SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
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AMETEK, Inc.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
------------------------------------------------------------------------
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Notes:
[LOGO OF AMETEK, INC. APPEARS HERE]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 25, 1995
Dear Fellow Stockholder:
I am pleased to extend to you a cordial invitation to attend the annual meeting
of the stockholders of AMETEK, Inc. (the "Company") to be held at the Four
Seasons Hotel, One Logan Square, Philadelphia, PA 19103, on Tuesday, April 25,
1995 at two o'clock in the afternoon, for the following purposes:
1. To elect eight directors, each to serve for a term of one year and until
his or her successor shall have been duly elected and qualified;
2. To approve the adoption by the Company's Board of Directors of the 1995
Stock Incentive Plan of AMETEK, Inc.;
3. To approve the appointment of Ernst & Young LLP as independent auditors
for the year 1995; and
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
Stockholders of record at the close of business on March 3, 1995 will be
entitled to vote at the meeting.
Your vote is important. Whether you plan to attend or not, I urge you to SIGN,
DATE AND RETURN THE ENCLOSED PROXY CARD IN THE ENVELOPE PROVIDED, in order that
as many shares as possible be represented at the meeting. If you attend the
meeting and prefer to vote in person, you may. Directions to the Four Seasons
Hotel are provided inside the back cover of the proxy statement. Hosted valet
parking by hotel employees and self park in a garage across the street from the
hotel are available.
I look forward to seeing you at the meeting.
Sincerely yours,
/s/ Walter E. Blankley
Walter E. Blankley
Chairman of the Board and
Chief Executive Officer
Dated: New York, New York, March 23, 1995
[LOGO OF AMETEK, INC. APPEARS HERE]
Principal executive offices
Station Square
Paoli, Pennsylvania 19301
PROXY STATEMENT
SOLICITATION OF PROXIES
The accompanying proxy is solicited by and on behalf of the Board of Directors
of AMETEK, Inc. for use at the annual meeting of its stockholders to be held on
April 25, 1995 and at any and all adjournments thereof.
The cost of solicitation will be borne by the Company. The Company has retained
Georgeson & Company Inc. to aid in the solicitation of proxies at a fee not
expected to exceed $7,500 plus reasonable expenses. The Company may use the
services of Georgeson & Company Inc., its directors, officers and other regular
employees to solicit proxies personally or by telephone, and may request
brokers, fiduciaries, custodians and nominees to send proxies, proxy statements
and other material to their principals at the expense of the Company. This
proxy statement and the accompanying proxy are being sent to the stockholders
of the Company on or about March 23, 1995. The annual report of the Company for
the year 1994 (which includes the Company's Annual Report on Form 10-K) is
enclosed herewith.
VOTING RIGHTS
Pursuant to the By-Laws, the Board of Directors has fixed the time and date for
the determination of stockholders entitled to notice of and to vote at the
meeting as of the close of business on March 3, 1995. Accordingly, only
stockholders of record on such date and at such time will be entitled to vote
at the meeting, notwithstanding any transfer of any stock on the books of the
Company thereafter. On March 3, 1995, the Company had outstanding 33,922,042
shares of Common Stock, $.01 par value per share, each of which entitled the
holder to one vote. There were, in addition, 2,475,475 issued shares held by
the Company in its treasury which, while so held, cannot be voted. The
affirmative vote of a plurality of the shares of common stock represented in
person or by proxy at the meeting is required for the election of directors.
For all other matters, a favorable vote of a majority of the shares of common
stock voted in person or by proxy at the meeting is required for approval.
Proxies marked as abstaining (including proxies containing broker non-votes) on
any matter to be acted upon by stockholders will be treated as present at the
meeting for purposes of determining a quorum but will not be counted as votes
cast on such matters. A proxy may be revoked by the stockholder at any time
prior to its being voted. If a proxy is properly signed and is not revoked by
the stockholder, the shares it represents will be voted at the meeting in
accordance with the instructions of the stockholder. If the proxy is signed and
returned without specifying choices, the shares will be voted in favor of the
election as directors of the nominees listed on the following page and in favor
of Proposals (2) and (3). The enclosed proxy also serves as the voting
instruction card for the trustees who hold shares of record for participants in
The AMETEK Savings and Investment Plan. Shares for which no instructions are
received by the trustee will be voted in the same proportion as the shares for
which the trustee receives instructions. Votes are tabulated at the annual
meeting by inspectors of election.
1
PROPOSAL (1)
ELECTION OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES
An entire Board of eight directors is proposed to be elected at the annual
meeting to hold office until the next annual meeting of stockholders and until
their respective successors have been duly elected and qualified. All proxies
received by the Board of Directors will be voted for the election, as
directors, of the nominees listed below if no direction to the contrary is
given. Each nominee who receives a plurality vote by ballot of the shares
present in person or represented by proxy and entitled to vote at the annual
meeting, will be elected as a director. In the event that any nominee is unable
or declines to serve, the proxy solicited herewith may be voted for the
election of another person in his or her stead. The Board of Directors knows of
no reason to anticipate that this will occur.
INFORMATION AS TO NOMINEES FOR ELECTION OF DIRECTORS
Principal Occupation Director
or Position, Continuously
Name of Nominee Age Other Directorships(1) Since
--------------- --- ---------------------- ------------
WALTER E. BLANKLEY 59 Chairman of the Board and Chief 1990
Executive Officer of the Company
since April 1993(2)
LEWIS G. COLE+ 64 Senior Partner, Stroock & 1987
Stroock & Lavan, Attorneys
HELMUT N. FRIEDLAENDER 81 Private investor 1955
SHELDON S. GORDON*. 59 General Partner of Blackstone 1989
Group and Chairman of Blackstone
Alternative Asset Management
L.P. since April 1991(3)
CHARLES D. KLEIN*+. 56 Financial Adviser to Mr. William 1980
Rosenwald and his family;
Managing Director of American
Securities, L.P. and executive
officer of affiliated and
predecessor entities
JAMES R. MALONE 52 President & Chief Executive 1994
Officer of Anchor Glass
Container Corp. since May 1993(4)
DAVID P. STEINMANN+ 53 Managing Director of American 1993
Securities, L.P. and executive
officer of affiliated and
predecessor entities
ELIZABETH ROSENWALD VARET+ 51 Private investor; Chairperson 1987
and Managing Director of
American Securities, L.P. and a
director of affiliated and
predecessor entities
- --------
* Member of the Audit Committee.
+ Member of the Compensation Committee.
. Member of the Nominating Committee.
(1) Except as noted, each nominee has held his or her present occupation for a
period in excess of five years.
(2) Mr. Blankley has been Chief Executive Officer since April 1990. From April
1990 to April 1993, Mr. Blankley also served as President of the Company.
Mr. Blankley was a Senior Vice President of the Company for a period of
more than five years prior to April 1990. Mr. Blankley is also a Director
of AMCAST Industrial Corporation and CDI Corporation.
(3) Mr. Gordon was Chairman of the Board and Chief Executive Officer of
Stamford Capital Group, Inc. from November 1985 to August 1990 and Chairman
of the Board of American Express Bank (Switzerland) AG from October 1985 to
July 1988. Mr. Gordon is also a director of Anangel-American Shipholdings
Limited.
(4) Mr. Malone was Chairman, President and Chief Executive Officer of Grimes
Aerospace Co. from 1990 to May 1993 and from 1986 to 1990 was Chairman and
Chief Executive Officer of Facet Enterprises. Mr. Malone is also a director
of Amsouth Bancorporation.
2
The Company has an Audit Committee, a Compensation Committee, and a Nominating
Committee, all of which are comprised of non-employee directors. The functions
of the Audit Committee include: reviewing with independent auditors the plan
and results of the auditing engagement; reviewing the scope and results of the
Company's procedures for internal auditing; reviewing the independence of the
auditors; considering the range of audit and non-audit services; and reviewing
the adequacy of the Company's system of internal accounting controls. The
functions of the Compensation Committee's non-employee directors include: study
and analysis of and recommendations to the Board concerning specific and
general matters of management compensation; periodic review of management
compensation policies and practices; recommendations to the Board of Directors
regarding incentive compensation awards and officer salary adjustments; and
administrative oversight of stock option plans and other incentive and
compensation plans. The functions of the Nominating Committee include:
determining an appropriate size and composition of the Board of Directors;
considering qualifications of prospective Board member candidates; conducting
research to identify and recommend nomination of suitable candidates; and
reviewing the experience, background, interests, ability and availability of
prospective nominees to meet time commitments of the Board of Directors and
committee responsibilities.
During 1994, there were 11 meetings of the Board of Directors, 3 meetings of
the Audit Committee, 2 meetings of the Compensation Committee and 1 meeting of
the Nominating Committee.
STOCK OWNERSHIP
The following table sets forth the number of shares of Common Stock of the
Company beneficially owned at January 31, 1995 by each director, by each of the
executive officers included in the Summary Compensation Table, and by all
directors and executive officers of the Company as a group, and the percentage
of the outstanding shares of Common Stock so owned by each such person and such
group.
Amount and Nature of
Beneficial Ownership(1)
-------------------------------------------
(Number of Shares)
Sole Voting Shared
and Voting or
Investment Investment Right to Percent
Name Power(2) Power(3) Acquire(4) Total of Class
---- ----------- ---------- ---------- --------- --------
WALTER E. BLANKLEY...... 37,212 48,567 145,000 230,779 *
LEWIS G. COLE........... (5)(11) 10,000 517,088 -- 527,088 1.5%
ROGER K. DERR........... 80,316 23,966 100,133 204,415 *
HELMUT N. FRIEDLAENDER.. (6) 48,500 30,400 -- 78,900 *
SHELDON S. GORDON....... 30,000 -- -- 30,000 *
FRANK S. HERMANCE....... 7,500 -- 55,000 62,500 *
CHARLES D. KLEIN........ (7)(11) 50,000 6,600 -- 56,600 *
ALLAN KORNFELD.......... 56,228 1,600 98,625 156,453 *
JAMES R. MALONE......... (8) 20,000 -- -- 20,000 *
GEORGE E. MARSINEK...... 212 -- 67,500 67,712 *
JOHN J. MOLINELLI....... 12,759 -- 39,125 51,884 *
DAVID P. STEINMANN...... (9)(11) 34,700 94,264 -- 128,964 *
ELIZABETH ROSENWALD
VARET.................. (10)(11) 65,800 603,308 -- 669,108 1.9%
All directors and
executive officers as a
group, consisting of 18
persons, including
individuals named
above.................. (11) 503,189 719,385 643,233 1,865,807 5.4%
3
- --------
*Represents less than 1% of the outstanding shares of Common Stock of the
Company.
(1) Pursuant to Rule 13d-3 under the Securities Exchange Act of 1934, as
amended, beneficial ownership of a security consists of sole or shared
voting power (including the power to vote or direct the vote) and/or sole
or shared investment power (including the power to dispose or direct the
disposition) with respect to the security through any contract,
arrangement, understanding, relationship or otherwise. Unless otherwise
indicated, beneficial ownership disclosed consists of sole voting and
investment power.
(2) Reported in this column are shares (including certain restricted shares)
with respect to which directors and officers have sole voting and
investment power.
(3) Reported in this column are other shares with respect to which directors
and officers have or share voting and/or investment power, including
shares directly owned by certain relatives with whom they are presumed to
share voting and/or investment power; however, beneficial ownership may be
disclaimed. Although shared beneficial ownership is included in each of
the individual totals, these shares are only reported once in the total
for all directors and executive officers as a group.
(4) Reported in this column are shares which executive officers have a present
right to acquire or are acquirable within 60 days through the exercise of
stock options awarded under AMETEK, Inc. Stock Option Plans.
(5) Mr. Cole has shared voting and investment power with respect to 517,088
shares, as to 4,000 shares of which such power is shared with Messrs.
Klein and Steinmann and others, as to 2,500 shares of which such power is
shared with Mr. Steinmann and others and as to 510,588 shares of which
such power is shared with Ms. Varet and others.
(6) Mr. Friedlaender has shared voting and investment power with respect to
30,400 shares. Of these, 15,200 shares are owned by a trust of which Mr.
Friedlaender is a trustee; Mr. Friedlaender disclaims beneficial ownership
of such shares.
(7) Mr. Klein has shared voting and investment power with respect to 6,600
shares, as to 4,000 shares of which such power is shared with Messrs. Cole
and Steinmann and others and as to 2,600 shares of which such power is
shared with Mr. Steinmann and others.
(8) Consists of 20,000 shares held pursuant to a restricted stock award under
the 1991 Stock Incentive Plan.
(9) Includes 13,334 shares held pursuant to a restricted stock award under the
1991 Plan. Mr. Steinmann has shared voting and investment power with
respect to 94,264 shares, as to 82,720 shares of which such power is
shared with Ms. Varet and others, as to 2,500 shares of which such power
is shared with Mr. Cole and others, as to 2,600 shares of which such power
is shared with Mr. Klein and others, as to 2,444 shares of which such
power is shared with others and as to 4,000 shares of which such power is
shared with Messrs. Cole, Klein and others.
(10) Includes 10,000 shares owned by a trust of which Ms. Varet's husband is a
beneficiary and as to which Ms. Varet disclaims any beneficial ownership.
Ms. Varet has shared voting and investment power with respect to 593,308
shares, as to 510,588 shares of which such power is shared with Mr. Cole
and others and as to 82,720 shares of which such power is shared with Mr.
Steinmann and others.
(11) Mr. Cole is a director, Mr. Steinmann is an executive officer, and Mr.
