Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
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Section 240.14a-12
SYMBOL TECHNOLOGIES, INC.
Payment of Filing Fee
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Item 22(a)(2) of Schedule 14A.
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14a- 6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a- 6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
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computed pursuant to Exchange Act
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[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a) (2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and date of its filing.
1) Amount Previously Paid:
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SYMBOL TECHNOLOGIES, INC.
ONE SYMBOL PLAZA
HOLTSVILLE, NEW YORK 11742-1300
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 1996
----------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Symbol
Technologies, Inc. (the "Corporation") will be held at 11:00 A.M., local
time, on April 29, 1996 at Chemical Banking Corp., World Headquarters, 270
Park Avenue, New York, New York, for the following purposes:
1. To elect nine directors of the Corporation to serve until the next
annual meeting of shareholders and until the election and qualification of
their respective successors;
2. To vote upon a proposal to amend the Corporation's Certificate of
Incorporation;
3. To ratify the appointment of Deloitte & Touche, independent certified
public accountants, as auditors for fiscal 1996; and
4. To transact such other business as may properly come before the
meeting.
Only holders of record of the Corporation's Common Stock at the close of
business on March 4, 1996 are entitled to notice of, and to vote at, the
meeting and any adjournment thereof. Such shareholders may vote in person or
by proxy. The stock transfer books of the Corporation will not be closed.
Shareholders who find it convenient are cordially invited to attend the
meeting in person. If you are not going to do so and wish that your shares be
voted, you are requested to fill in, sign, date and return the accompanying
proxy in the enclosed envelope. No postage is required if mailed in the
United States.
By Order of the Board of Directors,
LEONARD H. GOLDNER
Secretary
Dated: March 7, 1996
SYMBOL TECHNOLOGIES, INC.
ONE SYMBOL PLAZA
HOLTSVILLE, NEW YORK 11742-1300
----------------
PROXY STATEMENT
----------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Symbol Technologies, Inc. (the "Corporation") of
proxies to be used at the Annual Meeting of Shareholders of the Corporation
to be held at 11:00 A.M., local time on April 29, 1996, at the Chemical
Banking Corp., World Headquarters, 270 Park Avenue, New York, New York, and
at any adjournment thereof. If proxy cards in the accompanying form are
properly executed and returned, the shares of Common Stock represented
thereby will be voted as instructed on the proxy. If no instructions are
given, such shares will be voted (1) for the election as directors of the
nominees of the Board of Directors named below, (2) in favor of the proposal
to amend the Corporation's Certificate of Incorporation, (3) to ratify the
appointment of Deloitte & Touche as the Corporation's auditors for fiscal
1996, and (4) in the discretion of the proxies named in the proxy card on any
other proposals to properly come before the meeting or any adjournment
thereof. Any proxy may be revoked by a shareholder prior to its exercise upon
written notice to the Secretary of the Corporation, or by the vote of a
shareholder cast in person at the meeting. The approximate date of mailing of
this Proxy Statement and the accompanying proxy is March 15, 1996.
VOTING
Holders of record of the Corporation's Common Stock on March 4, 1996, will
be entitled to vote at the Annual Meeting or any adjournment thereof. As of
that date, there were 27,387,673 shares of Common Stock outstanding and
entitled to vote and a majority, or 13,693,837 of these shares, will constitute
a quorum for the transaction of business. Each share of Common Stock entitles
the holder thereof to one vote on all matters to come before the meeting,
including election of directors. Only votes cast "for" a motion constitute
affirmative votes. Votes "withheld" or abstentions (including broker
non-votes) are considered for quorum purposes but since they are not votes
"for" a motion, they will have the same effect as negative votes or votes
"against" such matters. The closing price of the Corporation's Common Stock
on the New York Stock Exchange on March 1, 1996 was $37.25 per share.
NOMINEES FOR ELECTION
The following information is supplied with respect to the nominees for
election as directors of the Corporation:
POSITIONS AND OFFICES HAS BEEN A
NAME AGE PRESENTLY HELD WITH THE CORPORATION DIRECTOR SINCE
- -------------------- ----- ----------------------------------------------- --------------
Jerome Swartz ....... 55 Chairman of the Board of Directors, 1973
Chief Executive Officer and Director
Harvey P. Mallement . 55 Director 1977
Frederic P. Heiman . 56 Executive Vice President and Director 1981
Raymond R. Martino . 57 Vice Chairman of the Board of Directors 1983
Saul P. Steinberg .. 56 Director 1985
Lowell C. Freiberg . 56 Director 1985
George Bugliarello . 68 Director 1992
Charles Wang ........ 51 Director 1994
Tomo Razmilovic .... 53 President, Chief Operating Officer and Director 1995
1
Dr. Swartz co-founded and has been employed by the Corporation from its
inception in 1973. He has been the Chairman of the Board of Directors and
Chief Executive Officer of the Corporation for more than the past ten years.
