Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of
the Commission Only (as
permitted by Rule 14a-
6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Park Electrochemical Corp.
(Name of Registrant as Specified in Its Charter)
Park Electrochemical Corp.
(Name of Person(s) Filing Proxy Statement, If Other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] 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:
APPENDIX to electronically filed Proxy Statement dated May 30, 2000
of Park Electrochemical Corp. listing all graphic information
included in such proxy statement:
1. Stock Performance Graph appearing on page _ of proxy statement
dated May 30, 2000 comparing the yearly percentage change in
the cumulative total shareholder return on the Registrant's
Common Stock with the cumulative total return of the New York
Stock Exchange Market Index and a Media General Financial
Services index for electronic components and accessories
manufacturers comprised of the Company and 212 other companies
for the period of the Company's five fiscal years commencing
February 27, 1995 and ending February 27, 2000, assuming that
$100 had been invested in the Company's Common Stock and each
index on February 24, 1995 and that all dividends on the
Company's Common Stock and on each stock included in each
index were reinvested.
Such graph shows that such $100 invested in the Company's
Common Stock would have had a value of $188.34 on March 3,
1996, $143.73 on March 2, 1997, 191.69 on March 1, 1998,
$165.04 on February 28, 1999 and $139.34 on February 27, 2000,
that such $100 invested in the Media General Financial
Services index would have had a value of $137.81, $217.65,
$261.40, $315.14 and $930.45, respectively, on such dates and
that such $100 invested in the New York Stock Exchange Market
Index would have had a value of $132.31, $162.04, $215.01,
$236.38 and $239.36, respectively, on such dates.
PARK ELECTROCHEMICAL CORP.
5 Dakota Drive
Lake Success, New York 11042
_______________
Notice of Annual Meeting of Shareholders
July 12, 2000
_______________
The Annual Meeting of Shareholders of PARK ELECTROCHEMICAL
CORP. (the "Company") will be held at The Bank of New York, One Wall
Street - 47th Floor, New York, New York on July 12, 2000, at 10:00
o'clock A.M., New York time (attendees must use the 80 Broadway
entrance), for the purpose of considering and acting upon the
following:
1. The election of six (6) directors to serve until
the next annual meeting of shareholders and
until their successors are elected and
qualified.
2. The approval of an amendment to the 1992 Stock
Option Plan to increase the aggregate number of
shares of Common Stock of the Company authorized
for issuance under such Plan by 300,000 shares.
3. The transaction of such other business as may
properly come before the meeting.
Only holders of record of Common Stock at the close of
business on May 23, 2000 will be entitled to notice of, and to vote
at, the meeting or any adjournment or postponement thereof.
By Order of the Board of Directors,
Jerry Shore
Chairman of the Board
Dated: June 5, 2000
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE
MEETING. IF YOU DO NOT EXPECT TO BE PRESENT, PLEASE DATE
AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT
PROMPTLY TO THE COMPANY IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
PARK ELECTROCHEMICAL CORP.
5 Dakota Drive
Lake Success, New York 11042
__________________
P R O X Y S T A T E M E N T
Annual Meeting of Shareholders
July 12, 2000
__________________
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors (the "Board") of Park Electrochemical Corp. (the
"Company") of proxies with respect to the Annual Meeting of Shareholders of the
Company to be held on July 12, 2000, and any adjournment or postponement thereof
(the "Meeting"). Any shareholder giving such a proxy (the form for which is
enclosed with this Proxy Statement) has the power to revoke the same at any time
before it is voted by (i) delivering written notice of such revocation bearing
a later date than the proxy to the Secretary of the Company, (ii) submitting a
later-dated proxy, or (iii) attending the Meeting and voting in person.
This Proxy Statement and the accompanying form of proxy are first being
mailed on or about June 5, 2000 to all shareholders of record as of the close of
business on May 23, 2000.
VOTING SECURITIES
At May 23, 2000, the outstanding voting securities of the Company
consisted of 10,471,348 shares of Common Stock, $.10 par value, of the
Company (the "Common Stock"), each share of which, held of record at the
close of business on May 23, 2000, is entitled to one vote. Presence in
person or by proxy of holders of a majority of the outstanding shares of
Common Stock will constitute a quorum for the transaction of business at the
Meeting. Abstentions and broker non-votes, if any, will be included for
purposes of determining a quorum. With respect to the election of directors,
abstentions and broker non-votes, if any, will not be counted as having been
voted and will have no effect on the outcome of the vote. With respect to the
proposed amendment to the 1992 Stock Option Plan, abstentions and broker
non-votes, if any, will have the effect of negative votes on such amendment.
At May 23, 2000, all executive officers and directors of the Company as a
group (12 persons) beneficially owned an aggregate of 1,569,151 shares of
Common Stock (including options to purchase an aggregate of 292,248 shares),
constituting approximately 14.6% of the outstanding shares of Common Stock
(giving effect to the exercise of such options).
The following table sets forth information at May 23, 2000 with respect to
each person (including any "group" of persons as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) who is known to the Company to be the beneficial owner of more than 5% of
the Common Stock:
Amount and
Nature of Percent
Title Name and Address Beneficial of
of Class of Beneficial Owner Ownership Class
Common Stock.........Jerry Shore 1,193,972 (1) 11.3%
5 Dakota Drive
Lake Success, NY 11042
Common Stock.........Loomis, Sayles & Company, L.P. 715,724 (2) 6.4%
One Financial Center
Boston, MA 02111
_____________________
(1) Includes 60,000 shares of Common Stock which Jerry Shore may acquire
pursuant to options, 112,410 shares owned by a member of Jerry Shore's
family, of which he disclaims beneficial ownership, and 35,753 shares
owned by a foundation, of which he disclaims beneficial ownership.
(2) Loomis, Sayles & Company, L.P., a registered investment adviser, holds
shared investment power over all of such shares and sole voting power
over 616,023 of such shares and shared voting power over 81,878 of
such shares, all of which are issuable upon conversion of the
Company's 5 1/2% Convertible Subordinated Notes due 2006, based on its
Schedule 13G/A dated February 22, 2000, filed under the Exchange Act,
which represented approximately 6.4% of the outstanding shares of the
Company's Common Stock as of May 23, 2000, assuming conversion of such
Notes into Common Stock.
For information with respect to the beneficial ownership of shares of
Common Stock by each director and each nominee for director of the Company,
see "Election of Directors" below.
ELECTION OF DIRECTORS
The Board to be elected at the Meeting consists of six members.
Proxies will be voted in accordance with their terms and, in the absence of
contrary instructions, for the election as directors of the nominees whose
names appear in the following table, to serve for the ensuing year and until
their successors are elected and qualified. Should any of the nominees not
remain a candidate at the time of the Meeting (a situation which is not now
anticipated), proxies solicited hereunder will be voted in favor of those
nominees who do remain as candidates and may be voted for substituted
nominees. The six nominees who receive a plurality of the votes cast at the
Meeting in person or by proxy shall be elected. Each of the nominees, other
than Mr. Ostrow, is presently a member of the Board.
Principal Occupation; Shares of Common
Positions and Offices Stock Beneficially
with the Company; Director Owned at May 23, 2000
Name Other Directorships Age Since Number Percent of Class
Mark S. Ain.......Chief Executive Officer 57 1998 5,000(1) *
and Chairman of the
Board of Kronos Incorpor-
ated, a manufacturer of
computerized systems for
time and labor management,
Chelmsford, Massachusetts;
and a director of KVH
Industries, Inc.
Anthony Chiesa... Former Vice President 79 1954 75,000 *
of the Company
Lloyd Frank...... Partner, Parker Chapin, 74 1985 6,500(2) *
LLP, New York City; and
director of Metro-Tel
Corp.
Ronald F. Ostrow. Private investor and 56 New -0- -
management consultant, Old
Westbury, New York. Mr.
Ostrow was President of the
ShipleyRonal division of
Rohm and Haas Company from
January 1999 to November 1999,
and he was President and Chief
Executive Officer from 1983 to
January 1999 and a director
from 1975 to January 1999 of
LeaRonal, Inc., a manufacturer
of specialty chemicals for the
electronics and metal finishing
industries, Freeport, New York.
LeaRonal, Inc. merged into Rohm
and Haas Company in January 1999.
