conditions of redemption of such shares of stock;
provided, that the Board of Directors shall not classify or
reclassify any of such shares into shares of the Common Stock, or
into any class or series of stock (i) which is not prioryour
name appears to the Common Stock eitherleft. When signing
as to dividendsa fiduciary, representative or
upon liquidationcorporate officer, give full title as
such. If you receive more than one proxy
card, please sign and (ii)
which is not limited in some respect either as to dividends or
upon liquidation. Subject to the foregoing, the power of the
Board of Directors to classify and reclassify any of the shares
of Preferred Stock shall include, without limitation, subject to
the provisions of the charter, authority to classify or
reclassify any unissued shares of such stock into a class or
classes of preferred stock, preference stock, special stock or
other stock, and to divide and classic shares of any class into
one or more series of such class, by determining, fixing, or
altering one or more of the following:
(a) The distinctive designation of such class or series and
the number of shares to constitute such class or series; provided
that, unless otherwise prohibited by the terms of such or any
other class or series, the number of shares of any class or
series may be decreased by the Board of Directors in connection
with any classification or reclassification of unissued shares
and the number of shares of such class or series may be increased
by the Board of Directors in connection with any such
classification or reclassification, and any shares of any class
or series which have been redeemed, purchased, otherwise acquired
or converted into shares of Common Stock or any other class or
series shall become part of the authorized capital stock and be
subject to classification and reclassification as provided in
this Section.
(b) Whether or not and,return all cards
received.
Dated:_________________________________
_______________________________________
Signature
_______________________________________
Signature if so, the rates, amounts and times
at which, and the conditions under which, dividends shall be
payable on shares of such class or series, whether any such
dividends shall rank senior or junior to or on a parity with the
dividends payable on any other class or series of Preferred
Stock, and the status of any such dividends as cumulative,
cumulative to a limited extent or non-cumulative and as
participating or non-participating.
(c) Whether or not shares of such class or series shall
have voting rights, in addition to any voting rights provided by
law and, if so, the terms of such voting rights.
(d) Whether or not shares of such class or series shall
have conversion or exchange privileges and, if so, the terms and
conditions thereof, including provision for adjustment of the
conversion or exchange rate in such events or at such times as
the Board of Directors shall determine.
(e) Whether or not shares of such class or series shall be
subject to redemption and, if so, the terms and conditions of
such redemption, including the date or dates upon or after which
they shall be redeemable and the amount per share payable in case
of redemption, which amount may vary under different conditions
and at different redemption dates; and whether or not there shall
be any sinking fund or purchase account in respect thereof, and
if so, the terms thereof.
(f) The rights of the holders of shares of such class or
series upon the liquidation, dissolution or winding up of the
affairs of, or upon any distribution of the assets of, the
Corporation, which rights may vary depending upon whether such
liquidation, dissolution or winding up is voluntary or
involuntary and, if voluntary, may vary at different dates, and
whether such rights shall rank senior or junior to or on a parity
with such rights of any other class or series of stock.
(g) Whether or not there shall be any limitations
applicable, while shares of such class or series are outstanding,
upon the payment of dividends or making of distributions on, or
the acquisition of, or the use of moneys for purchase or
redemption of, any stock of the Corporation, or upon any other
action of the Corporation, including action under this Section,
and, if so, the terms and conditions thereof.
(h) Any other preferences, rights, restrictions, including
restrictions on transferability, and qualifications of shares of
such class or series, not inconsistent with law and the charter
of the Corporation.
