March 20, 1995
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, NW
Washington, DC 20549-1004
Gentlemen:
Re: Symbol Technologies, Inc. (the
"Company")
Definitive Proxy Material Commission
File No. 1-9802
Registrant CIK No. 0000278352
I transmit for filing, pursuant to Section
14(a) of the Securities Exchange Act of 1934 (the
"Act") the following definitive proxy materials in
connection with the Annual Meeting of Shareholders of
the Company scheduled for May 8, 1995
Pursuant to Rule 14a-3(c) of the Act, Seven
(7) copies of the Company's Annual Report to
Shareholders, which will be mailed to shareholders
together with the definitive proxy materials, will be
submitted in paper form by copy of this letter. This
report is not to be deemed "soliciting material" or
"filed" with the Commission and is solely for your
information. I have been advised by the Company that
the financial statements contained in the report do not
reflect any changes from the preceding year's financial
statements with respect to accounting principals or
practices or in the method of applying such principals
or practices. Kindly address any comments you may have
concerning the following proxy materials to the
undersigned.
The Company intends to release definitive
proxy materials together with the Annual Report to
Shareholders on or about March 20, 1995.
The purpose of the Annual Meeting is to
consider proposals to (1) elect nine (9) directors of
the Company, (2) adopt an amendment to the 1991
Employee Stock Option Plan, (3) adopt the Executive
Bonus Plan, (4) ratify the appointment of Deloitte &
Touche as the Company's independent accountants for
fiscal year 1995, and (4) transact any such business as
may properly come before the meeting.
Securities and Exchange Commission
March 20, 1995
Page -2-
A certified check in the amount of $125.00 in
payment of the filing fee has been deposited in the SEC
Lockbox Account No. 910-8739 at Mellon Bank in
Pittsburgh, PA 15251.
Very truly yours,
s/Leonard H. Goldner
Leonard H. Goldner
Senior Vice
President
and General Counsel
LHG:mk
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 240.14a-
11(c) or 240.14a-12
SYMBOL TECHNOLOGIES, INC.
Payment of Filing Fee
[X] $125 per exchange Act Rules 0-11(c)(1)(ii), 14a-
6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule
14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on 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
(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 date of
its filing:
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement
No.:
3) Filing Party:
4) Date Filed:
SYMBOL TECHNOLOGIES, INC
116 Wilbur Place
Bohemia, New York 11716
____________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 8, 1995
___________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of
Shareholders of Symbol Technologies, Inc. (the
"Corporation") will be held at 11:00 A.M., local time,
on May 8, 1995 at Chemical Banking Corp., World
Headquarters, 270 Park Avenue, New York, New York, for
the following purposes:
1. To elect nine directors of the Corporation to
serve until the next annual meeting of
shareholders and until the election and
qualification of their respective successors;
2. To vote upon a proposal to amend the 1991
Employee Stock Option Plan;
3. To vote upon a proposal to approve the
adoption of the Executive Bonus Plan;
4. To ratify the appointment of Deloitte &
Touche, independent certified public
accountants, as auditors for fiscal 1995; and
5. To transact such other business as may
properly come before the meeting.
Only holders of record of the Corporation's
Common Stock at the close of business on March 10,
1995 are entitled to notice of, and to vote at, the
meeting and any adjournment thereof. Such
shareholders may vote in person or by proxy. The
stock transfer books of the Corporation will not be
closed.
Shareholders who find it convenient are cordially
invited to attend the meeting in person. If you are
not going to do so and wish that your shares be voted,
you are requested to fill in, sign, date and return the
accompanying proxy in the enclosed envelope. No
postage is required if mailed in the United States.
By Order of the Board of
Directors,
Leonard H. Goldner
Secretary
Dated: March 16, 1995
SYMBOL TECHNOLOGIES, INC.
116 Wilbur Place
Bohemia, New York 11716
____________________
PROXY STATEMENT
___________________
This Proxy Statement is furnished in connection
with the solicitation by the Board of Directors of
Symbol Technologies, Inc. (the "Corporation") of
proxies to be used at the Annual Meeting of
Shareholders of the Corporation to be held at 11:00
A.M., local time on May 8, 1995, at the Chemical
Banking Corp., World Headquarters, 270 Park Avenue, New
York, New York, and at any adjournment thereof. If
proxy cards in the accompanying form are properly
executed and returned, the shares of Common Stock
represented thereby will be voted as instructed on the
proxy. If no instructions are given, such shares will
be voted (1) for the election as directors of the
nominees of the Board of Directors named below, (2) in
favor of the proposal to amend the 1991 Employee Stock
Option Plan, (3) in favor of the proposal to approve
the adoption of the Executive Bonus Plan, (4) to ratify
the appointment of Deloitte & Touche as the
Corporation's auditors for fiscal 1995, and (5) in the
discretion of the proxies named in the proxy card on
any other proposals to properly come before the meeting
or any adjournment thereof. Any proxy may be revoked
by a shareholder prior to its exercise upon written
notice to the Secretary of the Corporation, or by the
vote of a shareholder cast in person at the meeting.
The approximate date of mailing of this Proxy Statement
and the accompanying proxy is March 20, 1995.
VOTING
Holders of record of the Corporation's Common
Stock on March 10, 1995, will be entitled to vote at
the Annual Meeting or any adjournment thereof. As of
that date, there were 25,747,690 shares of Common Stock
outstanding and entitled to vote and a majority, or
12,873,846 of these shares, will constitute a quorum
for the transaction of business. Each share of Common
Stock entitles the holder thereof to one vote on all
matters to come before the meeting, including election
of directors. Only votes cast "for" a motion constitute
affirmative
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votes. Votes "withheld" or abstentions (including
broker non-votes) are considered for quorum purposes
but since they are not votes "for" a motion, they will
have the same effect as negative votes or votes
"against" such matters. The closing price of the
Corporation's Common Stock on the New York Stock
Exchange on March 10, 1995 was $28.25 per share.
NOMINEES FOR ELECTION
The following information is supplied with respect
to the nominees for election as directors of the
Corporation:
Positions and Offices Has
Been a
Name Age Presently Held With the Corporation
Director Since
Jerome Swartz 54 Chairman of the Board of Directors,
1973
Chief Executive Officer and
Director
Harvey P. Mallement 54 Director
1977
Frederic P. Heiman 55 Executive Vice President and
Director 1981
Raymond R. Martino 57 Vice Chairman of the Board of
Directors 1983
Saul P. Steinberg 55 Director
1985
Lowell C. Freiberg 55 Director
1985
George Bugliarello 67 Director
1992
Jan Lindelow 49 President, Chief Operating
Officer and Director 1994
Charles Wang 50 Director
1994
Dr. Swartz co-founded and has been employed by the
Corporation from its inception in 1973. He has been
the Chairman of the Board of Directors and Chief
Executive Officer of the Corporation for more than the
past ten years. Dr. Swartz was an industry consultant
for the prior 12 years in the areas of optical and
electronic systems and instrumentation and has a total
of some 110 issued and pending U.S. patents and
technical papers to his credit. He is presently a
member of the Board of Trustees of Polytechnic
University and an adjunct full professor at S.U.N.Y.,
Stony Brook.
Mr. Mallement has been one of the Managing General
Partners of Harvest Partners, Inc., a venture capital
and leveraged buyout investment management company,
since its inception in April 1981. He is an officer
and director of seven privately held companies.
