SYMBOL TECHNOLOGIES, INC.
ONE SYMBOL PLAZA
HOLTSVILLE, NEW YORK 11742-1300
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 2002
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To our shareholders:
The Annual Meeting of Shareholders of Symbol Technologies, Inc. will be
held at 10:00 A.M., local time, on May 6, 2002 at Symbol Technologies, Inc.,
World Headquarters, One Symbol Plaza, Holtsville, NY. At the meeting,
shareholders will be asked to vote on the following proposals:
Proposal 1. To elect six directors of Symbol. Each director will serve
until their successors are elected at the next Annual Meeting
of Shareholders;
Proposal 2. To vote upon a proposal to adopt the 2002 Directors' Stock
Option Plan;
Proposal 3. To amend the 1997 Employee Stock Purchase Plan to increase the
authorized number of shares that may be issued by 3,000,000 to
a total of 4,898,438;
Proposal 4. To ratify the appointment of independent auditors for 2002;
Proposal 5. To transact any other business that is properly brought before
the meeting.
Shareholders of record at the close of business on March 11, 2002 are
entitled to receive this notice and to vote at the meeting.
You may vote your shares by completing and returning the enclosed proxy
card or by telephone or via the Internet. Submitting your instructions by any of
these methods will not affect your right to attend the meeting and vote.
By Order of the Board of Directors,
LEONARD H. GOLDNER
Secretary
Dated: March 12, 2002
SYMBOL TECHNOLOGIES, INC.
ONE SYMBOL PLAZA
HOLTSVILLE, NEW YORK 11742-1300
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PROXY STATEMENT
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We are providing these proxy materials because the Board of Directors of
Symbol Technologies, Inc. ("Symbol" or the "Corporation") is soliciting your
proxy to vote at Symbol's Annual Meeting of Shareholders at 10:00 A.M., local
time on May 6, 2002, at Symbol Technologies, Inc., World Headquarters, One
Symbol Plaza, Holtsville, New York, and at any adjournment of this meeting. This
Proxy Statement contains information about the items being voted on at the
Annual Meeting and information about Symbol.
QUESTIONS AND ANSWERS
WHO IS ENTITLED TO VOTE?
Shareholders who own Symbol common stock on March 11, 2002 will be entitled
to vote at the Annual Meeting. On that date there were 229,598,455 shares of
common stock outstanding and entitled to vote. Each share is entitled to one
vote on each matter properly brought before the meeting. Any references to
shares of Symbol common stock included in this Proxy Statement have been
adjusted to reflect the two stock splits effective in 2000 and 2001.
HOW DO I VOTE?
Symbol is offering you three methods of voting.
o You may indicate your vote on the enclosed proxy card, sign and date
the card and return the card in the enclosed prepaid envelope.
o You may vote by telephone by calling the toll free number that appears
on the enclosed proxy card and following the instructions given.
o You may vote via the Internet. Internet voting instructions are
provided on the enclosed proxy card.
All shares entitled to vote and represented by properly completed proxies
received before the meeting and not revoked will be voted at the meeting as you
instructed. If you do not indicate how your shares should be voted on a matter,
the shares represented by your properly completed proxy will be voted as the
Board of Directors recommends.
WHAT CAN I VOTE ON?
o The election of six directors to serve for a term of one year;
o To adopt the 2002 Directors' Stock Option Plan;
o To amend the 1997 Employee Stock Purchase Plan to increase the
authorized number of shares that may be issued by 3,000,000 shares;
o To ratify the appointment of independent accountants to audit the
financial statements of Symbol for 2002; and
o To transact any other business that is properly brought before the
meeting.
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HOW DOES THE BOARD RECOMMEND I VOTE ON THE PROPOSALS?
The Board recommends votes:
o FOR each of the nominees for the Board of Directors.
o FOR the adoption of the 2002 Directors' Stock Option Plan.
o FOR the amendment of the 1997 Employee Stock Purchase Plan.
o FOR the appointment of Deloitte & Touche LLP, independent accountants
to audit the financial statements of Symbol for 2002.
MAY I CHANGE MY VOTE?
You can revoke your proxy at any time before it is exercised by timely
delivery of a properly executed, later-dated proxy card or telephone or Internet
vote or by voting by ballot at the meeting.
HOW MANY VOTES ARE REQUIRED TO HOLD A MEETING?
A quorum is necessary to hold a valid meeting of shareholders. The
presence, in person or by proxy, of shareholders representing a majority of the
shares of Symbol's common stock outstanding and entitled to vote constitutes a
quorum. Abstentions and broker "non-votes" are counted as present and entitled
to vote for determination of a quorum.
An abstention is a properly executed proxy marked ABSTAIN for any matter. A
broker "non-vote" occurs when you hold your shares in "street name" through a
broker or other nominee and you do not give your broker or nominee instructions
on how to vote on matters over which your broker or nominee does not have voting
discretion. If you do not provide voting instructions, your shares may not be
voted on these matters.
HOW MANY VOTES ARE REQUIRED TO PASS A PROPOSAL?
A plurality of the votes cast is required to elect directors. This means
that the nominees who receive the greatest number of votes for each open seat
will be elected. Votes withheld and broker "non-votes" are not counted for
purposes of electing directors.
A vote is withheld when a properly executed proxy is marked VOTE WITHHOLD
for the election of one or more directors.
The affirmative vote of a majority of the votes present or represented and
entitled to vote is required for all other matters.
HOW WILL VOTING ON ANY OTHER BUSINESS BE CONDUCTED?
We do not know of any business or proposals to be considered at the 2002
Annual Meeting other than the items described in this Proxy Statement. If any
other business is proposed and we permit it to be presented at the meeting, the
signed proxies received from you and other shareholders give the persons named
the authority to vote on the matter according to their judgment.
WHEN ARE SHAREHOLDER PROPOSALS FOR THE 2003 ANNUAL MEETING DUE?
To be included in the Proxy Statement for the 2003 Annual Meeting,
proposals must be received in writing by December 2, 2002.
Under the By-Laws of Symbol, notice of proposals to be presented in person
at the next Annual Meeting of Shareholders must be received in writing by
December 31, 2002.
WHO RECEIVES PROXY MATERIALS?
This Proxy Statement and enclosed proxy card are being mailed to
shareholders on or about April 2, 2002. Each registered owner of Symbol common
stock on March 11, 2002 should also receive a copy of
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Symbol's 2001 Annual Report to Shareholders. IF YOU HAVE NOT RECEIVED THE
ANNUAL REPORT, WHICH INCLUDES A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM
10-K, PLEASE CONTACT US AND WE WILL SEND A COPY WITHOUT EXHIBITS AT NO EXPENSE
TO YOU. THE CORPORATION WILL PROVIDE ANY EXHIBIT REQUESTED UPON PAYMENT OF A
SPECIFIED REASONABLE FEE LIMITED TO THE CORPORATION'S REASONABLE EXPENSES IN
FURNISHING SUCH EXHIBIT.
MAY I INSPECT THE SHAREHOLDER LIST?
In accordance with Delaware law, a list of shareholders entitled to vote at
the meeting will be available at the location of the Annual Meeting on May 6,
2002 and for 10 days prior to the meeting at Symbol's World Headquarters between
the hours of 9:00 a.m. and 4:00 p.m. Eastern Standard Time.
WHO BEARS THE COSTS OF THIS PROXY SOLICITATION?
Symbol pays the costs of this proxy solicitation. We have also made
arrangements with brokerage houses and other custodians, nominees and
fiduciaries of shares to send proxy materials to shareholders. We may reimburse
them for any expenses they incur.
HOW CAN I CONTACT SYMBOL TO REQUEST MATERIALS OR INFORMATION REFERRED TO IN
THIS QUESTIONS AND ANSWERS?
You may contact us
o By mail addressed to:
Symbol Technologies, Inc.
One Symbol Plaza
Holtsville, NY 11742
Attention: Treasurer
o By calling 631-738-4104
o By leaving a message on our website at www.symbol.com
The closing price of Symbol's common stock on the New York Stock Exchange
on March 1, 2002 was $8.85 per share.
NOMINEES FOR ELECTION
The following information is supplied about the nominees for election as
directors of Symbol:
POSITIONS AND OFFICES HAS BEEN A
NAME AGE PRESENTLY HELD WITH SYMBOL DIRECTOR SINCE
---- --- -------------------------- --------------
Jerome Swartz ............... 61 Chairman of the Board of Directors, Chief 1975
Executive Officer, Chief Scientist and Director
Harvey P. Mallement ......... 61 Director 1977
Raymond R. Martino .......... 63 Vice Chairman of the Board of Directors 1983
George Bugliarello .......... 74 Director 1992
Leo A. Guthart .............. 64 Director 1999
James Simons ................ 63 Director 2000
Dr. Swartz co-founded and has been employed by Symbol since it commenced
operations in 1975. He has been the Chairman of the Board of Directors for more
than the past fifteen years, and served as Chief Executive Officer of the
Company for more than fifteen years until July 1, 2000. Dr. Swartz re-assumed
the Chief Executive Officer position on February 14, 2002. Dr. Swartz was an
industry consultant for 12 years in the areas of optical and electronic systems
and instrumentation. He is the author of more than 30 published technical
papers, and is credited with more than 160 issued and pending U.S. patents,
including the Company's basic patents in hand-held laser scanning. He is a
member of the Board of Trustees of Polytechnic University of New York and a
member of the Board of Directors of the Stony
3
Brook University Foundation. He is also a Fellow of the Institute of Electrical
and Electronic Engineers and a member elect of the National Academy of
Engineering. He has been the recipient of the Institute of Electrical and
Electronic Engineers' Ernst Weber Leadership Award for career achievement.
Mr. Mallement is a founding and General Partner of Harvest Partners, Inc.,
a private equity and leveraged buyout investment management company formed in
April 1981. He serves on the board of several of Harvest's portfolio companies
including Community Distributors, Inc., a retail drugstore chain, Edgen
Corporation, a value added distributor of carbon and specialty steel pipe
utilized in the energy industry, Home Care Industries, Inc., a leading
manufacturer of vacuum cleaner filter bags and air filtration products, Home
Care Supply, Inc., the largest privately held provider of home healthcare
supplies and equipment, Logisco Inc., an integrated third party logistics
company and priNexus, Inc. a marketing communications company providing, on an
integrated basis, the creation, production and distribution of electronic and
printed marketing materials.
Mr. Martino was Symbol's President and Chief Operating Officer from
December 1983 until June 1994. He is currently the Vice Chairman of the Board of
Directors of Symbol and is employed by Symbol on a part-time and consulting
basis.