Klein is a portfolio manager of Oak Hall Capital Advisors, L.P., an
investment manager of (i) the AMETEK, Inc. Employees' Master Retirement
Trust, which holds among its assets 571,400 shares, and (ii) AMETEK
Foundation, Inc., which holds among its assets 55,800 shares; none of
these shares have been included in the above table. Oak Hall Capital
Advisors, L.P. is an affiliate of American Securities, L.P.
4
The following table sets forth the only entities known to the Company to be
beneficial owners of more than five percent of the outstanding Common Stock of
the Company:
Name and Address of Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class
------------------- -------------------------------------------------- ----------
FMR Corp. (1)
82 Devonshire Street Sole dispositive, but no
Boston, MA 02109-3614 voting power for........ 4,504,500 shares 13.06%
==============
Gabelli Funds, Inc.
One Corporate Center Sole voting and
Rye, NY 10580-1434 dispositive power for... 685,000 shares
GAMCO Investors, Inc. Sole voting power for
One Corporate Center 2,007,805 shares but
Rye, NY 10580-1434 sole dispositive power
for..................... 2,149,825 shares
--------------
TOTAL (2)............... 2,834,825 shares 8.22%
==============
- --------
(1) Based on Schedule 13(G) filed on February 13, 1995.
(2) Based on Schedule 13(D) filed on February 2, 1995, Mr. Mario J. Gabelli is
deemed to have beneficial ownership of these shares.
COMPENSATION OF DIRECTORS
The current annual rate of compensation for services as a non-employee director
of the Company is $50,000. Mr. Blankley, the only employee director of the
Company in 1994, did not receive any compensation for his services as a
director.
Pursuant to a Retirement Plan for Directors (the "Directors Plan"), the Company
has agreed to provide retirement benefits and death benefits to those directors
who have not accrued benefits under the Employees' Retirement Plan of AMETEK,
Inc. and who have completed at least three years of service as a director or
officer of the Company. The retirement benefit payable under the Directors Plan
is an annual amount equal to 100% of the highest annual rate of compensation
for directors during the director's period of service on the Board of
Directors; however, the benefit is reduced proportionately if the participant
has less than five years of service. The Company shall satisfy its obligations
arising under the Directors Plan exclusively from its general assets. All of
the current directors other than Mr. Blankley are participants in the Directors
Plan and each of these participants, other than Messrs. Malone and Steinmann,
has accrued an annual retirement benefit of $50,000. Messrs. Malone and
Steinmann have not yet accrued any benefit under the Plan.
Pursuant to a Death Benefit Program for Directors (the "Directors Program"),
the Company has entered into individual agreements with certain directors which
require the Company to pay death benefits to their designated beneficiaries and
to pay benefits to the directors under certain circumstances. The Directors
Program currently provides for a benefit, payable for ten years, in an annual
amount equal to 100% of the highest annual rate of compensation during the
director's period of service on the Board of Directors, commencing at death or
the later of age 70 or retirement; however, with respect to directors who
became participants after January 1, 1989, the directors must complete at least
five years of service as a director before they become eligible to receive a
benefit upon the later of age 70 or retirement. Active directors also have a
group term life insurance benefit of $50,000. To fund benefits under the
Directors Program, the Company has purchased individual life insurance policies
on the lives of certain of the covered directors. The Company retains the right
to terminate any or all of the Directors Program agreements under certain
circumstances. All of the current directors other than Mr. Blankley are
participants in the Directors Program.
5
EXECUTIVE OFFICERS OF THE REGISTRANT
Officers are appointed by the Board of Directors to serve for the ensuing year
and until their successors have been elected and qualified. Information on
executive officers of the Company is shown below:
Name Age Present Position with the Company
---- --- ---------------------------------
Walter E.
Blankley....... 59 Chairman of the Board and Chief Executive Officer
Roger K. Derr*.. 63 Executive Vice President-Chief Operating Officer
Frank S.
Hermance*...... 46 President of the Precision Instruments Group
Murray A.
Luftglass...... 63 Senior Vice President-Corporate Development
George E.
Marsinek*...... 57 President of the Electro-Mechanical Group
John J.
Molinelli*..... 48 Senior Vice President-Chief Financial Officer
Albert J.
Neupaver*...... 43 President of the Industrial Materials Group
Otto W.
Richards....... 65 Vice President and Comptroller
Deirdre D.
Saunders....... 47 Treasurer and Assistant Secretary
Robert W.
Yannarell...... 61 Secretary
- --------
*Office of the President, formed March 1993.
WALTER E. BLANKLEY'S employment history with the Company and other
directorships currently held are included on page 2 under section ELECTION
OF DIRECTORS.
ROGER K. DERR has been Executive Vice President-Chief Operating Officer since
April 1990. He had served as a Senior Vice President of AMETEK since 1982.
FRANK S. HERMANCE was elected President of the Precision Instruments Group on
September 23, 1994. He joined the Company as a Group Vice President in
November 1990. Previously he was General Manager of several instrument
divisions of Tektronix, Inc.
MURRAY A. LUFTGLASS has been Senior Vice President--Corporate Development since
May 1984.
GEORGE E. MARSINEK was elected President of the Electro-Mechanical Group on
September 23, 1994. He has been a Group Vice President since April 1990 and
was elected Vice President in 1988.
JOHN J. MOLINELLI was named Senior Vice President--Chief Financial Officer on
April 29, 1994. Previously he served as Vice President and Comptroller of
AMETEK since April 1993. He was elected Comptroller in 1991 and General
Auditor in 1989.
ALBERT J. NEUPAVER was elected President of the Industrial Materials Group on
September 23, 1994. Previously he served as a Group Vice President since May
1994 . He was elected Vice President of AMETEK in 1991 and was General
Manager of the Specialty Metals Products division since 1989.
OTTO W. RICHARDS joined the Company as Vice President and Comptroller on April
29, 1994. From April 1, 1993 to April 1994 he was Senior Vice President--
Administration, Ketema, Inc. and from December 1988 to April 1993 he was
Senior Vice President and Chief Financial Officer, Ketema, Inc.
DEIRDRE D. SAUNDERS has served as Treasurer and Assistant Secretary since April
1993. Ms. Saunders joined AMETEK in 1987 as Assistant Treasurer.
ROBERT W. YANNARELL has served as Secretary of the Company since April 1993.
Previously he served as Treasurer and Assistant Secretary since 1987.
6
EXECUTIVE COMPENSATION
The following table sets forth certain information for the fiscal years ended
December 31 in each of 1994, 1993 and 1992 concerning compensation paid or
accrued for the Chairman of the Board and Chief Executive Officer and for the
four other most highly compensated executive officers of the Company serving
at December 31, 1994.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards
---------------------------- -----------------------
Other Restricted Securities
Annual Stock Underlying All Other
Name and Salary Bonus Compensation Awards Options/SARs Compensation
Principal Position Year ($) ($) ($) ($) (#) ($)(1)
- ------------------ ---- ------- ------- ------------ ---------- ------------ ------------
Walter E. Blankley 1994 457,500 335,000 -- -- 125,000 1,656
Chairman of the Board 1993 430,000 100,000 -- -- 50,000 1,656
and Chief Executive Of-
ficer 1992 380,000 210,000 -- -- 37,500 1,386
Roger K. Derr 1994 271,300 125,000 -- -- 50,000 1,668
Executive Vice Presi-
dent-- 1993 263,900 75,000 -- -- -- 1,668
Chief Operating Officer 1992 252,500 150,000 -- -- 25,000 1,386
Frank S. Hermance 1994 220,000 125,000 -- -- 50,000 1,326
President of the 1993 213,000 48,000 -- -- -- 1,326
Precision Instrument
Group 1992 200,000 77,000 -- -- 15,000 1,386
George E. Marsinek 1994 205,500 150,000 -- -- 50,000 1,554
President of the 1993 197,000 75,000 -- -- -- 1,554
Electro-mechanical
Group 1992 186,500 100,000 -- -- 15,000 1,386
John J. Molinelli 1994 157,933 100,000 -- -- 40,000 1,350
Senior Vice President-- 1993 129,000 40,000 -- -- -- 1,350
Chief Financial Officer 1992 120,000 60,000 -- -- 10,000 1,386
Allan Kornfeld(2) 1994 90,167 -- -- -- -- 400,354
Executive Vice Presi-
dent-- 1993 265,250 75,000 -- -- -- 1,554
Chief Financial Officer 1992 252,500 150,000 -- -- 25,000 1,386
- --------
(1) The amounts reported represent the Company's contribution ($1,200 each) to
The AMETEK Savings and Investment Plan for each of the individuals listed
above (except for Mr. Kornfeld) and the dollar value of premiums paid by
the Company with respect to term life insurance for the benefit of each of
the named executive officers.
(2) On April 29, 1994, Allan Kornfeld resigned as Executive Vice President--
Chief Financial Officer and John J. Molinelli was named Senior Vice
President--Chief Financial Officer. The amount in the All Other
Compensation column represents, in addition to amounts noted in (1) above,
Mr. Kornfeld's severance pay ($400,000) of which $25,000 is to be paid in
1995.
7
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
The following table provides details regarding stock options granted to the
named executive officers in 1994. In addition, the table provides the
hypothetical gains or "option spreads" that would result for the respective
options based on assumed rates of annual compounded stock price appreciation
of 5% and 10% from the date the options were granted through their expiration
dates. No stock appreciation rights were granted to the named executive
officers in 1994.
STOCK OPTION/SAR GRANTS IN 1994
Potential
Realizable Value at
Assumed Annual
Rate of Stock
Price Appreciation
Individual Grants for Option Term(2)
-------------------------------------------------------------- -------------------
Percent of Total
Number of Options/SARs
Securities Underlying Granted to
Options/SARs Employees in Exercise Expiration
Name Granted (#)(1) Fiscal Year Price ($/Sh) Date 5% ($) 10% ($)
---- --------------------- ---------------- ------------ ---------- -------------------
Walter E. Blankley 125,000 11.03 14.0625 05/10/2001 715,606 1,667,667
++
Roger K. Derr + 8,083 0.71 14.0625 05/10/2001 46,274 107,838
++ 41,917 3.70 14.0625 05/10/1999 162,856 359,870
+
++
Frank S. Hermance 50,000 4.41 14.0625 05/10/2001 286,242 667,067
George E. Marsinek 50,000 4.41 14.0625 05/10/2001 286,242 667,067
John J. Molinelli 40,000 3.53 14.0625 05/10/2001 228,994 533,653
Allan Kornfeld -- -- -- -- -- --
- --------
(1) The options granted in 1994 to Messrs. Blankley, Hermance, Marsinek and
Molinelli and 8,083 of the options granted in 1994 to Mr. Derr are
exercisable after the first anniversary of the date of the grant (May 10,
1994) during each of the four succeeding twelve-month periods only to the
extent of twenty-five percent (25%) of the total number of shares
optioned. The balance of options granted to Mr. Derr (41,917) are
exercisable to the extent of twenty percent (20%) during each of the
succeeding twelve-month periods from the grant date (May 10, 1994) to the
expiration date (May 10, 1999). In all cases, optioned shares which may
have been but were not purchased during any one twelve-month period may be
purchased during any one or more succeeding twelve-month periods up to the
expiration date of the option. Options generally become fully exercisable
in the event of the holder's death, retirement or termination of
employment in connection with a change in control.
(2) The amounts represent certain assumed rates of appreciation. Actual gains,
if any, on stock option exercises are dependent on future performance of
the Company's Common Stock. There can be no assurance that the rates of
appreciation reflected in this table will be achieved.
8
The following table illustrates stock option and stock appreciation rights
exercised by the named executive officers during 1994 and the aggregate amounts
realized by each such officer. In addition, the table shows the aggregate
number of unexercised options and stock appreciation rights that were
exercisable and unexercisable as of December 31, 1994 and the values of "in-
the-money" stock options and SARs on December 31, 1994 which represent the
positive difference between the market price of the Company's Common Stock and
the exercise price of such options/SARs.
AGGREGATED OPTION/SAR EXERCISES IN 1994
AND OPTION/SAR VALUES AT DECEMBER 31, 1994
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money
Options/SARs Options/SARs
Shares at December 31, 1994 December 31, 1994 ($)
Acquired On Value ------------------------- -------------------------
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
---- ------------ ------------ ----------- ------------- ----------- -------------
Walter E. Blankley -- -- 158,750 212,500 581,380 669,532
Roger K. Derr 7,918 4,911 112,633 74,992 403,880 235,454
Frank S. Hermance 7,500 118,750 50,000 70,000 224,343 211,562
George E. Marsinek -- -- 75,000 70,000 287,084 211,562
John J. Molinelli 3,959 3,281 38,125 53,375 156,365 159,970
Allan Kornfeld 17,918 70,936 111,125 33,375 408,114 118,407
DEFINED BENEFIT AND ACTUARIAL PLANS
The Employees' Retirement Plan of AMETEK, Inc. (the "Retirement Plan") is a
non-contributory defined benefit pension plan under which contributions are
actuarially determined. The following table sets forth the estimated annual
benefits, expressed as a single life annuity, payable upon retirement (assuming
normal retirement at age 65) under the Retirement Plan for individuals with the
indicated years of service and at the indicated compensation levels (without
taking into account statutory restrictions incorporated in the Retirement Plan
and described below):
PENSION PLAN TABLE
Annual Benefits Based On
Years of Service at Normal Retirement Age(1)
Average --------------------------------------------
Compensation 15 20 25 30 35
------------ -------- -------- -------- -------- --------
$150,000........................... 59,100 62,900 66,700 66,700 66,700
200,000........................... 79,500 84,600 89,700 89,700 89,700
250,000........................... 99,900 106,300 112,600 112,600 112,600
300,000........................... 120,300 127,900 135,600 135,600 135,600
350,000........................... 140,700 149,600 158,500 158,500 158,500
400,000........................... 161,100 171,300 181,500 181,500 181,500
450,000........................... 181,500 193,000 204,400 204,400 204,400
500,000........................... 201,900 214,600 227,400 227,400 227,400
550,000........................... 222,300 236,300 250,300 250,300 250,300
600,000........................... 242,700 258,000 273,300 273,300 273,300
650,000........................... 263,100 279,700 296,200 296,200 296,200
700,000........................... 283,500 301,300 319,200 319,200 319,200
- --------
(1) Benefit amounts assume a participant reaches age 65 in 1995; for younger
participants, the benefit amounts are less than the amounts indicated
above.