Dr. Heiman has been Executive Vice President of
the Corporation since July 1986. In addition, in 1993
he was appointed the Corporation's Chief Technology
Officer and in 1994 General Manager of the
Corporation's Network Systems Organization. He was
previously employed by Intel Corporation, a
manufacturer of semiconductor components, from May 1982
until July 1986, in a number of positions, the most
recent of which was as its Director of Corporate
-2-
Planning. Dr. Heiman is the inventor or co-inventor of
20 issued U.S. patents, including basic elements of the
MOS integrated circuit chip, which became the basis of
much of the modern revolution in computer and
electronics communications and the first silicon
storage tube used in display and scanning applications.
Mr. Martino was the Corporation's President and
Chief Operating Officer from December 1983 until June
30, 1994. He is currently the Corporation's Vice
Chairman of the Board of Directors and is employed by
the Corporation on a part-time and consulting basis.
Mr. Steinberg founded and has been the Chief
Executive Officer and a Director of Reliance Group
Holdings, Inc. ("Reliance") and predecessors of
Reliance since 1961. Reliance is a holding company
whose principal business is the ownership of property
and casualty and title insurance companies. He is also
a member of the Board of Trustees of the University of
Pennsylvania and Chairman of the Wharton School Board
of Overseers. Mr. Steinberg served Telemundo Group,
Inc. ("Telemundo") as Chief Executive Officer from
February 1990 until May 1992, and as President from
February 1990 until February 1991. Telemundo consented
to the entry of an order for relief under Chapter 11 of
the U.S. Bankruptcy Code in July 1993. Telemundo's
Plan of Reorganization was consumated on December 30,
1994. Mr. Steinberg is also a Director of Reliance
Insurance Company, Reliance Financial Services
Corporation and Zenith National Insurance Corp.
Mr. Freiberg has been employed by Reliance and its
predecessors since 1969. For more than the past five
years, he has been the Senior Vice President and Chief
Financial Officer of Reliance.
Dr. Bugliarello has been Chancellor of Polytechnic
University since July 1, 1994. For the prior 21 years,
he was President of Polytechnic University. He has
been a member of several scientific organizations
including past Chairman of the Board of Science and
Technologies for International Development of the
National Academy of Sciences. He is a member of the
National Academy of engineering and is also the U.S.
Member of the Science for Stability Steering Group of
the Scientific Affairs Division of NATO. He is a
member of the Board of Directors of several
organizations including the Long Island Lighting
Company, Comtech Laboratories and Spectrum Information
Technologies, Inc. In January 1995, Spectrum
Information Technologies, Inc. filed for bankruptcy
under Chapter 11 of the U.S. Bankruptcy Code.
-3-
Mr. Lindelow joined the Corporation in June 1994.
Previously, he was employed by Asea Brown Boveri LTD
("ABA"), a Swiss multinational conglomerate, from May
1989 until June 1994. From January 1992 until leaving
ABB, Mr. Lindelow served as President of its U.S.
Industrial and Diversified Business Segment with
responsibility for 15 companies having combined revenue
in excess of $2 billion and from May 1989 until
December 1991, as chairman and CEO of ABB Power T&D
Company Inc. Prior to that time, he was employed for
more than 18 years by Sperry Univac Corporation (now
Unisys Corporation) in various technical and senior
management positions.
Mr. Wang founded and has been the Chairman and
Chief Executive Officer of Computer Associates
International, Inc. since 1976. Computer Associates is
the world's second largest software company with fiscal
1994 revenues exceeding $2.1 billion.
Pursuant to agreements between Reliance and the
Corporation, Reliance currently has the right to
designate one person to the Corporation's Board of
Directors. Reliance has designated Mr. Steinberg .
MEETINGS OF THE BOARD
During the fiscal year ended December 31, 1994,
the Board of Directors held 8 meetings. Each director
attended 75% or more of the aggregate of (1) the total
number of meetings of the Board of Directors and (2)
the total number of meetings held by all the committees
of the Board on which such director served.
The Board of Directors has an Audit Committee
consisting of Messrs. Mallement and Bugliarello. The
primary functions of the Audit Committee are to review
the Corporation's financial statements, to recommend
the appointment of the Corporation's independent
auditors and to review the overall scope of the audit.
The Audit Committee held two meetings in 1994.
The Board of Directors has a Compensation/Stock
Option Committee consisting of Messrs. Mallement and
Steinberg. The primary functions of this Committee are
to review the salaries, benefits and any other
compensation of the Corporation's senior executive
officers, to make recommendations to the Board of
Directors with respect to these matters and to
administer the Corporation's stock option plans.
During 1994, the Committee held 8 meetings and acted
twice by unanimous written consent.
-4-
The Board of Directors has a Nominating Committee
consisting of Messrs. Swartz, Mallement and Steinberg.
The primary function of this Committee is to review and
recommend to the Board potential candidates for
election to the Board of Directors. Shareholders
wishing to recommend candidates for consideration by
the Committee can do so by writing to the Secretary of
the Corporation at its corporate office in Bohemia, New
York, giving the candidate's name, biographical data
and qualifications. Any such recommendation should be
accompanied by a written statement from the individual
of his or her consent to be nominated as a candidate
and, if nominated and elected, to serve as a director.
The Committee held two meetings in 1994.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information
with respect to the Common Stock of the Corporation
beneficially owned by any person who is known to the
Corporation to be the beneficial owner of more than 5%
of the Corporation's voting securities:
Name and Address Amount and Nature of
Percent of
of Beneficial Owner Beneficial Ownership(1)
Common Stock
Saul P. Steinberg and 3,579,884(2)
13.9
Reliance Financial Services Corporation
Park Avenue Plaza
New York, New York 10055
Edward C. Johnson and 3,123,900(3)
12.1
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109
Prudential Insurance Company of America
2,201,063(4) 8.5
Prudential Plaza
New York, New York 07102
_______________
(1) The table identifies any persons having sole
voting and investment power with respect to the
shares set forth opposite their names as of March
15, 1994, except as otherwise disclosed in the
footnotes to the table, according to information
publicly filed or otherwise furnished to the
Corporation.
-5-
(2) Of the Common Stock shown, 3,568,634 shares are
beneficially owned by Reliance Financial Services
Corporation ("Reliance Financial"). Reliance
Financial is a wholly owned subsidiary of
Reliance. Approximately 47% of the common voting
stock of Reliance is owned by Saul P. Steinberg,
members of his family and affiliated trusts. As a
result of his stock holdings in Reliance, Mr.
Steinberg may be deemed to control Reliance
Financial and to be a beneficial owner of the
shares beneficially owned by Reliance Financial.
Sole voting and dispositive power with respect to
such shares are held as follows: Reliance
Insurance Company, a subsidiary of Reliance
Financial, 2,870,534 shares; United Pacific
Insurance Company, a subsidiary of Reliance
Insurance Company, 500,000 shares;Reliance
National Indemnity, a subsidiary of Reliance
Insurance Company, 198,100 shares. Mr. Steinberg
disclaims beneficial ownership of the 3,568,634
shares beneficially owned by Reliance Financial.
Includes 11,250 shares Mr. Steinberg beneficially
owns which may be acquired within 60 days of
March 15, 1995, pursuant to the exercise of a
warrant and an option held by him.