Brian E. Shore... President and Chief 48 1983 218,565(3) 2.1%
Executive Officer of
the Company
Jerry Shore...... Chairman of the Board 74 1954 1,193,972(4) 11.4%
of the Company
_________________
<FN>
* Less than 1%.
(1) Consists of shares which Mark S. Ain may acquire pursuant to options.
(2) Includes 2,500 shares which Lloyd Frank may acquire pursuant to options
and 2,000 shares owned by a member of Lloyd Frank's family, of which he
disclaims beneficial ownership.
(3) Includes 174,250 shares which Brian E. Shore may acquire pursuant to
options.
(4) See note 1 to the table under "Voting Securities" for information with
respect to these shares.
Each of the persons named in the above table has had the principal
occupation set forth opposite his name for at least the past five years,
except for (i) Ronald F. Ostrow, who held the positions described in the
above table, (ii) Jerry Shore who was President of the Company for more than
five years until March 4, 1996 and Chief Executive officer of the Company
for more than five years until November 19, 1996, and (iii) Brian E. Shore,
who was elected Chief Executive Officer of the Company effective November
19, 1996, President of the Company effective March 4, 1996, an Executive
Vice President of the Company in May 1994 and a Vice President of the
Company in January 1993 and served as the Company's General Counsel for more
than five years prior to May 1994. Parker Chapin, LLP, a law firm of which
Lloyd Frank is a partner, was retained to provide counsel to the Company
during its last fiscal year and the Company has retained this firm during
its current fiscal year.
There are no family relationships among any of the persons named in
the above table or among any of such persons and any of the other executive
officers of the Company, except that Jerry Shore is the father of Brian E.
Shore.
The Company's Audit Committee currently consists of Mark S. Ain,
Anthony Chiesa and Lloyd Frank. The Audit Committee's functions, among
others, are to review the Company's financial statements with the Company's
independent auditors, recommend to the Board the appointment of the
independent auditors, review the performance and scope of services to be
provided by the independent auditors and review the adequacy and
effectiveness of internal accounting procedures and controls. The Company
has a Compensation Committee and a Stock Option Committee, each consisting
of Anthony Chiesa, Lloyd Frank and Jerry Shore. Their functions are
described herein under "Executive Compensation--Compensation Report". The
Company does not have a nominating committee.
During the Company's last fiscal year, the Board of Directors met
seven times and authorized action by unanimous written consent on eight
occasions, the Audit Committee met once, the Compensation Committee met once
and authorized action by unanimous written consent on one occasion, and the
Stock Option Committee met twice and authorized action by unanimous written
consent on one occasion. Each of the directors attended at least 75% of the
meetings held by the Board and each committee thereof of which he was a
member during the Company's last fiscal year.
Each director who is not an employee of the Company or any of its
subsidiaries receives a fee of $10,000 per annum for his services as a
director and is reimbursed for travel expenses incurred in attending
meetings of the Board of Directors of the Company.
On October 6, 1999, Messrs. Ain, Chiesa and Frank each received a
nonqualified stock option for 2,000 shares of Common Stock, at an exercise
price of $35.9375 per share under the Company's 1992 Stock Option Plan, as
amended. Each of these options expires on October 6, 2009 and is
exercisable 25 percent after one year from date of grant, 50 percent after
two years from date of grant, 75 percent after three years from date of
grant and 100 percent after four years from date of grant.
EXECUTIVE COMPENSATION
Summary Compensation
The following table shows the compensation for each of the three
most recent fiscal years for the Company's Chief Executive Officer and
the four other most highly compensated executive officers who were
serving in such capacities at the end of the Company's most recent
fiscal year (one of whom is no longer serving as an executive officer)
and the compensation for E. Phillip Smoot, who retired as Executive Vice
President on August 29, 1999.
INSERT COMPENSATION TABLE
Long-Term
Compensation
Annual Compensation Awards
Name and Securities All Other
Principal Year Other Annual Underlying Compensation
Position (1) Salary Bonus Compensation Options/SARs(#) (2)
Brian E. Shore 2000 $344,000 $175,000 $ -0- 40,000 $ 11,200
President and Chief 1999 333,900 175,000 -0- 40,000 9,600
Executive Officer 1998 315,000 200,000 -0- 75,000 13,600
Robert A. Forcier(3) 2000 187,200 75,000 -0- 15,000 11,200
Senior Vice President,
Advanced Product Marketing
Emily J. Groehl(3) 2000 202,800 125,000 -0- 15,000 11,200
Senior Vice President,
Sales and Marketing
Carl W. Smith(3) 2000 197,600 50,000 -0- 15,000 11,200
Senior Vice President,
North American Business Unit
Thomas T. Spooner(3) 2000 152,635 75,000 -0- 15,000 11,200
Senior Vice President,
Technology
E. Phillip Smoot(4) 2000 180,000 100,000 -0- -0- 253,100
Executive Vice President 1999 350,844 150,000 -0- 20,000 30,051
(retired August 29, 1999) 1998 338,000 275,000 -0- 15,000 52,105
_________________
<FN>
(1) Information is provided for the Company's fiscal years ended February
27, 2000, February 28, 1999 and March 1, 1998, respectively.
(2) Includes the amounts of Company contributions to the Profit Sharing
Plan which were accrued for the accounts of the named executive
officers for the fiscal years shown. These amounts vest in accordance
with a graduated scale based on years of service of the employee with
the Company. The amounts shown for Mr. Smoot for 2000, 1999 and 1998
also include $11,900, $20,451 and $38,505, respectively, credited by
the Company to a separate account maintained by the Company in
accordance with Mr. Smoot's employment agreement then in effect. These
amounts were determined as the amount the Company would have
contributed to the Profit Sharing Plan for Mr. Smoot for such years
but for the limitations imposed by the Internal Revenue Code of 1986,
as amended. The amount shown for Mr. Smoot for 2000 also reflects
payments made for consulting services. See note 4 below.
(3) Messrs. Forcier, Smith and Spooner and Ms. Groehl became executive
officers of the Company on May 24, 1999, and Mr. Smith resigned as an
executive officer on February 27, 2000. Mr. Forcier's title was
changed to Senior Vice President, OEM Marketing and Technology in May
2000. Under the Securities and Exchange Commission's rules regarding
the disclosure of executive compensation, no information is required
to be provided for prior years during which such persons were not
executive officers. At May 23, 2000, Messrs. Forcier and Spooner and
Ms. Groehl beneficially owned a total of 44,114 shares of Common
Stock, including 34,000 shares which they may acquire pursuant to
employee stock options.
(4) Mr. Smoot was employed as Executive Vice President of the Company and
President and Chief Executive Officer of Nelco International
Corporation, a subsidiary of the Company, pursuant to an employment
and consulting agreement entered into in February 1999, which replaced
an employment agreement entered into in March 1996, for a term of
employment ending on August 29, 1999 and a consulting period
commencing on August 30, 1999 and ending on March 2, 2003. The
agreement provides for (i) a base salary at the rate of $360,000 per
annum commencing March 1, 1999, (ii) a consulting fee at the rate of
$360,000 per annum commencing August 30, 1999 and ending February 27,
2000, (iii) a consulting fee at the rate of $180,000 per annum
commencing February 28, 2000, (iv) a bonus of $100,000 for the
Company's fiscal year ended February 28, 1999, (v) bonuses of $50,000
payable September 15, 1999 and $50,000 payable May 15, 2000 if certain
objectives are achieved, (vi) employee benefits for Mr. Smoot until
February 27, 2000 and (vii) medical benefits for Mr. Smoot and his
spouse until March 2, 2003. In addition, Mr. Smoot received a payment
of $50,000 in the 2000 fiscal year in connection with his consulting
services. If the Company terminates Mr. Smoot's employment or service
as a consultant other than for "Cause" (as defined in the agreement)
or his disability, the Company will continue to pay him his base
salary or consulting fee that otherwise would have been paid until
March 2, 2003 and will maintain for the continued benefit of Mr. Smoot
and his dependents until March 2, 2003 all employee welfare benefit
plans and programs in which he was entitled to participate prior to
the termination of his employment or service as a consultant.