Dr. Swartz was an industry consultant for the prior 12 years in the areas of
optical and electronic systems and instrumentation and has a total of some
125 issued and pending U.S. patents and technical papers to his credit. He is
presently a member of the Board of Trustees of Polytechnic University and an
adjunct full professor at S.U.N.Y., Stony Brook. He was also recently elected
a fellow of the Institute of Electrical and Electronic Engineers.
Mr. Mallement has been one of the Managing General Partners of Harvest
Partners, Inc., a private equity and leveraged buyout investment management
company, since its inception in April 1981. He is an officer and director of
seven privately held companies.
Dr. Heiman has been Executive Vice President of the Corporation since July
1986. In addition, in 1993 he was appointed the Corporation's Chief
Technology Officer. He was previously employed by Intel Corporation, a
manufacturer of semiconductor components, from May 1982 until July 1986, in a
number of positions, the most recent of which was as its Director of
Corporate Planning. Dr. Heiman is the inventor or co-inventor of 20 issued
U.S. patents, including basic elements of the MOS integrated circuit chip,
which became the basis of much of the modern revolution in computer and
electronics communications and the first silicon storage tube used in display
and scanning applications.
Mr. Martino was the Corporation's President and Chief Operating Officer
from December 1983 until June 30, 1994. He is currently the Corporation's
Vice Chairman of the Board of Directors and is employed by the Corporation on
a part-time and consulting basis.
Mr. Steinberg founded and has been the Chief Executive Officer and a
Director of Reliance Group Holdings, Inc. ("Reliance") and predecessors of
Reliance since 1961. Reliance is a holding company whose principal business
is the ownership of property and casualty and title insurance companies. He
is also a member of the Board of Trustees of the University of Pennsylvania
and Chairman of the Wharton School Board of Overseers. Mr. Steinberg served
Telemundo Group, Inc. ("Telemundo") as Chief Executive Officer from February
1990 until May 1992, and as President from February 1990 until February 1991.
Telemundo consented to the entry of an order for relief under Chapter 11 of
the U.S. Bankruptcy Code in July 1993. Telemundo's Plan of Reorganization was
consummated on December 30, 1994. Mr. Steinberg is also a Director of
Reliance Insurance Company, Reliance Financial Services Corporation and
Zenith National Insurance Corp.
Mr. Freiberg has been employed by Reliance and its predecessors since
1969. For more than the past five years, he has been the Senior Vice
President and Chief Financial Officer of Reliance.
Dr. Bugliarello has been Chancellor of Polytechnic University since July
1, 1994. For the prior 21 years, he was President of Polytechnic University.
He has been a member of several scientific organizations including past
Chairman of the Board of Science and Technologies for International
Development of the National Academy of Sciences. He is a member of the
National Academy of engineering and is also the U.S. Member of the Science
for Stability Steering Group of the Scientific Affairs Division of NATO. He
is a member of the Board of Directors of several organizations including the
Long Island Lighting Company, Comtech Laboratories and Spectrum Information
Technologies, Inc. In January 1995, Spectrum Information Technologies, Inc.
filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
Mr. Wang founded and has been the Chairman and Chief Executive Officer of
Computer Associates International, Inc. since 1976. Computer Associates is
the world's second largest software company with fiscal 1995 revenues
exceeding $2.6 billion.
Mr. Razmilovic has been President and Chief Operating Officer of the
Corporation since October 1995. He was previously Senior Vice President
- --Worldwide Sales and Services. He first joined the Corporation in 1989.
Prior thereto, he was President of ICL Europe, a large European computer
manufacturer and he also led its industry marketing and software development
divisions.
Pursuant to agreements between Reliance and the Corporation, Reliance
currently has the right to designate one person to the Corporation's Board of
Directors. Reliance has designated Mr. Steinberg.