(3) The number of shares beneficially owned as of
December 31, 1994 according to a statement on
Schedule 13G filed with the Securities and
Exchange Commission. Of such shares, 11,200 are
beneficially owned by Fidelity International
Limited ("FIL"). Approximately 47.22% of the
voting stock of FIL is owned by Edward C. Johnson
and members of his family. Mr. Johnson, members
of his family and associated trusts form a
controlling group with respect to the common
voting stock of FMR Corp. ("FMR"). Mr. Johnson
serves as Chairman of FIL and FMR. As a result of
such common ownership and control, FMR may be
deemed to be a beneficial owner of the shares held
by FIL. FMR disclaims beneficial ownership of the
11,200 shares beneficially owned by FIL. Of the
Common Stock shown, Fidelity Magellan Fund, an
investment company, had the right to receive or
the power to direct the receipt of dividends from,
or the proceeds from the sale of 2,266,900 of such
shares.
(4) The number of shares beneficially owned as of
December 31, 1994 according to a statement on
Schedule 13G filed with the Securities and
Exchange Commission. Prudential Insurance
Company, an insurance company, has sole power to
vote or direct the vote and dispose of or direct
the disposition of 169,000 of such shares, shared
power to vote or direct the vote of 1,626,863 of
such shares and shared power to dispose or direct
the disposition of 2,032,063 of such shares.
Prudential may have direct or indirect voting
and/or investment discretion over 2,201,063 shares
which are held for the benefit of its clients by
its separate accounts, externally managed
accounts, registered investment companies,
subsidiaries and/or other affiliates.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information
as of March 15, 1995 with respect to the Common Stock
of the Corporation beneficially owned by (i) all
directors and nominees, (ii) the executive officers
listed in the following Summary Compensation Table, and
(iii) all executive officers and directors as a group:
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Amount and Nature of
Percent of
Name of Individual or Identity of Group Beneficial
Ownership(1) Common Stock
Jerome Swartz................................................
685,938(2) 2.6
Harvey P. Mallement......................................
57,048(3) *
Frederic Heiman.............................................
29,900(4) *
Raymond R. Martino......................................
220,366(5) *
Saul P. Steinberg............................................
3,579,884(6) 13.9
Lowell C. Freiberg..........................................
36,250(7) *
George Bugliarello..........................................
2,750(8) *
Jan Lindelow..................................................
2,000 *
Charles Wang.................................................
10,000 *
Tomo Razmilovic...........................................
38,350(9) *
All executive officers and directors as a group.
4,826,481 (10) 18.0
(consisting of 17 individuals)
____________________
* Less than 1%
(1) The persons identified in this table have sole
voting and investment power with respect to the
shares set forth opposite their names, except as
otherwise disclosed in the footnotes to the table,
according to information furnished to the
Corporation by each of them.
(2) Includes (i) 403,750 shares which may be acquired
pursuant to the exercise of options within 60 days
of March 15, 1995, (ii) 50,000 shares held in
trust for the benefit of Dr. Swartz and his
family, (iii) 5,509 shares owned by his wife, and
(iv) 14,600 shares held by a charitable lead trust
of which he is a co-trustee and his adult children
are ultimate beneficiaries. Does not include
27,902 shares owned by his children. Dr. Swartz
disclaims beneficial ownership of the shares held
by or for the benefit of members of his family.
(3) Includes 21,250 shares that may be acquired
pursuant to the exercise of an option or warrants
within 60 days of March 15, 1995. Also includes
23,798 shares which are owned by a limited
partnership in which he is a General Partner. Mr.
Mallement has an indirect beneficial ownership of
1,831 of such shares. Mr. Mallement disclaims
beneficial ownership of any other shares held by
this partnership.
(4) Represents 14,900 shares that may be acquired
pursuant to the exercise of options within 60 days
of March 15, 1995 and 15,000 shares owned jointly
by Dr. Heiman and his wife.
(5) Represents 200,366 shares that may be acquired
pursuant to the exercise of options within 60 days
of March 15, 1995 and 20,000 shares owned by Mr.
Martino.
(6) Represents 3,568,634 shares owned by Reliance
Financial and its subsidiaries and 11,250 shares
that may be acquired by Mr. Steinberg pursuant to
the exercise of an option and a warrant within 60
days of March 15, 1995. See "Principal
Shareholders."
-7-
(7) Represents shares that may be acquired pursuant to
the exercise of an option and warrants within 60
days of March 15, 1995. Mr. Freiberg disclaims
beneficial ownership of the shares owned by
Reliance Financial. See "Principal Shareholders."
(8) Represents 1,500 shares owned jointly by Dr.
Bugliarello and his wife and 1,250 shares that may
be acquired pursuant to the exercise of an option
within 60 days of March 15, 1995.
(9) Represents 28,350 shares that may be acquired
pursuant to the exercise of options within 60 days
of March 15, 1995 and 10,000 shares owned by Mr.
Razmilovic.
(10) Includes an aggregate of 952,091 shares which may
be acquired pursuant to the exercise of options
and warrants within 60 days of March 15, 1995.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT
Section 16(a) of the Securities Exchange Act
of 1934 requires the Corporation's directors and
executive officers, and persons who own more than 10%
of a registered class of the Corporation's equity
securities, to file with the Securities and Exchange
Commission and the New York Stock Exchange, reports of
ownership and reports of changes in ownership of Common
Stock and other equity securities of the Corporation
and to furnish the Corporation with copies of all
Section 16(a) forms they file.
Based on a review of the copies of such
reports furnished to the Corporation, the Corporation
believes that, during the 1994 fiscal year, all filing
requirements applicable to its executive officers,
directors and greater than 10% shareholders were
complied with except that Mr. Wang made a late filing
of his initial Form 3 in September 1994. The filing
indicated he did not own any shares of Common Stock or
any other equity securities of the Corporation other
than an option which was awarded to him automatically
upon his election as a director of the Corporation.
-8-
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The Corporation's Compensation/Stock Option
Committee (the "Committee") is composed entirely of
outside directors. Messrs. Mallement and Steinberg are
the current members of the Committee. Mr. Mallement
was the Corporation's Vice President-Finance from
September 1977 until February 1982 and its Secretary
from November 1980 until February 1982. Mr. Steinberg
has never been an officer or employee of the
Corporation.
COMPENSATION/STOCK OPTION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
A primary role of the Committee is to oversee
compensation practices for the Corporation's senior
executive officers. The Committee's responsibilities
include reviewing the salaries, benefits and other
compensation of the Corporation's senior executive
officers, making recommendations to the full Board of
Directors with respect to these matters and
administering the Corporation's stock option plans. In
its oversight capacity, the Committee is dedicated to
ensuring that the Corporation's financial resources are
used effectively to support the achievement of its
short- and long-term business objectives. The
Committee has available to it an outside compensation
consultant and access to independent compensation data.
In the course of its executive compensation
decision making, the Committee adheres to several
guiding principles. Specifically, the Committee takes
the position that the executive compensation program
should:
Target pay levels at rates that are
competitive in light of market practices so as
to ensure that the Corporation is positioned
to attract and retain high performing
management talent, particularly in the areas
of technology in which it competes.
Reflect a pay-for-performance orientation,
linking overall compensation paid to senior
executives with the Corporation's financial
performance.
Encourage share ownership on the part of key
associates with the objective of aligning the
interests of management and investors, thereby
promoting the maximization of shareholder
value.