Stock Options
The Company's 1992 Stock Option Plan (the "Plan") provides for the
grant to key employees of the Company of both options which qualify as
incentive stock options under the Internal Revenue Code of 1986 and
non-qualified stock options. The Plan is administered by the Stock Option
Committee. The following table sets forth certain information for the
Company's last fiscal year with respect to options to purchase shares of
Common Stock granted pursuant to the Plan:
Insert Option/SAR Grants Table
Option/SAR Grants in Last Fiscal Year
Number of Potential Realizable Value
Securities % of Total at Assumed
Underlying Options/SARs Exercise Annual Rates of Stock Price
Options/SARs Granted to or Base Appreciation for Option
Granted (#) Employees in Price Term (2)
Name (1) Fiscal Year ($/sh.) Expiration Date 0% ($) 5% ($) 10% ($)
Brian E. Shore 40,000 17.3% $24.8125 June 15, 2009 $-0- $624,178 1,581,789
Robert A. Forcier 15,000 6.5% 24.8125 June 15, 2009 -0- 234,067 593,171
Emily J. Groehl 15,000 6.5% 24.8125 June 15, 2009 -0- 234,067 593,171
Carl W. Smith 15,000 6.5% 24.8125 June 15, 2009 -0- 234,067 593,171
Thomas T. Spooner 15,000 6.5% 24.8125 June 15, 2009 -0- 234,067 593,171
E. Phillip Smoot -0- - - - - - -
(retired)
_____________________
<FN>
(1) Options become exercisable 25% one year from the date of grant with an
additional 25% exercisable each succeeding anniversary of the date of
grant. The Company has not granted stock appreciation rights.
(2) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options at the
expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the life of the options.
This schedule does not take into account provisions of the options
providing for termination of the option following termination of
employment, nontransferability or vesting over periods of four years. The
dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, of the Company's stock price. The column indicating 0% appreciation
is included to reflect the fact that a zero percent gain in stock price
will result in zero dollars for the optionee. No gain to the optionees is
possible without an increase in stock price, which will benefit all
shareholders commensurately.
Aggregated Option Exercises in the Last Fiscal Year and Fiscal Year-End
Option Values
The following table provides information regarding the pre-tax value
realized from the exercise of stock options during the Company's last fiscal
year and the value of unexercised options held by the named individuals as
of the end of such fiscal year.
Insert Aggregated Options Table
Number of Securities Value of Unexercised
Shares Acquired Value Underlying Unexercised In-the-Money Options/SARs
On Exercise (#) Realized Options/SARs at FY-End (#) at FY-End ($) (3)
Name (1) (2) Exercisable Unexercisable Exercisable Unexercisable
Brian E. Shore 2,000 $ 32,250 129,250 113,750 $655,875 $-0-
Robert A. Forcier -0- -0- 20,938 20,312 236,625 -0-
Emily J. Groehl 5,888 53,857 -0- 20,312 -0- -0-
Carl W. Smith -0- -0- 3,125 24,375 -0- -0-
Thomas T. Spooner 17,687 435,846 -0- 17,563 -0- -0-
E. Phillip Smoot 91,250 625,335 -0- -0- -0- -0-
(retired)
<FN>
(1) The Company has not granted stock appreciation rights.
(2) Value realized equals market value of the underlying shares on the
date of exercise, less the exercise price, times the number of shares
acquired, without deducting any taxes paid by the employee.
(3) Value of unexercised options equals market value of the shares
underlying "in-the-money" options at February 27, 2000 ($22.75), less
exercise price, times the number of options outstanding.
Employment and Consulting Agreements
Jerry Shore, Chairman of the Board, was President of the Company until March
4, 1996 and Chief Executive Officer of the Company until November 19, 1996.
In accordance with the provisions of an amended and restated employment
agreement between Jerry Shore and the Company, as amended, Jerry Shore is
serving as Chairman of the Board, and effective as of March 3, 1997, the
first day of the Company's 1998 fiscal year, he retired from full-time
employment with the Company and commenced serving as a consultant for a term
of five years. In accordance with the employment agreement, he is being
paid an annual consulting fee equal to 60% of his base salary in effect
under the agreement at the time of his retirement, subject to an indexed
cost of living increase. During the 2000 fiscal year, the Company paid him
a consulting fee of $229,880. In October 1997, in connection with the
Company's agreement to participate in a split dollar life insurance
agreement for Jerry Shore's benefit as discussed below, Jerry Shore agreed
to extend his consulting term for an additional year and agreed not to
compete with the Company during the consulting term.
In October 1997, the Company entered into a split-dollar life insurance
agreement with a trust established by Jerry Shore for the benefit of his
descendants, of which Jerry Shore's children, including Brian E. Shore, are
the trustees. Pursuant to this agreement, the Company pays to Jerry Shore
an amount equal to the portion of the annual premiums on two life insurance
policies held in the trust that represents the "economic benefit" to Jerry
Shore calculated in accordance with United States Treasury Department rules
then in effect ($18,302 in the 2000 fiscal year), and the Company pays the
balance of the annual premiums on the policies to the insurers ($110,550 in
the 2000 fiscal year). Both policies are joint life policies payable on the
death of the survivor of Jerry Shore and his spouse, with an aggregate face
value of $5 million. The aggregate amount of the premiums on the policies
paid by the Company constitutes indebtedness from the trust to the Company
and is secured by collateral assignments of the policies. Upon the
termination of the split-dollar life insurance agreement, whether by the
death of the survivor of the insureds or the earlier termination of the
agreement, the Company is entitled to be repaid by the trust the amount of
such indebtedness.
Compensation Report
Compensation of the Company's executive officers is composed of
salary, annual cash bonuses, stock options and the Company's Profit Sharing
Plan. The Board has a Compensation Committee which considers and takes any
necessary action regarding the compensation of the Company's Chief Executive
Officer, other than the grant of stock options or compensation pursuant to
plans administered by the Board. Brian E. Shore, President and Chief
Executive Officer of the Company, determines the annual salary and cash
bonus for each executive officer other than himself. The Board also has a
Stock Option Committee which administers the Company's Stock Option Plans,
including decisions as to the number of options to grant to each executive
officer. The amount of discretionary contributions to the Profit Sharing
Plan for each fiscal year is determined by the Board of Directors.
Salaries of executive officers are determined based on the
significance of the position to the Company, individual experience and
expertise, individual performance and information gathered informally as to
compensation levels of comparable companies in the same geographic location
as the Company. Brian E. Shore reviews the salary of each key employee,
including executive officers, annually and makes adjustments as appropriate.
Decisions as to the award of annual cash bonuses to executive officers
with respect to each fiscal year are made after the close of the fiscal
year. The amount awarded to each executive officer is based on the Company's
overall performance, individual performance, base salary level, bonuses paid
in prior years and overall equity and fairness.
The Company typically grants stock options under the Company's Stock
Option Plans once each year. The Stock Option Committee bases its decisions
on individual performance, base salary and bonus levels, recommendations
from senior management and overall equity and fairness.
The Board decides annually the amount of the Company's contribution to
the Profit Sharing Plan. The amount of such contribution is discretionary,
but may not exceed 15% of the total remuneration paid to eligible employees
or such other amount as is allowed under the Internal Revenue Code of 1986,
as amended (the "Code"). Subject to this limit, the Board determines the
amount to be contributed for each year based on the Company's overall
performance, the amount contributed in prior years and the amounts of prior
contributions recently forfeited by eligible employees due to termination of
employment prior to vesting. The Profit Sharing Plan is a broad-based plan
in which numerous employees as well as executive officers are eligible to
participate. Once the Company contribution is made, amounts are allocated
to eligible employees in accordance with a formula based on their
remuneration.
The Board, the Compensation Committee, the Stock Option Committee and
Brian E. Shore use no set formulas in making their determinations and may
afford different weight to different factors for each executive officer.
Such weighting may vary from year to year.
The Board and the Compensation Committee have reviewed the impact of
Section 162(m) of the Code which limits the deductibility of certain
otherwise deductible compensation in excess of $1 million paid to the Chief
Executive Officer and the other executive officers named in the table set
forth under "Executive Compensation--Summary Compensation" elsewhere herein.