Dr. Bugliarello has been Chancellor of Polytechnic University since July
1994. For the prior 21 years, he was President of Polytechnic University. He has
been a member of several scientific organizations including past Chairman of the
Board of Science and Technologies for International Development of the National
Academy of Sciences. He is a member of the National Academy of Engineering and
the Council on Foreign Relations. He is a member of the Board of Directors of
several organizations including Comtech Laboratories.
Dr. Guthart is currently employed as the Managing Partner of Topspin
Partners, L.P., a private equity management company. He previously served as
Executive Vice President of the Honeywell Corporation. He also was Vice Chairman
of the Board of Pittway Corporation from 1987 until 2000 and served as Chief
Executive Officer of its Security Group for many years. This group includes
ADEMCO, a manufacturer of alarm equipment; ADI, the largest U.S. distributor of
security equipment; First Alert Professional Security Systems, a brand name
marketing program for alarm dealers; and AlarmNet, a cellular radio service that
transmits alarm and security signals in major U.S. cities. He has also served as
Chairman of Security and Fire Solutions of Honeywell International since
February 2000. Dr. Guthart has served as a director of the Acorn Fund, a
growth-oriented mutual fund, since 1997. Since 1996, he has also served as
non-executive Chairman of Cylink Corporation, a supplier of information security
encryption equipment, and since 1993 as a director of AptarGroup, Inc., a
producer of dispensing valves, pumps and closures for the pharmaceutical and
fragrance industries. From 1960 to 1963 Dr. Guthart served on the faculty of
Harvard Business School and from 1993 to 1996 he was Chairman of the Board of
Trustees of Hofstra University.
Dr. Simons has been the President of Renaissance Technologies Corporation
since 1982. Renaissance Technologies Corporation is an investment firm dedicated
to the use of mathematical methods. From 1968 to 1975, Dr. Simons served as
Chairman of the Mathematics Department of S.U.N.Y. Stony Brook. Dr. Simons has
been a founder and director of Franklin Electronic Publishers since 1981 and
Cylink Corporation since 1983. Dr. Simons has been Chairman of the Board and a
Director of Segue Software since 1988. Dr. Simons serves as Chair Emeritus of
the Stony Brook Foundation Board at S.U.N.Y. Stony Brook, is a member of the
Board of Governors of the New York Academy of Science and is a director of
B.S.A., the management organization of Brookhaven National Laboratories. Dr.
Simons has taught mathematics at M.I.T. and Harvard University and served as a
cryptanalyst at the Institute of Defense Analysis in Princeton.
Messrs. Wang and Razmilovic will not be standing for re-election as
directors of the Corporation.
MEETINGS OF THE BOARD
During the fiscal year ended December 31, 2001 the Board of Directors held
five meetings. Each director attended 75% or more of the aggregate of (1) the
total number of meetings of the Board of Directors and (2) the total number of
meetings held by all the committees of the Board on which that director served.
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The Board of Directors has an Audit Committee. Messrs. Mallement,
Bugliarello and Guthart are the members. The primary functions of the Audit
Committee are to review Symbol's financial statements, to recommend the
appointment of Symbol's independent auditors and to review the overall scope of
the audit. The members of the Audit Committee are independent as defined under
the New York Stock Exchange's listing standards. The Audit Committee held eight
meetings in 2001. Symbol has adopted a written charter for its Audit Committee,
a copy of which was attached to the Corporation's 2001 Proxy Statement.
The Board of Directors has a Compensation/Stock Option Committee consisting
of Messrs. Guthart and Mallement. The primary functions of this Committee are to
review the salaries, benefits and any other compensation of Symbol's senior
executive officers, to make recommendations to the Board of Directors about
these matters and to administer Symbol's stock option plans. During 2001, the
Committee held five meetings.
The Board of Directors has a Nominating Committee. Drs. Swartz and Simons
are the members. The primary function of this committee is to review and
recommend to the Board potential candidates for election to the Board of
Directors. The committee held one meeting in 2001. Shareholders may recommend
candidates for consideration by the committee by providing written notice to the
Secretary of Symbol by December 31 of the year before the date of the meeting.
You should send this notice to Symbol's offices in Holtsville, New York. Please
provide the candidate's name, biographical data and qualifications.
Recommendations should include a written statement from the individual of his or
her consent to be nominated as a candidate and, if nominated and elected, to
serve as a director.
PRINCIPAL SHAREHOLDERS
To the Company's knowledge, as of March 1, 2001, no one person owns more
than 5% of Symbol's common stock.
SECURITY OWNERSHIP OF MANAGEMENT
In the following table you can find information about the common stock of
Symbol owned as of February 15, 2002, except as otherwise stated in the
footnotes to the table, by:
o all directors and nominees
o executive officers listed in the following Summary Compensation Table
o all executive officers and directors as a group
AMOUNT AND NATURE OF PERCENT OF
NAME OF INDIVIDUAL OR IDENTITY OF GROUP BENEFICIAL OWNERSHIP (1) COMMON STOCK
--------------------------------------- ------------------------ ------------
Jerome Swartz ................................... 11,620,186 (2) 4.8%
Harvey P. Mallement ............................. 366,655 (3) *
Raymond R. Martino .............................. 617,202 (4) *
George Bugliarello .............................. 221,614 (5) *
Charles B. Wang ................................. 324,135 (6) *
Tomo Razmilovic ................................. 1,566,248 (7) *
Leo A. Guthart .................................. 86,250 (8) *
James Simons .................................... 26,250 (9) *
Leonard H. Goldner .............................. 1,179,388(10) *
Kenneth V. Jaeggi ............................... 277,568(11) *
Satya P. Sharma ................................. 1,011,231(12) *
All executive officers and directors as a group
(consisting of 16 individuals) ................. 18,513,986(13) 7.6%
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- ----------
* Less than 1%.
(1) The persons identified in this table have sole voting and investment power
over the shares of Symbol common stock stated above, except as stated
otherwise in these footnotes. This chart was prepared from information
the directors, nominees and executive officers have given to us.
(2) This number includes:
o 8,500,496 shares which may be acquired upon the exercise of options
within 60 days of February 15, 2002.
o 61,736 shares owned by his wife.
o 173,152 shares held in trust of which Dr. Swartz is the income
beneficiary and his children are the residual beneficiaries. All of these
shares are subject to "European Collar" arrangements.
o 2,773,934 shares owned by Dr. Swartz. 757,404 of these shares are
subject to "European Collar" arrangements. Dr. Swartz has shared
investment power over the shares covered by these arrangements.
o 110,868 shares held by charitable trusts.
Dr. Swartz disclaims beneficial ownership of shares owned by or for the
benefit of members of his family, and held by charitable trusts.
(3) This number includes 210,225 shares that may be acquired upon the exercise
of options and a warrant within 60 days of February 15, 2002 and 156,430
shares owned by Mr. Mallement. 91,125 of these shares are subject to
"European Collar" arrangements. Mr. Mallement has shared investment power
over the shares covered by these arrangements.
(4) This number includes 78,750 shares that may be acquired upon the exercise
of options within 60 days of February 15, 2002 and 538,452 shares owned
by Mr. Martino.
(5) This number includes 210,225 shares that may be acquired upon the exercise
of options and warrants within 60 days of February 15, 2002 and 11,389
shares owned jointly by Dr. Bugliarello and his wife.
(6) This number includes 248,198 shares that may be acquired upon the exercise
of options and warrants within 60 days of February 15, 2002 and 75,937
shares owned by Mr. Wang.
(7) This number includes 236,250 shares that may be acquired upon the exercise
of options within 60 days of February 15, 2002 and 1,329,998 shares owned
by Mr. Razmilovic. 573,445 of these shares are subject to "European
Collar" arrangements. Mr. Razmilovic has shared investment power over the
shares covered by these arrangements.
(8) This number includes 78,750 shares that may be acquired upon the exercise
of options within 60 days of February 15, 2002 and 7,500 shares owned by
Dr. Guthart.
(9) This number includes 18,750 shares that may be acquired upon the exercise
of options within 60 days of February 15, 2002 and 7,500 shares owned by
Dr. Simons.
(10) This number includes:
o 786,820 shares that may be acquired upon the exercise of options within
60 days of February 15, 2002. 253,123 of these options are held by a
trust for the benefit of his wife and children. Mr. Goldner's wife is a
co-trustee of this trust. 80,512 of these options are held by a trust for
the benefit of him and his children. Mr. Goldner is a co-trustee of this
trust.
o 383,343 shares owned by Mr. Goldner and 9,225 shares owned by his wife.
297,594 of the shares owned by Mr. Goldner are subject to "European
Collar" arrangements. Mr. Goldner has shared investment power over the
shares covered by these arrangements.
Mr. Goldner disclaims beneficial ownership of the options held in trust
for the benefit of his wife and children and any shares owned by his wife.
(11) This number includes 44,888 shares that may be acquired upon the exercise
of options within 60 days of February 15, 2002, and 232,680 shares owned
by Mr. Jaeggi. 153,909 of these shares are subject to "European Collar"
arrangements. Mr. Jaeggi has shared investment power over the shares
covered by these arrangements.
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(12) This number includes:
o 816,231 shares that may be acquired upon the exercise of options within
60 days of February 15, 2002.
o 195,000 shares owned by Dr. Sharma.
(13) This number includes 11,860,324 shares that may be acquired upon the
exercise of options and warrants within 60 days of February 15, 2002.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires our directors
and executive officers, and persons who own more than 10% of a registered class
of Symbol's common stock, to file a report of holdings and transactions in
Symbol common stock with the Securities and Exchange Commission and the New York
Stock Exchange and to furnish Symbol with copies of all Section 16(a) forms they
file.
Based on our records and other information furnished to us, we believe
that, during 2001 executive officers, directors and greater than 10%
shareholders complied with all filing requirements applicable to them.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Our Compensation/Stock Option Committee is composed entirely of outside
directors. Messrs. Guthart and Mallement are the current members of the
Committee. During the last ten years, they have not been officers or employees
of Symbol.
COMPENSATION/STOCK OPTION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
ROLE OF THE COMPENSATION COMMITTEE
A primary role of the Committee is to oversee compensation practices for
the Corporation's senior executive officers. Our responsibilities include:
o reviewing the salaries, benefits and other compensation of the
Corporation's senior executive officers;
o making recommendations to the full Board of Directors with respect to
executive compensation; and
o administering the Corporation's stock option plans.
Our goal is to ensure that the Corporation's financial resources are used
effectively to support its short-and long-term business objectives. We have
available to us an outside compensation consultant and access to independent
compensation data.