-9-
The Corporation's total compensation program is
described below. The Committee believes that the
Corporation's executive compensation program is
structured to appropriately recognize the performance
and contribution of individual officers and to attract
and retain top quality management talent. The
Committee further believes that the executive
compensation program is effective in supporting the
Corporation's business goals and human resource
strategies.
Description of Compensation Policies
It is the Corporation's policy to pay its senior
executives at levels that reflect the Corporation's
financial performance relative to comparable
organizations. This policy is implemented by means of
a coordinated, total pay program comprised of discrete
elements that reward individual value added to the
Corporation, provide motivation to achieve corporate
financial targets that are consistent with shareholder
expectations, and encourage long-term share ownership
by senior executives. These elements exist in the
context of a reward system that includes base salary, a
bonus plan and awards of stock options.
The Corporation, with the assistance of outside
consulting firms, periodically conducts comparisons of
the compensation practices of approximately 30 selected
companies. This panel consists of "high tech"
companies with which the Corporation believes it
competes in attracting and retaining employees. Twelve
of the panel companies are included in the S&P High
Tech Composite Index. The Corporation seeks to target
the total compensation (e.g. base salary, annual bonus
and stock options) paid to its senior executives at
approximately the 75th percentile of the total
compensation paid for comparable positions at the panel
companies, after adjusting by regression analysis for
the different magnitude of revenues.
Based on a review of Internal Revenue Service
regulations which have been proposed but not yet
adopted and awsuming shareholder approval of the
Executive Bonus Plan, the Committee believes that all
compensation paid in 1994 and payable in 1995 to its
senior executive officers (including Dr. Swartz) will
be fully deductible by the Corporation. After final
regulations are adopted, the Committee will review the
Corporation's compensation programs and will revise
these programs, if necessary, to insure that future
compensation payable to its senior executive officers
will continue to be deductible to the fullest extent
possible under applicable law.
-10-
Relationship of Executive Compensation to Performance
Base Salary
Executive officers' base salaries are normally
reviewed each year. An exception to this policy has
historically been made with respect to the
consideration of base salaries for the Corporation's
three most senior executive officers due to their
employment agreements which required that salary
reviews for these executives be undertaken biennially
and salary increases be fixed for a period of two
consecutive years. In 1995 and succeeding years, after
the expiration of these agreements, it is anticipated
that all senior executive officers salaries will be
reviewed on an annual basis, except for Dr. Swartz who
will continue to be reviewed on a biennial basis. In
assessing the extent to which executive salary
increases are warranted, the Committee considers a
number of factors, including performance on the job,
external market pay practices, the incremental value
the executive adds to the Corporation and the
executive's level of experience and expertise. In the
case of Dr. Swartz, the Committee considered his
effectiveness as Chairman of the Board and Chief
Executive Officer of the Corporation as well as his
many noteworthy contributions to the Corporation. These
contributions include 58 issued U.S. patents which he
has assigned to the Corporation and which provide
competitive advantages to the Corporation and have also
generated significant licensing revenues that have
materially added to the Corporation's profitability.
Adjustments in base salary are generally not based upon
the financial performance of the Corporation.
In 1994, after a period of two years during which
time their annual base salaries had remained unchanged
pursuant to the terms of their employment agreements,
the Committee increased (i) Dr. Swartz' annual base
salary by 5% to $656,250 for the ensuing two-year
period July 1, 1994 through June 30, 1996 and (ii) Dr.
Heiman's annual base salary by 9% from $343,750 to
$375,000 for the ensuing 18 month period July 1, 1994
through December 31, 1995.
Profit Sharing Bonus Plan
The Corporation promotes a pay-for-performance
philosophy through the operation of its Profit Sharing
Bonus Plan (the "Profit Sharing Plan"). The Profit
Sharing Plan was designed to ensure that cash
compensation levels correlate closely with the
Corporation's financial results. In 1994, most of the
Corporation's North American based management level
associates participated in the Profit Sharing Plan,
including all executive officers other than Mr.
Razmilovic.
-11-
Effective January 1, 1995, subject to shareholder
approval, the Committee adopted, and the Board of
Directors ratified, the creation of an Executive Bonus
Plan to replace the Profit Sharing Bonus Plan for all
executive officers of the Corporation. The purpose of
the Executive Bonus Plan is to more directly tie the
level of annual executive incentive compensation to the
financial performance of the Corporation than was
possible under the Profit Sharing Plan. If the
Corporation achieves its plan level of profitability in
1995, bonuses under the Executive Bonus Plan will
approximate those that would have been paid under the
Profit Sharing Plan. However, under the Executive
Bonus Plan, bonuses will generally be lower than they
would have been under the Profit Sharing Plan if the
Corporation's operating performance is below plan and
higher than they would have been under the Profit
Sharing Plan if the Corporation's operating performance
exceeds plan. For additional information concerning
the Executive Bonus Plan, see the "Proposal to Approve
the Adoption of the Executive Bonus Plan."
Under the Profit Sharing Plan, participants were
assigned a Target Bonus which equaled a defined
percentage of the participant's annual base salary.
The Target Bonus percentages for Messrs. Swartz,
Martino, Lindelow and Heiman were established in their
employment agreements based on their level of
responsibility. With respect to other participants in
the Profit Sharing Plan, their defined percentage was
based on the participant's relative level of
responsibility. The Target Bonus (for participants
other than Messrs. Swartz, Martino, Lindelow and
Heiman) could be adjusted at the end of each year based
upon the participant's performance during the year.
Actual bonuses under the Profit Sharing Plan were
determined by multiplying the Target Bonus by a
fraction, the numerator of which was the percentage of
the Corporation's consolidated net operating income
which the Board of Directors designated as the Bonus
Pool and the denominator of which was the aggregate of
all Target Bonuses for all participants in the Profit
Sharing Plan.
The designation of the percentage of the
Corporation's consolidated net operating income
allocated to the Bonus Pool was left to the discretion
of the Board which each year made its determination
after considering the Corporation's financial results
for the preceding fiscal year and reviewing the
Corporation's financial projections for the year ahead.
For 1994, the Board determined that 10% of the
Corporation's consolidated net operating income would
be contributed to the Bonus Pool, except that there
would have been no contribution to the Profit Sharing
Plan in 1994 if consolidated net operating income had
not equaled or exceeded 7.5% of total revenue. This
designation was consistent with past Board actions.
-12-
In 1994, all executive officers who participated
in the Profit Sharing Plan (including Dr. Swartz)
received as their actual bonus payment an amount
approximating 129% of their Target Bonus. In 1993, the
Corporation had lower operating revenues and all
participants in the Profit Sharing Plan (including Dr.
Swartz) received as their actual bonus payment an
amount approximately 61% of their target bonus. In
1992, the Corporation had a net operating loss and,
accordingly, no payments were made to any participant
(including Dr. Swartz) under the Profit Sharing Plan.
This result reinforced the sensitivity of the Profit
Sharing Plan to the Corporation's actual financial
results.
Stock Options
The Corporation reinforces the importance of
producing satisfactory returns to shareholders over the
long term through the operation of its 1990 Non-
Executive Stock Option Plan and 1991 Employee Stock
Option Plan (the "Plans"). Stock options granted under
the Plans provide associates with the opportunity to
acquire an equity interest in the Corporation, and to
participate in the creation of shareholder value as
reflected in growth in the price of the Corporation's
Common Stock.