It is the Company's policy to attempt to design its executive compensation
plans and arrangements to be treated as tax deductible compensation
wherever, in the judgment of the Board or the Compensation Committee, as the
case may be, to do so would be consistent with the objectives of that
compensation plan or arrangement. Accordingly, the Board and the
Compensation Committee from time to time may consider whether changes in the
Company's compensation plans and arrangements, particularly the 1992 Stock
Option Plan, may be appropriate to continue to fulfill the requirements for
treatment as tax deductible compensation under the Code.
The Board of Directors Compensation Committee and
Stock Option Committee
Mark S. Ain Anthony Chiesa
Anthony Chiesa Lloyd Frank
Lloyd Frank Jerry Shore
Brian E. Shore
Jerry Shore
Compensation Committee Interlocks and Insider Participation
Anthony Chiesa, a member of the Compensation and Stock Option
Committees, is a former Vice President of the Company who retired in 1977.
Lloyd Frank, also a member of such Committees, is a partner of the law firm
Parker Chapin, LLP, which firm was retained to provide counsel to the
Company during its last fiscal year and which the Company has retained
during its current fiscal year. Jerry Shore, the third member of such
Committees, was President of the Company until March 4, 1996 and Chief
Executive Officer of the Company until November 19, 1996. Brian E. Shore,
a director of the Company who is also an executive officer of the Company,
participated in deliberations of the Board relating to the amount of the
Company's contribution to the Profit Sharing Plan during the Company's last
fiscal year, and Brian E. Shore determines the annual salary and cash bonus
for each executive officer of the Company, other than himself.
STOCK PERFORMANCE GRAPH
The graph set forth below compares the annual cumulative total return
for the Company's five fiscal years ended February 27, 2000 among the
Company, the New York Stock Exchange Market Index (the "NYSE Index") and a
Media General Financial Services index for electronic components and
accessories manufacturers (the "Group Index") comprised of the Company and
212 other companies. The companies in the Group Index are classified in the
same three-digit industry group in the Standard Industrial Classification
Code system and are described as companies primarily engaged in the
manufacture of electronic components and accessories. The returns of each
company in the Group Index have been weighted according to the company's
stock market capitalization. The graph has been prepared based on an
assumed investment of $100 on February 24, 1995 and the reinvestment of
dividends (where applicable).
[Graph to come]
1995 1996 1997 1998 1999 2000
Park Electrochemical $100.00 $188.34 $143.73 $191.69 $165.04 $139.34
Group Index 100.00 137.81 217.65 261.40 315.14 930.45
NYSE Index 100.00 132.31 162.04 215.01 236.38 239.36
APPROVAL OF AMENDMENT TO THE 1992 STOCK OPTION PLAN
At the Meeting, shareholders will be asked to approve an amendment to
increase the number of shares available under the 1992 Stock Option Plan
(the "Amendment"). The Board of Directors of the Company adopted the
proposed Amendment, subject to shareholder approval, on May 16, 2000.
The Board of Directors is of the opinion that the 1992 Stock Option
Plan, and its predecessor plans, the 1974 Stock Option Plan and the 1982
Stock Option Plan, have been of significant importance and benefit to the
Company and its shareholders in enabling the Company to attract and retain
directors, officers and other key employees and in increasing their
commitment to the Company's continued success and better aligning their
economic interests with the Company and its shareholders. In the view of the
Board of Directors, the proposed Amendment will enable the Company to
continue to realize the benefits of stock options.
A summary of the proposed Amendment is set forth below, followed by a
description of the terms of the 1992 Stock Option Plan, as amended.
Amendment
Shares Subject to the 1992 Stock Option Plan. The Amendment increases
the number of shares of the Company's Common Stock with respect to which
options may be granted under the 1992 Stock Option Plan by 300,000 shares.
At May 30, 2000, there were approximately 235,000 shares remaining for grant
as stock options under the 1992 Stock Option Plan, which may not be
sufficient for the Company's grants of stock options during the next twelve
months if the Company follows its recent historical stock option grant
patterns and if the Company desires to grant stock options to attract key
senior employees during the next twelve months. The Amendment increases the
total number of shares with respect to which stock options may be granted
under the 1992 Stock Option Plan from 1,450,000 to 1,750,000, subject to
adjustment (together with the exercise price of options) to reflect any
change in the Company's outstanding shares by reason of stock dividends,
stock splits, recapitalizations, mergers, consolidations or other similar
events affecting the number or kind of outstanding shares.
Summary of Plan
The following summary of the material features of the Plan does not
purport to be complete and is qualified in its entirety by the terms of the
1992 Stock Option Plan (the "Plan").
The Plan is administered by the Stock Option Committee (the
"Committee"), which consists of three members appointed by the Board of
Directors. At present, the Committee consists of Messrs. Lloyd Frank,
Anthony Chiesa and Jerry Shore. The Committee has authority to determine
the individuals to receive options, the number of shares subject to each
option, whether options shall be incentive stock options or non-qualified
stock options and other pertinent terms and provisions of the options and to
determine other matters relating to the Plan.
Options granted under the Plan will be subject to, among other things,
the following terms and conditions:
(i) The option price per share will be determined by the
Committee but will not be less than 100% of the fair market value of
the Common Stock on the date the options are granted. The option
price will be payable in full upon exercise in cash, shares of
Common Stock or any combination thereof. The Committee may, in its
discretion, include a provision in a particular option to allow the
holder to surrender such option in whole or in part in lieu of the
exercise of such option if the fair market value of the shares of
Common Stock subject to such option exceeds the option price and to
receive a payment in cash, shares of Common Stock or a combination
of cash and shares of Common Stock equal to the amount by which such
fair market value exceeds the option price.
(ii) Options may be granted for terms up to but not
exceeding ten years, in the case of incentive stock options, and ten
years and one month, in the case of non-qualified stock options.
(iii) Incentive stock options may not be granted under the
Plan to any employee or director who, at the time of grant, owns
stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or of any subsidiary or of a
parent of the Company unless the option price is at least 110% of
the fair market value of the Common Stock on the date the option is
granted and the term of the option does not exceed five years from
the date of grant.
(iv) In addition, the aggregate fair market value of the
shares of Common Stock as to which incentive stock options may be
granted under the Plan (and any other incentive stock options
satisfying the requirements of the Internal Revenue Code of 1986, as
amended (the "Code"), granted under any other plan of the Company
and its subsidiaries and any parent of the Company) which options
are exercisable for the first time by any particular optionee during
any calendar year shall not exceed $100,000.
(v) An option may not be transferred other than by will or
by the laws of descent and distribution, and an option may be
exercised during the holder's lifetime only by the holder.
(vi) If an optionee's employment or service as a director is
terminated for any reason other than disability or death, unless
otherwise provided in connection with the grant of a particular
option, the option may be exercised only within three months after
such termination (but not after the date the option would otherwise
expire) to the extent shares were purchasable at the date of
termination; provided that if the optionee's employment or service
as a director is terminated for cause or without the consent of the
Company, the option shall (to the extent not previously exercised)
terminate immediately.
(vii) If an optionee's employment or service as a director is
terminated by reason of disability, unless otherwise provided in
connection with the grant of a particular option, the option may be
exercised, to the extent that the optionee was entitled to do so at
the termination of his employment or service as a director, at any
time within one year after such termination (but not after the date
the option would otherwise expire).
(viii) In the case of the death of an optionee while employed
or while serving as a director or within three months after
termination of his employment or service as a director (unless such
termination was for cause or without the consent of the Company),
unless otherwise provided in connection with the grant of a
particular option, the option may be exercised by the optionee's
executor, administrator or other persons entitled by law to his
rights under the option, to the extent the optionee was entitled to
do so at the date of his death, at any time within six months after
the date of such death (but not after the date the option would
otherwise expire).
(ix) In connection with the termination of employment or
service as a director of any particular optionee, as described in
paragraph (vi) or (vii) above and in connection with the death of
any particular optionee as described in paragraph (viii) above, the
Committee may, in its discretion, permit a longer period for
exercise of an option than that referred to in paragraph (vi), (vii)
or (viii) above, as the case may be, or permit such option to be
exercisable in whole or in part with respect to shares of Common
Stock as to which such option was not otherwise exercisable at the
time of such termination, disability or death, as the case may be.