9
The annual compensation taken into account for any plan year is generally equal
to the participant's salary and any bonus accrued during the plan year as
reported in the Summary Compensation Table. Compensation in excess of certain
amounts prescribed by the Secretary of the Treasury ($150,000 for 1995) cannot
be taken into account under the Retirement Plan. The individuals named in the
Summary Compensation Table are subject to this limitation. However, in
accordance with non-qualified supplemental pension arrangements, the Company
has agreed to provide to each of Messrs. Blankley, Derr and Kornfeld, a benefit
in an amount equal to the excess of the annual pension benefit which would be
payable to him under the terms of the Retirement Plan in the absence of
statutory restrictions over the amount actually payable under the Retirement
Plan. The benefit is capped at the projected excess payable at age 65
determined as of May 21, 1991. Pursuant to agreements entered into with each of
these executives, a restricted stock award has been granted under the 1991
Stock Incentive Plan of AMETEK, Inc. for a number of shares of the Company's
Common Stock having a fair market value on the date of grant equal to 50% of
the present value of the projected benefit under the supplemental pension
arrangement; the remaining portion of the benefit will be payable in cash,
directly out of the Company's general assets. At December 31, 1994 the
executives named in the Summary Compensation Table had the following years of
credited service under the Retirement Plan: Mr. Blankley--34; Mr. Derr--36; Mr.
Hermance--4; Mr. Marsinek--30; Mr. Molinelli--25; and Mr. Kornfeld--18.
In addition, for retirements occurring in 1995, the maximum annual pension
benefit payable at normal retirement age is restricted, by law, to the greater
of $120,000 or the amount of such benefit determined under the Retirement Plan
and prior existing law as of December 31, 1982. The $120,000 limit is adjusted
annually by the Secretary of the Treasury to reflect increases in the cost of
living.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The following report, submitted by the Compensation Committee of the Board of
Directors (the "Compensation Committee"), provides information regarding
policies and practices concerning compensation of the Chairman of the Board and
Chief Executive Officer and the other executive officers of the Company.
COMPENSATION OVERVIEW
The functions performed by the Compensation Committee include
recommending to the Board of Directors (a) remuneration arrangements
for senior management and directors and (b) compensation plans in which
officers and employees are eligible to participate. Members of the
Compensation Committee are directors who are not employees of the
Company. The current members of the Compensation Committee are Messrs.
Cole, Klein and Steinmann and Ms. Varet.
Executive compensation consists of three principal elements: (a)
salary; (b) annual bonus; and (c) grants of stock options and stock
appreciation rights and restricted stock awards under Company plans.
Additional retirement and other benefits are provided for the Company's
executives similar to those typically provided by other major
corporations.
Decisions about executive officers' salary and bonus are made under the
supervision of the Compensation Committee, while decisions concerning
compensation in the form of stock options, SARs and restricted stock
awards are made under the supervision of the committee of the Board of
Directors designated for the appropriate plan. The members of each of
these
10
plan committees currently are the same as the members of the
Compensation Committee; thus, references in this report to the
"Compensation Committee" should be read, where appropriate, as
references to the various plan committees.
Underlying the Compensation Committee's decisions with respect to
executive officers' compensation is the belief that it is fundamentally
important that the Company attract, retain, motivate and benefit from
the guidance and experience of talented and qualified individuals so
that the Company's short-term and long-term success will continue and
its profitability and worldwide reputation for quality, and thus
shareholder value, will grow. The Company also believes that its
executives should be encouraged to acquire a larger equity interest in
the Company, thereby having additional incentives, corresponding to the
interests of shareholders, to put forth their maximum efforts for the
success and profitability of the Company's businesses and the
achievement of increased shareholder value. Information regarding
similarly situated executive officers at comparable companies was drawn
from publicly available information for certain of the companies
included in the index of companies used in the Performance Graph set
forth on page 14 and for certain other companies identified by an
independent employee benefits consulting firm retained by the Company.
SALARY
Salary levels for the Company's executive officers are established
principally on the basis of the executive's responsibilities. In each
case, consideration is given both to personal factors such as the
individual's experience and record and the responsibility associated
with his or her position and to external factors such as salaries paid
to similarly situated executive officers by comparable companies and
prevailing conditions in the geographic area where the executives'
principal services will be performed. Comparable companies were
identified as described above. Annual adjustments to each executive
officer's salary are determined based on the foregoing factors but with
due consideration also being given to prevailing economic conditions,
to the relationship of such adjustments to those being given to other
employees within the Company, to the performance of the executive's
duties and responsibilities and to other individual performance-related
criteria that may be relevant with respect to such executive officer at
the time. In evaluating the salaries paid to similarly situated
executive officers, consideration is given to the full range of such
salaries and to the experience and records of those executives who
received salaries at the high, medium and low points of such range. In
determining executive salaries, the Compensation Committee has
generally targeted the median level of the compensation range for
comparable companies. In addition, in establishing salary levels,
consideration is given to the competitiveness of the total annual
compensation received by the Company's executive officers as compared
to the total compensation received by other similarly situated
executive officers.
ANNUAL BONUS
Bonuses are viewed as a reward for individual contributions to the
Company's performance, based not only on the Company's short-term
results but also on the investments made by the Company for the future
growth of the Company's profits. In addition, consideration is given to
the achievement of selected financial goals (i.e., operating
performance, asset management and business growth development) and
progress in meeting other long-term objectives, as well as the
executive officers' leadership role in these activities. Bonus
decisions generally are made toward the end of each year. Pursuant to
the Company's Additional Compensation Plan, each year an aggregate
amount, generally equal to five percent of income before federal income
11
taxes exclusive of capital gains and certain non-recurring charges, is
accrued for the purpose of paying the bonuses to executive officers and
certain other employees. As a result of overall Company performance in
1994, which met or exceeded the targeted financial goals referred to
above, the bonus pool for 1994 increased compared to 1993. The Chairman
of the Board and Chief Executive Officer reviews Company performance
and the individual contribution of each executive officer to the
Company's performance and makes recommendations to the Compensation
Committee with respect to the suitable bonus amount to be awarded to
such individual for that year based on such review. The Compensation
Committee then meets with the Chairman of the Board and Chief Executive
Officer to consider such recommendations, makes any changes that may be
deemed appropriate, and presents its recommendations to the Board of
Directors which then discusses and votes upon the bonuses. The
principal financial performance measures considered by the Compensation
Committee are earnings, return on assets and cash flow, with the
relative weight of each of these factors being roughly equal. However,
the significance of any one of these factors may vary from one
executive officer to another depending upon whether that officer has
been assigned other long-term goals, such as reorganizing a business
line, developing new products or increasing market penetration for
current products.
STOCK OPTIONS, SARS AND RESTRICTED STOCK AWARDS
Awards of stock options, SARs and shares of restricted stock are
considered an important complement to the cash elements of the
Company's executive officers' compensation described above and have the
purpose of aligning the executives' interests with the stockholders'
interests. The plans under which such awards are made have been
approved by the Company's stockholders. Company stock options and SARs
generally require the executive to be employed by the Company on the
exercise date and become exercisable in stages over a period of years
following the date of grant. The exercise price of options generally
equals the mean market price of the Company's stock on the grant date;
accordingly, such options will only yield income to the executive if
the market price of the Company's stock is greater, at the time of
exercise, than it was when the option was granted. Although the Company
has not yet done so, it could grant options with average prices greater
than the market price of the Company's stock on the grant date in order
to vary the long-term incentive being created for the option recipient.
It is believed that a principal factor influencing the market price of
the Company's stock is the Company's performance as reflected in its
sales, earnings, cash flow and other results; thus, by granting stock
options and SARs to the Company's executive officers, such individuals
are encouraged to achieve consistent improvements in the Company's
performance. Awards of shares of restricted stock are subject to
forfeiture restrictions which prohibit the recipient from selling such
shares until the specified period of restriction following the date the
award lapses. Such awards provide inducements to the executive officers
to remain with the Company over the long term and to work to enhance
corporate performance and, correspondingly, shareholder value. When
considering whether to make grants of stock options and SARs or awards
of restricted stock, the Compensation Committee reviews practices of
other comparable companies (which are identified as described above) as
well as individual performance-related criteria such as those already
described, and takes into consideration the effect such awards might
have on Company performance and shareholder value. The measures of
Company performance that are considered in making such awards, and the
relative weight of each of these factors, are the same as those used in
determining bonus levels, which are described above. The long-term
objectives that an officer has been assigned are also considered.
However, in determining to grant options or SARs or award restricted
stock, the Compensation Committee has generally placed greater emphasis
on long-term objectives than it has in its determination of bonus
awards.
12
MR. BLANKLEY'S 1994 COMPENSATION
In determining the appropriate levels for Mr. Blankley's 1994 base
salary, bonus and stock option grant, the Compensation Committee
considered the same factors that it considered when fixing compensation
levels for the Company's other executive officers and sought to achieve
the same corporate goals. The Compensation Committee also considered
the major initiatives and programs which, in 1994, were commenced or
furthered under Mr. Blankley's leadership, such as: (a) the substantial
progress made in implementing the Company's plan (announced in November
1993) to enhance shareholder value by restructuring certain businesses,
implementing a shift in the operating strategies of certain businesses,
repurchasing up to $150 million of its common stock, refinancing its
existing debt and reducing the dividend on its common stock; (b) the
continued extension of Total Quality Management principles throughout
the Company; (c) the substantial progress made by the Company in
establishing and expanding its various operations in Europe and the
Pacific Rim; and (d) the overall improvement in the Company's
international sales activities. Certain personal criteria also were
reviewed, such as the fact that 1994 was the second year of Mr.
Blankley's service as Chairman of the Board and CEO after more than 30
years of service with the Company in many positions including the
positions of President and Chief Executive Officer. The Compensation
Committee also evaluated data regarding CEO compensation practices of
other comparable companies (which were identified previously) so that
Mr. Blankley's total compensation package would be in line with that of
CEOs in such other companies. In addition, in fixing Mr. Blankley's
bonus, the Compensation Committee considered the Company's financial
performance and, in particular, the improvements achieved by the
Company in earnings per share, return on assets and cash flow and the
improvement in the Company's share price.
SECTION 162(m)
Section 162(m) of the Internal Revenue Code limits the deductibility by
a publicly-held corporation of compensation paid in a taxable year to
the Chief Executive Officer and any other executive officer whose
compensation is required to be reported in the Summary Compensation
Table to $1 million. For the 1994 taxable year, the Company did not
exceed, and therefore was not affected by, this limitation.
Mr. Lewis G. Cole
Mr. Charles D. Klein
Mr. David P. Steinmann
Ms. Elizabeth Rosenwald Varet
13
PERFORMANCE GRAPH
The following graph presents a comparison of cumulative total returns for the
Company's common stock during the five fiscal years ended December 31, 1994
with the S&P 500 index, and an index of published industry groups.
[GRAPH APPEARS HERE]
COMPARISON OF FIVE YEAR CUMULATIVE RETURN
AMONG AMETEK, INC., S&P 500 INDEX AND PUBLISHED INDUSTRY INDEX
Published
Measurement period S&P 500 Industry
(Fiscal Year Covered) Ametek,Inc. Index Index
- --------------------- ----------- ------- ---------
Measurement PT -
12/31/89 $ 100.00 $ 100.00 $ 100.00
FYE 12/31/90 $ 74.69 $ 96.89 $ 94.44
FYE 12/31/91 $ 112.78 $ 126.42 $ 117.95
FYE 12/31/92 $ 140.36 $ 136.05 $ 120.37
FYE 12/31/93 $ 114.54 $ 149.76 $ 133.07
FYE 12/31/94 $ 154.01 $ 151.74 $ 130.31
The above graph assumes $100 invested on December 31, 1989 in AMETEK, Inc.
common stock, the S&P 500, an index of published industry groups, and assumes
reinvestment of dividends.
The index of published industry groups, shown above, includes the companies
(including AMETEK, Inc.) consisting of two separate industry groups published
by Business Week as the "Electrical Products" and "Instrument" groups.
Published industry group annual total returns are weighted using the beginning
of period market capitalization.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Lewis G. Cole, Charles D. Klein, David P. Steinmann and Elizabeth R. Varet
comprise the Compensation Committee. Messrs. Klein and Steinmann, and Ms. Varet
are managing directors of American Securities, L.P., an investment banking
firm. Mr. Cole is a member of the law firm of Stroock & Stroock & Lavan.
The law firm of Stroock & Stroock & Lavan, of which Mr. Cole is a member,
rendered during 1994 and continues to render services as General Counsel for
the Company and its subsidiaries. The investment banking firm of American
Securities, L.P., and affiliates of American Securities, L.P., including Oak
Hall Capital Advisors, L.P., rendered during 1994 and continue to render
financial advisory, investment management and other services to the Company.