EXECUTIVE COMPENSATION GUIDING PRINCIPLES
In our oversight capacity, we adhere to several guiding principles. We take
the position that the executive compensation program should:
o Target pay levels at rates that are competitive. Our goal is to ensure
that the Corporation can attract and retain high performing management
talent, particularly in the areas of technology in which it competes.
o Relate compensation to performance. Overall compensation paid to senior
executives should be tied to how well the Corporation performs
financially. We also believe that the better an individual performs, the
higher the individual's compensation should be.
o Encourage share ownership on the part of key employees. Our goal is to
align the interests of management and investors to build shareholder
value.
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As described below, our executive compensation program is designed to
balance short- and long-term financial objectives, reward the performance and
contribution of individual officers and to attract and retain top quality
management talent. We believe that the executive compensation program supports
the Corporation's business goals and human resource strategies.
DESCRIPTION OF COMPENSATION POLICIES
It is the Corporation's policy to pay its senior executives at levels that
reflect the Corporation's financial performance relative to comparable
organizations. This policy is implemented by a program comprised of elements
that:
o reward individual performance;
o provide motivation to achieve corporate financial targets that are
consistent with shareholder expectations; and
o encourage long-term share ownership.
The three elements of the Corporation's compensation program are:
o Base salary
o Executive Bonus Plan
o Stock option awards
The Corporation, with the assistance of outside consulting firms,
periodically compares its compensation program with the compensation practices
of approximately 35 selected companies. This panel consists of "high tech"
companies with which the Corporation competes in attracting and retaining
employees. Seventeen of the panel companies are included in the S&P Technology
Sector Index. The Corporation targets the total compensation paid to its senior
executives at approximately the 75th percentile of the panel companies (after
adjusting for the different magnitude of revenues).
Based on a review of Internal Revenue Service regulations, we believe that
all compensation paid in connection with 2001's results to Mr. Razmilovic and
payable in 2002 to Messrs. Swartz and Razmilovic and to the other senior
executive officers will be fully deductible by the Corporation. We will continue
to review the Corporation's compensation programs and may revise these programs
as we deem necessary.
RELATIONSHIP OF EXECUTIVE COMPENSATION TO PERFORMANCE
BASE SALARY
We generally review executive officers' base salaries each year except that
Messrs. Razmilovic and Swartz are reviewed on a biennial basis. Their annual
base salaries were reviewed in July 2000 and at that time were increased to
$1,000,000 each, effective July 1, 2000. We will review Dr. Swartz' base salary
again in July 2002. Adjustments in base salary are generally not based upon the
financial performance of the Corporation although we do not contemplate raising
his salary in 2002. In determining executive salary increases, we consider a
number of factors, including:
o individual performance on the job;
o external market pay practices;
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o the value the executive adds to the Corporation; and
o the executive's level of experience and expertise.
EXECUTIVE BONUS PLAN
The Corporation promotes a pay-for-performance philosophy. A significant
element of annual compensation is linked to the financial performance of the
Corporation. In 1999, we adopted and the Board of Directors and shareholders
ratified a new Executive Bonus Plan which was substantially similar to our
previous executive bonus plan. The purpose of the plan is to tie the level of
annual executive incentive compensation to the financial performance of the
Corporation. All executive officers of the Corporation participate in the
Executive Bonus Plan. We have full authority to construe, interpret and
administer the Executive Bonus Plan, as well as to determine the extent to which
operating performance standards have been met. We also have authority to modify
the targets for the performance goals under the Executive Bonus Plan.
Under the Executive Bonus Plan, each year we establish corporate financial
performance objectives (exclusive of extraordinary revenues and charges), based
on earnings per share. We have identified three levels of performance:
o threshold performance, at which the minimum award (one-half a
participant's target bonus) will be earned and below which no award will
be earned;
o target performance, at which the target award will be earned; and
o maximum performance, at which the maximum award (twice a participant's
target bonus) will be earned and above which no additional award will be
earned.
For 2002, threshold performance has been established at results equal to
70% of the 2002 Business Plan; target performance has been established at
results equal to 100% of the 2002 Business Plan; and maximum performance has
been established at results equal to or greater than 130% of the 2002 Business
Plan.
Each participant in the Executive Bonus Plan has been assigned a target
bonus representing a percentage of the participant's base salary. The target
bonus for 2002 is 100% for Dr. Swartz, 75% for Mr. Goldner, and 50% for Messrs.
Jaeggi and Sharma. These target bonuses conform to their individual employment
agreements and their levels of responsibility. The target bonuses for other
participants in the Executive Bonus Plan are established by the Chief Executive
Officer based on the individual's performance and relative level of
responsibility. They range from 25% to 50% of base salary.
Messrs. Swartz and Razmilovic's bonuses are determined solely on the basis
of corporate financial performance. 25% of all other participants' bonuses are
based on individual performance during the year. 75% will be based on corporate
financial performance. In 2001, no bonuses were paid to any participant in the
Executive Bonus Plan. In 2000, all participants in the Executive Bonus Plan
received bonuses equal to 114.3%, of their target bonus and in 1999 they
received bonuses equal to 116.7% of their target bonus (less adjustments in
certain instances for individual performance).
STOCK OPTIONS
The Corporation reinforces the importance of producing satisfactory returns
to shareholders over the long term through the operation of its stock option
plans. Stock options provide employees with the opportunity to become
shareholders of the Corporation, and to participate in the creation of
shareholder value as reflected in growth in the price of the Corporation's
common stock.
Option exercise prices are equal to 100% of the fair market value of the
Corporation's common stock on the date of option grant. This ensures that
participants will derive benefit only as shareholders realize corresponding
gains. To encourage a long-term decision making perspective, options are
assigned a 10 year term and generally become exercisable over four to five years
following a one-year waiting period. We grant additional options to selected
employees based on an assessment of competitive compensation
9
practices, particularly in high technology industries, individual contribution
and performance. We believe that granting stock options reinforces the
Corporation's objective of insuring a strong link between employee rewards and
shareholder interests.
In February 2001 in connection with a periodic performance review, we
granted Mr. Razmilovic options to purchase 375,000 shares of the Corporation's
common stock at an exercise price of $27.97. The exercise price was equal to the
closing price of the Corporation's common stock on the date the option was
granted. 12,750 of these options vested on January 1, 2002, and 19,125 would
have vested on July 1, 2002, January 1, 2003, July 1, 2003, January 1, 2004,
July 1, 2004 and January 1, 2005 and 247,500 would have vested on January 1,
2006. In February 2002, all of these options were canceled in connection with
arrangements entered into between Symbol and Mr. Razmilovic. Mr. Razmilovic
resigned as Chief Executive Officer of the Corporation effective as of February
14, 2002.
Effective January 1, 1995, we established for executive officers a stock
ownership and option retention program that we administer. We firmly believe
that the long term interests of the Corporation's shareholders are best served
when management maintains a significant, equity-based interest in the
Corporation. We consider both vested, unexercised options and shares owned as
meaningful expressions of such interest. We developed a program with target
levels of equity interest for each executive officer. Under the program, without
the Committee's prior permission, if an executive has not attained the minimum
requirements described below, his ability to exercise options or sell shares is
limited. Executive officers must agree to participate in the program to be
eligible to receive option awards after January 1, 1995. All current executive
officers have agreed to participate in the program.
The program limits the exercise of vested options (other than in the last
year of the term of an option) unless the executive meets and will continue to
meet the equity interest requirement described below after the exercise and sale
of shares acquired upon exercise. The equity interest requirement provides that
the combined value of the Corporation's common stock and vested options held by
the executive, each valued at the then market price of the Corporation's common
stock, must be equal to or greater than a designated multiple of the executive's
annual base salary plus target bonus.
If the equity interest requirement is satisfied, the program allows for the
exercise of vested options within strict limits. At least 50% of the net after
tax proceeds obtainable upon the exercise of any option (other than options
awarded after January 1, 1994 in connection with an executive's initial hire or
initial promotion to an executive officer position, or options already held by
persons who were promoted to an executive officer position after January 1,
1994) must be retained in the form of shares of the Corporation's common stock
unless and until the executive owns shares of common stock having a market value
equal to a specified multiple of his base salary.
- -------------------------------------------------------------------------------------------------
OWNERSHIP EQUITY INTEREST
POSITION REQUIREMENT SHARE REQUIREMENT
- -------------------------------------------------------------------------------------------------
Chairman of the Board 7 times base salary plus target bonus 5 times base salary
- -------------------------------------------------------------------------------------------------
President 5 times base salary plus target bonus 3 times base salary
- -------------------------------------------------------------------------------------------------
Executive/Senior Vice President 3 times base salary plus target bonus 2 times base salary
- -------------------------------------------------------------------------------------------------
Vice President 2 times base salary plus target bonus 1 times base salary
- -------------------------------------------------------------------------------------------------
SUMMARY
We are responsible for recommending to the Board, for its approval,
compensation decisions affecting the Corporation's senior executive officers.
Our goal is to ensure that the overall compensation offered to senior executive
officers is:
o consistent with the Corporation's interest in providing competitive pay
opportunities,
o reflective of its pay-for-performance orientation,
o encourages share ownership on the part of executives; and
o is supportive of the Corporation's short-and long-term business goals.
10
We will continue to actively monitor the effectiveness of the Corporation's
senior executive compensation plans and assess the appropriateness of senior
executive pay levels to assure prudent application of the Corporation's
resources.
Compensation/Stock Option Committee
Dr. Leo Guthart, Chairman
Harvey Mallement
11
MANAGEMENT REMUNERATION AND TRANSACTIONS
In the following Summary Compensation Table you can find compensation
information about Symbol's Chief Executive Officer and the four other executive
officers who were the most highly paid in 2001.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------------------------- ----------------------
NAME AND OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(D) COMPENSATION(E) OPTIONS (NO.) COMPENSATION
------------------ ---- ------ -------- --------------- ------------- ------------
Tomo Razmilovic ............ 2001 $1,000,002(A) $ 0 $ 0 375,000 $10,453(F)
President and 2000 $ 832,770(A) $ 949,400 $260,000 937,500 $12,955(F)
Chief Executive Officer 1999 $ 635,749(B) $ 742,000 $ 0 405,000 $12,373(F)
and Director
Jerome Swartz. ............. 2001 $1,000,002(A) $ 0 $ 0 300,000 $75,325(G)
Chairman of the 2000 $ 958,578(A) $1,092,800 $ 0 375,000 $72,519(G)
Board and Chief Scientist 1999 $ 895,651(B) $1,045,300 $ 0 708,750 $67,656(G)
and Director
Leonard H. Goldner ......... 2001 $ 458,094(A) $ 0 $ 0 150,000 $ 5,100(H)
Executive Vice President, 2000 $ 415,854(A) $ 237,000 $ 75,000 52,500 $ 5,100(H)
General Counsel 1999 $ 378,040(B) $ 220,600 $ 0 151,875 $ 4,800(H)
and Secretary
Kenneth V. Jaeggi .......... 2001 $ 433,002(A) $ 0 $ 0 120,000 $64,323(I)
Senior Vice President, and 2000 $ 400,442(A) $ 228,300 $ 72,000 30,000 $42,651(I)
Chief Financial Officer 1999 $ 364,020(B) $ 212,500 $ 0 111,374 $61,108(I)
Satya Sharma ............... 2001 $ 349,566(A) $ 0 $ 0 120,000 $ 5,100(H)
Senior Vice President 2000 $ 313,955(A) $ 179,000 $ 50,000 30,000 $ 5,100(H)
& GM Corporate 1999 $ 273,000(C) $ 159,300 $ 0 205,312 $ 3,200(H)
Quality & Operations
- ----------
(A) Includes $10,200 in contributions to Symbol's 401(k) deferred compensation
plan.