Option exercise prices are equal to 100% of the
fair market value of the Corporation's Common Stock on
the date of option grant. This ensures that
participants will derive benefits only as shareholders
realize corresponding gains. To encourage a long-term
decision making perspective, options are generally
assigned a 10-year term and options generally become
exercisable ratably over five years with a two year
waiting period followed by equal vesting over the next
three years.
The Committee grants, generally on a biennial
basis, additional options to selected associates based
on an assessment of competitive compensation practices,
particularly in high technology industries, individual
contribution and performance. The Committee believes
that in granting such stock options, it is effectively
reinforcing the Corporation's objective of insuring a
strong link between associate rewards and shareholder
interests. In 1994, the Committee determined that it
was appropriate and desirable to grant Dr. Swartz a one-
time bonus award of an option to purchase 100,000
shares of Common Stock under the 1991 Employee Stock
Option Plan at a price of $26.125 per share (the fair
market value of the Corporation's Common Stock on the
date the option was granted by the Committee) in
recognition that, among other factors, (i) the plan of
consolidation
-13-
and reorganization (recommended in December 1992, by
Dr. Swartz and his management team) had been
implemented, resulting in significant cost savings and
substantially improved operating results; (ii) the
Corporation had attained record revenues, operating
income and net income in 1994; and (iii) Dr. Swartz
successfully completed a search for and recruited a new
President and Chief Operating Officer and facilitated
the smooth transition of duties from Mr. Martino to the
new President, Mr. Lindelow.
Stock Ownership and Option Retention Program
Effective January 1, 1995, the Committee
established for executive officers a stock ownership
and option retention program which it will administer.
The Committee firmly believes that the long term
interests of the Corporation's shareholders are best
served when management maintains a significant, equity-
based interest in the Corporation. The Committee
considers both vested, unexercised options and shares
owned as meaningful expressions of such interest.
Accordingly, the Committee developed a program with
target levels of equity interest for each executive
officer. Under the program, without prior permission
of the Committee, unless and until an executive has
attained the minimum requirements described below,
there will exist significant limitations on an
executive's freedom to reduce his equity position.
Executive officers must agree to participate in the
program to be eligible to receive option awards after
January 1, 1995.
The program limits the exercise of vested options
(other than in the last year of the term of an option)
unless the executive meets and will continue to meet
the equity interest requirement described below after
the exercise and sale of shares acquired upon exercise.
The equity interest requirement provides that the
combined value of the Corporation's Common Stock and
vested options held by the executive, each valued at
the then market price of the Corporation's Common
Stock, must be equal to or greater than a designated
multiple of target cash compensation (annual base
salary plus target bonus) ("TCC").
If the equity interest requirement is satisfied,
the program allows for the exercise of vested options
but within strict limits. At least 50% of the net
after tax proceeds obtainable upon the exercise of any
option (other than options awarded after January 1,
1994 as part of an executive's initial hire award) must
be retained in the form of shares of the Corporation's
Common Stock unless and until the executive then owns
shares of Common Stock having a market value equal to a
specified multiple of his base salary.
-14-
Equity Share
Position Interest Ownership
Requireme Requireme
t nt
Chairman of the 5 times Base
Board 7 times Salary
TCC
President 3
5 times times
TCC Base
Salary
Executive and
Senior 2
Vice 3 times times
President TCC Base
Salary
Vice 1
President 2 times times
TCC Base
Salary
Summary
The Committee is responsible for recommending to
the Board, for its approval, compensation decisions
affecting the Corporation's senior executive officers.
The Committee ensures that the overall compensation
offered to senior executive officers is consistent with
the Corporation's interest in providing competitive pay
opportunities, reflective of its pay-for-performance
orientation, encourages share ownership on the part of
executives and is generally supportive of the
Corporation's short- and long-term business goals. The
Committee will continue to actively monitor the
effectiveness of the Corporation's senior executive
compensation plans and assess the appropriateness of
senior executive pay levels to assure prudent
application of the Corporation's resources.
Compensation /Stock Option Committee
Harvey P. Mallement, Chairman
Saul P. Steinberg
-15-
MANAGEMENT REMUNERATION AND TRANSACTIONS
The following Summary Compensation Table sets
forth compensation information with respect to the
Corporation's Chief Executive Officer and the four
other executive officers who in 1994 were the most
highly paid executive officers, for services rendered
in all capacities during the fiscal years ended
December 31, 1994, 1993 and 1992.
Summary Compensation Table
Annual Compensation
Long Term Compensation
Name and Other Securities All
Principal Yea Salar Bonus Annual Underlying Other
Position r y E Compens Options (#) Compens
ationF ationF
Jerome Swartz 199 $640, $
Chairman 4 462A $824, $0 100,000 13,621H
of the Board, 199 $562, 915 $
Chief 3 500B $0 195,000 11,912H
Executive 199 $562, $346, $
Officer 2 500C 361 $0 49,500 9,861H
and
Director $0
Raymond R. 199 $437, $
Martino 4 717A $563, $0 0 13,061I
President, 199 $393, 509 $
Chief 3 750B $0 117,000 12,404I
Operating 199 $393, $242, $
Officer 2 750C 442 $0 31,500 11,941I
and Vice
Chairman $0
of the
Board
Jan Lindelow 199 $218, $223,50
4 859D $281, 0G 275,000 $ 0
President, 199 -- 739 - -----
Chief 3 ----- ------- -- ------
Operating 199 -- ----- - -----
Officer 2 ----- -- -- -- ------
and Director ------
-----
--
Frederic P. 199 $359, $
Heiman 4 001A $254, $0 0 4,620J
Executive 199 $309, 316 $
Vice 3 375B $0 58,000 4,497J
President 199 $309, $104, $
and 2 375C 780 $0 22,500 4,364J
Director
$0
Tomo 199 $262, 0
Razmilovic 4 500 $196, $0 $118,83
Senior 199 $250, 875 101,500 9K
Vice 3 000 $0
President 199 $250, $125, 12,750 $234,64
World Wide 2 000 000 $0 4K
Sales and $ $
Services 50,00 60,261K
and Managing 0
Director-
International
Operations
____________________
A Includes $9,240 in contributions to the
Corporation's 401(k) deferred compensation plan.
B Includes $8,994 in contributions to the
Corporation's 401(k) deferred compensation plan.
C Includes $8,728 in contributions to the
Corporation's 401(k) deferred compensation plan.
D Represents payments for only a portion of 1994.
-16-
E Represents amounts earned and accrued pursuant to
the Corporation's Bonus Profit Sharing Plan in the
fiscal year indicated but generally paid in the
first quarter of the next succeeding year for all
named executives other than Mr. Razmilovic. Mr.
Razmilovic did not participate in this Plan. His
bonuses were based upon his attainment of certain
sales related goals established by the President.
F Not included are the amounts of certain
perquisites and other personal benefits provided
by the Corporation since such amounts do not
exceed the lesser of (i) $50,000 or (ii) 10% of
the total annual salary and bonus reported in the
table for any named executive officer.
G $111,750 of which was paid in 1994 and $111,750 of
which is payable in 1995. This represents a bonus
for joining the Corporation and compensation for a
portion of the compensation he forfeited from his
prior employer.