Mr. Cole is a director and Mr. Steinmann is an executive vice president of Oak
Hall Capital Advisors GP Corp., the general partner of Oak Hall Capital
Advisors, L.P. For 1994, American Securities, L.P. and its affiliates received
$1,000,000 in the aggregate for such services. American Securities, L.P. is
owned indirectly, through family trusts of which Ms. Varet and Mr. Cole are co-
trustees, by Ms. Varet and members of her family.
14
COMPLIANCE WITH SECTION 16(a) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and officers to file with the Securities and Exchange Commission and
the New York Stock Exchange initial reports of ownership and reports of changes
in ownership of the Company's Common Stock. Copies of all such Section 16(a)
reports are required to be furnished to the Company. These filing requirements
also apply to holders of more than ten percent of the Company's Common Stock;
to the Company's knowledge, there currently are no such holders. To the
Company's knowledge, based solely on a review of the copies of Section 16(a)
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 31, 1994 all
Section 16(a) filing requirements applicable to the Company's officers and
directors were complied with, except for a late filing of Form 3, "Initial
Statement of Beneficial Ownership of Securities," for James R. Malone. Mr.
Malone is now in compliance with all applicable Section 16(a) filing
requirements.
EMPLOYMENT CONTRACTS AND TERMINATION, SEVERANCE AND
CHANGE-IN-CONTROL ARRANGEMENTS
Pursuant to agreements with the Company, Messrs. Blankley and Derr will be
entitled to a severance benefit in the event that the executive's employment is
terminated by the Company without cause or by the executive for good reason
within 18 months after a Change in Control (as defined below), in an amount
equal to 2.99 times the executive's average taxable compensation (as defined
under Section 280G of the Internal Revenue Code of 1986, as amended ("the
Code")) from the Company during the five preceding taxable years. Each benefit
is subject to reduction, if necessary to prevent any "excess parachute
payments" within the meaning of Section 280G of the Code. For purposes of the
agreements, a "Change in Control" means the acquisition of 30% or more of the
voting stock of the Company by any party other than the Company (or its
affiliates), or a change in the members of the Board of Directors, within any
two-year period, such that the members at the beginning of the period cease to
constitute a majority (unless the change is approved by two-thirds of the
persons who are members at the beginning of the period). Assuming that a Change
in Control, followed by a termination of employment, occurred on January 31,
1995, the following amounts would be payable pursuant to the agreements: Mr.
Blankley-$1,575,282; Mr. Derr-$1,155,133.
Pursuant to a Supplemental Senior Executive Death Benefit Program (the
"Program"), the Company has entered into individual agreements with certain
executives which require the Company to pay death benefits to their designated
beneficiaries and to pay benefits to the executives under certain
circumstances. If a covered executive dies before retirement or before age 65
while on disability retirement, the executive's beneficiary will receive
monthly payments from the date of the executive's death until the date he or
she would have attained age 80, but not less than for 15 years (the 15-year
minimum guarantee does not apply to executives whose inclusion in the Program
is approved after December 31, 1986). The specified dollar amount of the
payments is determined on the basis of the executive's salary and age. In
addition, the standard death benefit payable to all salaried personnel from the
Company's group term life insurance policy is limited to $50,000 for
participants in the Program. If a covered executive retires, or reaches age 65
while on disability retirement, the Program provides for an annual benefit of
one-tenth of an amount equal to the lesser of (a) twice the executive's average
annual base salary for the last five full years of service, rounded off to the
next highest multiple of $50,000 or (b) a maximum amount specified in the
agreement. The highest maximum amount specified in the existing agreements is
$1,000,000. The benefit is payable monthly over a period of 10 years to the
executive or the executive's beneficiary. The payments will commence for
retirees at age 70 or death, whichever is earlier. However, if the executive
retires after age 70, the payments commence on retirement.
15
To fund benefits under the Program, the Company has purchased individual life
insurance policies on the lives of certain of the covered executives. The
Company retains the right to terminate all of the Program agreements under
certain circumstances. Messrs. Blankley, Derr, Hermance, Marsinek, Molinelli
and Kornfeld are participants in the Program.
PROPOSAL (2)
APPROVAL OF THE 1995 STOCK INCENTIVE PLAN OF AMETEK, INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
The Board of Directors of the Company, at its meeting held on February 22,
1995, adopted, subject to the approval of stockholders at this meeting, the
1995 Stock Incentive Plan of AMETEK, Inc.
Approval of the 1995 Plan will require the affirmative vote of the holders of a
majority of the votes cast at the annual meeting with respect to the approval
of the 1995 Plan.
DESCRIPTION OF THE 1995 PLAN
The purpose of the 1995 Plan is to encourage the Company's key employees and
directors to acquire a larger proprietary interest in the Company and to
provide incentives to maximize the long-term growth of the Company. It is
anticipated that the opportunity for acquisition of such proprietary interest
will aid the Company in securing and retaining key employees.
A summary of the material features of the 1995 Plan appears below. The full
text of the 1995 Plan is set forth in Annex A and should be referred to for a
complete description of its provisions.
Effective Date and Expiration
The 1995 Plan was adopted and approved by the Board of Directors effective
February 22, 1995, subject to its approval by the stockholders of the Company.
In the event that the 1995 Plan is not approved by the stockholders of the
Company as aforesaid, the 1995 Plan shall be void and of no force or effect.
Administration
The 1995 Plan is administered by a committee (the "Incentive Committee"),
comprised of three or more directors of the Company who are not also employees
of the Company ("Non-Employee Directors"). The Incentive Committee has full
authority to interpret the 1995 Plan and to establish rules for its
administration.
Limitations on Awards
Under the 1995 Plan, the aggregate number of shares of Common Stock that may be
issued pursuant to stock options, restricted stock awards, phantom stock awards
(other than any phantom stock awards which are payable only in cash), or stock
appreciation rights may not exceed 2,200,000. A maximum of 15% of the aggregate
number of shares, or 330,000 shares, may be awarded to any single individual
during the duration of the 1995 Plan. A maximum of 10% of the aggregate number
of shares, or 220,000 shares, may be awarded as restricted stock. In the event
the Company adopts a stock purchase plan for the benefit of its employees, the
shares of Common Stock awarded under that plan shall further reduce the
aggregate number of shares available under the 1995 Plan.
16
Eligibility for Awards
All key employees and directors (excluding any director who is a member of the
Incentive Committee or who is a member of the law firm then retained as general
counsel to the Company) are eligible to participate in the 1995 Plan. The
current eligible group consists of approximately 670 persons. The exact number
of persons who will be eligible under the 1995 Plan during its term is not
currently known because the selection of participants is a discretionary
decision of the Committee. In addition, under the 1995 Plan certain Non-
Employee Directors are eligible to receive restricted stock awards, as
described below.
Determination of Amount and Form of Award
The amount of individual awards to key employees will be determined by the
Incentive Committee, subject to the limitations of the 1995 Plan. In
determining the amount and form of an award, consideration will be given to the
functions and responsibilities of the key employee, his or her potential
contributions to the success of the Company, and other factors deemed relevant
by the Incentive Committee.
Stock Options
The Incentive Committee can grant non-qualified options and options qualifying
as incentive stock options under the Internal Revenue Code of 1986, as amended.
The term of an option cannot exceed ten years from the date of grant. The
purchase price of Common Stock issuable upon the exercise of non-qualified
stock options is determined by the Incentive Committee at the time of grant,
and may not be less than 50% of the Fair Market Value of the Common Stock on
the date of grant, or the par value of the stock (whichever is greater). The
exercise price of an incentive stock option must be at least equal to the fair
market value of the Common Stock on the date of grant. Stock options may be
exercised as determined by the Incentive Committee, but in no event after ten
years from the date of grant. The 1995 Plan further provides that the aggregate
fair market value (determined at the time the option is granted) of the Common
Stock with respect to which incentive stock options are exercisable for the
first time by a participant during any calendar year (under all stock option
plans of the Company and its subsidiaries) shall not exceed $100,000; to the
extent that this limitation is exceeded, such options shall be treated as non-
qualified stock options for purposes of the 1995 Plan and of the Code.
Payment of the purchase price for shares acquired upon the exercise of options
may be made by any one or more of the following methods: in cash, by check, by
delivery to the Company of shares of Common Stock already owned by the option
holder, or by such other methods as the Incentive Committee may permit from
time to time; provided, however, that a holder may not use any shares of Common
Stock that were acquired pursuant to the exercise of an option granted under
the 1995 Plan (or any other stock option plan that may be maintained by the
Company or its subsidiaries) to acquire additional shares, unless the holder
has beneficially owned such shares for at least six months, and a holder may
not use any shares of Common Stock that are subject to transfer restrictions to
acquire additional shares.
Stock Appreciation Rights ("SARs")
A stock appreciation right may be granted either independently or in connection
with a stock option (either at the time of grant or at any time during the term
of the stock option). A stock appreciation right granted in connection with a
stock option shall be exercisable or transferable (a) only to the extent that
the related stock option is exercisable or transferable and (b) either in
conjunction with, or as an alternative to, the exercise of the related option.
A stock appreciation right is the right to receive an amount equal to the
excess (or a portion of the excess, as determined by the Incentive Committee),
of the fair market value of a share of Common Stock on the date of exercise
over (i) the
17
fair market value of a share of Common Stock on the date of grant, in the case
of a stock appreciation right granted independently of any stock option, or
(ii) the exercise price of the related stock option, in the case of a stock
appreciation right granted in connection with a stock option. However, with
respect to officers and directors who exercise stock appreciation rights only
during quarterly ten-day periods beginning on the third business day after the
release of the Company's quarterly summary statements of sales and earnings,
the amount payable to all such holders who exercise their stock appreciation
rights during any such period may be uniformly determined by reference to a
single fair market value of a share of Common Stock on any day during such
relevant quarterly period, as may be designated by the Incentive Committee,
rather than the fair market value of such Common Stock on the actual date of
exercise by each respective holder. The holder of a conjunctive stock
appreciation right granted in connection with a stock option is entitled to
receive payment at the time, and to the extent that the stock option is
exercised. The holder of an alternative stock appreciation right granted in
connection with a stock option is entitled to exercise such right by
surrendering the stock option, or any portion thereof to the extent
unexercised, with respect to the number of shares as to which such stock
appreciation right is exercised, and to receive payment therefor. Such stock
option, to the extent surrendered, shall be deemed exercised and the number of
shares with respect to which it was surrendered shall not be available for
future grants of incentive awards. A stock appreciation right granted
independently of any related stock option is exercisable as determined by the
Incentive Committee, but in no event after ten years from the date of grant.
The amount payable upon the exercise of a conjunctive stock appreciation right
granted in connection with a stock option in no event shall exceed two times
the exercise price paid by the holder upon the exercise of the option. In
addition, the Incentive Committee otherwise may limit the amount payable upon
the exercise of any stock appreciation right. At the election of the holder,
but subject to disapproval of such election by the Incentive Committee,
distribution of the amount payable upon the exercise of a stock appreciation
right may be made in shares of Common Stock, valued at their fair market value
on the date of exercise of the stock appreciation right, or in cash, or in a
combination of cash and shares. No stock appreciation right granted to an
officer or director of the Company may be exercised earlier than six months
after the date of grant, except in the event of death or disability.
Stock options and stock appreciation rights become immediately exercisable in
full upon the retirement of the holder after reaching the age of 65 (provided
the holder has been in the employ of the Company for at least two years), upon
the death of the holder while in the employ of the Company, upon the holder's
termination of employment in connection with a Change in Control, as defined in
the 1995 Plan, or upon the occurrence of such special circumstances as in the
opinion of the Incentive Committee merit special consideration. Stock options
and stock appreciation rights terminate at the end of the third business day
following the holder's termination of employment. This period is extended to
three months in the case of the holder's retirement on or after attaining the
age of 65 years, and to six months in the case of the death of the holder, in
which case the stock option and/or stock appreciation right is exercisable by
the holder's estate.
Restricted Stock Awards
The Incentive Committee may grant restricted stock awards to eligible
individuals. A restricted stock award is the grant of shares of Common Stock or
the grant of the right to purchase Common Stock at a price determined by the
Incentive Committee. Such shares of Common Stock, when and if issued, shall be
subject to transfer restrictions determined by the Incentive Committee in its
sole discretion, and subject to substantial risk of forfeiture unless and until
specific conditions established by the Incentive Committee at the time of grant
are met. Such conditions may be based on continuing employment or achievement
of pre-established performance objectives, or both, as determined by the
Incentive Committee. Unless the holder of a restricted stock award ceases to be
an employee of the Company (for reasons other than those described below), the
transfer restrictions imposed upon restricted stock awards lapse in accordance
with a schedule or other conditions as are determined by
18
the Incentive Committee. All restrictions immediately cease upon the death or
disability of the holder, upon the holder's termination of employment in
connection with a Change in Control, as defined in the 1995 Plan, or upon the
occurrence of such special circumstances as in the opinion of the Incentive
Committee merit special consideration. Certificates for the shares of Common
Stock granted or purchased pursuant to restricted stock awards are issued in
the names of the holders thereof, but the certificates are retained by the
Company for the holders' accounts and are not delivered to holders until such
time as the restrictions imposed on the transfer of such shares shall have
lapsed. The holder of a restricted stock award has the right to vote the shares
of Common Stock registered in his or her name. Dividends and distributions
(including stock dividends and distributions in the event of a split-up,
conversion, exchange, reclassification or substitution) with respect to such
shares may be retained by the Company for the holder's account, to be
distributed to the holder at the time, and to the extent that, the restrictions
imposed on the transfer of such shares shall have lapsed.