(B) Includes $9,600 in contributions to Symbol's 401(k) deferred compensation
plan.
(C) Includes $6,400 in contributions to Symbol's 401(k) deferred compensation
plan.
(D) Represents amounts earned and accrued pursuant to Symbol's Executive Bonus
Plan. Amounts indicated are earned and accrued in the fiscal year indicated
but are generally paid in the first quarter of the next succeeding year.
(E) Includes special one-time bonus awards. Not included are the amounts of
certain perquisites and other personal benefits provided by Symbol since
such amounts do not exceed the lesser of (i) $50,000 or (ii) 10% of the
total annual salary and bonus reported in the table for any named executive
officer.
(F) Represents:
o $4,800 in 1999 and $5,100 in 2000 and 2001 in contributions to Symbol's
401(k) deferred compensation plan; and
o $7,573, $7,855 and $5,353 in 1999, 2000 and 2001, respectively, for the
estimated economic benefit of insurance premium payments made by Symbol
for a split-dollar whole life insurance arrangement as projected on an
actuarial basis. Mr. Razmilovic's family members are beneficiaries of
these policies but, under the arrangement, Symbol will recover all its
premiums paid.
12
(G) Represents:
o $4,800 in 1999 and $5,100 in 2000 and 2001 in contributions to Symbol's
401(k) deferred compensation plan;
o $22,856 in 1999, $27,419 in 2000, and $30,225 in 2001 for:
premiums paid on his behalf on term life insurance policies, under which
Dr. Swartz' family members are the beneficiaries, and the estimated
economic benefit of insurance premium payments made by Symbol for a
split-dollar whole life insurance arrangement as projected on an actuarial
basis. Dr. Swartz' family members are beneficiaries of these split-dollar
policies but, under the arrangement, Symbol will recover all its premiums
paid; and
o a non-reimbursable expense allowance of $40,000 in 1999, 2000, and 2001.
(H) Represents contributions to Symbol's 401(k) deferred compensation plan.
(I) Represents:
o $4,800 in 1999, and $5,100 in 2000 and 2001 in contributions to Symbol's
401 (k) deferred compensation plan; and
o $56,308, $37,551 and $59,223 in 1999, 2000 and 2001, respectively for
retroactive reimbursement of relocation expenses associated with Mr.
Jaeggi's relocation to the Long Island area.
In 2000, we entered into an employment agreement with Mr. Razmilovic that
was scheduled to terminate on June 30, 2005. Under that agreement, Mr.
Razmilovic received a base salary of $1,000,000 in 2001. In February 2002, we
entered into new agreements with Mr. Razmilovic that superceded and replaced the
earlier agreement. The new agreements provide for:
o the payment to Mr. Razmilovic of Five Million Dollars in March, 2002;
o the payment to Mr. Razmilovic of Two Million Dollars in May, 2003; and
o the termination and cancellation of 1,818,750 outstanding stock options
previously granted to Mr. Razmilovic;
The new agreements provide for Mr. Razmilovic to remain as a full-time
employee through May 6, 2002 at an annual salary of $1,000,000 and then to be
employed on a part-time and consulting basis for a period of five years
beginning May 7, 2002. Mr. Razmilovic will receive $200,000 per annum during
this five year period and will continue to participate in fringe benefit
programs in effect as of February 14, 2002.
In 2000, we entered into an employment agreement with Dr. Swartz that
terminates on June 30, 2005. Dr. Swartz will receive an annual base salary of
$1,000,000 through June 30, 2002. His base salary will be reviewed in July 2002.
Dr. Swartz also participates in Symbol's Executive Bonus Plan. The target amount
of his bonus is 100% of his base salary. If his employment is terminated for any
reason (other than due to his death or disability or for cause or his voluntary
resignation), Dr. Swartz will receive payments equal to one year's (if such
termination occurs after June 30, 2003) or two year's (if such termination
occurs before such date) annual base salary and bonus during the last completed
fiscal year immediately before any such termination.
In 2000, we entered into an employment agreement with Mr. Goldner that
terminates on December 31, 2005. Mr. Goldner will receive an annual base salary
of $465,775 for the year ending on February 28, 2003. Mr. Goldner's salary will
be reviewed in December 2002. Mr. Goldner also participates in Symbol's
Executive Bonus Plan. The target amount of his bonus is 75% of his base salary.
If his employment is terminated for any reason (other than due to his death or
disability or for cause or his voluntary resignation), Mr. Goldner will receive
payments equal to one year's (if such termination occurs after December 31,
2003) or two year's (if such termination occurs before such date) annual base
salary and bonus during the last completed fiscal year immediately before any
such termination.
In 2000, we entered into a new employment agreement with Mr. Martino that
terminates on February 15, 2005. He is employed as a part-time consultant,
assisting the Chairman of the Board and the
13
President. In 2002, Mr. Martino will receive $100,000. In February 2002, Mr.
Martino was awarded options under the 1997 Employee Stock Option Plan to
purchase 25,000 shares of Symbol's common stock at an exercise price of $8.09
per share. This is the same as the price of Symbol's common stock on the date
the option was granted. Ten percent of these options will vest on January 1,
2003 and fifteen percent will vest on July 1, 2003 and each of the five next
consecutive six month anniversary dates of that date.
Directors who are not employees of Symbol are paid an annual retainer of
$15,000, in equal quarterly installments. They also receive a fee of $2,500 for
each Board of Directors meeting they attend or each meeting of a committee that
is not held in conjunction with a Board of Directors meeting. The Chairman of
the Audit Committee and the Compensation/Stock Option Committee are also paid an
annual retainer of $5,000 in equal quarterly installments. Directors who are
employees do not receive additional compensation for serving as directors or for
attending Board or committee meetings. Symbol reimburses Directors for their
expenses in connection with attending meetings of the Board of Directors or
committees of the Board.
OPTION GRANTS
Symbol currently maintains two stock option plans, the 2001 Non-Executive
Stock Option Plan (the "2001 Plan") and the 1997 Employee Stock Option Plan (the
"1997 Plan"). Under these plans options are granted to selected employees of
Symbol. The 2001 Plan authorizes the Compensation/Stock Option Committee of the
Board of Directors to grant options to key employees of Symbol and its
subsidiaries other than corporate officers. Under the 1997 Plan, the Committee
can grant options to key employees, including those who are officers of Symbol.
Under the 1997 Plan, an individual may not be awarded options to purchase more
than 1% of the then outstanding shares of Symbol's common stock in any calendar
year. The Committee may determine at the time of grant that some options are
qualified under the Internal Revenue Code of 1986 as incentive stock options and
some of the options may be non-qualified options. None of the options granted
under either Plan are exercisable for a period of more than ten years. Incentive
stock options granted under the 1997 Plan to owners of 10% or more of Symbol's
common stock are not exercisable for a period exceeding five years. The exercise
price of an option under either plan must be at least 100% of the price of
Symbol's common stock on the date of grant.
Incentive stock options must comply with provisions of the Internal Revenue
Code of 1986 relating to the maximum amount that can be vested by an optionee in
any one calendar year and the minimum exercise price of an Incentive Stock
Option and other matters. The 2001 Plan terminates on February 25, 2011 and the
1997 Plan terminates on February 9, 2007.
14
The following table shows certain information about stock options granted
to the individuals named in the Summary Compensation Table under all stock
option plans:
INDIVIDUAL GRANTS IN 2001
-----------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO 5%
OPTIONS EMPLOYEES IN EXERCISE EXPIRATION STOCK
NAME GRANTED (NO.)(B) FISCAL YEAR(G) OR BASE PRICE(H) DATE PRICE(I)
---- ---------------- -------------- ---------------- ---- --------
All Shareholders ......... -- -- -- -- $45.56
Tomo Razmilovic .......... 375,000(C) 6.90% $27.9700 02/25/11 $45.56
CEO's Gain as % of all
Shareholders' Gain ......
Jerome Swartz ............ 300,000(D) 5.52% $27.9700 02/25/11 $45.56
Leonard Goldner .......... 150,000(E) 2.76% $27.9700 02/25/11 $45.56
Kenneth Jaeggi ........... 120,000(F) 2.21% $27.9700 02/25/11 $45.56
Satya Sharma ............. 120,000(F) 2.21% $27.9700 02/25/11 $45.56
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE APPRECIATION FOR OPTION TERM(A)
----------------------------------------------------
10%
DOLLAR STOCK
NAME GAIN PRICE(I) DOLLAR GAIN
---- ---- -------- -----------
All Shareholders ......... $ 4,024,294,296 $ 72.55 $ 10,198,351,868
Tomo Razmilovic .......... $ 6,596,319 $ 72.55 $ 16,716,366
CEO's Gain as % of all
Shareholders' Gain ...... 0.164% 0.164%
Jerome Swartz ............ $ 5,277,055 $ 72.55 $ 13,373,093
Leonard Goldner .......... $ 2,638,527 $ 72.55 $ 6,686,546
Kenneth Jaeggi ........... $ 2,110,822 $ 72.55 $ 5,349,237
Satya Sharma ............. $ 2,110,822 $ 72.55 $ 5,349,237
- -------
(A) Total dollar gains based on the assumed annual rates of appreciation of the
exercise price of each option. The gain derived by all shareholders is
based on the outstanding number of shares at December 31, 2001. The actual
amount, if any, an executive will realize will depend on the excess of the
market price over the exercise price on the date the option is actually
exercised. The amount actually realized by an executive or any shareholder
may not be at or near the values estimated in this table.
(B) If a change in control of Symbol were to occur, all of the then unvested
portion of each option would become immediately exercisable.
(C) 247,500 of these options will vest on January 1, 2006. Of the remaining
127,500 options, 12,750 vested on January 1, 2002 and 19,125 would have
vested on July 1, 2002 and each of the five next consecutive six month
anniversary dates of that date. All of these options were cancelled on
February 14, 2002.