Any such action of the Committee with respect to incentive stock
options is subject to the limitations provided by the Code.
The Board shall make appropriate adjustments in the number of shares and
option price of shares subject to outstanding options and in the number of
shares available for option under the Plan in the event of any change in the
Common Stock by reason of any stock dividend, recapitalization, merger,
consolidation, split-up, subdivision, combination or exchange of shares or
the like.
If certain transactions occur, then the holders of outstanding options
shall become entitled to receive a cash payment equal to the number of
shares of Common Stock subject to the option multiplied by the amount by
which the applicable transaction price for shares of Common Stock exceeds
the option price, upon surrender of the options and cancellation of the
options by the Company. The transactions in which holders may become
entitled to such payment include (1) certain mergers and consolidations, (2)
a sale of all or substantially all of the Company's assets, (3) dissolution
of the Company, (4) a third person becomes the beneficial owner of 30% or
more of the Company's voting stock or (5) individuals who constitute the
members of the Company's Board of Directors as of the date the Plan was
adopted by the Board (the "Incumbent Board") cease to constitute a majority
of the Board, provided that persons whose election or nomination for
election by the shareholders is approved by a vote of at least 80% of the
Incumbent Board are considered to be members of the Incumbent Board, in each
case if such transaction is not approved by a majority of the Board in
actions taken prior to, and with respect to, such transaction. The
applicable transaction price for shares of Common Stock is (1) the per share
price offered to shareholders of the Company in any merger, consolidation,
sale of assets or dissolution, (2) the price offered for shares of Common
Stock in any tender offer which results in a change in beneficial ownership
as described above, or (3) the fair market value of the shares of Common
Stock as determined by the Committee in the case of other changes in
beneficial ownership or a change in the Incumbent Board as described above.
Holders of options will be entitled to such cash payment whether or not such
options are exercisable at the time any such transaction occurs. In
addition, in connection with a merger, consolidation, sale of all or
substantially all of the Company's assets and certain other transactions in
which the outstanding options are not assumed or new options are not
substituted under the terms of such transaction, the Company may
unilaterally cancel the outstanding options and pay the holders an amount
equal to the same net consideration the holders would have received if such
holders had exercised such options and sold the shares of Common Stock on
the effective date of such transaction.
Upon the expiration or termination of unexercised options, shares of
Common Stock subject thereto will again be available for grant under the
Plan. No options may be granted under the Plan after March 24, 2002.
Options outstanding on such date shall, however, in all respects continue
subject to the Plan. The Board may terminate the Plan at any time with
respect to any shares of Common Stock not at the time subject to option and
may amend or modify the Plan, provided, however, that without the approval
of shareholders no amendment or modification may be made which would (1)
increase the maximum number of shares available for option (except for anti-
dilution adjustments described above), or (2) change the eligibility
requirements for individuals entitled to receive options under the Plan.
United States Federal Income Tax Consequences
The following is a summary of the United States federal income tax
consequences under current tax law (without regard to any proposed changes,
which may be retroactive in effect) with respect to incentive stock options
and non-qualified stock options granted to U.S. employees and directors.
For this purpose, it is assumed that the shares acquired pursuant to the
exercise of any option are held by the optionee as a capital asset. Certain
other rules not discussed here apply to the use of previously acquired
shares of Common Stock in payment of the option exercise price.
Incentive Stock Options
In general, no taxable income will be recognized by an optionee upon the
grant or exercise of an incentive stock option. The optionee's tax basis in
the shares received on the exercise of such an option will be equal to the
option price paid by the optionee for such shares.
If the shares received upon the exercise of any incentive stock option
are held for more than one year after the date of transfer of such shares to
the optionee and more than two years from the date of grant of the option,
any gain or loss recognized by the optionee on the subsequent sale of the
stock will be a long-term capital gain or loss, as the case may be.
If the shares received upon the exercise of an incentive stock option
are disposed of prior to the end of such holding periods, an amount equal to
the excess (if any) of (a) the lower of the disposition price or the fair
market value of such shares on the date of exercise of the incentive stock
option, over (b) the optionee's tax basis in such shares will be treated as
ordinary income, and any further gain will be a short-term or long-term
capital gain depending upon the period the shares were held. Any loss on
the disposition of such shares will be a short-term or long-term capital
loss depending upon the period the shares were held.
The Company will not receive any tax deduction on the grant or exercise
of an incentive stock option. However, the Company will be entitled to a
tax deduction in the amount of any ordinary income recognized by an
optionee.
Non-Qualified Options
No taxable income will be recognized by an optionee upon the grant of a
non-qualified stock option. Upon the exercise of the option, the excess of
the fair market value of the shares at the time of such exercise over the
exercise price will be treated as compensation. Any amounts treated as
compensation (i) will be taxable as ordinary income to the optionee and (ii)
generally will be allowed as an income tax deduction to the Company. The
optionee's tax basis for shares acquired upon exercise of the option will be
increased by any amounts so treated as compensation.
Any gain or loss realized by an optionee on the subsequent sale of
shares acquired upon the exercise of a non-qualified stock option will be
short-term or long-term capital gain or loss depending on the period the
shares were held.
Cancellation or Surrender
Consideration received by an optionee upon the surrender to, or
cancellation by, the Company of either an incentive or non-qualified stock
option will be taxable as ordinary income to the optionee and generally
allowed as an income tax deduction to the Company.
Alternative Minimum Tax
In addition to the federal income tax consequences described above, an
optionee may also be subject to the federal alternative minimum tax. In
general, upon the exercise of any incentive stock option an amount equal to
the excess of the fair market value of the shares acquired on the exercise
date over the exercise price will be treated as an item of adjustment for
purposes of the alternative minimum tax. If, however, the shares are
disposed of in the same taxable year in which the exercise occurs, the
maximum amount that will be treated as an item of adjustment will be an
amount equal to the excess of the amount received upon such disposition over
the exercise price.
New Plan Benefits
Options under the 1992 Stock Option Plan will be granted at the sole
discretion of the Committee and performance criteria, if any, may vary from
year to year and from participant to participant. Therefore, benefits under
the 1992 Stock Option Plan are not determinable. Compensation paid and
other benefits granted to directors and executive officers of the Company
for the 2000 fiscal year are set forth elsewhere herein. See "Election of
Directors" and "Executive Compensation" elsewhere herein.
Vote Required
In accordance with the terms of the 1992 Stock Option Plan, the
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock entitled to vote at the Meeting is required to approve the
Amendment.
The Board of Directors recommends that shareholders vote FOR the
approval of the Amendment to the 1992 Stock Option Plan. Proxies will be
voted in accordance with their terms and, in the absence of contrary
instructions, for the approval of the Amendment.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than 10 percent of a registered class of
the Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the New York Stock
Exchange. Officers, directors and greater than 10 percent shareholders are
required by regulations of the Securities and Exchange Commission to furnish
the Company with copies of all Section 16(a) reports they file. Based
solely on a review of the copies of such reports furnished to the Company,
or written representation that no Form 5 reports were required, the Company
believes that all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10 percent beneficial owners were
complied with during the 2000 fiscal year.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the year 2001 Annual
Meeting of Shareholders pursuant to Rule 14a-8 under the Exchange Act must
be received by the Company at the Company's principal executive offices for
inclusion in the Proxy Statement and form of Proxy relating to that meeting
by February 5, 2001. In order for shareholder proposals made outside of
Rule 14a-8 under the Exchange Act to be considered "timely" within the
meaning of Rule 14a-4(c) under the Exchange Act, such proposals must be
received by the Company at the Company's principal executive offices by
April 13, 2001. The Company's By-Laws require that proposals of
shareholders made outside of Rule 14a-8 under the Exchange Act must be
submitted, in accordance with the requirements of the By-Laws, not later
than April 13, 2001 and not earlier than March 14, 2001.
OTHER MATTERS
The Board of the Company has selected Ernst & Young LLP, the Company's
auditors for the past fiscal year, as the auditors of the Company for the
current fiscal year. A representative of Ernst & Young LLP is expected to
be present at the Annual Meeting. He will have the opportunity to make a
statement if he so desires and will be available to respond to appropriate
questions.