The 1995 Plan also provides for the granting of incentive awards to certain
Non-Employee Directors whose initial election to the Board of Directors of the
Company is after February 22, 1995 and who otherwise are not eligible to
participate in the 1995 Plan, and thereby assists the Company in attracting and
retaining highly qualified directors. Pursuant to the 1995 Plan, each such Non-
Employee Director (other than directors who are partners of the law firm
retained as general counsel to the Company) may, in the Incentive Committee's
discretion, be granted a restricted stock award within 60 days after his or her
initial election to the Board of Directors of the Company, entitling the holder
to purchase such number of shares of Common Stock as are determined by the
Incentive Committee, for a purchase price of $1.00 per share. The transfer
restrictions imposed on the shares of Common Stock subject to such awards will
lapse, and said shares will become nonforfeitable and transferable, at the rate
of one-third per year as of each of the first, second and third anniversaries
of the date of grant, if the holder is then a director of the Company. With
respect to the restricted stock awards granted to Non-Employee Directors, all
restrictions will immediately lapse and all shares of Common Stock subject to
the award will become nonforfeitable upon the death or disability of the
holder, upon the holder's cessation of service as a director of the Company at
or after age 65 (and after having completed at least two full years of
service), or upon the holder's cessation of service as a director of the
Company in connection with a Change in Control, as defined in the 1995 Plan.
Phantom Stock Awards
The Incentive Committee may grant phantom stock awards to eligible individuals.
A phantom stock award entitles the holder to receive payment from the Company,
upon the expiration of a vesting period, in an amount equal to (i) the fair
market value of one share of Common Stock on the date of such expiration,
multiplied by (ii) the number of units of phantom stock credited to the holder
pursuant to such award and as to which the vesting period has expired. Payment
of such amount may be made in the form of cash, or shares of Common Stock, or a
combination of cash or shares, pursuant to such terms and conditions as are
determined by the Incentive Committee. The vesting period generally expires in
accordance with a schedule or other conditions as are determined by the
Incentive Committee; however, the vesting period completely expires, and all
amounts become payable, immediately upon the death or disability of the holder,
upon the holder's termination of employment in connection with a Change in
Control, as defined in the 1995 Plan, or upon the occurrence of such special
circumstances as in the opinion of the Incentive Committee merit special
consideration. The holder of a phantom stock award is credited with amounts
equal to the dividends payable with respect to the same number of shares of
Common Stock as the number of phantom stock units credited under the award;
however, such dividend-equivalent amounts may be retained by the Company for
the holder's account, to be distributed to the holder at the time, and to the
extent that, the vesting period with respect to such number of units shall have
expired.
19
Anti-Dilution
Each Incentive Award (other than grants of restricted stock) contains usual
anti-dilution provisions which are applicable in the event of a stock dividend,
split-up, conversion, exchange, reclassification or substitution. In other
events involving a change in the corporate structure of the Company, the
Incentive Committee may make such equitable adjustments to Incentive Awards as
may be necessary to prevent dilution or enlargement of the rights of the
holders thereof.
Other Considerations
As consideration for granting incentive awards under the 1995 Plan, the Company
obtains either (a) an option on the services of the recipient, if he or she is
not covered by an employment contract with the Company, for a period of up to
one year, and if he or she currently is covered by an employment contract with
the Company, for not less than an additional one-year period or (b) such other
consideration as the Incentive Committee in its sole discretion may request.
Each Incentive Award may be subject to provisions to assure that any exercise
or disposition of Common Stock will not violate the securities laws. The 1995
Plan does not have a termination date; however, no incentive stock option may
be granted under the 1995 Plan after February 21, 2005.
Amendment
The Company or the Incentive Committee may at any time withdraw or amend the
1995 Plan and may, with the consent of the affected holder of an outstanding
incentive award, at any time withdraw or amend the terms and conditions of
outstanding incentive awards. Any amendment which would increase the number of
shares issuable pursuant to incentive awards or to any individual or change the
class of employees or directors to whom incentive awards may be granted shall
be subject to the approval of the stockholders of the Company within one year
of such amendment.
Market Value of Shares
The shares of the Company's Common Stock are listed on the New York Stock
Exchange and the Pacific Stock Exchange. The market price per share at the
close of business on March 3, 1995 was $17.625.
Federal Income Tax Consequences
The Federal income tax consequences to an employee who receives incentive stock
options generally will, under current law, be as follows: An employee will not
realize any income upon the grant or exercise of an incentive stock option. If
the employee disposes of the shares of Common Stock acquired upon the exercise
of an incentive stock option at least two years after the date the option is
granted and at least one year after the Common Stock is transferred to him or
her, the employee will realize long-term capital gain in an amount equal to the
excess, if any, of his or her selling price for the shares over the option
exercise price. In such case, the Company will not be entitled to any tax
deduction resulting from the issuance or sale of the shares. If the employee
disposes of the shares of Common Stock acquired upon the exercise of an
incentive stock option prior to the expiration of two years from the date the
option is granted, or one year from the date the Common Stock is transferred to
him or her (the "holding period"), any gain realized will be taxable at such
time as follows: (a) as ordinary income to the extent of the difference between
the option exercise price and the lesser of the fair market value of the shares
on the date the option was exercised or the amount realized from such
disposition, and (b) as capital gain to the extent of any excess, which gain
shall be treated as short-term or long-term capital gain depending upon the
holding period of the Common Stock. In such case, the Company may claim an
income tax deduction (as compensation) for the amount taxable to the employee
as ordinary income. In general, the difference between the fair market value of
the Common Stock at the time the incentive stock option is exercised and the
option exercise price will constitute an item of adjustment for purposes of
determining alternative minimum
20
taxable income, and under certain circumstances may be subject, in the year in
which the option is exercised, to the alternative minimum tax. If an employee
uses shares of Common Stock which he or she owns to pay, in whole or in part,
the exercise price for shares acquired pursuant to an incentive stock option,
(a) the holding period for the newly issued shares of Common Stock equal in
value to the old shares which were surrendered upon the exercise shall include
the period during which the old shares were held, (b) the employee's basis in
such newly issued shares will be the same as his or her basis in the old shares
surrendered and (c) no gain or loss will be recognized by the employee on the
old shares surrendered. However, if any employee uses shares previously
acquired pursuant to the exercise of an incentive stock option to pay all or
part of the exercise price under an incentive stock option, such tender will
constitute a disposition of such previously acquired shares for purposes of the
one-year (or two-year) holding period requirement applicable to such incentive
stock option and such tender may be treated as a taxable exchange.
The Federal income tax consequences to an individual who receives non-qualified
stock options generally will, under current law, be as follows: An individual
will not realize any income at the time the option is granted. The individual,
if he or she is not a director, officer or beneficial owner of more than 10% of
the outstanding shares of Common Stock (hereinafter, a "director, officer or
principal stockholder"), will realize income, at the time he or she exercises
such option, in an amount equal to the amount by which the then fair market
value of the Common Stock acquired pursuant to the exercise of the option
exceeds the price paid for such Common Stock. If a director, officer or
principal stockholder receives shares pursuant to the exercise of such an
option, he or she will realize ordinary income only on the earlier of (i) six
months after the date of exercise, or (ii) the date on which he or she can sell
such shares at a profit without being subject to suit under Section 16(b) of
the Securities Exchange Act of 1934, as amended, at which time he or she will
be subject to tax on the difference between the then fair market value of the
shares and the price paid for them. Alternatively, a director, officer or
principal stockholder who would not otherwise be subject to tax on the value of
his or her shares as of the date they were acquired can file a written election
with the Internal Revenue Service, no more than 30 days after the shares are
transferred to him or her, to be taxed as of the date of transfer. The
individual then will realize income in a total amount equal to the amount by
which the fair market value of the shares, as of the date he or she acquired
them, exceeds the price paid for such shares. All income realized upon the
exercise of a non-qualified stock option will be taxed at ordinary income
rates. The Company will be entitled to a tax deduction (as compensation) for
the amount taxable to an individual (including a director, officer and
principal stockholder) upon the exercise of a non-qualified stock option, as
described above, in the same year as those amounts are taxable to the
individual. Shares of Common Stock issued pursuant to the exercise of a non-
qualified stock option generally will constitute a capital asset in the hands
of an individual (including a director, officer or principal stockholder) and
will be eligible for capital gain or loss treatment upon any subsequent
disposition. The holding period of an individual (including a director, officer
or principal stockholder) will commence upon the date he or she recognizes
income with respect to the issuance of such shares, as described above. The
individual's basis in the shares will be equal to the greater of their fair
market value as of that date or the amount paid for such shares. If, however,
an individual uses shares of Common Stock which he or she owns to pay, in whole
or in part, the exercise price for shares acquired pursuant to the exercise of
a non-qualified stock option, (a) the holding period for the newly issued
shares of Common Stock equal in value to the old shares which were surrendered
upon the exercise shall include the period during which the old shares were
held, (b) the individual's basis in such newly issued shares will be the same
as his or her basis in the surrendered shares, (c) no gain or loss will be
realized by the individual on the old shares surrendered, and (d) the
individual will realize ordinary income in an amount equal to the fair market
value of the additional shares received over and above the old shares
surrendered.
The Federal income tax consequences to an individual who receives restricted
stock awards generally will, under current law, be as follows: An individual
will not realize any income when the right to
21
acquire shares subject to restricted stock awards ("Restricted Shares") is
granted to him or her. The individual will realize ordinary income as and when
the Restricted Shares are no longer subject to a substantial risk of forfeiture
(which risk of forfeiture includes the restrictions imposed by Section 16(b) of
the Securities Exchange Act of 1934), in an amount equal to the difference
between the fair market value of the Restricted Shares as of such date and the
price, if any, he or she paid for such shares. Alternatively, the individual
can file a written election with the Internal Revenue Service, no more than 30
days after the certificates for the Restricted Shares are issued, to be taxed
as of the date of issuance on the difference between the then fair market value
of the Restricted Shares and the price, if any, he or she paid for such shares.
Once the individual has realized ordinary income with respect to the Restricted
Shares, any subsequent increase in the value of the Restricted Shares generally
will be taxed when the shares are sold as long-term or short-term capital gain,
depending on how long the Restricted Shares are held. The individual's holding
period with respect to the Restricted Shares will begin on the date he or she
realizes ordinary income with respect to the Restricted Shares and the basis in
the shares will be equal to their then fair market value. The Company will be
entitled to a tax deduction when, and to the extent, ordinary income is
realized by the individual with respect to such shares. Any dividends or other
distributions paid on the Restricted Shares generally will be taxable when
distributed to the individual.
An individual will be subject to tax, at ordinary income rates, on the amount
of cash and the fair market value of any property received by him or her upon
the exercise of any stock appreciation rights or upon the expiration of the
vesting period under a phantom stock award. The Company will be entitled to a
tax deduction equal to the amount includible in the employee's income. In
addition to the Federal income tax consequences discussed above, Section 280G
of the Code provides that if an officer, stockholder or highly compensated
individual receives a payment which is in the nature of compensation and which
is contingent upon a change in control of the employer, and such payment equals
or exceeds three times his or her "base salary" (as hereinafter defined), then
any amount received in excess of base salary shall be considered an "excess
parachute payment." An individual's "base salary" is equal to his or her
average annual compensation over the five-year period (or period of employment,
if shorter) ending with the close of the individual's taxable year immediately
preceding the taxable year in which the change in control occurs. If the
taxpayer establishes, by clear and convincing evidence, that such payment is
reasonable compensation for past or future services, then all or a portion of
such payment may be deemed not to be a parachute payment. Under certain
circumstances, incentive awards may give rise to excess parachute payments. If
so, then in addition to any income tax which would otherwise be owed in
connection with such payment, the individual will be subject to an excise tax
equal to 20% of such excess payment, and the Company will not be entitled to
any tax deduction to which it would have been entitled with respect to such
excess parachute payment.
For purposes of Section 162(m), as described above in the Compensation
Committee Report on Executive Compensation, compensation which is performance-
based is not counted as subject to the deductibility limitations. Income
pursuant to stock options and stock appreciation rights having an exercise
price or base value equal to the fair market value of the Common Stock on the
date of grant, granted under the 1995 Plan, are intended to permit the full
deduction by the Company, by qualifying such amounts as performance-based
compensation and, therefore, exempt from the limitations of Section 162(m).
Income pursuant to restricted stock awards and phantom stock awards would be
subject to the deductibility limitations of Section 162(m).
The foregoing summary with respect to Federal income taxation does not purport
to be complete and does not take into account state tax implications. Reference
is made to the applicable provisions of the Code.
22
PROPOSAL (3)
APPOINTMENT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THIS PROPOSAL.
The Board of Directors has appointed the firm of Ernst & Young LLP, which has
audited the accounts of the Company since 1930, as independent auditors for the
year 1995. The stockholders are requested to signify their approval of the
appointment.
It is expected that a representative of Ernst & Young LLP will be present at
the annual meeting of stockholders. The representative will have an opportunity
to make a statement and is expected to be available to respond to appropriate
questions.
(4) OTHER MATTERS
As of this date the Board of Directors is not aware of any matters which may
come before the meeting other than those hereinabove set forth, but the proxy
solicited herewith confers discretionary authority to vote with respect to any
other business that may properly come before the meeting.
Proposals of stockholders intended to be presented at the Company's 1996 annual
meeting of stockholders must be received by the Company at its executive
offices shown on page 2 of this proxy statement on or prior to November 24,
1995 to be eligible for inclusion in the proxy material to be used in
connection with the 1996 annual meeting.