(D) 202,500 of these options will vest on January 1, 2006. Of the remaining
97,500 options, 9,750 vested on January 1, 2002 and 14,625 will vest on
July 1, 2002 and each of the five next consecutive six month anniversary
dates of that date.
(E) 100,500 of these options will vest on January 1, 2006. Of the remaining
49,500 options, 4,950 vested on January 1, 2002 and 7,425 will vest on July
1, 2002 and each of the five next consecutive six month anniversary dates
of that date. On February 27, 2001, Mr. Goldner transferred his entire
interest in these options to a trust for the benefit of him and his
children. He is a co-trustee of the trust.
(F) 80,250 of these options will vest on January 1, 2006. Of the remaining
39,750 options, 3,975 vested on January 1, 2002 and 5,962 will vest on July
1, 2002 and each of the five next consecutive six month anniversary dates
of that date.
(G) Based on 5,436,000 options granted to all employees in 2001.
(H) 100% of the closing price of Symbol's common stock on the date of grant.
(I) The stock price represents the price of Symbol's common stock if the
assumed annual rates of stock price appreciation are achieved over the term
of the options. In the case of all shareholders, the share price of the
options awarded to Mr. Razmilovic was used.
15
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table shows information about unexercised options to purchase
Symbol's common stock on December 31, 2001 and the value realized upon the
exercise of options in 2001 by the individuals named in the Summary Compensation
Table.
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
HELD AT DECEMBER 31, 2001 HELD AT DECEMBER 31, 2001(A)
NUMBER OF --------------------------- ----------------------------
SHARES
ACQUIRED ON VALUE
NAME EXERCISE IN 2001 REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ---------------- -------- ----------- ------------- ----------- -------------
Tomo Razmilovic 464,415 $10,483,920 2,180,380 1,619,250 $16,216,196 $252,639
Jerome Swartz(B) 1,669,169 $31,092,602 8,221,871 1,270,313 $78,511,541 $515,060
Leonard H. Goldner(C) 0 $ 0 722,808 290,625 $ 6,381,154 $ 4,050
Kenneth V. Jaeggi 196,423 $ 3,517,542 3,000 213,826 $ 0 $ 4,131
Satya P. Sharma 0 $ 0 759,661 270,188 $ 6,785,868 $ 4,455
- ----------
(A) Based on the closing price of Symbol's common stock on the New York Stock
Exchange on that date of $15.88.
(B) Includes options to purchase 2,708,437 shares held by trusts for the
benefit of his children. 2,384,437 of these options are exercisable and
324,000 are unexercisable. The value of these exercisable options was
$18,755,682 and the value of these unexercisable options was $259,619. Dr.
Swartz disclaims beneficial ownership of the options held by these trusts.
(C) Includes options to purchase 253,123 shares held by a trust for the benefit
of his wife and children. All of these options are exercisable. His wife is
a co-trustee of this trust. The value of these options was $2,315,702. Mr.
Goldner disclaims beneficial ownership of the shares owned by this trust.
Also includes 286,875 options held by a trust for the benefit of him and
his children, 36,750 of these options are exercisable and 250,125 are
unexercisable. Mr. Goldner is a co-trustee of this trust. The value of
these exercisable options was $2,825 and unexercisable options was $4,237.
Employees of Symbol and some of its subsidiaries are eligible to
participate in a 401(k) deferred compensation plan after 90 days of service.
With some limitations, a participant may make pre-tax contributions to the plan.
The maximum contribution a participant was allowed to make in 2001 was $10,500
and will be allowed to make in 2002 is $11,000. Symbol will match 50% of the
first 6% contributed by each participant during each pay period. The employee's
contribution is vested immediately. Symbol's contribution is 100% vested after
one year of service. Amounts accumulated under this plan are normally paid to a
participant on retirement or termination of employment. Payments depend on:
o the amounts contributed by the participant,
o the manner in which contributions have been invested,
o the amount of any prior withdrawal,
o other factors.
Symbol maintains an Executive Retirement Plan for a select group of senior
management employees. The Plan is a non-qualified deferred compensation plan.
The Compensation/Stock Option Committee of the Board of Directors selects
participants. Under the Executive Retirement Plan, the maximum benefit a
participant may be paid is the participant's average compensation (base salary
plus bonus) for three fiscal years before the date the participant is no longer
a full time employee multiplied by five (the "Benefit Ceiling Amount"). After
five successive years of participation in the Executive Retirement Plan, a
participant is entitled to 50% of the Benefit Ceiling Amount. After each
additional year of participation in the Executive Retirement Plan up to five
additional years of participation, a participant is entitled to an additional
10% of the Benefit Ceiling Amount. Benefits are normally payable in equal
monthly installments over a ten year period after retirement, beginning after
the participant attains age 65 (or age 62 with 20 years or more of credited
service). Upon death or disability, payment is accelerated and made
16
in a lump sum but the amount is reduced to the then present value of the benefit
payments which would have been made under the normal mode of payment. Mr.
Razmilovic, Mr. Goldner, Mr. Jaeggi and Dr. Sharma are participants in the
Executive Retirement Plan.
The following table illustrates the estimated annual retirement benefits
payable under the Executive Retirement Plan to a participant at specified
average compensation levels and years of service. Benefits under the Executive
Retirement Plan are not offset for Social Security benefits. Benefits payable
under the Executive Retirement Plan will be reduced by the value of any
retirement income of the participant attributable to contributions by Symbol to
any qualified pension plan adopted by Symbol (excluding Symbol's current 401(k)
deferred compensation plan).
PENSION PLAN TABLE
YEARS OF SERVICE
3 YEARS AVERAGE --------------------------
ANNUAL COMPENSATION 5 10
-------------------- ----------- ------------
$ 400,000 $100,000 $ 200,000
800,000 200,000 400,000
1,200,000 300,000 600,000
1,600,000 400,000 800,000
2,000,000 500,000 1,000,000
2,400,000 600,000 1,200,000
On January 1, 2001, Messrs. Razmilovic, Goldner, Jaeggi and Sharma had 11,
11, 4 and 7 years of credited service, respectively. Mr. Razmilovic became a
participant in the Executive Retirement Plan in October 1995. He did not receive
credit under the Plan for his prior service to Symbol. Instead, he received two
years of credited service for each year of employment from October 1995 to
October 2000.
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
The following chart shows a comparison of the yearly performance change in
an investment of $100 in Symbol common stock compared to an investment of $100
in the S&P Composite 500 Stock Index and the S&P Technology Sector Index for a
five year period beginning January 1, 1996 and ending December 31, 2001. The
chart assumes that all dividends will be reinvested.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG SYMBOL TECHNOLOGIES, INC., THE S & P 500 INDEX
AND THE S & P TECHNOLOGY SECTOR INDEX
------------------------------------------------------------
12/96 12/97 12/98 12/99 12/00 12/01
SYMBOL TECHNOLOGIES, INC. 100.00 128.11 325.73 486.14 413.14 273.62
S & P 500 100.00 133.36 171.47 207.56 188.66 166.24
S & P TECHNOLOGY SECTOR 100.00 126.09 218.11 381.99 229.38 174.89
17
PROPOSAL TO ADOPT THE SYMBOL TECHNOLOGIES, INC.
2002 DIRECTORS' STOCK OPTION PLAN
The Board of Directors feels it is appropriate to adopt a stock option plan
pursuant to which non- full time employee directors would annually be issued
stock options. The grant of stock options at 100 percent of fair market value
continues to be a desirable and useful means to further strengthen the non- full
time employee directors' linkage with shareholder interests and to complement
the Corporation's other director compensation packages.
Accordingly, the Board of Directors adopted on February 19, 2002, subject
to shareholder approval, the Symbol Technologies, Inc. 2002 Directors' Stock
Option Plan (the "2002 Directors' Plan") pursuant to which each person who is
not a full-time employee of the Corporation or one of its subsidiaries and who
has been a director for at least eleven (11) months shall, upon re-election at
the annual meeting of shareholders, be granted an option to purchase 20,000
shares of the Corporation's Common Stock. Each option will have a ten-year term;
ten percent (10%) will become exercisable beginning on the first anniversary of
the date of grant and fifteen percent (15%) shall become exercisable every six
(6) months thereafter; the options will have an option exercise price equal to
100 percent of the fair market value of shares of the Corporation's Common Stock
on the date of grant. The options will generally not be transferable except to
the extent that options may be exercised by an executor or administrator
provided, however, with the prior approval of the Board, options under the 2002
Directors' Plan may be transferred to an optionee's spouse, children,
grandchildren or trusts or partnerships for the benefit of such persons.
Directors also receive an option to purchase 50,000 shares of the Corporation's
Common Stock upon their initial election to the Board of Directors pursuant to
the 2000 Directors' Stock Option Plan.
The Corporation will receive no consideration upon the grant of options
under the 2002 Directors' Plan. The exercise price of an option must be paid in
full upon exercise. Payment may be made in cash, check or, in whole or in part,
in shares of Common Stock of the Corporation already owned by the person
exercising the option, valued at fair market value.
Counsel for the Corporation has advised that under current law certain of
the federal income tax consequences to non-full time employee directors and the
Corporation under the proposed 2002 Directors' Plan should generally be as
follows: A director to whom an option is granted will generally not recognize
income at the time of grant of such option. When a director exercises the stock
option, the director will recognize ordinary compensation income equal to the
difference between the exercise price paid and the fair market value as of the
date of option exercise of the shares the director receives. The tax basis of
such shares to the director will equal the amount includable in the director's
gross income as compensation, and the director's holding period for such shares
will commence on the day on which the director recognizes taxable income in
respect of such shares. Subject to applicable provisions of the Internal Revenue
Code and regulations thereunder, the Corporation will generally be entitled to a
federal income tax deduction in respect of these stock options in an amount
equal to the ordinary compensation income recognized by the director as
described above.
The discussion set forth above does not purport to be a complete analysis
of the potential tax consequences relevant to recipients of options or to the
Corporation or to describe tax consequences based on particular circumstances.
It is based on federal income tax law and interpretational authorities as of the
date of this proxy statement, which are subject to change at any time.
The total number of shares of the Common Stock of the Corporation that may
be subject to options issued pursuant to the 2002 Directors' Plan is 1,000,000.
This number and the terms of outstanding options are subject to automatic
adjustment in the event of reorganization, merger, consolidation,
recapitalization, stock splits, combination or exchange of shares, stock
dividends or other similar events. The 2002 Directors' Plan will have a ten-year
term and will be administered by the Board of Directors.
The table set forth below shows the number of shares of Common Stock
underlying the annual stock option grants beginning in 2002 to all of the
Corporation's non-full time employee directors as a group. The table assumes
that non-full time employee directors will each receive an annual grant of an
option to purchase 20,000 shares of Common Stock.