The Company will bear the expense of proxy solicitation. Directors,
officers and employees of the Company and its subsidiaries may solicit
proxies by mail, telephone, telegraph, facsimile or in person (but will
receive no additional compensation for such solicitation). The Company also
has retained D.F. King & Co., Inc., New York, New York, to assist in the
solicitation of proxies in the same manner at an anticipated fee of
approximately $5,000, plus reimbursement of certain out-of-pocket expenses.
In addition, brokerage houses and other custodians, nominees and fiduciaries
will be requested to forward the soliciting material to beneficial owners
and to obtain authorizations for the execution of proxies, and if they in
turn so request, the Company will reimburse such brokerage houses and other
custodians, nominees and fiduciaries for their expenses in forwarding such
material.
The Board does not know of any other matters to be brought before the
meeting. If any other matters not mentioned in the Proxy Statement are
properly brought before the meeting, including matters incident to the
conduct of the meeting or relating to the adjournment thereof, the persons
named in the enclosed proxy intend to vote such proxy in accordance with
their best judgment on such matters.
The Annual Report, including financial statements, of the Company for
the fiscal year ended February 27, 2000 is enclosed herewith but is not a
part of the proxy soliciting material.
By Order of the Board of Directors,
Jerry Shore
Chairman of the Board
Dated: June 5, 2000
Appendix to Proxy Statement
The Park Electrochemical Corp. 1992 Stock Option Plan, as amended, is
being filed as an Appendix to the Proxy Statement dated May 30, 2000 for the
annual meeting of Shareholders of Park Electrochemical Corp. to be held on
July 12, 2000, pursuant to Instruction 3 to Item 10 of Schedule 14A under
the Securities Exchange Act of 1934.
PARK ELECTROCHEMICAL CORP.
1992 STOCK OPTION PLAN, AS AMENDED
1. Purpose of the Plan. This Plan (herein called the "Plan") is
designed to provide an incentive to key employees, including officers, and
directors of PARK ELECTROCHEMICAL CORP., a New York corporation (the
"Company"), and its subsidiaries, and to offer an additional inducement in
obtaining the services of key personnel and directors. The Plan provides
for the grant of (i) incentive stock options ("Incentive Stock Options"), as
contemplated by Section 422 of the Internal Revenue Code of 1986, as now in
effect or later amended (the "Code"), which options shall be subject to the
tax treatment described in Section 421 of the Code, and (ii) non-qualified
stock options ("Non-Qualified Stock Options").
2. Stock Subject to the Plan. Options may be granted under the Plan
to purchase in the aggregate not more than 1,750,000 shares of Common Stock,
par value $.10 per share, of the Company ("Common Stock"), which shares may,
in the discretion of the Board of Directors, consist either in whole or in
part of authorized but unissued shares of Common Stock or shares of Common
Stock held in the treasury of the Company. Subject to the provisions of
Paragraph 7, any shares subject to an option which for any reason expires or
is terminated unexercised as to such shares shall again become available for
option under the Plan.
3. Administration of the Plan. The Plan shall be administered by a
Stock Option Committee (the "Committee") consisting of three persons. The
Committee shall be appointed by, and shall serve at the pleasure of, the
Board of Directors. A majority of the members shall constitute a quorum, and
the acts of a majority of the members present at any meeting at which a
quorum is present, and any acts approved in writing by a majority of the
members without a meeting, shall be the acts of the Committee. The members
of the Committee shall be "disinterested" to the extent required in order
for options granted under the Plan to benefit from the exemption pursuant to
Rule 16b-3 (or any successor exemption) promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
Subject to the express provisions of the Plan, the Committee shall
have the authority, in its discretion, to determine the individuals to
receive options, the times when they shall receive them, the number of
shares to be subject to each option (except that no grants of options may be
made "in tandem", i.e., where an exercise of one option, in whole or in
part, automatically results in the lapse of termination of another option,
in whole or in part), whether and to what extent options shall be designated
Incentive Stock Options or Non-Qualified Stock Options, the amount of any
required federal income tax or other withholding amount, the term of each
option, the date each option shall become exercisable, whether an option
shall be exercisable in whole, in part or in installments, and if in
installments, the number of shares subject to each installment, the date
each installment shall become exercisable and the term of each installment,
to accelerate the date of exercise of any installment, to construe the
respective option agreements and the Plan, and to make all other
determinations necessary or advisable for administering the Plan. The
determinations of the Committee on the matters referred to in this paragraph
shall be conclusive.
4. Eligibility. The Committee may, consistent with the purposes of
the Plan, grant options from time to time within ten (10) years from the
date of adoption of the Plan by the Board of Directors of the Company, to
(i) key employees, including officers and directors who are employees, of
the Company or any of its present or future subsidiary corporations
("Subsidiaries") and (ii) directors of the Company who are not employees of
the Company or any of its Subsidiaries, and covering such number of shares
of Common Stock as the Committee may determine. The aggregate fair market
value (determined at the time the stock option is granted) of the shares
with respect to which Incentive Stock Options may be granted under this Plan
and any other incentive stock options satisfying the requirements of Section
422 of the Code granted under any other plan of the company or any of its
subsidiaries (as defined in Section 424(f) of the Code) or of its parent (as
defined in Section 424(e) of the Code) which are exercisable for the first
time by any particular optionee during any calendar year shall not exceed
$100,000. In addition, no Incentive Stock Option may be granted under the
Plan if such grant, together with any other applicable grant of Incentive
Stock Options under the Plan and any other incentive stock options
satisfying the requirements of the Code granted under any other plan of the
Company or any of its subsidiaries (as defined in Section 424(f) of the
Code) or of its parent (as defined in Section 424(e) of the Code) would
exceed any other applicable maximum established under the Code for incentive
stock options. Individuals, including those who have been granted options
under the Company's 1964 and 1968 Qualified Stock Option Plans and the
Company's 1974 Amended Stock Option Plan and 1982 Amended and Restated Stock
Option Plan, may receive more than one option under the Plan. If an option
granted under the Plan exceeds the foregoing limitations, such option shall
be deemed a Non-Qualified Stock option to the extent it exceeds such
limitations. Commencing in the Company's fiscal year ending March 2, 1997,
no Participant may, in any such fiscal year, receive Options relating to
Shares which in the aggregate exceed the greater of (i) 50% of the total
number of Shares granted pursuant to the Plan in any such year or (ii)
100,000 Shares.
5. Option Price. The purchase price of the Common Stock under each
option shall be determined by the Committee, but shall in no event be less
than the fair market value of the Common Stock at the time of grant;
provided, however, that if at the time an Incentive Stock Option is granted,
the individual owns stock possessing more than 10% of the total combined
voting power of all classes of the capital stock of the Company, of its
present and future subsidiaries (as defined in Section 424(f) of the Code)
or of a parent (as defined in Section 424(e) of the Code), the purchase
price shall not be less than 110% of the fair market value of the Common
Stock at the time of grant. Such fair market value shall be taken by the
Committee as the reported closing price of the Common Stock on the New York
Stock Exchange (or, if the Common Stock is not then listed on the New York
Stock Exchange, on such other securities exchange on which the Common Stock
may then be listed), on the date the option is granted, or if there is no
sale of the Common Stock on that date, then on the last previous day on
which such sale was reported, provided that, if the foregoing clause is
inapplicable, fair market value shall be determined by the Committee and
provided that, with respect to Incentive Stock Options, if such method is
inconsistent with any regulations applicable to such options adopted by the
Treasury Department, then the fair market value shall be determined by the
Committee consistent with such regulations. For the purposes of this Plan,
an individual shall be deemed to own shares which he may purchase under
outstanding options and shares attributed to him under Section 424(d) of the
Code or any comparable provision thereafter enacted.
6. Term of Option. The term of each Incentive Stock Option granted
pursuant to the Plan shall be for a period not exceeding ten (10) years from
the date of granting thereof; provided, however, that if, at the time an
Incentive Stock Option is granted, the individual to whom such option is
granted owns stock possessing more than 10% of the total combined voting
power of all classes of the capital stock of the Company, of any of its
present or future subsidiaries (as defined in Section 424(f) of the Code) or
of a parent (as defined in Section 424(e) of the Code), the term of the
Incentive Stock Option granted to such individual shall be for a period not
exceeding five (5) years from the date of grant thereof. The term of each
Non-Qualified Stock Option granted pursuant to the Plan shall be for a
period not exceeding ten (10) years and one (1) month from the date of grant
thereof. Options shall be subject to earlier termination as hereinafter
provided.