By order of the Board of Directors
ROBERT W. YANNARELL,
Secretary
Dated: New York, New York, March 23, 1995
23
ANNEX A
1995 STOCK INCENTIVE PLAN OF AMETEK, INC.
1. Purpose. The purpose of this Stock Incentive Plan is to advance the
interests of the Corporation by encouraging and enabling the acquisition of a
larger personal proprietary interest in the Corporation by key employees and
Directors of the Corporation and its Affiliates upon whose judgment and keen
interest the Corporation is largely dependent for the successful conduct of its
operations, and by providing such key employees and Directors with incentives
to maximize the success of the Corporation. It is anticipated that the
acquisition of such proprietary interest in the Corporation and such incentives
will strengthen the desire of such key employees and Directors to remain with
the Corporation as well as that such incentives and the opportunity to acquire
such a proprietary interest will enable the Corporation and its Affiliates to
attract desirable personnel and Directors.
2. Definitions. When used in this Plan, unless the context otherwise requires:
(a) "Act" shall mean the Securities Exchange Act of 1934, as amended.
(b) "Affiliate" shall mean a person or entity that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is
under common control with the Corporation. For this purpose, 50% general
voting power of an incorporated entity, or 50% profits interest of an
unincorporated entity, as the case may be, shall constitute control.
(c) "Board of Directors" shall mean the Board of Directors of the
Corporation as constituted at any time.
(d) "Chairman of the Board" shall mean the person who at the time shall be
Chairman of the Board of Directors of the Corporation.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Committee" shall mean the Compensation Committee of AMETEK, Inc.
hereinafter described in Section 4.
(g) "Corporation" shall mean AMETEK, Inc.
(h) "Fair Market Value" shall mean the average of the high and low sales
prices on the stock exchange or market on which the Shares are primarily
traded on the date as of which such value is being determined or, if there
shall be no sale on that date, then on the last previous day on which a
sale was reported.
(i) "Incentive Award" shall mean an Option, Phantom Stock Award, Restricted
Stock Award, or Rights granted pursuant to the Plan.
(j) "Incentive Stock Option" shall mean an option as defined under Section
422 of the Code and regulations promulgated thereunder.
(k) "Non-Employee Director" shall mean a Director of the Corporation and/or
its Affiliates who is not also an employee of the Corporation and/or its
Affiliates.
(l) "Non-Qualified Stock Option" shall mean an Option other than an
Incentive Stock Option.
(m) "Options" shall mean the stock options granted pursuant to the Plan,
including Non-Qualified Stock Options and Incentive Stock Options, which
shall entitle the holder thereof to purchase Shares from the Corporation
for such price and at such times as the Committee shall determine at the
time the Options are granted, subject to the terms and conditions of the
Plan.
(n) "Phantom Stock Award" shall mean an Award granted in accordance with
the provisions of Section 11 hereof, which shall entitle the holder thereof
to receive from the Corporation cash or Shares, or a combination of cash
and Shares, based upon the Fair Market Value of Shares at the
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time of the expiration of the vesting period under such Award, subject to
the terms and conditions of the Plan.
(o) "Phantom Stock Units" shall mean the units of Phantom stock credited to
the holder of a Phantom Stock Award, each of which units shall be a
fictitious share of common stock which is the equivalent of one Share.
(p) "Plan" shall mean the 1995 Stock Incentive Plan of AMETEK, Inc. adopted
by the Board of Directors on February 22, 1995, as such Plan from time to
time may be amended.
(q) "Restricted Shares" shall mean the Shares issued as a result of a
Restricted Stock Award.
(r) "Restricted Stock Award" shall mean a grant of Shares or of the right
to purchase Shares pursuant to Section 10 hereof. Such Shares, when and if
issued, shall be subject to such transfer restrictions and risk of
forfeiture as the Committee shall determine at the time the Award is
granted, or as specified in subsection (d) of Section 10 hereof, until such
specific conditions are met. Such conditions may be based on continuing
employment (or services) or achievement of pre-established performance
objectives, or both.
(s) "Rights" shall mean stock appreciation rights granted pursuant to the
Plan, which shall entitle the holder thereof to receive from the
Corporation cash or Shares or a combination of cash and Shares based upon
the excess of the Fair Market Value of Shares at the time of exercise over
the purchase price of the Shares subject to the related Option, or the Fair
Market Value of Shares on the date the Rights were granted, as the case may
be, subject to the terms and conditions of the Plan.
(t) "Share" shall mean a share of common stock of the Corporation.
3. Shares Subject to the Plan. Subject to the provisions of Section 17 hereof,
the aggregate number of Shares that may be subject to Options, Phantom Stock
Awards (other than any Phantom Stock Awards which are payable only in cash),
Restricted Stock Awards and Rights shall not exceed 2,200,000, which Shares may
be either Treasury Shares or authorized but unissued Shares. A maximum of 15%
of the aggregate number of shares, or 330,000 shares, may be awarded to any
single individual during the duration of the Plan. A maximum of 10% of the
aggregate number of shares, or 220,000 shares, may be awarded as Restricted
Shares. In the event the Company adopts a stock purchase plan for the benefit
of its employees, the shares of Common Stock awarded under that plan shall
further reduce the aggregate number of shares available under this Plan. If the
Shares that would be issued or transferred pursuant to any such Incentive Award
are not issued or transferred and cease to be issuable or transferable for any
reason (including the extent to which payment pursuant to a Phantom Stock Award
is made in cash), or if Restricted Shares issued pursuant to a Restricted Stock
Award are forfeited and the holders received no benefits of ownership which are
not also forfeited (other than voting rights), the number of Shares subject to
such Incentive Award will no longer be charged against the limitation provided
for herein and may again be made subject to Incentive Awards; provided,
however, that Shares as to which an Option has been surrendered in connection
with the exercise of a related Right shall not again be available for the grant
of any further Incentive Awards.
4. Committee. The Plan shall be administered by a Committee which shall consist
of at least three Non-Employee Directors, none of whom shall have been eligible
to participate in the Plan or in any other plan of the Corporation or any of
its Affiliates entitling the participants therein to acquire stock, stock
options or stock appreciation rights of the Corporation or any of its
Affiliates at any time within one year prior to appointment; and provided,
further, that the counting of Shares that are subject to outstanding Incentive
Awards and the number of Shares that remain available for further grants
hereunder shall in any event comply with Rule 16b-3 promulgated under the Act.
Notwithstanding the preceding, with respect to any Option or Right granted to
any person who is a "covered employee" as defined in Section 162(m) of the Code
that is canceled (other than with respect to the
A-2
exercise of a related Right or Option) or as to which the exercise price or
base value is reduced, the number of Shares subject to such Option or Right
shall continue to be counted, in accordance with said Section 162(m) and
regulations promulgated thereunder, against the maximum number of Shares which
may be the subject of Incentive Awards granted to such person. The members of
the Committee shall be selected by the Board of Directors. If a member of the
Committee, for any reason, shall cease to serve, the vacancy may be filled by
the Board of Directors. Any member of the Committee may be removed at any time,
with or without cause, by the Board of Directors. The Chairman of the Committee
shall be designated by the Board of Directors, and meetings of the Committee
may be called at any time by its Chairman or upon written request of a majority
of the members of the Committee, provided that meetings may be held at any time
without notice if all the members are present or if at any time before or after
the meeting those not present waive notice of the meeting in writing. Subject
to the preceding provision, at least one day's notice of the meeting shall be
given in person or by telephone, letter, telegram or cablegram. At all meetings
of the Committee, a majority of the members of the Committee at the time of
such meeting shall be necessary to constitute a quorum. Any act of a majority
of the quorum present at a meeting shall be the act of the Committee.
5. Participants. All key employees of the Corporation and its Affiliates shall
be eligible to receive Incentive Awards under the Plan. The persons to whom
Incentive Awards are to be offered under the Plan and the number of Shares with
respect to which Incentive Awards are to be granted to each such person shall
be determined by the Committee in its sole discretion, subject, however, to the
terms and conditions of the Plan. Notwithstanding the foregoing, no Incentive
Stock Option may be granted under the Plan to any Non-Employee Director or to
any person who would, after the granting of such Incentive Stock Option, own
(within the meaning of Section 422(b)(6) of the Code) common stock of the
Corporation possessing more than 10% of the total combined voting power or
value of all classes of common stock of the Corporation or an Affiliate. Non-
Employee Directors shall be eligible to be granted Restricted Stock Awards in
accordance with the provisions of subsection (d) of Section 10 hereof.
6. Grant of Options. The number of Options to be granted to any eligible person
shall be determined by the Committee in its sole discretion. At the time an
Option is granted, the Committee may, in its sole discretion, designate whether
such Option (a) is to be considered as an Incentive Stock Option, or (b) is to
be treated as a Non-Qualified Stock Option for purposes of this Plan and the
Code, or (c) is in part to be considered as an Incentive Stock Option and in
part to be treated as a Non-Qualified Stock Option for purposes of this Plan
and the Code; provided, however, that no Incentive Stock Option may be granted
after February 21, 2005.
Notwithstanding any other provision of this Plan to the contrary, to the extent
that the aggregate Fair Market Value (determined as of the date an Option is
granted) of the Shares with respect to which Options which are designated as
Incentive Stock Options (and any other incentive stock options granted to an
employee after 1986 under any other incentive stock option plan maintained by
the Corporation or any Affiliate that meets the requirements of Section 422 of
the Code) first become exercisable in any calendar year exceeds $100,000, such
Options shall be treated as Non-Qualified Stock Options. This paragraph shall
be applied by taking options into account in the order in which they are
granted.
Nothing herein contained shall be construed to prohibit the granting of Options
at different times to the same person.
The form of Option shall be as determined from time to time by the Committee. A
certificate of Option signed by the Chairman of the Board or the President or a
Vice President, attested by the Treasurer or an Assistant Treasurer, or
Secretary or an Assistant Secretary of the Corporation and having the
A-3
seal of the Corporation affixed thereto, shall be delivered to each person to
whom an Option is granted.
7. Grant of Rights. The Committee shall have the authority in its discretion to
grant to any eligible person Rights which may be granted separately or in
connection with an Option (either at the time of grant or at any time during
the term of the Option). Rights granted in connection with an Option shall be
granted with respect to the same number of Shares then covered by the Option,
subject to adjustment pursuant to the provisions of Section 17 hereof, and may
be exercised, as determined by the Committee in its discretion at the time of
the grant of the Rights, either in conjunction with, or as an alternative to,
the exercise of the related Option.
Conjunctive Rights granted in connection with an Option shall entitle the
holder thereof to receive payment from the Corporation, determined as
hereinafter provided, only if and to the extent that the related Option is
exercisable and is exercised. Upon any exercise of an Option in respect of
which conjunctive Rights shall have been granted, the holder of the Rights
shall be entitled to receive payment of an amount equal to the product obtained
by multiplying (i) the excess of the Fair Market Value of one Share on the date
of such exercise over the purchase price per Share payable upon exercise of the
related Option (the "Price Spread"), or a portion of the Price Spread
determined by the Committee at the time of grant, by (ii) the number of Shares
in respect of which the related Option shall have then been so exercised;
provided, however, that the amount of the payment which a holder of such Rights
shall be entitled to receive upon any exercise of the Rights shall in no event
exceed two times the aggregate purchase price payable by such holder for the
Shares in respect of which the related Option shall have then been so
exercised.
Alternative Rights granted in connection with an Option shall entitle the
holder thereof to receive payment from the Corporation, determined as
hereinafter provided, only if and to the extent that the related Option is
exercisable, by surrendering the Option with respect to the number of Shares as
to which such Rights are then exercised. Such Option, to the extent
surrendered, shall be deemed exercised. Upon any exercise of alternative
Rights, the holder thereof shall be entitled to receive payment of an amount
equal to the product obtained by multiplying (i) the Price Spread, or a portion
of the Price Spread determined by the Committee at the time of grant, by (ii)
the number of Shares in respect of which the Rights shall have then been so
exercised. Rights granted without relationship to an Option shall be
exercisable as determined by the Committee, but in no event after ten years
from the date of grant. Such Rights shall entitle the holder, upon the exercise
thereof, to receive payment from the Corporation of an amount equal to the
product obtained by multiplying (i) the excess of the Fair Market Value of one
Share on the date of such exercise over the Fair Market Value of one Share on
the date the Rights were granted (the "Value Spread"), or a portion of the
Value Spread determined by the Committee at the time of grant, by (ii) the
number of Shares in respect of which the Rights shall have then been so
exercised.
Notwithstanding anything contained herein, the Committee may, in its sole
discretion, limit the amount payable upon the exercise of Rights. Any such
limitation shall be determined as of the date of grant and noted on the
certificate evidencing the grant of the Rights.
At the holder's election, payment of the amount determined hereunder upon the
exercise of Rights may be made solely in cash, or solely in Shares valued at
their Fair Market Value on the date of exercise of the Rights, or in a
combination of cash and Shares. Notwithstanding any other provision of the Plan
or of any Option or Rights, upon the exercise of Rights, the Committee shall
have the power at its discretion to disapprove the holder's election as to the
form (i.e., cash or Shares, or part in cash and part in Shares) in which
payment of the Rights will be made and to substitute therefor payment as it
determines. If the Committee does not disapprove an election made upon the
exercise of Rights within 60 days after such exercise or election then the
Committee shall be deemed to have
A-4
approved such election. No fractional Shares shall be issued by the
Corporation, and settlement therefor shall be made in cash.
Notwithstanding any other provision of the Plan or of the Rights, for purposes
of determining the amount of the Price Spread or the Value Spread in the case
of a holder of Rights who is a Director or officer subject to Section 16(b) of
the Act, the Committee, in its sole discretion, may designate a single Fair
Market Value per Share with respect to all such holders who exercise Rights
during any single ten-day period specified in Rule 16b-3(e)(3) under the Act;
provided, however, that the Fair Market Value per Share designated by the
Committee during any such period shall in no event be greater than the highest
Fair Market Value per Share on any day during such period or less than the
lowest Fair Market Value per Share on any day during such period.