18
NEW PLAN BENEFITS
SYMBOL TECHNOLGIES, INC. 2002 DIRECTORS' STOCK OPTION PLAN
NUMBER OF SHARES
OF COMMON STOCK
GROUP UNDERLYING STOCK OPTIONS
----- ------------------------
Non-Full Time Employee Director Group 100,000
A complete copy of the 2002 Directors' Plan is set forth in Appendix A to
this proxy statement, and the preceding discussion of the 2002 Directors' Plan
is qualified in its entirety by reference to it.
ACCORDINGLY, YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING
RESOLUTION:
RESOLVED, that, effective as of May 6, 2002, the Company's 2002 Directors'
Stock Option Plan as set forth in Appendix A of the Corporation's proxy
statement dated March 12, 2002 be, and it hereby is, adopted.
VOTE REQUIRED FOR APPROVAL
Approval by the affirmative vote of the holders of a majority of the shares
of Common Stock of the Corporation outstanding and entitled to vote is required
for adoption of the 2002 Directors' Plan.
PROPOSAL TO AMEND THE 1997 EMPLOYEE STOCK PURCHASE PLAN
The 1997 Employee Stock Purchase Plan (the "1997 Purchase Plan") was
adopted by the Board of Directors on February 10, 1997 and approved by the
shareholders on May 5, 1997. The Corporation proposes to amend the 1997 Purchase
Plan to increase the authorized number of shares that may be issued under the
Plan by 3,000,000 to a total of 4,898,438 shares. The full text of the proposed
amendment to the 1997 Purchase Plan is annexed hereto as Appendix B. On February
19, 2002, the Board of Directors of the Corporation approved the amendment of
the 1997 Purchase Plan, subject to shareholder approval.
The 1997 Purchase Plan is intended to provide an incentive to, and to
encourage stock ownership by, all eligible employees of the Corporation and
participating subsidiaries so that they may share in the growth of the
Corporation by acquiring or increasing their proprietary interest in the
Corporation. The 1997 Purchase Plan is designed to encourage eligible employees
to remain in the employ of the Corporation. Under the 1997 Purchase Plan,
payroll deductions are used to purchase the Corporation's Common Stock for
eligible, participating employees through the exercise of stock options.
The 1997 Purchase Plan initially authorized the issuance of 250,000 shares,
which number was subsequently adjusted for stock splits implemented by the
Corporation. As of December 31, 2001, the Corporation had only 187,939 shares
available to be issued under the 1997 Purchase Plan. At its current rate of
issuance, the Corporation will exhaust the number of authorized shares that can
be issued under the 1997 Purchase Plan during 2002. The Board of Directors
believes that it is in the best interest of the Corporation and its shareholders
that there be sufficient authorized shares under the 1997 Purchase Plan to
encourage eligible employees to own stock in and to continue to remain in the
employ of the Corporation.
It is intended that the 1997 Purchase Plan will be administered by the
Compensation/Stock Option Committee of the Board of Directors of the
Corporation. The Compensation/Stock Option Committee, subject to the provisions
of the 1997 Purchase Plan, has the power to construe the 1997 Purchase Plan, to
determine all questions thereunder, and to adopt and amend such rules and
regulations for administration of the 1997 Purchase Plan as it may deem
appropriate. The Compensation/Stock Option Committee or the Board of Directors
may, from time to time, adopt amendments to the 1997 Purchase Plan provided
that, without the approval of the Corporation's shareholders, no amendment may
increase the number of shares that may be issued under the 1997 Purchase Plan or
change the class of the employees eligible to receive options under the 1997
Purchase Plan, or cause Rule 16b-3 under the Securities Exchange Act of 1934 to
be inapplicable to the 1997 Purchase Plan.
19
The 1997 Purchase Plan may be terminated at any time by the Corporation's
Board of Directors but such termination will not affect options then outstanding
under the 1997 Purchase Plan. If at any time shares of Common Stock reserved for
the purposes of the 1997 Purchase Plan remain available for purchase but not in
sufficient number to satisfy all then unfilled purchase requirements, the
available shares will be apportioned among participants in proportion to the
amount of payroll deductions accumulated on behalf of each participant that
would otherwise be used to purchase stock, and the 1997 Purchase Plan will
terminate. Upon termination of the 1997 Purchase Plan, all payroll deductions
not used to purchase Common Stock will be refunded to 1997 Purchase Plan
participants without interest.
The 1997 Purchase Plan as amended authorizes the issuance of up to
4,898,438 shares of Common Stock pursuant to the exercise of non-transferable
options granted to participating employees. The Common Stock subject to the
options under the 1997 Purchase Plan includes shares of the Corporation's
authorized but unissued Common Stock, shares of Common Stock reacquired by the
Corporation, and shares of Common Stock purchased in the open market. Option
holders are generally protected against dilution in the event of certain capital
changes such as a recapitalization, stock split, merger, consolidation,
reorganization, combination, liquidation, stock dividend or similar
transactions.
An employee electing to participate in the 1997 Purchase Plan must
authorize an amount (a whole percentage not less than 2% nor more than 10% of
the employee's base compensation) to be deducted by the Corporation from the
employee's pay and applied toward the purchase of Common Stock under the 1997
Purchase Plan. Deductions under the 1997 Purchase Plan generally may not be
increased and may not be decreased more than once during the six month periods
commencing on the first day of January or the first day of July in each year
(the "Payment Period"). On the first business day of each Payment Period, the
Corporation will grant to each 1997 Purchase Plan participant an option to
purchase shares of Common Stock of the Corporation. On the last day of the
Payment Period, the employee will be deemed to have exercised this option, at
the option price to the extent of such employee's accumulated payroll deduction,
on the condition that the employee remains eligible to participate in the 1997
Purchase Plan throughout the Payment Period. In no event, however, may the
employee exercise an option granted under the 1997 Purchase Plan for more than
2,500 shares during a Payment Period. If the amount of the accumulated payroll
deductions exceeds the aggregate purchase price of 2,500 shares, the excess
deductions will be promptly refunded to the employee without interest.
Furthermore, no employee may be granted an option which permits the employee's
right to purchase shares of Common Stock under the 1997 Purchase Plan and all
other Section 423 plans of the Corporation and any subsidiary corporations, to
accrue at a rate which exceeds $25,000 of fair market value of such stock
(determined on the respective date(s) of grant) for each calendar year in which
the option is outstanding. Any excess accumulation of payroll deductions will be
promptly refunded to the employee without interest. Under the terms of the 1997
Purchase Plan, the option price is an amount equal to the lesser of (i) 85% of
the fair market value of the Common Stock on the first business day of the
Payment Period, or (ii) 85% of the fair market value of the Common Stock on the
last business day of the Payment Period. The Corporation will accumulate and
hold for the employee's account the amounts deducted from his pay. No interest
will be paid on these amounts.
An employee may enter the 1997 Purchase Plan by delivering to the
Corporation, at least 30 days before the beginning date of the next succeeding
Payment Period, an authorization stating the initial percentage to be deducted
from the employee's pay and authorizing the purchase of shares of Common Stock
for the Employee in each Payment Period in accordance with the terms of the 1997
Purchase Plan. Unless an employee files a new authorization or withdraws from
the 1997 Purchase Plan, the deductions and purchases under the authorization the
employee has on file under the 1997 Purchase Plan will continue from the initial
Payment Period to succeeding Payment Periods as long as the 1997 Purchase Plan
remains in effect. Deductions may be increased or decreased during a Payment
Period, as set forth above. An employee may withdraw from the 1997 Purchase
Plan, in whole but not in part, at any time prior to the last business day of
each Payment Period by delivering a withdrawal notice to the Corporation in
which event the Corporation will refund the entire balance of the employee's
deductions not previously used to purchase stock under the 1997 Purchase Plan.
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Employees of the Corporation and participating subsidiaries (A) who have
completed more than 90 days of employment with the Corporation or any of its
subsidiaries on or before the first day of any Payment Period, and (B) whose
customary employment is not less than 20 hours per week and more than 5 months
per calendar year are able to participate in the 1997 Purchase Plan. An employee
may not be granted an option under the 1997 Purchase Plan if after the granting
of the option such employee would be treated as owning 5% or more of the total
combined voting power or value of all classes of stock of the Corporation or its
subsidiaries. Directors who are not employees of the Corporation may not
participate in the 1997 Purchase Plan.
If an employee is not a participant in the 1997 Purchase Plan on the last
day of the Payment Period, the employee generally is not entitled to exercise
his option. An employee's rights under the 1997 Purchase Plan generally
terminate upon his voluntary withdrawal from the 1997 Purchase Plan at any time,
or when he ceases employment because of retirement, resignation, discharge,
death, change of status or any other reason.
An employee's rights under the 1997 Purchase Plan are the employee's alone
and may not be transferred to, assigned to, or availed of by, any other person.
Any option granted to an employee may be exercised, during the employee's
lifetime, only by the employee. Employees are required to retain any shares
acquired upon the exercise of any options under the 1997 Purchase Plan for a six
month period after the exercise thereof.
The proceeds received by the Corporation, if any, from the sale of Common
Stock pursuant to the 1997 Purchase Plan will be used for general corporate
purposes. The Corporation's obligation to deliver shares of Common Stock is
subject to the approval of any governmental authority required in connection
with the sale or issuance of such shares.
The following general rules are currently applicable for United States
federal income tax purposes to employees who receive grants of options for
Common Stock and purchase shares of Common Stock pursuant to the 1997 Purchase
Plan:
1. The amounts deducted from an employee's pay under the 1997 Purchase Plan
will be included in the employee's compensation subject to federal income
tax. Subject to certain requirements no additional income will be
recognized by the employee either at the time the options are granted
pursuant to the 1997 Purchase Plan or at the time the employee purchases
shares of Common Stock pursuant to the 1997 Purchase Plan.
2. If the employee disposes of shares of Common Stock more than two years after
the first business day of the Payment Period in which the employee acquired
the shares, then upon such disposition the employee will recognize ordinary
compensation in an amount equal to the lesser of:
(a) the excess, if any, of the fair market value of the shares on the date of
disposition over the amount the employee paid for the shares, or
(b) the excess of the fair market value of the shares on the first business
day of the Payment Period over the option price determined as if the
option was exercised on the first business day of the Payment Period.
In addition, the employee generally will recognize a capital gain or loss
in an amount equal to the difference between the amount realized upon the
sale of shares and the employee's basis in the shares (i.e., the amount the
employee paid for the shares plus the amount, if any, taxed as ordinary
compensation income). If the employee's holding period for the shares
exceeds one year, such gain or loss will be a long-term capital gain or
loss.