(6) For the purposes hereof and of any articles
supplementary to the charter providing for the classification or
reclassification of any shares of Preferred Stock or of any other
charter document of the Corporation (unless otherwise provided in
any such articles or document), any class or series of stock of
the Corporation shall be deemed to rank:
(a) prior to another class or series either as to dividends
or upon liquidation, if the holders of such class or series shall
be entitled to the receipt of dividends or of amounts
distributable on liquidation, dissolution or winding up, as the
case may be, in preference or priority to holders of such other
class or series;
(b) on a parity with another class or series either as to
dividends or upon liquidation, whether or not the dividend rates,
dividend payment dates or redemption or liquidation price per
share thereof be different from those of such others, if the
holders of such class or series
of stock shall be entitled to receipt of dividends or
amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in proportion to their respective
dividend rates
or redemption or liquidation prices, without preference or
priority over the holders of such other class or series; and
(c) junior to another class or series either as to
dividends or upon liquidation, if the rights of the holders of
such class or series shall be subject or subordinate to the
rights of the holders of such other class or series in respect of
the receipt of dividends or the amounts distributable upon
liquidation, dissolution or winding up, as the case may be.
SECOND: (a) As of immediately before the amendment the total
number of shares of stock of all classes which the Corporation
has authority to issue is 48,000,000 shares, of which no shares
are Preferred Stock (par value $.20 per share) and 48,000,000
shares are Common Stock (par value $.20 per share).
(b) As amended the total number of shares of stock of all
classes which the Corporation has authority to issue is
120,000,000 shares, of which 20,000,000 shares are Preferred
Stock (par value $.20 per share) and 100,000,000 shares are
Common Stock (par value $.20 per share).
(c) The aggregate par value of all shares having a par
value is $9,600,000 before the amendment and $24,000,000 as
amended.
(d) The shares of stock of the Corporation are divided into
classes, and the description, as amended, of each class,
including the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption is set
forth above in Article FIRST.
___________
Exhibit Bheld jointly
PLEASE PROMPTLY SIGN, DATE, AND RETURN THE
PROXY CARD IN THE ENCLOSED ENVELOPE.
19
LOGO
T. ROWE PRICE ASSOCIATES, INC.
PROPOSED 1995 DIRECTOR STOCK OPTION PLAN
1. PURPOSESANNUAL MEETING OF STOCKHOLDERS
April 17, 1997
Renaissance Harborplace Hotel
202 E. Pratt Street
Baltimore, Maryland 21202
100 E. PRATT STREET IS LOCATED ACROSS FROM BALTIMORE'S INNER
HARBOR. IT IS BOUNDED ON THE DIRECTOR PLAN:
T. Rowe Price Associates, Inc. (the "Company"NORTH BY LOMBARD STREET, ON THE
WEST BY LIGHT STREET, AND ON THE EAST BY CALVERT STREET.
PARKING IS AVAILABLE IN THE HOTEL'S UNDERGROUND GARAGE. (The
Corporation will provide a voucher for one hour of free
parking for non-employee stockholders who attend the annual
meeting.)
has adoptedDIRECTIONS
- ----------
From the 1995 Director Stock Option Plansouth: Take I-95 north to I-395 (downtown) directly into Baltimore
City. Turn right on Pratt Street and then left on Calvert Street. The hotel
parking garage entrance is on the right side of Calvert Street approximately 50
feet before the next traffic light at Lombard Street.
From the north: Take I-83 (Jones Falls Expressway) directly into Baltimore City.
Turn right on Lombard Street. Proceed for Non-Employee Directors
(the "Director Plan")approximately 2/3 mile and then turn
left on South Street and right into the hotel's parking garage.
From the west: Take Route 40 (Baltimore National Pike) east directly into
Baltimore City (Edmondson Avenue to provideMulberry Street). Turn right on Martin
Luther King Boulevard. Proceed south for approximately 1/2 mile and then turn
left (east) on Pratt Street. Proceed east on Pratt Street for approximately 7/8
mile and then left on Calvert Street. Refer to "From the south" directions for
the issuance of options to
purchase shareslocation of the Company's Common Stock, par value $.20 per
share (the "Stock"), as a means of long-term compensationhotel's parking garage.