H Represents $4,364 in 1992, $4,497 in 1993 and
$4,620 in 1994 for contributions to the
Corporation's 401(k) deferred compensation plan
and $5,497 in 1992, $7,415 in 1993 and $9,001 in
1994 for (i) premiums paid on his behalf on a term
life insurance policy for which members of his
family are the beneficiary and (ii) the estimated
dollar value of the economic benefit to Dr. Swartz
for insurance premium payments made by the
Corporation on a split dollar whole life policy
for which the Corporation will eventually recover
all premiums paid.
I Represents $4,364 in 1992, $4,497 in 1993 and
$4,620 in 1994 for contributions to the
Corporation's 401(k) deferred compensation plan
and $7,577 in 1992, $7,907 in 1993 and $8,441 in
1994 for premiums for which the Corporation
reimburses Mr. Martino on a term life insurance
policy for which members of his family are
beneficiaries.
J Represents contributions to the Corporation's
401(k) deferred compensation plan.
K Represents (i) $140,000 for a disturbance
allowance to reimburse Mr. Razmilovic for a
portion of the expenses incurred in connection
with his relocation to the Long Island area due to
his promotion in 1993 to Senior Vice President -
World Wide Sales and Services, (ii) $33,462 in
1993 and $48,000 in 1994 to reimburse him for a
portion of his duplicate housing expenses since
his duties for the Corporation and its
subsidiaries require that he maintain a home in
both the United Kingdom and Long Island, and (iii)
$60,261 in 1992, $61,184 in 1993 and $70,839 in
1994 for contributions to a defined contribution
retirement plan maintained by the Corporation's UK
subsidiary on his behalf.
On July 1, 1990, Dr. Swartz and the Corporation
entered into an employment agreement which terminates
on June 30, 1995, pursuant to which Dr. Swartz will
receive an annual base salary of $656,250 for the two
years ending June 30, 1996 which is subject to
renegotiation thereafter. Dr. Swartz is also eligible
to participate in the Corporation's Executive Bonus
Plan. The target amount of his bonus for 1995 is 100%
of his base salary. In addition, if his employment
with the Corporation is terminated for any reason
(other than for cause or his voluntary resignation),
Dr. Swartz will receive a payment in an amount equal to
his annual base salary and bonus during the last
completed fiscal year immediately preceding any such
termination.
-17-
On May 12, 1994, the Corporation and Mr. Martino
entered into an employment agreement pursuant to which
Mr. Martino was employed as the Corporation's President
and Chief Operating Officer until his successor was
appointed and then to assist his successor in the
transition. Effective January 1, 1995 and for the
ensuing five year period, he is to be employed on a
part-time and consulting basis, assisting the Chairman
of the Board and President. His salary during such 5
year period is $150,000 per annum. Effective January
1, 1995, he is no longer eligible to participate in any
corporate bonus plan. On August 18, 1994, the
Corporation purchased Mr. Martino's home in St. James,
New York for $435,000 which price was determined by an
independent appraiser. The Corporation is currently
utilizing this property as temporary housing for
associates locating to the Long Island area. The
Corporation believes that it will eventually sell this
property to an unaffiliated third party.
On May 12, 1994, the Corporation and Mr. Lindelow
entered into an employment agreement which terminates
on June 30, 1999, pursuant to which Mr. Lindelow will
receive an annual base salary of $437,500 for the 18
months period ending December 31, 1995, which is
subject to renegotiation thereafter. Mr. Lindelow is
also eligible to participate in the Corporation's
Executive Bonus Plan. The target amount of his bonus
for 1995 is 100% of his base salary. Half of his
target bonus for 1995 has been guaranteed by the
Corporation. In addition, if his employment with the
Corporation is terminated (other than for cause or his
voluntary resignation without good reason), he will
receive severance payments which will vary, depending
on the reasons for the termination of his employment,
between one and two year's annual base salary plus one
to two times the annualized bonus he received during
the last completed fiscal year preceding any such
termination.
On July 1, 1990, the Corporation and Dr. Heiman
entered into an employment agreement which terminates
on June 30, 1995, pursuant to which Dr. Heiman will
receive an annual base salary of $375,000 for the 18
months ending December 31, 1995. Dr. Heiman will also
participate in the Corporation's Executive Bonus Plan.
The target amount of his bonus for 1995 is 55% of his
base salary. In addition, if his employment with the
Corporation is terminated for any reason (other than
for cause or his voluntary resignation), he will
receive a payment in an amount equal to his annual base
salary and bonus during the last completed fiscal year
immediately preceding any such termination.
-18-
Mr. Razmilovic, the Corporation and Symbol
Technologies Limited, a wholly-owned United Kingdom
subsidiary of the Corporation have entered into
agreements dated as of May 1, 1993 pursuant to which he
is employed by the Corporation and Symbol Technologies
Limited until December 31, 1995. Under these
agreements, Mr. Razmilovic will receive an aggregate
base salary of $278,034 for 1995. In 1995, Mr.
Razmilovic is also eligible to participate in the
Corporation's Executive Bonus Plan. The target amount
of his bonus for 1995 is 55% of his base salary. In
addition, to assist in his relocation to the United
States, the Corporation loaned Mr. Razmilovic $50,000
in 1993 and an additional $100,000 in 1994. These
loans bore interest at the prime rate ( 6% in 1994).
The loans were repaid in their entirety in 1994. In
addition, if his employment is terminated for any
reason (other than for cause or his voluntary
resignation), he will receive a severance payment equal
to two years base salary plus twice the bonus he
received during the last completed fiscal year
immediately preceding any such termination.
In February 1993, the Corporation assumed a second
mortgage held by the former employer of Mr. Lieberman,
Senior Vice President-Operations, on his residence in
the Boston, Massachusetts area. Under the terms of the
mortgage, Mr. Lieberman owed the Corporation $361,262.
This loan bore interest at the prime rate (6% in 1994).
On January 2, 1994, the Corporation purchased Mr.
Lieberman's former residence. The purchase price was
$655,000, which was the price determined by an
independent third party appraiser. In connection with
the purchase, Mr. Lieberman repaid the loan to the
Corporation in its entirety. On September 2, 1994, the
Corporation sold the residence to an unaffiliated third
party for $585,000.
Directors who are not employees of the Corporation
receive an annual retainer of $10,000, payable in
quarterly installments as well as a fee of $2,500 for
each Board of Directors meeting attended or each
meeting of a committee which is not held in conjunction
with a Board of Directors meeting. Directors who are
employees receive no additional compensation for
serving as directors or for attending Board or
committee meetings. The Corporation reimburses
Directors for expenses incurred in connection with
attending meetings of the Board of Directors or
committees of the Board.
In addition, Directors who are not employees of
the Corporation participate in the Corporation's 1994
Directors' Stock Option Plan (the "1994 Plan").
Pursuant to the 1994 Plan, when a person is initially
elected to the Board of Directors, he is awarded an
option to purchase 10,000 shares. Moreover,
-19-
commencing in 1994, every person who has been a
Director for more than 11 months is, upon re-election
at the annual meeting of shareholders, granted an
option to purchase 2,500 shares of the Corporation's
Common Stock. Each option has a term of ten years,
becomes exercisable in two equal annual installments
beginning on the first anniversary of the date of grant
and has an exercise price equal to 100% of the fair
market value of shares of the Corporation's Common
Stock on the date of grant. Pursuant to the 1994 Plan,
in 1994 Mr. Wang was granted an option to purchase
10,000 shares and Messrs. Mallement, Steinberg,
Freiberg and Bugliarello each received options to
purchase 2,500 shares. If re-elected at the 1995
Annual Meeting, Messrs. Mallement, Steinberg, Freiberg
and Bugliarello will also each be awarded an option to
purchase an additional 2,500 shares in 1995.