3. If the employee disposes of shares of Common Stock within two years after
the first business day of the Payment Period in which the employee acquired
the shares, then upon disposition the employee will recognize ordinary
compensation in an amount equal to the excess of the fair market value of
the shares on the last business day of the applicable Payment Period over
the amount the employee paid for the shares.
21
In addition, the employee generally will recognize a capital gain or loss
in an amount equal to the difference between the amount realized upon the
sale of the shares and the employee's basis in the shares (i.e., the amount
the employee paid for the shares plus the amount, if any, taxed to the
employee as ordinary compensation income). If the employee's holding period
for the shares is more than one year, such gain or loss will be a long-term
capital gain or loss.
4. If the two-year holding period is satisfied, the Corporation will not
receive any deduction for federal income tax purposes with respect to the
options or the shares of Common Stock issued upon their exercise. If the
two-year holding period is not satisfied, the Corporation generally will be
entitled to a deduction in an amount equal to the amount which is
considered ordinary compensation income to the employee, subject to general
limitations on the deductibility of compensation.
Approval of the amendment to the 1997 Purchase Plan will require an
affirmative vote of a majority of the outstanding shares of Common Stock of the
Corporation represented in person or by proxy at the Annual Meeting and entitled
to vote. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
1997 EMPLOYEE STOCK PURCHASE PLAN.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of Symbol hereby reports as follows:
1. The Audit Committee has reviewed and discussed the audited financial
statements with Symbol's management.
2. The Audit Committee has discussed with Deloitte & Touche LLP the
Corporation's independent accountants, the matters required to be discussed
by SAS 61 (Communication with Audit Committee).
3. The Audit Committee has received the written disclosures and the letter
from Deloitte & Touche LLP, required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committee), has
discussed with Deloitte & Touche LLP their independence, and considered
whether the provision of non-audit services is compatible with maintaining
Deloitte & Touche LLP's independence.
4. Based on the review and discussion referred to in paragraphs (1) through (3)
above, the Audit Committee recommended to the Board of Directors of Symbol,
and the Board has approved, that the audited financial statements be
included in Symbol's Annual Report on Form 10-K for the fiscal year ended
December 31, 2001, for filing with the Securities and Exchange Commission.
Harvey Mallement (Chair)
Dr. George Bugliarello
Dr. Leo A. Guthart
Notwithstanding anything to the contrary set forth in any of the
Corporation's previous or future filings under the Securities Act of 1933 or
the Securities Exchange Act of 1934 that might incorporate this proxy statement
or future filings with the Securities and Exchange Commission, in whole or in
part, the foregoing report shall not be deemed to be incorporated by reference
into any such filing.
22
AUDIT AND NON-AUDIT FEES
For the fiscal year ended December 31, 2001, aggregate fees billed to the
company for services provided by the Company's principal accounting firm,
Deloitte & Touche LLP, the member firms of Deloitte Touche Tohmatsu, and their
respective affiliates (collectively, "Deloitte") were as follows:
(DOLLARS)
A. Audit Fees 919,361
B. Financial Information Systems - 0 -
Design And Implementation Fees
C. All Other Fees including Audit Related
Fees of $588,043* 2,894,928
- ----------
* Audit related services included fees for employee benefit plan audits, due
diligence and related services on acquisitions and accounting consultations.
All other fees related to non-audit services included fees for tax
consultations, tax preparations and other consultations.
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche LLP, independent certified public accountants, were
selected by the Board of Directors to audit the financial statements of Symbol
for the fiscal year ended December 31, 2001. The Board of Directors and Audit
Committee have recommended that they be retained to audit the financial
statements of Symbol for the current fiscal year. Representatives of Deloitte &
Touche LLP will be present at the Annual Meeting of Shareholders. They will have
an opportunity to make a statement at the meeting and will be available to
respond to appropriate questions raised orally by shareholders. If shareholders
do not ratify the appointment of Deloitte & Touche LLP as Symbol's independent
accountants for the current year, the Audit Committee and the Board of Directors
will reconsider the appointment. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
FOR THE PROPOSAL TO RETAIN DELOITTE & TOUCHE LLP TO AUDIT THE FINANCIAL
STATEMENTS OF SYMBOL FOR FISCAL 2002.
It is important that your shares be represented at the meeting. If you are
unable to be present in person, you are respectfully requested to sign the
enclosed proxy and return it in the enclosed stamped and addressed envelope or
provide your instructions by telephone or via the Internet as promptly as
possible.
By Order of the Board of Directors
Leonard H. Goldner
Secretary
Dated: March 12, 2002
Holtsville, New York
23
APPENDIX A
SYMBOL TECHNOLOGIES, INC.
2002 DIRECTORS' STOCK OPTION PLAN
1. PURPOSE. The purpose of the Symbol Technologies, Inc. 2002 Directors'
Stock Option Plan (the "Plan") is to advance the interests of Symbol
Technologies, Inc. (the "Company") and its shareholders by encouraging
increased share ownership by members of the Board of Directors of the Company
(the "Board") who are not employees of the Company or any of its subsidiaries,
in order to promote long-term shareholder value through continuing ownership of
the Company's Common Stock.
2. ADMINISTRATION. The Plan shall be administered by the Board. The Board
shall have all the powers vested in it by the terms of the Plan, such powers to
include authority (within the limitations described herein) to prescribe the
form of the agreement embodying awards of nonqualified stock options made under
the Plan ("Options"). The Board shall, subject to the provisions of the Plan,
grant Options under the Plan and shall have the power to construe the Plan, to
determine all questions arising thereunder and to adopt and amend such rules
and regulations for the administration of the Plan as it may deem desirable.
Any decisions of the Board in the administration of the Plan, as described
herein, shall be final and conclusive. The Board may act only by a majority of
its members in office, except that the members thereof may authorize the
Secretary or any other executive officer of the Company to execute and deliver
documents on behalf of the Board. No member of the Board shall be liable for
anything done or omitted to be done by him or by any other member of the Board
in connection with the Plan, except for his own willful misconduct or as
expressly provided by statute.
3. PARTICIPATION. Each member of the Board who is not employed by the
Company or any of its subsidiaries on a full-time basis(a "Non-Employee
Director') shall be eligible to receive an Option in accordance with Paragraph
5 below. As used herein, the term "subsidiary" means any corporation at least
fifty percent (50%) of whose outstanding voting stock is owned, directly or
indirectly, by the Company.
4. AWARDS UNDER THE PLAN. (A) Type of Awards. Awards under the Plan shall
include only Options, which are rights to purchase shares of common stock of
the Company having a par value of $.01 per share (the "Common Stock"). Such
Options are subject to the terms, conditions and restrictions specified in
Paragraph 5 below.
(B) Maximum Number of Shares That May Be Issued. There may be issued under
the Plan pursuant to the exercise of Options an aggregate of not more than
1,000,000 shares of Common Stock subject to adjustment as provided in Paragraph
6 below. Such shares may be reserved or made available from the Corporation's
authorized and reissued Common Stock or from Common Stock reacquired and held
in the Company's treasury. If any Option is cancelled, terminates or expires
unexercised, in whole or in part, any shares of Common Stock that would
otherwise have been issuable pursuant thereto will be available for issuance
under new Options.
(C) Rights with Respect to Shares. A Non-Employee Director to whom an
Option is granted (and any person succeeding to such a Non-Employee Director's
rights pursuant to the Plan) shall have no rights as a shareholder with respect
to any shares of Common Stock issuable pursuant to any such Option until
receipt by the Company of the payment referred to in subparagraph 5(c)(iv)
below. Except as provided in Paragraph 7 below, no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or extraordinary,
and whether in cash, securities or other property) for which the record date is
prior to the date of receipt of such payment.
5. OPTION PRICE AND TERMS. Each Option granted under the Plan shall be
evidenced by an agreement in such form as the Board shall prescribe from time
to time in accordance with the Plan and shall comply with the following terms
and conditions:
(a) The Option exercise price shall be the fair market value of the Common
Stock subject to such Option on the date the Option is granted, which shall be
the closing price on the date of grant as reported on the New York Stock
Exchange Composite Transactions Tape, or if no shares of Common Stock were
traded on that date, on the last preceding date on which the Common Stock was
traded.
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(b) Each year beginning in 2002, each Non-Employee Director who has been a
director of the Company for at least eleven (11) months shall, upon his
re-election at the annual meeting of shareholders, automatically be granted an
Option to purchase 20,000 shares of Common Stock.
(c) Options shall not be exercisable:
(i) before the expiration of one year from the date of grant, and
(ii) after the expiration of ten years from the date of grant, and
(iii) may be exercised during such period as follows: ten percent (10%)
of the total number of shares of Common Stock covered by an Option shall
become exercisable on the first anniversary of the date it is granted;
fifteen percent (15%) of the total number of Shares of Common Stock covered
by an Option shall become exercisable every six (6) months thereafter.
(iv) unless payment in full is made for the shares of Common Stock
being acquired at the time of exercise; such payment shall be made:
(A) if such person shall cease to be such a Non-Employee Director
for reasons other than death, while holding an Option that has not
expired and has not been fully exercised, such person, at any time
within ninety (90) days of the date he ceased to be such a
Non-Employee Director (but in no event after the Option has expired
under the provisions of subparagraph 5(c)(ii) above), may exercise the
Option with respect to any shares of Common Stock as to which he could
have exercised the Option on the date he ceased to be a Non-Employee
Director; or
(B) if any person to whom an Option has been granted shall die
holding an Option that has not expired and has not been fully
exercised, his executors, administrators, heirs or distributees, or a
transferee as provided in subparagraph 6(b) hereof, as the case may
be, may, at any time within one (1) year after the date of such date
(but in no event after the Option has expired under the provisions of
sub-paragraph 5(c)(ii) above), exercise the Option with respect to any
shares of Common Stock as to which the decedent could have exercised
the Option at the time of his death.
6. TRANSFERABILITY OF OPTIONS
(a) Subject to the provisions of subparagraph 6 (b) hereof, options shall
not be transferable by the optionee other than by will or the laws of descent
and distribution, and shall be exercisable during his lifetime only by him (or
by his duly appointed guardian or conservator).
(b) The Board may, in its discretion, authorize the transfer of all or a
portion of any options granted hereunder on terms which permit the transfer by
the optionee to (i)the spouse, children or grandchildren of the optionee (the
"Immediate Family Members"), (ii) a trust or trusts for the exclusive benefit
of the Immediate Family Members; or (iii) a partnership in which the Immediate
Family Members and/or the optionee are the only partners, provided that(A) the
optionee shall receive the approval of the Board prior to such transfer, and
such transfer must be limited to the person or entities listed in this
sub-paragraph 6 (b), and (B) subsequent transfers of such transferred options
shall be prohibited except in accordance with this paragraph 6. Following any
such transfer, such options shall continue to be subject to the same terms and
conditions as were applicable immediately prior to the transfer, provided that
for purposes of this plan, the term optionee shall be deemed to refer to the
transferor. In the event of the termination of the employment of the
transferor, the provisions provided herein shall continue to be applicable to
the options and shall limit the ability of the transferee to exercise any such
transferred options the same extent they would have limited the optionee.