From the east: Take I-95 south through the Inner Harbor Tunnel. Exit at I-395
(downtown) directly into Baltimore City. Turn right on Pratt Street and then
left on Calvert Street. Refer to "From the south" directions for membersthe location of
the Board of Directors of the Company in order to
provide Non-Employee Directors with an equity interest in the
Company, to attract and retain well-qualified individuals to
serve as Non-Employee Directors, and to further align the
interests of Non-Employee Directors of the Company with those of
the stockholders of the Company. For purposes of this Plan,
Non-Employee Directors are persons who are not employees of the
Company or any of its affiliates or subsidiaries.
2. ADMINISTRATION:
The Director Plan shall be administered by the Board of
Directors of the Company; provided that, in administering the
Director Plan, the Board of Directors shall have no discretion
regarding the price, timing, or amount of options to be granted
hereunder.
3. STOCK SUBJECT TO OPTION:
The Company will reserve 70,000 authorized but unissued
shares of the Stock for issuance and delivery under the Director
Plan, subject to adjustment as provided in paragraph 6 hereof. If
any unexercised option terminates for any reason, shares of the
Stock covered thereby shall become available for grant again.
4. ELIGIBILITY:
The individuals who shall be eligible to participate in the
Director Plan shall be all Non-Employee Directors of the Company.
5. TERMS AND CONDITIONS OF OPTIONS:
Options under the Director Plan are intended to be
non-statutory stock options not qualifying under any section of
the Internal Revenue Code of 1986, as amended (the "Code"). All
stock options granted under the Director Plan shall be subject to
the following provisions:
(a) Option Price. The exercise price per share with respect
to each option shall be 100% of the fair market value of the
Stock on the date the option is granted. For purposes hereof,
fair market value shall be the last reported sale price in the
Nasdaq National Market (or any other recognized securities market
on which the Stock is traded if not then traded on the Nasdaq
National Market) on the date of grant, or the next succeeding
business day on which the Nasdaq National Market (or such other
market) is open for business and reports an actual transaction in
the Company's Stock. If the Stock is not then traded on any
recognized market, fair market value shall be as determined by
the Board of Directors in accordance with applicable federal
income tax and securities regulations.
(b) Option Grants.
(i) Each Non-Employee Director in office on April 6, 1995
shall be granted an option to purchase 4,000 shares of Stock at
the close of business on April 6, 1995 and an option to purchase
2,000 shares of Stock at the close of business on the last
Thursday of the month during each succeeding year in which the
annual meeting of stockholders is held, subject to a maximum
individual award of options to purchase 10,000 shares of Common
Stock.
(ii) Each Non-Employee Director initially elected as a
director after April 6, 1995 shall be granted an option to
purchase 2,000 shares of Common Stock as of the close of business
on the date of the first regular meeting of directors held on or
after the date of the participant's initial election
as a director and an option to purchase 2,000 shares of
Stock as of the close of business on the last Thursday of the
month during each succeeding year in which the annual meeting of
stockholders is held, subject to a maximum individual award of
options to purchase 10,000 shares of Stock.
(c) Exercise of Options.
(i) Each option granted under this Plan shall become
exercisable in full one year after the initial grant, but shall
not be exercisable as to any shares prior thereto. Except as
provided in paragraph (ii) below, full payment for shares
acquired shall be made in cash or by certified check at or prior
to the time that an option, or any part thereof, is exercised.
The participant will have no rights as a stockholder until the
shares as to which the option has been exercised are issued by
the Company.
(ii) Shares of the Company's Stock with a value equal to the
exercise price or a combination of cash and Stock with a value
equal to the exercise price may be used as payment for shares
acquired.
(d) Term of Option. No stock option may be exercised after
the earlier to occur of: (i) the expiration of 10 years after the
date such option was granted; or (ii) five years after the
Non-Employee Director ceases to be a director for any reason,
during which period any installments which first become
exercisable may thereafter be exercised.
(e) Options Nonassignable and Nontransferable. Each option
and all rights thereunder shall not be assignable or transferable
during the Director's life, but may be transferred by will or
pursuant to the laws of descent and distribution to the extent
permitted under applicable federal securities and tax laws.
6. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION:
The aggregate number of shares of stock on which option
awards under the Director Plan may be granted to persons
participating under the Director Plan, the number of shares
thereof covered by each award, the price per share thereof in
each award, and any numerical limitations contained herein
relating to awards shall all be proportionately adjusted for any
increase or decrease in the number of issued shares of Stock of
the Company resulting from a subdivision or consolidation of
shares or other capital adjustment, or the payment of a stock
dividend or other increase or decrease in such shares, effected
without receipt of consideration by the Company; provided,
however, that any fractional shares resulting from any such
adjustment shall be eliminated. In the case of other changes in
the Company's capitalization, adjustments shall be made to the
extent determined by the Board of Directors as necessary or
appropriate to reflect the transaction and as permitted under
applicable securities and tax laws.
If the Company shall be the surviving or resulting
corporation in any merger or consolidation, any award granted
hereunder shall pertain to and apply to the securities to which a
holder of the number of shares of Stock subject to the award
would have been entitled; but a dissolution or liquidation of the
Company, or a merger or consolidation in which the Company is not
the surviving or resulting corporation shall cause every award
outstanding hereunder to terminate, except that the surviving or
resulting corporation may, in its absolute and uncontrolled
discretion, tender awards with respect to its shares on terms and
conditions, both as to the number of shares and otherwise, which
shall substantially preserve the rights and benefits of any award
then outstanding hereunder.
7. EFFECTIVE DATE OF THE DIRECTOR PLAN:
The Director Plan shall become effective upon its adoption
by the Board of Directors and subsequent approval by a majority
of the votes cast in person or by proxy at a meeting of the
stockholders of the Company held within 12 months of the action
of the Board of Directors described above.
8. TERMINATION DATE:
No options may be granted under the Director Plan after
April 30, 2002. Subject to paragraph 5(d), options granted before
April 30, 2002 under the Director Plan may be exercised after
that date in accordance with their terms.
9. AMENDMENT:
This Director Plan may be amended, suspended, terminated or
restated, in whole or in part, at any time by the Board of
Directors; provided, however, that any provisions of this Plan
regarding the amount and price of options to be awarded to
Non-Employee Directors and the timing of awards, or that which
may be deemed to set forth a formula that determines the amount,
price, and timing of awards may not
be amended more than once every six months, other than to
comport with any changes in the Code, the Employee Retirement
Income Security Act of 1974, as amended, or the rules under such
statutes; and, provided further, however, that no such amendment
shall become effective without the approval of the stockholders
of the Company to the extent stockholder approval is required in
order to comply with Rule 16b-3 of the Securities Exchange Act of
1934.
10. COMPLIANCE WITH LAWS AND REGULATIONS:
The grant, holding and vesting of all options under the
Director Plan shall be subject to any and all requirements and
restrictions that may, in the opinion of the Board, be necessary
or advisable for the purposes of complying with any statute, rule
or regulation of any governmental authority, or any agreement,
policy or rule of any stock exchange or other regulatory
organization governing any market on which the Stock is traded.
11. MISCELLANEOUS:
(a) Expenses. The Company shall bear all expenses and costs
in connection with the administration of the Director Plan.
(b) Applicable Law. The validity, interpretation and
administration of this Plan and any rules, regulations,
determinations or decisions made hereunder, and the rights of any
and all persons having or claiming to have any interest herein or
hereunder, shall be determined exclusively in accordance with the
laws of the State of Maryland, without regard to the choice of
laws provisions thereof.
(c) Headings. The headings herein are for reference
purposes only and shall not affect the meaning or interpretation
of the Director Plan.
(d) Notices. All notices or other communications made or
given pursuant to this Director Plan shall be in writing and
shall be sufficiently made or given if hand-delivered or mailed
by certified mail, addressed to any Non-Employee Director at the
address contained in the records of the Company or to the Company
at its principal office.
(e) Federal Securities Law Requirement. Awards granted
hereunder shall be subject to all conditions required under Rule
16b-3 to qualify the award for any exception from the provisions
of Section 16(b) of the Securities Exchange Act of 1934 available
under that Rule.
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