7. Exercise or Surrender of Option. (a) General. An option (or any
part or installment thereof) shall be exercised by giving written notice to
the Company at its principal office (at the time of adoption of this Plan,
located at 5 Dakota Drive, Lake Success, New York 11042), identifying the
option being exercised, specifying the number of shares as to which such
option is being exercised and accompanied by payment in full in cash, Common
Stock or any combination thereof, of the aggregate purchase price therefor
plus any required federal income tax or other withholding amount.
Certificates representing the shares purchased shall be issued as promptly
as practicable thereafter. The holder of an option shall not have the right
of a shareholder with respect to the shares covered by his option until the
date of issuance of a stock certificate to him or her for such shares. In
no case may a fraction of a share be purchased or issued under the Plan.
(b) Surrender. (1) General Rule. The Committee acting in its
absolute discretion may incorporate a provision in the terms of an option to
allow a holder of an option granted under this Plan to surrender his or her
option in whole or in part in lieu of the exercise in whole or in part of
that option on any date that:
(a) the fair market value of the Common Stock subject to
such option (determined in accordance with Paragraph 5)
exceeds the option price (determined pursuant to Paragraph
5) for such Common Stock; and
(b) the option to purchase such Common Stock is
otherwise exercisable.
(2) Procedure. The surrender of an option in whole or in part
shall be effected by the delivery of the Stock Option Contract provided for
in Paragraph 10 to the Committee or to its delegate together with a
statement signed by the holder of an option granted under this Plan which
specifies the number of shares of Common Stock as to which the holder of an
option granted under this Plan surrenders his or her option and how he or
she desires payment be made for such Common Shares surrendered in accordance
with this Paragraph.
(3) Payment. In exchange for his or her shares surrendered in
accordance with this Paragraph a holder of an option granted under this Plan
shall receive a payment in cash or in Common Stock, or in a combination of
cash and Common Stock, equal in amount on the date such surrender is
effected to the excess of the fair market value determined in accordance
with Paragraph 5 of the Shares surrendered in accordance with this Paragraph
on such date over the option price determined pursuant to Paragraph 5 for
the Shares surrendered in accordance with this Paragraph (reduced by any
applicable federal income tax or other withholding amount). The Committee
acting in its absolute discretion may approve or disapprove the request for
payment by the holder of an option granted under this Plan in whole or in
part in cash and may cause such payment to be made in cash or in such
combination of cash and Common Stock as the Committee deems appropriate. A
request for payment only in Common Stock shall be approved and made in
Common Stock to the extent payment can be made in whole shares of Common
Stock and, at the Committee's discretion, in cash in lieu of any fractional
share of Common Stock.
(4) Restrictions. Any option which incorporates a provision
to allow a holder thereof to surrender his or her option in whole or in part
shall also incorporate such additional restrictions, if any, on the exercise
or surrender of such option as the Committee deems necessary or appropriate,
including restrictions to satisfy the conditions to the exemption related to
such surrender rights set forth in Rule 16b-3 (or any successor exemption)
promulgated under Section 16(b) of the Exchange Act.
8. Termination of Employment. Unless otherwise provided in
connection with the grant of any particular option or in the applicable
Stock Option Contact, any option holder whose employment or whose service as
a director has terminated for any reason other than death may exercise his
option, to the extent exercisable upon the effective date of such
termination, at any time within three (3) months after the date of
termination, but in no event after the expiration of the term of the option,
provided, however, that if his employment or service as a director shall be
terminated either (i) for cause, or (ii) without the consent of the Company,
said option shall (to the extent not previously exercised) terminate
immediately. Options granted under the Plan shall not be affected by any
change of employment so long as the holder continues to be an employee of
the Company or of any of the Subsidiaries or of a corporation or its parent
or subsidiary issuing or assuming a stock option in a transaction to which
Section 424(a) of the Code applies. Notwithstanding the foregoing, any
holder of an option whose employment or service as a director has terminated
by reason of disability (as defined in Section 22(e)(3) of the Code) may
exercise his option to the extent exercisable upon the effective date of
such termination, at any time within one (1) year after the date of
termination, but in no event after the expiration of the term of the option.
In connection with the termination of employment or service as a director of
any particular holder of an option, the Committee may, in its discretion,
determine to permit a longer period than that specified in this Paragraph or
the applicable Stock Option Contract for the exercise of all or any part of
such option after such termination or to permit such option to be
exercisable in whole or in part with respect to the shares as to which such
option would not otherwise be exercisable at the time of such termination;
provided, however, that the period for exercise of any Incentive Stock
Option after termination of employment or service as a director shall not
exceed the maximum period provided by the Code.
9. Death of an Employee. If an option holder dies while he is
employed by the Company or any of the Subsidiaries or serving as a director
of the Company, or within three months after termination of his employment
or service as a director (unless such termination was either (i) for cause,
or (ii) without the consent of the Company), unless otherwise provided in
connection with the grant of such option or in the applicable Stock Option
Contract, the option may be exercised, to the extent exercisable on the date
of his or her death, by his or her executor, administrator or other person
at the time entitled by law to his rights under the option, at any time
within six (6) months after death, but in no event after the expiration of
the term of the option. In connection with the death of any particular
holder of an option, the Committee may, in its discretion, determine to
permit a longer period than that specified in this Paragraph or the
applicable Stock Option Contract for the exercise of such option after such
death or to permit such option to be exercisable in whole or in part with
respect to the shares as to which option would not otherwise be exercisable
at the time of such death; provided, however, that the period for exercise
of any Incentive Stock Option after death shall not exceed the maximum
period provided by the Code.
10. Stock Option Contracts. Each option shall be evidenced by an
appropriate Stock Option Contract which shall provide, among other things,
(a) that the individual agrees that he or she will remain in the employ of
the Company or the Subsidiaries or as a director of the Company, at the
election of the Company, for a period of at least (i) one (1) year from the
date the option is granted to him or her, or (ii) such later date to which
he or she is then contractually obligated to remain in the employ of the
Company, (b) that in the event of the exercise of such option, unless the
shares received upon exercise shall have been registered pursuant to an
effective registration statement under the Securities Act of 1933, as
amended, the individual acknowledges that such shares may be "restricted
securities" as defined in Rule 144 under such Act and agrees that such
shares may not be sold except in compliance with applicable provisions of
such Act, and (c) that in the event of any disposition of the shares of
Common Stock acquired upon the exercise of an Incentive Stock Option within
two (2) years from the date of grant of the option or one (1) year from the
date of issuance of such shares to him or her, the individual will notify
the Company thereof in writing within thirty (30) days after such
disposition and will pay to the Company an amount necessary to satisfy any
obligations the Company may have to withhold any taxes by reason of such
disqualifying disposition. Nothing in the Plan or in any Stock Option
Contract entered into pursuant hereto shall confer upon any individual any
right to continue in the employ of the Company or the Subsidiaries or as a
director of the Company, or interfere in any way with the right of the
Company or the Subsidiaries (subject to the terms of any written employment
contract) to terminate his or her employment or service as a director at any
time without liability to the Company or the Subsidiaries.
11. Adjustments Upon changes in Common stock; Certain other Changes.
(a) Notwithstanding any other provision of the Plan, in the event of any
change in the outstanding Common Stock by reason of a stock dividend,
recapitalization, merger, consolidation, split-up, combination or exchange
of shares or the like, the aggregate number and kind of shares available
under the Plan, the aggregate number and kind of shares subject to each
outstanding option and the option prices provided therein shall be
appropriately adjusted by the Board of Directors, whose determination shall
be conclusive.