Option Grants
Currently, the Corporation maintains two stock
option plans, the 1990 Non-Executive Stock Option Plan
(the "1990 Plan") and the 1991 Employee Stock Option
Plan (the "1991 Plan") pursuant to which options may be
granted to employees of the Corporation. The 1990 Plan
and the 1991 Plan authorize the Compensation/Stock
Option Committee of the Board of Directors to grant
options, from time to time, to key employees of the
Corporation and of its subsidiaries (and in the case of
the 1991 Plan, key officers, including those who are
executive officers of the Corporation). Under the 1991
Plan, no individual may be awarded options to purchase
more than 275,000 shares in any calendar year. Certain
of the options, by their terms, as determined by the
Committee at the time of grant, may be qualified under
the Internal Revenue Code of 1986 (the "Code") as
Incentive Stock Options ("ISO's") and certain of the
options may be non-qualified options. No option
granted under the 1990 Plan or the 1991 Plan is
exercisable for a period exceeding ten years. No ISO
granted under the 1991 Plan to owners of 10% or more of
the Common Stock of the Corporation is exercisable for
a period exceeding five years. The exercise price of
an option under the Plans must be at least 100% of the
fair market value of the underlying Common Stock on the
date of grant.
ISO's must comply with certain provisions of the
Code relating to, among other matters, the maximum
amount that can be vested by an optionee in any one
calendar year and the minimum exercise price of an ISO.
The 1990 Plan terminates on April 30, 2000 and the 1991
Plan terminates on October 13, 2001.
-20-
The following table shows, as to each
individual named in the Summary Compensation
Table, certain information with respect to
stock options granted to such individuals
under all stock option plans administered by
the Corporation:
Potential Realizable
Value at Assumed Annual
Individual Grants in 1994 Rates of
Stock Price Appreciation for Option TermA
Name Number % of
of Total
Securiti Options Exerci 5% 10%
es Granted se or Expirati Stock Dollar Stock
underlyi to Base on PriceE Gain PriceE Dollar
ng Employees PriceD Date Gain
Options in Fiscal
Granted YearC
(#)B
All -- - $1,028,21
Shareholders ----- ------ -------- $40.86 $405,78 $65.06 1,838
- 5,781
Jerome Swartz $ $
100,000 16% $26.12 8/4/04 $42.55 1,642,5 $67.76 4,163,500
5 00
CEO's Gain as
% of All
Shareholders' .405% .405%
Gain
Raymond R. --
Martino 0 ----- ------ -------- -------- ------- - ---- ---------
---- -- -- -- ----- -
Jan Lindelow $ $
250,000 40% $24.25 6/7/04 $39.50 3,812,5 $62.90 9,662,500
00 $
25,000 4% $29.25 12/11/04 $47.65 $ $75.87 1,165,500
460,000
Frederic P.
Heiman 0 ------- ------ -------- -------- ------- ------ _____
----- -- -- -- -----
Tomo -- - -- -
Razmilovic 0 ----- ------ ----- ------ ------ ------ ------
A Total dollar gains based on the assumed
annual rates of appreciation of the
exercise price of each option. The gain
derived by all shareholders is based on
the outstanding number of shares at
December 31, 1994. The actual value, if
any, an executive will realize will
depend on the excess of the market price
over the exercise price on the date the
option is actually exercised. There can
be no assurance that the value actually
realized by an executive or any
shareholder will be at or near the
values estimated in this table.
B The options awarded to Messrs. Swartz
and Lindelow vest in four equal, annual
installments commencing two years after
date of grant. If a change in control
of the Corporation were to occur, all of
the then unvested portion of each option
would become immediately exercisable.
-21-
C Based on 620,475 options granted to all
employees in 1994.
D 100% of the closing price of the
Corporation's Common Stock on the date
of grant.
E The stock price represents the price of
the Corporation's Common Stock if the
assumed annual rates of stock price
appreciation are achieved over the term
of the options using a weighted average
share price of options granted to
Messrs. Swartz and Lindelow.
-22-
Option Exercises and Fiscal Year-End Values
Shown below is information with respect to the
unexercised options to purchase the Corporation's
Common Stock as of December 31, 1994 and the value
realized upon the exercise in 1994 of any option by the
individuals named in the Summary Compensation Table.
Value of
Number Number of Unexercised, In-The-
of Securities Money
Shares Underlying Options
Acquire Value Unexercised Held at December 31,
Name d on Reali Options 1994A
Exercis zed Held at December
e in 31, 1994 Exercisable
1994 Unexercisable
Exercisable
Unexercisable
Jerome $8,74 $7,928,
Swartz 453,842 1,877 365,650 336,100 794 $4,199,738
Raymond R. $3,66 $3,766,
Martino 185,500 6,855 176,666 143,700 585 $2,552,288
Jan 0
Lindelow 0 0 275,000 0 $1,696,875
Frederic P. $3,78
Heiman 185,100 9,613 0 79,100 0 $1,390,463
Tomo $1,28 $
Razmilovic 84,100 1,853 5,100 98,650 63,113 $1,776,994
ABased on the closing price of the Corporation's
Common Stock on the New York Stock Exchange on that
date of $30.875.
Employees of the Corporation and certain of its
subsidiaries are eligible to participate in a 401(k)
deferred compensation plan after 90 days of service. A
participant may elect to make pre-tax contributions,
subject to certain limitations, with a maximum
contribution of $9,240 in 1994 and 1995. The first 6%
contributed by each participant during each pay period
is eligible for a matching 50% contribution by the
Corporation. There is immediate vesting of the
individual's contribution and 100% vesting of the
Corporation's contribution after one year of service.
Amounts accumulated under this plan are normally paid
to a participant on retirement or termination of
employment and depend, among other factors, on the
amounts contributed by the participant, the manner in
which contributions have been invested, and the amount
of any prior withdrawal.
The Corporation maintains an Executive Retirement
Plan (the "Retirement Plan"), which is a non-qualified
deferred compensation arrangement for a select group of
senior management employees of the Corporation.
Participants are selected by the Compensation/Stock
Option Committee of the Board of Directors. Under the
Retirement Plan, the maximum benefit payable to a
participant is the participant's average compensation
(base salary plus bonus) for the three year period
ending on the date the participant ceases to be a full
time employee of the
-23-
Corporation multiplied by five (the "Benefit Ceiling
Amount"). After five successive years of participation
in the Retirement Plan, a participant is entitled to
50% of the Benefit Ceiling Amount. After each
additional year of participation in the Retirement Plan
up to five additional years of participation, a
participant is entitled to an additional 10% of the
Benefit Ceiling Amount. Benefits are normally payable
in equal monthly installments over a ten year period
after retirement, beginning after the participant
attains age 65 (or age 62 with 20 years or more of
credited service). However, upon death or disability,
payment is accelerated and made in a lump sum but the
amount is reduced to the then present value of the
benefit payments which would have been made under the
normal mode of payment. Messrs. Swartz, Lindelow and
Heiman are participants in the Retirement Plan. Mr.
Martino was a participant in the Retirement Plan for 11
years. In March 1995, the Corporation will make a lump
sum payment to him of $1,238,007 which will represent
the discounted value of his benefits under the
Retirement Plan and satisfy all obligations to him
under the Retirement Plan.