The form of Rights shall be as determined from time to time by the Committee. A
certificate of Rights signed by the Chairman of the Board or the President or a
Vice President, attested by the Treasurer or an Assistant Treasurer, or
Secretary or an Assistant Secretary, of the Corporation and having the seal of
the Corporation affixed thereto, shall be delivered to each person to whom
Rights are granted.
8. Duration of Option and Related Rights. The duration of any Option granted
under the Plan shall be fixed by the Committee in its sole discretion;
provided, however, that no Option shall remain in effect for a period of more
than ten years from the date on which it is granted. The duration of any Rights
granted in connection with any Option granted under the Plan shall be
coterminous with the duration of the related Option.
9. Exercise of Options and Rights. Except as otherwise provided herein, an
Option and Rights, after the grant thereof, shall be exercisable by the holder
at such rate and times as may be fixed by the Committee, in its sole
discretion, at the time the Option and Rights are granted. Notwithstanding the
foregoing, all or any part of any remaining unexercised Options or Rights
granted to any person may be exercised (a) subject to the provisions of Section
13 hereof, upon the holder's retirement at or after age 65, provided the holder
has completed at least two full years of employment with the Corporation or an
Affiliate, (b) subject to the provisions of Section 13 hereof, upon the death
of the holder, (c) upon the holder's termination of employment in connection
with a Change in Control, or (d) upon the occurrence of such special
circumstance or event as in the opinion of the Committee merits special
consideration.
As used in the Plan, a "Change in Control" shall be deemed to have occurred if,
without the consent or approval of a majority of the Board of Directors, (i)
any person (as such term is used in Sections 13(d) and 14(d)(2) of the Act)
becomes the beneficial owner (as defined in Rule 13d-3 under the Act), directly
or indirectly, of securities of the Corporation representing 20% or more of the
combined voting power of the Corporation's then outstanding securities, or (ii)
the stockholders of the Corporation approve a merger, consolidation, sale or
disposition of all or substantially all of the Corporation's assets, or a plan
of liquidation.
An Option shall be exercised by the delivery of a duly signed notice in writing
to such effect, together with the Option certificate and the full purchase
price of the Shares purchased pursuant to the exercise of the Option, to the
Secretary or an officer of the Corporation appointed by the Chairman of the
Board for the purpose of receiving the same. Payment of the full purchase price
shall be made as follows: in cash, or by check payable to the order of the
Corporation, or by delivery to the Corporation of Shares which shall be valued
at their Fair Market Value on the date of exercise of the Option or by such
other methods as the Committee may permit from time to time; provided, however,
that a holder may not use any Shares acquired pursuant to the exercise of an
Option granted under this Plan or any other stock option plan maintained by the
Corporation or any Affiliate unless the holder has beneficially owned such
Shares for at least six months, nor may the holder use
A-5
any Restricted Shares with respect to which all restrictions and conditions
have not lapsed or been satisfied. Any Rights exercised in conjunction
therewith shall be exercised by the inclusion in such notice of a notice of
exercise of Rights, together with the Rights certificate, and a specification
of the percentages of the Rights which the holder desires to receive in cash
and in Shares.
Within a reasonable time after the exercise of an Option, the Corporation shall
cause to be issued and delivered, to the person entitled thereto, a certificate
for the Shares purchased pursuant to the exercise of the Option, and, if Rights
have been exercised in conjunction therewith, the amount of cash and/or a
certificate for the number of Shares determined in accordance with Section 7
hereof. If the Option and any conjunctive Rights shall have been exercised with
respect to less than all of the Shares subject to the Option and Rights, the
Corporation shall also cause to be delivered to the person entitled thereto an
Option certificate and a Rights certificate with respect to the number of
Shares equal to the difference between the number of Shares of the Option
certificate and Rights certificate surrendered at the time of the exercise of
the Option and Rights and the number of Shares with respect to which the Option
and Rights were so exercised, or the original Option certificate and Rights
certificate shall be endorsed to give effect to the partial exercise thereof.
If any Option is treated in part as an Incentive Stock Option and in part as a
Non-Qualified Stock Option, the Corporation shall designate the Shares that are
treated as purchased pursuant to the exercise of an Incentive Stock Option by
causing to be delivered a separate certificate therefor.
Rights that are exercisable as an alternative to the exercise of a related
Option, or without relationship to an Option, shall be exercised by the
delivery of a duly signed notice in writing to such effect, together with the
Rights certificate, and a specification of the percentages of the Rights which
the holder desires to receive in cash and in Shares. Holders of alternative
Rights shall also surrender the related Option certificate. Within a reasonable
time thereafter, the Corporation shall cause to be delivered and/or issued to
the person entitled thereto, the amount of cash and/or a certificate for the
number of Shares determined in accordance with Section 7 hereof. Upon the
exercise of alternative Rights, the number of Shares subject to exercise under
the related Option or portion thereof shall be reduced by the number of Shares
represented by the Option or portion thereof surrendered. Shares subject to
Options or portions thereof surrendered upon the exercise of alternative Rights
shall not be available for subsequent Incentive Awards under the Plan. If the
Rights shall have been exercised with respect to less than all of the Shares
subject thereto (or to the related Option, if any), the Corporation shall also
cause to be delivered to the person entitled thereto a Rights certificate (and
an Option certificate, in the case of alternative Rights) with respect to the
difference between the number of Shares of the Rights certificate (and related
Option certificate, if any) surrendered at the time of the exercise of the
Rights and the number of Shares with respect to which the Rights were so
exercised (and the related Option, if any, was so surrendered), or the original
Rights certificate (and related Option certificate, if any) shall be endorsed
to give effect to the partial exercise (and surrender) thereof.
Notwithstanding any other provision of the Plan or of any Option or Rights, no
Option or Rights granted pursuant to the Plan may be exercised at any time when
the Option or Rights or the granting or exercise thereof violates any law or
governmental order or regulation.
10. Terms and Conditions of Restricted Stock Awards.
(a) All Restricted Shares granted to or purchased by an eligible person
pursuant to the Plan shall be subject to the following conditions:
(i) the Restricted Shares may not be sold, transferred, or otherwise
alienated or hypothecated until the restrictions are removed or expire;
(ii) each certificate representing Restricted Shares issued pursuant to a
Restricted Stock Award under this Plan shall bear a legend making
appropriate reference to the restrictions imposed; and
A-6
(iii) the Committee may impose such other conditions as it may deem
advisable on any Restricted Shares granted to or purchased by an eligible
person pursuant to a Restricted Stock Award under this Plan, including,
without limitation, restrictions under the requirements of any stock
exchange upon which such Shares or shares of the same class are then
listed, and under any securities law applicable to such Shares.
(b) The restrictions imposed under subsection (a) hereof upon Restricted Stock
Awards shall lapse in accordance with a schedule or other conditions as
determined by the Committee, subject to the provisions of Section 13 hereof.
(c) Prior to the expiration or lapse of all of the restrictions and conditions
imposed upon Restricted Shares, a stock certificate or certificates
representing such Restricted Shares shall be registered in the holder's name
but shall be retained by the Corporation for the holder's account. The holder
shall have the right to vote such Restricted Shares and shall have all other
rights and privileges of a beneficial and record owner with respect thereto,
including, without limitation, the right to receive dividends, distributions
and adjustments with respect thereto; provided, however, that such dividends,
distributions and adjustments may be retained by the Corporation for the
holder's account and for delivery to the holder, together with the stock
certificate or certificates representing such Restricted Shares, as and when
said restrictions and conditions shall have expired or lapsed.
(d) Each Non-Employee Director whose initial election to the Board of Directors
is after the date of adoption of the Plan by the Board of Directors (other than
any Non-Employee Director who is a partner of the law firm then retained as
general counsel to the Corporation) may, in the discretion of the Committee, be
granted a Restricted Stock Award within 60 days after such Non-Employee
Director's initial election to the Board of Directors. Each such Restricted
Stock Award shall entitle the holder to purchase such number of Restricted
Shares as may be determined by the Committee, for a purchase price of $1.00 per
Share. The restrictions imposed on the transfer of the Restricted Shares
subject to each Restricted Stock Award granted pursuant to this subsection (d)
shall lapse, and said Restricted Shares shall become nonforfeitable and
transferable, at the rate of 33 1/3% per year, at the end of each successive
twelve-month period following the date on which each such Restricted Stock
Award is granted, if within such period the Non-Employee Director's service as
a member of the Board of Directors has not ceased. Notwithstanding the
preceding, all restrictions imposed on the transfer of the Restricted Shares
subject to each Restricted Stock Award granted pursuant to this subsection (d)
shall lapse, and all such Restricted Shares shall become nonforfeitable, (i)
upon the death or disability of the Non-Employee Director, (ii) upon the Non-
Employee Director's cessation of service as a Director at or after age 65,
provided the Non-Employee Director has completed at least two full years of
service with the Corporation or an Affiliate, or (iii) upon the Non-Employee
Director's cessation of service as a Director in connection with a Change in
Control. Payment of the purchase price for the Restricted Shares purchased
pursuant to each such Restricted Stock Award shall be made in cash, or by check
payable to the order of the Corporation. No Incentive Award may be granted to a
Non-Employee Director other than in accordance with the provisions of this
subsection (d).
11. Terms and Conditions of Phantom Stock Awards. The Committee shall have the
authority in its discretion to grant to any eligible person Phantom Stock
Awards which shall be subject to the following conditions:
(a) The Phantom Stock Units credited to the holder of a Phantom Stock Award
shall be subject to a vesting period which shall mean a period commencing
on the date the Award is granted and ending in accordance with a schedule
or other conditions as determined by the Committee, subject to the
provisions of Section 13 hereof. The Committee may provide for the
expiration of the vesting period in installments where deemed appropriate.
A-7
(b) A Phantom Stock Award shall entitle the holder, upon the expiration of
the vesting period, to receive payment from the Corporation of an amount
equal to the product obtained by multiplying (i) the Fair Market Value of
one Share on the date of such expiration by (ii) the number of Phantom
Stock Units in respect of which the vesting period shall have then expired.
The payment of such amount may be made solely in cash, or solely in Shares
valued at their Fair Market Value on the date of expiration of the vesting
period, or in a combination of cash and Shares, subject to such terms and
conditions as are determined by the Committee; provided, however, that no
fractional Shares shall be issued by the Corporation, and settlement
therefore shall be made in cash.
(c) The Committee may impose such other conditions as it may deem advisable
on any Shares which may be issued pursuant to a Phantom Stock Award under
this Plan, including, without limitation, restrictions under the
requirements of any stock exchange upon which such Shares or shares of the
same class are then listed, and under any securities law applicable to such
Shares.
(d) Prior to the expiration of the vesting period under a Phantom Stock
Award, amounts equal to the dividends payable with respect to the same
number of Shares as the number of Phantom Stock Units as to which the
vesting period has not expired shall be credited to the holder's account
under such Award; provided, however, that such dividend-equivalent amounts
may be retained by the Corporation for the holder's account and for
delivery to the holder only as and when said vesting period shall have
expired.
12. Purchase Price. The purchase price per Share for Restricted Shares to be
purchased pursuant to Restricted Stock Awards, or for the Shares to be
purchased pursuant to the exercise of an Option, shall be fixed by the
Committee at the time of the grant of the Restricted Stock Award or Option;
provided, however, that (i) the purchase price per Share for the Shares to be
purchased pursuant to the exercise of an Incentive Stock Option shall not be
less than 100% of the Fair Market Value of a Share on the date such Incentive
Stock Option is granted, and (ii) the purchase price per Share for the Shares
to be purchased pursuant to the exercise of a Non-Qualified Stock Option shall
not be less than the greater of (A) 50% of the Fair Market Value of a Share on
the date such Non-Qualified Stock Option is granted, or (B) the par value of a
Share.
13. Termination of Employment. If a holder of an Option and/or Rights shall
voluntarily or involuntarily leave the employ of the Corporation and its
Affiliates, the Option and Rights of such holder shall terminate forthwith,
except that the holder shall have until the end of the third business day
following the cessation of the holder's employment with the Corporation and its
Affiliates to exercise any unexercised Option and/or Rights the holder could
have exercised on the day on which he left the employ of the Corporation and
Affiliates. Notwithstanding the foregoing, if the cessation of employment is
due to retirement on or after attaining the age of sixty-five years, or to
death, the holder or the representatives of the estate of the holder shall have
the privilege of exercising the unexercised Options and/or Rights which the
holder or the deceased could have exercised at the time of his retirement or
death, provided that such exercise must be accomplished prior to the expiration
of such Options and Rights and either within three months of the holder's
retirement or within six months after the death of the holder, as the case may
be. If the employment of any holder with the Corporation or an Affiliate shall
be terminated because of the holder's violation of the duties of such
employment with the Corporation or its Affiliates as he may from time to time
have, the existence of which violation shall be determined by the Committee in
its sole discretion and which determination by the Committee shall be
conclusive, all unexercised Options and Rights of such holder shall terminate
immediately upon the termination of the holder's employment with the
Corporation or an Affiliate, and a holder whose employment with the Corporation
or an Affiliate is so terminated shall have no right after such termination to
exercise any unexercised Option or Rights he might have exercised prior to the
termination of his employment with the Corporation or an Affiliate.