7. DILUTION AND OTHER ADJUSTMENTS. In the event of any change in the
outstanding Common Stock of the Company by reason of any stock split, stock
dividend, split-up, split-off, recapitalization, merger, consolidation, rights
offering, reorganization combination or exchange of shares, a sale by the
Company of all or virtually all of its assets, any distribution to shareholders
other than a normal cash dividend, or other extraordinary or unusual events,
the number or kind of shares that may be issued under the Plan pursuant to
subparagraph 4(b) above, and the number or kind of Common Stock subject to, and
the
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Option price per share under all then outstanding Options shall be
automatically adjusted so that the proportionate interest of the participant
shall be maintained as before the occurrence of such event. Any fractional
share resulting from adjustments pursuant to this paragraph shall be eliminated
from any then outstanding Option. Adjustments under this paragraph shall be
made by the Board, whose determination thereof shall be conclusive and binding.
8. MISCELLANEOUS PROVISIONS
(a) Except as expressly provided for in the Plan, no person shall have any
claim or right to be granted an Option under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any Non-Employee Director
any right to be retained in the service of the Company or to continue to serve
as a director of the Company.
(b) An optionee's rights and interest under the Plan may not be assigned or
transferred (except as provided in subparagraph 6(b)), hypothecated or
encumbered in whole or in part either directly or by operation of law or
otherwise (except in the event of a participant's death, by will or the laws of
descent and distribution), including, but not by way of limitation, execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner, and no
such right or interest of any optionee in the Plan shall be subject to any
obligation or liability of such participant.
(c) No Common Stock shall be issued hereunder unless counsel for the
Company shall be satisfied that such issuance will be in compliance with
applicable federal, state, local and foreign securities, securities exchange and
other applicable laws and requirements.
(d) It shall be a condition to the obligation of the Company to issue
Common Stock upon exercise of an Option, that the optionee (or any beneficiary
or person entitled to act under subparagraph 5(c)(iv)(B) above) pay to the
Company, upon its demand, such amount as may be requested by the Company for the
purpose of satisfying any liability to withhold federal, state, local or foreign
income or other taxes. If the amount requested is not paid, the Company may
refuse to issue any shares of Common Stock and all rights under the Option shall
become null and void.
(e) The expenses of the Plan shall be borne by the Company.
(f) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the issuance of shares of Common Stock upon exercise of any
Option under the Plan, and rights to the issuance of Common Stock upon exercise
of Options shall be subordinate to the claims of the Company's general
creditors.
(g) By accepting any Option or other benefit under the Plan, each optionee
and each person claiming under or through him shall be conclusively deemed to
have indicated his acceptance and ratification of, and consent to, any action
taken under the Plan by the Company or the Board.
(h) The masculine pronoun means the feminine and the singular means the
plural in the Plan, wherever appropriate.
9. AMENDMENT OR DISCONTINUANCE. The Plan may be amended at any time and
from time to time by the Board as the Board shall deem advisable; provided,
however, that no amendment shall become effective without shareholder approval
if such shareholder approval is required by law, rule or regulation, and
provided further, to the extent required by Rule 16b-3 under Section 16 of the
Securities Exchange Act of 1934, in effect from time to time, Plan provisions
relating to the amount, price and timing of Options shall not be amended more
than once every six months, except that the foregoing shall not preclude any
amendment to comport with changes in the Internal Revenue Code of 1986, the
Employee Retirement Income Security Act of 1974 or the rules thereunder in
effect from time to time. No amendment of the Plan shall materially and
adversely affect any right of any participant with respect to any Option
theretofore granted without such participant's written consent.
10. GENERAL RESTRICTIONS.
(a) No Option granted hereunder shall be exercisable if the Company shall,
at any time and in its sole discretion, determine that (i) the listing upon any
securities exchange, registration or qualification under
A-3
any state or federal law of any Shares otherwise deliverable upon such
exercise, or (ii) the consent or approval of any regulatory body or the
satisfaction of withholding tax or other withholding liabilities, is necessary
or appropriate in connection with such exercise. In any of such events, the
exercisability of such Options shall be suspended and shall be not effective
unless and until such withholding, listing, registration, qualification or
approval shall have been effected or obtained free of any conditions not
acceptable to the Company in its sole discretion, notwithstanding any
termination of any Option or any portion of an Option during the period when
exercisability has been suspended.
(b) The Board may require, as a condition to the right to exercise an
Option, that the Company receive from the optionee, at the time of any such
exercise, representations, warranties and agreements to the effect that the
Common Stock is being purchased by the optionee without any present intention to
sell or otherwise distribute such Common Stock in violation of the Securities
Act of 1933 (the "1933 Act") and that the optionee will not dispose of such
Common Stock in transactions which, in the opinion of counsel to the Company,
would violate the registration provisions of the 1933 Act and the rules and
regulations thereunder and any applicable "blue sky" laws or regulations. The
certificates issued to evidence such shares of Common Stock shall bear the
appropriate legends summarizing such restrictions on the disposition thereof.
11. SHAREHOLDER APPROVAL AND ADOPTION. The Plan shall be submitted to the
shareholders of the Company for approval in accordance with the applicable
provisions of the General Corporate Law of the State of Delaware as promptly as
practicable and in any event by September 30, 2002. Any Options granted
hereunder prior to such shareholder approval shall not be exercisable unless and
until such approval is obtained. If such approval is not obtained by September
30, 2002, the Plan and any Options granted hereunder shall be terminated.
12. TERMINATION. Unless the Plan shall theretofore have been terminated in
accordance with Paragraph 11 above, the Plan shall terminate on February 18,
2012 and no Options under the Plan shall thereafter be granted, provided,
however, the Board at any time may, in its sole discretion, terminate the Plan
prior to the foregoing date. No termination of the Plan shall without the
consent of the holder of any existing Option, materially and adversely affect
his rights under such Option.
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APPENDIX B
TEXT OF PROPOSED AMENDMENT TO THE 1997 EMPLOYEE STOCK PURCHASE PLAN
Article 4 of the 1997 Employee Stock Purchase Plan is proposed to be
amended. All other terms and conditions of the 1997 Employee Stock Purchase Plan
will remain unchanged. If the proposed amendment is approved by the
stockholders, Article 4 will be as follows:
ARTICLE 4--STOCK SUBJECT TO THE PLAN
The stock subject to the options under the Plan shall be authorized but
unissued Common Stock or treasury shares or shares purchased in the open market.
The aggregate number of shares which may be issued pursuant to the Plan is
4,898,438, subject to adjustment as provided in Article 13. If any option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part, the unpurchased shares subject thereto shall again be available
under the Plan.
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VOTE BY TELEPHONE AND INTERNET
24 HOURS A DAY, 7 DAYS A WEEK
TELEPHONE INTERNET MAIL
1-866-814-2810 https://www.proxyvotenow.com/sbl
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Use any touch-tone telephone to vote Use the Internet to vote your proxy. Mark, sign and date your proxy
your proxy. Have your proxy card in Have your proxy card in hand when you card and return it in the
hand when you call. You will be access the website. You will be postage-paid envelope we have
prompted to enter your control number, prompted to enter your control provided
located in the box below, and then number, located in the box below, to
follow the simple directions. create an electronic ballot.
- -----------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------
Your telephone or Internet vote authorizes the named If you have submitted your proxy by
proxies to vote your shares in the same manner as if you telephone or the Internet there is no
marked, signed and returned the proxy card. need for you to mail back your proxy.
CONTROL NUMBER FOR
CALL TOLL-FREE TO VOTE TELEPHONE OR INTERNET VOTING
1-866-814-2810
DETACH PROXY CARD HERE IF YOU ARE NOT
VOTING BY TELEPHONE OR INTERNET
================================================================================================================
1. Election of Directors FOR all nominees [ ] WITHHOLD AUTHORITY to [ ] EXCEPTIONS* [ ]
listed below vote for all nominees
listed below
Nominees: 01 - Jerome Swartz, 02 - Harvey P. Mallement, 03 - Raymond R. Martino, 04 - George Bugliarello,
05 - Leo A. Guthart and 06 - James Simons
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE
THAT NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions:
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2. To approve adoption of the
2002 Directors' Stock Option Plan. FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To approve an amendment to the 1997 Employee Stock Purchase Plan. FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. To ratify the appointment of Deloitte & Touche LLP, independent FOR [ ] AGAINST [ ] ABSTAIN [ ]
certified public accountants, as auditors for fiscal year 2002.
5. In their discretion, upon any other business which may properly FOR [ ] AGAINST [ ] ABSTAIN [ ]
come before the meeting or any adjournment thereof.
Address Change and/or Comments Mark Here
Please sign exactly as name or names appear on this proxy.
When signing as attorney, executor, administrator, trustee,
custodian, guardian or corporate officer, give full title.
If more than one trustee, all should sign. Joint owners must
each sign.
Dated: 2002
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Signature(s)
-----------------------------------------------------------
Signature(s)
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK [ ]
(PLEASE SIGN, DATE AND RETURN THIS PROXY CARD IN THE ENCLOSED ENVELOPE.)
SYMBOL TECHNOLOGIES, INC.
PROXY/VOTING INSTRUCTION CARD
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SYMBOL TECHNOLOGIES, INC.
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 6, 2002.
The undersigned hereby constitutes and appoints JEROME SWARTZ and RICHARD
BRAVMAN, and each of them, with full power of substitution in each, the proxies
of the undersigned, to represent the undersigned and vote all of the shares of
Symbol Technologies, Inc. Common Stock which the undersigned would be entitled
to vote at the Annual Meeting of Shareholders to be held on May 6, 2002, and at
any adjournment or postponement thereof, as indicated on the reverse side.
This proxy, when properly executed, will be voted in the manner directed herein
by the undersigned shareholder. If no direction is given, this proxy will be
voted FOR proposals 1, 2, 3 and 4. The undersigned acknowledges receipt of the
accompanying Proxy Statement dated March 12, 2002.
Comments / Address Change
--------------------
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SYMBOL TECHNOLOGIES, INC.
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P.O. Box 11095
NEW YORK, N.Y. 10203-0095
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If you have written in the above space, please
mark the Comments notification box on the
reverse side
(Continued, and to be signed and dated on the reverse side.)