The following table illustrates the estimated
annual retirement benefits payable under the Retirement
Plan to a participant at specified average compensation
levels and years of service. There is no offset in
benefits under the Retirement Plan for Social Security
benefits. However, benefits payable under the
Retirement Plan will be reduced by the value of any
retirement income of the participant attributable to
contributions by the Corporation to any qualified
pension plan adopted by the Corporation (excluding the
Corporation's current 401(k) deferred compensation
plan).
PENSION PLAN TABLE
Years of Service
3 Years Average
Annual Compensation 5 10
$ 400,000 $100,000
$200,000
800,000 200,000
400,000
1,200,000 300,000
600,000
1,600,000 400,000
800,000
As of January 1, 1995, Messrs. Swartz, Lindelow
and Heiman had 20, 0 and 8 years, respectively, of
credited service.
-24-
Shareowner Return Performance Presentation
Set forth below is a graph comparing the yearly
percentage change in the cumulative total shareowner
return on the Corporation's Common Stock against the
cumulative total return of the S&P Composite-500 Stock
Index and the S&P High Technology Composite Index for
the period of five years commencing January 1, 1990 and
ending December 31, 1994, assuming in each case a fixed
investment of $100 at the respective closing prices on
December 31, 1989 and reinvestment on a quarterly basis
of all dividends.
-25-
Symbol Technologies, Inc.
Total Shareholder Return Versus
S&P 500 and S&P High-Tech Composite
Measurement Period
(Fiscal Year Covered) Symbol Technologies, Inc. S&P
Index S&P High-Tech Composite
Measurement Pt. 12/31/89 100 100
100
FYE 1990 72 97 102
FYE 1991 158 126 116
FYE 1992 79 136 121
FYE 1993 112 150 149
FYE 1994 190 152 174
-26-
PROPOSAL TO AMEND THE
1991 EMPLOYEE STOCK OPTION PLAN
The Board of Directors, subject to shareholder
approval, has amended the 1991 Plan to increase the
authorized number of shares that may be issued under
the 1991 Plan by an additional 1,500,000 shares to a
total of 2,500,000 shares. As of March 13, 1995,
options to purchase 42,900 shares had been exercised
and there were outstanding options to purchase
1,521,775 shares under the 1991 Plan. The number of
shares covered by the outstanding options includes
options to purchase an aggregate of 560,000 shares
which were issued pursuant to the foregoing amendment
to the 1991 Plan (including options to purchase
200,000, 135,000, 27,500 and 32,500 awarded to Messrs.
Swartz, Lindelow, Heiman and Razmilovic, respectively).
If the foregoing amendment is not approved by
shareholders, any options issued in excess of the
number currently permitted under the 1991 Plan will be
canceled. The Corporation has agreed to make other
arrangements with Mr. Lindelow to provide him with
benefits comparable to those he would have had with
respect to options to purchase 110,000 shares which
would have to be canceled. Reference is made to the
information contained under the headings "Security
Ownership of Management" and "Management Remuneration
and Transactions" above.
The Board of Directors believes that, as a result
of the Corporation's anticipated continued growth, it
will be necessary to hire additional management
personnel. In view of these personnel needs, and in
light of the present level of remuneration paid to
management (see "Management Remuneration and
Transactions") and the present level of management's
equity in the Corporation (see "Security Ownership of
Management"), the Board of Directors is of the opinion
that it is appropriate that stock options continue to
be a major component of the Corporation's management
remuneration package and that, accordingly, the number
of shares of the Corporation's Common Stock available
for the grant of stock options to key employees and
officers under the 1991 Plan should be increased by an
additional 1,500,000 shares of Common Stock to a total
of 2,500,000. Accordingly, on June 8, 1994 and
February 6, 1995 the Board of Directors, subject to
shareholder approval, amended the 1991 Plan to provide
that the aggregate number of shares that have been
purchased and that may henceforth be purchased pursuant
to the exercise of options under the 1991 Plan shall
not exceed 2,500,000 shares.
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Options under the 1991 Plan may be granted to
officers and key employees of the Corporation selected
by the Compensation/Stock Option Committee of the
Board. Shares of Common Stock issued upon the exercise
of options under the 1991 Plan may be reserved or made
available from the Corporation's authorized and
unissued shares or from shares reacquired and held in
the Corporation's treasury. A more complete summary of
the material terms of the 1991 Plan, as amended, is set
forth in Annex A to this Proxy Statement. The closing
sale price of the Corporation's Common Stock as quoted
on the New York Stock Exchange on March 10, 1995 was
$28.25 per share.
The affirmative vote of the holders of a majority
of the outstanding shares of the Corporation's Common
Stock present or represented and entitled to vote at
the meeting will be required for the approval of this
proposal. Accordingly, your Board of Directors
recommends a vote FOR the proposal to approve the
foregoing amendment to the 1991 Plan.
PROPOSAL TO APPROVE THE ADOPTION OF THE EXECUTIVE BONUS
PLAN
The Corporation promotes a pay-for-
performance philosophy wherein a significant element of
annual compensation is directly linked to the financial
performance of the Corporation. This has been
accomplished in prior years through the administration
of the Profit Sharing Bonus Plan in which most of the
Corporation's North American-based management level
associates, including all executive officers except Mr.
Razmilovic participated.
Effective January 1, 1995, subject to
shareholder approval, the Compensation/Stock Option
Committee of the Board (the "Committee") adopted and
the Board of Directors ratified the creation of an
Executive Bonus Plan (the "Executive Bonus Plan"), the
purpose of which is to more directly tie the level of
annual executive incentive compensation to the
financial performance of the Corporation than was
possible under the prior Profit Sharing Plan. All
executive officers of the Corporation will participate
in the Executive Bonus Plan. Under the Executive Bonus
Plan, participants will generally receive lower bonuses
than they would have under the Profit Sharing Plan if
the Corporation's operating performance is below plan
and higher than they would have under the Profit
Sharing Bonus Plan if the Corporation's operating
performance exceeds plan. The Committee has full
authority to construe, interpret and administer the
Executive Bonus Plan, as well as to determine the
extent, if any, to which operating
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performance standards have been met. The Committee
will also have authority to modify (prior to the
beginning of the calendar year for which the targets
will be applicable) the specific targets for the
performance goals under the Executive Bonus Plan.
Under the Executive Bonus Plan, the Committee
will each year, establish corporate financial
performance objectives (exclusive of extraordinary
revenues and charges), expressed in terms of earnings
per share. Three levels of performance will be
identified: threshold performance, at which the minimum
award will be earned and below which no award will be
earned; target performance, at which the target award
will be earned and; maximum performance, at which the
maximum award (twice a participant's target bonus) will
be earned and above which no additional award will be
earned. For 1995, threshold performance has been
established at results equal to 85% of the
Corporation's 1995 Business Plan; target performance
has been established at results between 97% and 100% of
the 1995 Business Plan; and maximum performance has
been established at results equal to or greater than
120% of the 1995 Business Plan.
Each participant in the Executive Bonus Plan
has been assigned a target bonus representing a
percentage of the participant's base salary. The
target bonuses for 1995 for Messrs. Swartz, Lindelow,
Heiman and Razmilovic are 100%, 100%, 55% and 55%,
respectively, which is consistent with past practice
and in conformity with their individual employment
agreements. The target bonuses for all other
participants in the Executive