A-8
Except as hereinafter provided, if a holder of a Restricted Stock Award shall
voluntarily or involuntarily leave the employ or service of the Corporation and
its Affiliates, all such Restricted Shares subject to restrictions at the time
his employment or service terminates (and any dividends, distributions and
adjustments retained by the Corporation with respect thereto) shall be
forfeited and any consideration received therefor from the holder shall be
returned to the holder. Notwithstanding the foregoing, all restrictions to
which Restricted Stock Awards are subject shall lapse (a) upon the death or
disability of the holder, (b) upon the holder's termination of employment or
cessation of service as a Director in connection with a Change in Control, or
(c) upon the occurrence of such special circumstance or event as in the opinion
of the Committee merits special consideration.
Except as hereinafter provided, if a holder of a Phantom Stock Award shall
voluntarily or involuntarily leave the employ or service of the Corporation and
its Affiliates prior to the complete expiration of the vesting period, all
amounts theretofore remaining payable pursuant to such Award (including any
dividend equivalent amounts retained by the Corporation with respect thereto)
shall be forfeited. Notwithstanding the foregoing, the vesting period under a
Phantom Stock Award shall completely expire, and all amounts remaining payable
thereunder shall be payable (a) upon the death or disability of the holder, (b)
upon the holder's termination of employment in connection with a Change in
Control, or (c) upon the occurrence of such special circumstance or event as in
the opinion of the Committee merits special consideration.
14. Consideration for Incentive Awards. As consideration for the grant of an
Incentive Award, the Corporation shall obtain in each case either (a) from any
recipient who at the time of the grant of the Incentive Award shall not have
been under a contract of employment, an option to have the services of such
recipient for such period, up to one year, as the Corporation shall determine,
or (b) from any recipient who is under an employment contract at the time the
Incentive Award is granted, an option to extend the term of his contract for a
period of not less than one year upon such terms and conditions as the
Corporation and the employee may agree, but if they are unable to agree, then
upon the same terms and conditions of such contract, or (c) from either a
recipient who is or is not under an employment contract at the time the
Incentive Award is granted, such other consideration as the Committee, in its
sole discretion, shall request.
15. Non-Transferability of Incentive Awards. Incentive Awards shall not be
transferable by the holder thereof otherwise than by will or the laws of
descent and distribution to the extent provided herein, and Incentive Awards
may be exercised or surrendered during the holder's lifetime only by the holder
thereof.
16. Tax Withholding. The Corporation or Affiliate shall deduct and withhold
such amounts under any federal, state or local tax rules or regulations as it
deems appropriate with respect to the issuance of Shares and/or the payment of
cash to the holder of any Incentive Award from any cash or other payments to be
made to the holder. In any event, the holder shall make available to the
Corporation or Affiliate, promptly when required, sufficient funds to meet the
requirements of such withholding; and the Committee shall be entitled to take
and authorize such steps as it may deem advisable in order to have such funds
available to the Corporation or Affiliate when required.
17. Adjustment Provision. If prior to the complete exercise of any Option, or
prior to the expiration or lapse of all of the restrictions and conditions
imposed pursuant to a Restricted Stock Award, there shall be declared and paid
a stock dividend upon the Shares or if the Shares shall be split up, converted,
exchanged, reclassified, or in any way substituted for,
(a) in the case of an Option, then the Option, to the extent that it has
not been exercised, shall entitle the holder thereof upon the future
exercise of the Option to such number and kind of securities or cash or
other property subject to the terms of the Option to which he would have
been entitled had he actually owned the Shares subject to the unexercised
portion of the Option
A-9
at the time of the occurrence of such stock dividend, split-up, conversion,
exchange, reclassification or substitution, and the aggregate purchase
price upon the future exercise of the Option shall be the same as if the
originally optioned Shares were being purchased thereunder; and
(b) in the case of a Restricted Share issued pursuant to a Restricted Stock
Award, the holder of such Award shall receive, subject to the same
restrictions and other conditions of such Award as determined pursuant to
the provisions of Section 10, the same securities or other property as are
received by the holders of the Corporation's Shares pursuant to such stock
dividend, split-up, conversion, exchange, reclassification or substitution.
Any fractional shares or securities payable upon the exercise of the Option as
a result of such adjustment shall be payable in cash based upon the Fair Market
Value of such shares or securities at the time of such exercise. If any such
event should occur, the number of Shares with respect to which Incentive Awards
remain to be issued, or with respect to which Incentive Awards may be reissued,
shall be adjusted in a similar manner.
In addition to the adjustments provided for in the preceding paragraph, upon
the occurrence of any of the events referred to in said paragraph prior to the
complete exercise of any Rights, or prior to the complete expiration of the
vesting period under a Phantom Stock Award, the Committee, in its sole
discretion, shall determine the amount of cash and/or number of Shares or other
property to which the holder of the Rights shall be entitled upon their
exercise, or to which the holder of the Phantom Stock Award shall be entitled
upon the expiration of the vesting period, so that there shall be no increase
or dilution in the cash and/or value of the Shares or other property to which
the holder of Rights or of a Phantom Stock Award shall be entitled by reason of
such events.
Notwithstanding any other provision of the Plan, in the event of a
recapitalization, merger, consolidation, rights offering, separation,
reorganization or liquidation, or any other change in the corporate structure
or outstanding Shares, the Committee may make such equitable adjustments to the
number of Shares and the class of shares available hereunder or to any
outstanding Incentive Awards as it shall deem appropriate to prevent dilution
or enlargement of rights.
18. Issuance of Shares and Compliance with Securities Act. The Corporation may
postpone the issuance and delivery of Shares pursuant to the grant or exercise
of any Incentive Award until (a) the admission of such Shares to listing on any
stock exchange on which Shares of the Corporation of the same class are then
listed and (b) the completion of such registration or other qualification of
such Shares under any state or federal law, rule or regulation as the
Corporation shall determine to be necessary or advisable. As a condition
precedent to the issuance of Shares pursuant to the grant or exercise of an
Incentive Award, the Corporation may require the recipient thereof to make such
representations and furnish such information as may, in the opinion of counsel
for the Corporation, be appropriate to permit the Corporation, in light of the
then existence or non-existence with respect to such Shares of an effective
Registration Statement under the Securities Act of 1933, as from time to time
amended, to issue the Shares in compliance with the provisions of that or any
comparable act.
19. Administration and Amendment of the Plan. Except as hereinafter provided,
the Board of Directors or the Committee may at any time withdraw or from time
to time amend the Plan and the terms and conditions of any Incentive Award not
theretofore granted, and the Board of Directors or the Committee, with the
consent of the affected holder of an Incentive Award, may at any time withdraw
or from time to time amend the Plan and the terms and conditions of such
Incentive Awards as have been theretofore granted. Notwithstanding the
foregoing, any amendment by the Board of Directors or Committee which would
increase the number of Shares issuable under the Plan or to any individual or
change the class of employees and Directors to whom Incentive Awards may be
A-10
granted shall be subject to the approval of the stockholders of the Corporation
within one year of such amendment.
A determination of the Committee as to any questions which may arise with
respect to the interpretation of the provisions of the Plan and Incentive
Awards shall be final.
The Committee may authorize and establish such rules, regulations and revisions
thereof not inconsistent with the provisions of the Plan, as it may determine
to be advisable to make the Plan and Incentive Awards effective or provide for
their administration, and may take such other action with regard to the Plan
and Incentive Awards as it shall deem desirable to effectuate their purpose.
20. Governing Law. Except as required by Delaware corporate law, the Plan shall
be governed by and construed in accordance with the laws of the state of New
York, without giving effect to principles of conflict of laws.
21. Effective Date of Plan. This Plan is conditioned upon its approval on or
before February 21, 1996 at any special or annual meeting of the stockholders
of the Corporation by a majority of the votes cast with respect to the issue of
such approval at such meeting.
A-11
DIRECTIONS TO
ANNUAL MEETING OF STOCKHOLDERS
HELD AT THE FOUR SEASONS HOTEL
ONE LOGAN SQUARE, (DOWNTOWN) PHILADELPHIA, PA.
FROM I-95 NORTH (FROM DELAWARE OR PHILADELPHIA INTERNATIONAL AIRPORT)
Follow 95 North and near the airport follow all signs for CENTRAL PHILADELPHIA
and 76 WEST. Follow 76 WEST to the 30TH STREET STATION EXIT. Off the exit ramp
go straight to the second traffic light and turn RIGHT onto MARKET STREET.
Follow MARKET STREET to 18TH STREET and turn LEFT. Follow 18TH STREET four
blocks, and the Hotel will be on the LEFT at the intersection of 18TH STREET
and the BENJAMIN FRANKLIN PARKWAY.
FROM 76 EAST (VALLEY FORGE)
Follow 76 EAST and all signs for CENTRAL PHILADELPHIA/CAMDEN. Exit LEFT when
approaching city and onto the CENTRAL PHILADELPHIA/ROUTE 676 EAST ramp. Almost
immediately you will exit to the RIGHT, marked as 23RD STREET/BENJAMIN FRANKLIN
PARKWAY. Follow this exit ramp straight (you will be on WINTER STREET) to the
3rd traffic light which will be the intersection of WINTER and 20TH STREETS.
Cross the intersection and merge into the traffic circle, staying to the right.
The Hotel will be halfway around the circle on the RIGHT at the intersection of
18TH STREET and BENJAMIN FRANKLIN PARKWAY.
FROM NEW YORK OR NEW JERSEY
Take Exit 4 off the New Jersey Turnpike. Follow 73N to 38W. Then 38W to 30W.
Follow signs and cross over the BENJAMIN FRANKLIN BRIDGE. Over the bridge,
follow signs for 676 WEST. Take 676 WEST (VINE STREET EXPRESSWAY) to BENJAMIN
FRANKLIN PARKWAY, ART MUSEUM Exit. At top of the ramp, turn RIGHT onto 22ND
STREET. Go one block to 1st traffic light and turn RIGHT onto BENJAMIN FRANKLIN
PARKWAY. Go through 2 traffic lights and enter the traffic circle. The Hotel is
halfway around the circle on the RIGHT at 18TH STREET and the BENJAMIN FRANKLIN
PARKWAY.
FROM I-95 SOUTH/NEW YORK
Take the CENTRAL PHILADELPHIA/HISTORIC AREA EXIT. At bottom of ramp follow
signs for 676 WEST. Take 676 WEST (VINE STREET EXPRESSWAY) to BENJAMIN FRANKLIN
PARKWAY, ART MUSEUM Exit. At top of ramp, turn RIGHT onto 22ND STREET. Go one
block to 1st traffic light and turn RIGHT onto BENJAMIN FRANKLIN PARKWAY. Go
through 2 traffic lights and enter the traffic circle. The Hotel is halfway
around the circle on the RIGHT at 18TH STREET and the BENJAMIN FRANKLIN
PARKWAY.
VIA AMTRAK
Take AMTRAK to the 30TH STREET STATION in downtown Philadelphia. The Four
Seasons Hotel is approximately a ten (10) minute ride from the cab stand at the
30TH STREET STATION.
[LOGO OF RECYCLED PAPER APPEARS HERE]
PRINTED ON RECYCLED PAPER.
This document is printed on recycled paper which contains at least 10% post
consumer waste.
[X] PLEASE MARK YOUR +++++
VOTES AS IN THIS + +
EXAMPLE. + +
+
+++++
UNLESS OTHERWISE SPECIFIED IN THE SPACES PROVIDED, THE UNDERSIGNED'S VOTE IS TO
BE CAST FOR THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED IN PROPOSAL (1)
AND FOR APPROVAL OF PROPOSALS (2) AND (3), AS MORE FULLY DESCRIBED IN THE
ACCOMPANYING PROXY STATEMENT.
FOR ALL NOMINEES WITHHOLD AUTHORITY
1. Election of [_] [_]
Directors:
Walter E. Blankley, Lewis G. Cole, Helmut N. Friedlaender, Sheldon S. Gordon,
Charles D. Klein, James R. Malone, David P. Steinmann, Elizabeth R. Varet
INSTRUCTION: To withhold authority to vote for any individual nominee, place
an "X" in the box on the left (FOR ALL NOMINEES) and write that nominee's name
in the space provided below.
- -------------------------------------------------------------------------------
2. Proposal to approve the 1995 Stock Incentive Plan of AMETEK, Inc.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Proposal to approve the appointment of Ernst & Young LLP as independent
auditors for the year 1995.
FOR AGAINST ABSTAIN
[_] [_] [_]
In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Receipt of the notice of said meeting and of the Proxy Statement and Annual
Report of AMETEK, Inc. accompanying the same is hereby acknowledged.
Please date, sign and return this proxy in the enclosed envelope.
SIGNATURE(S) ________________________________________________DATED_________,1995
________________________________________________DATED_________,1995
NOTE: Please sign exactly as your name appears hereon. Executors,
administrators, trustees, etc. should so indicate when signing, giving
full title as such. If signer is a corporation, execute in full corporate
name by authorized officer. If shares held in the name of two or more
persons, all should sign.
AMETEK, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Walter E. Blankley, Lewis G. Cole and Robert
W. Yannarell, or a majority of those present and acting, or, if only one is
present, then that one, proxies, with full power of substitution, to vote all
stock of AMETEK, INC. which the undersigned is entitled to vote at the
Company's Annual Meeting to be held at the Four Seasons Hotel, One Logan
Square, Philadelphia, Pennsylvania, on Tuesday, April 25, 1995, at two o'clock
in the afternoon, and at any adjournment thereof, hereby ratifying all that
said proxies or their substitutes may do by virtue hereof, and the undersigned
authorizes and instructs said proxies to vote as follows:
(TO BE SIGNED ON REVERSE SIDE)
SEE REVERSE
SIDE