(b) If a transaction occurs which is not approved, recommended
or supported by a majority of the Board of Directors of the Company in
actions taken prior to, and with respect to, such transaction in which any
of the following occurs: (i) the Company merges or consolidates with any
other corporation (other than one of the Company's wholly owned
subsidiaries) and is not the surviving corporation (or survives only as the
subsidiary of another corporation), (ii) the Company sells all or
substantially all of its assets to any other person or entity, or (iii) the
Company is dissolved, or (iv) any third person or entity (other than the
trustee or committee of any qualified employee benefit plan of the Company)
together with its affiliates and associates (as such terms are defined in
the rules under the Exchange Act) shall be directly or indirectly, the
beneficial owner (as such term is defined for purposes of Regulation 13D-G
under the Exchange Act) of at least thirty percent (30%) of the voting stock
of the Company, or (v) the individuals who constitute the members of
Company's Board of Directors on the date hereof (the "Incumbent Board")
cease for any reason to constitute at least a majority thereof, provided
that any person becoming a Director subsequent to the date of adoption of
this Plan by the Board of Directors whose election or nomination for
election by the Company's shareholders was approved by a vote of at least
eighty percent (80%) of the Directors comprising the Incumbent Board (either
by a specific vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for Director, without objection to
such nomination) shall be, for purposes of this clause (v), considered as
though such person were a member of the Incumbent Board, then within (a) ten
days after the approval by the shareholders of the Company of such merger,
consolidation, sale of assets or dissolution as described in clause (i),
(ii) or (iii) of this Paragraph 11(b) or (b) thirty days after the
occurrence of such change of beneficial ownership (as so defined) or
Directors as described in clause (iv) or (v) of this Paragraph 11(b) with
respect to all such outstanding options, irrespective of whether such
options are then exercisable, shall be surrendered to the Company by each
grantee of such options and such options shall thereupon be cancelled by the
Company, and the grantee shall receive a cash payment by the Company in an
amount equal to the number of shares of Common Stock subject to the option
held by such grantee multiplied by the amount by which (x) exceeds (y) where
(y) equals the purchase price per share of Common Stock covered by the
option and (x) equals (1) the per share price offered to shareholders of the
Company in any such merger, consolidation, sale or assets or dissolution
transaction, (2) the price offered to shareholders of the Company in any
tender offer or exchange offer whereby any such change of beneficial
ownership (as so defined) or Directors takes place, or (3) the "fair market
value" of the Common Stock on the date determined by the Committee (as
constituted prior to any change described in clause (iv) or (v)) to be the
date of cancellation and surrender of such options if any such change of
beneficial ownership or Directors occurs other than pursuant to a tender or
exchange offer, whichever is appropriate. In the event that the
consideration offered to shareholders of the Company in any transaction
described in this Paragraph 11(b) consists of anything other than cash, the
Committee (as constituted prior to such transaction) shall determine the
fair cash equivalent of the portion of the consideration offered which is
other than cash.
(c) Any adjustment provided for in Paragraph 11(b) above shall
be subject to any required shareholder action. Notwithstanding anything to
the contrary herein, no adjustment provided for in Paragraph 11(b) shall be
made if such adjustment would result in a modification of any Incentive
Stock Option (within the meaning of Section 424 of the Code) , or cause such
Incentive Stock Option to fail to continue to qualify as an incentive stock
option under section 422 of the Code.
12. Amendments and Termination of the Plan. The Board of Directors,
without further approval of the shareholders, may at any time suspend or
terminate the Plan, in whole or in part, or amend it from time to time in
such respects as it may deem advisable in order that Incentive Stock Options
granted hereunder meet the requirements for "incentive stock options" under
the Code or any comparable provisions thereafter enacted and conform to any
change in applicable law or to regulations or rulings of administrative
agencies or may so amend it in any other respect not involving a substantial
departure from the principles herein set forth, provided, however, that no
amendment shall be effective without the approval, within twelve (12) months
thereafter, of holders of a majority of the issued and outstanding shares of
Common Stock of the Company which would (a) except as specified in Paragraph
11(a), change the maximum number of shares for which options may be granted
under the Plan, or (b) change the eligibility requirements for individuals
entitled to receive options hereunder. No termination, suspension or
amendment of the Plan shall, without the consent of the holder of an
existing option affected thereby, adversely affect his or her rights under
such option.
13. Non-Transferability of Options. No option granted under the Plan
shall be transferable otherwise than by will or the laws of descent and
distribution, and options may be exercised, during the lifetime of the
holder thereof, only by him or her.
14. Conditions of Exercise or Surrender. Each option shall be
subject to the requirement that, if at any time the Board of Directors or
the Committee shall determine, in its discretion, that the listing,
registration or qualification of the shares subject to such option upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable, as
a condition of, or in connection with, the granting of such option or the
issue or purchase of shares thereunder, no such option may be exercised in
whole or in part unless such listing, registration, qualification, consent
or approval shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors or the Committee.
15. Sale or Merger of the Company. If the Company agrees to sell all
or substantially all of its assets for cash or property or for a combination
of cash and property or agrees to any merger, consolidation, reorganization,
division or other corporate transaction in which Common Stock is converted
into another security or into the right to receive securities or property
and such agreement does not provide for the assumption or substitution of
the options granted under this Plan, each then outstanding option at the
direction and discretion of the Board of Directions may be cancelled
unilaterally by the Company as of the effective date of such transaction in
exchange for the same net consideration which each holder of an option
granted under this Plan would have received if each such option had been
exercisable in full on such date and each holder of an option granted under
this Plan had exercised each such option for Common Stock under Paragraph 7
on such date and then sold such Common Stock on such date.
16. Shareholder's Approval. This Plan shall become effective when
adopted by the Board of Directors, subject to approval by a majority of the
outstanding shares of stock of the Company at the annual meeting of its
shareholders next succeeding such adoption, and any Non-Qualified Stock
Options or Incentive Stock Options granted hereunder prior to such
shareholder approval shall be conditioned thereon; provided that the date of
grant of any options so granted under this Plan shall be determined as if
such options had not been subject to such approval.
17. Miscellaneous. (a) No Shareholder Rights. No holder of an
option granted under this Plan shall have any rights as a shareholder of the
Company as a result of the grant of an option to him or to her under this
Plan or his or her exercise or surrender of such option pending the actual
delivery of shares of Common Stock subject to such option to such holder.
(b) Withholding. The exercise or surrender of any option
granted under this Plan shall constitute the holder's full and complete
consent to whatever action the Committee elects to satisfy the federal and
state tax withholding requirements, if any, which the Committee in its
discretion deems applicable to such exercise or surrender.
[PROXY CARD]
PARK ELECTROCHEMICAL CORP.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS July 12, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints ANTHONY
CHIESA, LLOYD FRANK and BRIAN E. SHORE, and each of them, the
attorneys and proxies of the undersigned, with full power of
substitution, to attend the Annual Meeting of Shareholders of
PARK ELECTROCHEMICAL CORP. (the "Company") to be held at The
Bank of New York, One Wall Street, New York, New York on July
12, 2000 at 10:00 o'clock A.M., New York time, and any
adjournments or postponements thereof, to vote all the shares
of Common Stock of the Company which the undersigned would be
entitled to vote if personally present upon the following
matters:
The Board of Directors recommends a vote "FOR" proposals 1 and
2.
(1) ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to
the contrary below).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below.
MARK S. AIN, ANTHONY CHIESA, LLOYD FRANK, RONALD F. OSTROW,
BRIAN E. SHORE and JERRY SHORE
(INSTRUCTION: To withhold authority to vote for any individual
nominee, check the "FOR" box above and write the nominee's name
in the space provided below.)
____________________________________________________________
(2) APPROVAL OF AMENDMENT TO 1992 STOCK OPTION PLAN to increase
the aggregate number of shares of Common Stock authorized for
issuance under such Plan by 300,000 shares.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) The transaction of such other business as may properly come
before the meeting.
Each properly executed proxy will be voted in accordance
with specifications made hereon. If no specification is made,
the shares represented by this Proxy will be voted "FOR" the
nominees, "FOR" the proposed amendment to the 1992 Stock Option
Plan, and in the discretion of the Proxies on any other business
as may properly come before the meeting.
The undersigned hereby acknowledges receipt of the
Company's 2000 Annual Report and the accompanying Notice of
Meeting and Proxy Statement and hereby revokes any proxy or
proxies heretofore given.
Dated:____________________, 2000
________________________________
________________________________
(Signature(s) of Shareholder(s))
Please date and sign exactly as name appears
hereon. Executors, aministrators, trustees,
etc. must so indicate when signing. If shares
are held jointly, both owners should sign.