2
MEETINGS OF THE BOARD
During the fiscal year ended December 31, 1995 the Board of Directors held
6 meetings. Each director attended 75% or more of the aggregate of (1) the
total number of meetings of the Board of Directors and (2) the total number
of meetings held by all the committees of the Board on which such director
served.
The Board of Directors has an Audit Committee consisting of Messrs.
Mallement and Bugliarello. The primary functions of the Audit Committee are
to review the Corporation's financial statements, to recommend the
appointment of the Corporation's independent auditors and to review the
overall scope of the audit. The Audit Committee held two meetings in 1995.
The Board of Directors has a Compensation/Stock Option Committee
consisting of Messrs. Mallement and Steinberg. The primary functions of this
Committee are to review the salaries, benefits and any other compensation of
the Corporation's senior executive officers, to make recommendations to the
Board of Directors with respect to these matters and to administer the
Corporation's stock option plans. During 1995 the Committee held 6 meetings.
The Board of Directors has a Nominating Committee consisting of Messrs.
Swartz, Mallement and Steinberg. The primary function of this Committee is to
review and recommend to the Board potential candidates for election to the
Board of Directors. Shareholders wishing to recommend candidates for
consideration by the Committee can do so by writing to the Secretary of the
Corporation at its corporate office in Holtsville, New York, giving the
candidate's name, biographical data and qualifications. Any such
recommendation should be accompanied by a written statement from the
individual of his or her consent to be nominated as a candidate and, if
nominated and elected, to serve as a director. The Committee held one meeting
in 1995.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to the
Common Stock of the Corporation beneficially owned by any person who is known
to the Corporation to be the beneficial owner of more than 5% of the
Corporation's voting securities:
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) COMMON STOCK
- --------------------------------------- ------------------------ --------------
Saul P. Steinberg and 3,589,884(2) 13.9
Reliance Financial Services Corporation
Park Avenue Plaza
New York, New York 10055
Prudential Insurance Company of America 2,582,475(3) 10.0
751 Broad Street
Newark, New Jersey 07102-3777
J.P. Morgan & Co. Incorporated 2,568,912(4) 10.0
60 Wall Street
New York, New York 10260
Jennison Associates Capital Corp. 2,499,300(5) 9.78
466 Lexington Avenue
New York, New York 10017
Forstmann-Leff Associates Inc. and subsidiaries 1,684,200(6) 6.6
55 East 52nd Street
New York, New York 10055
- ----------
(1) The table identifies any persons having sole voting and investment power
with respect to the shares set forth opposite their names as of February
15, 1996 except as otherwise disclosed in the footnotes to the table,
according to information publicly filed or otherwise furnished to the
Corporation.
(2) Of the Common Stock shown, 3,578,634 shares are beneficially owned by
Reliance Financial Services Corporation ("Reliance Financial"). Reliance
Financial is a wholly owned subsidiary of Reliance. Approximately 47% of
the common voting stock of Reliance is owned by Saul P. Steinberg, members
of his family and affiliated trusts. As a result of his stock holdings in
Reliance, Mr. Steinberg may be deemed to control Reliance Financial and to
be a beneficial owner of the shares beneficially owned by Reliance
Financial. Sole voting and dispositive power with respect to such shares
are held as follows: Reliance Insurance Company, a subsidiary of Reliance
Financial,
3
2,880,534 shares; United Pacific Insurance Company, a subsidiary
of Reliance Insurance Company, 500,000 shares; Reliance National Indemnity,
a subsidiary of Reliance Insurance Company, 198,100 shares. Mr. Steinberg
disclaims beneficial ownership of the 3,578,634 shares beneficially owned
by Reliance Financial. Includes 11,250 shares Mr. Steinberg beneficially
owns which may be acquired within 60 days of February 15, 1996, pursuant to
the exercise of a warrant and an option held by him.
(3) The number of shares beneficially owned as of December 31, 1995 according
to a statement on Schedule 13G filed with the Securities and Exchange
Commission. Prudential Insurance Company of America, an insurance company,
has sole power to vote or direct the vote and dispose of or direct the
disposition of 359,600 of such shares, shared power to vote or direct the
vote of 1,968,275 of such shares, and shared power to dispose of or
direct the disposition of 2,222,875 of such shares. Prudential may have
direct or indirect voting and/or investment discretion over 2,582,475
shares which are held for the benefit of its clients by its separate
accounts, externally managed accounts, registered investment companies,
subsidiaries and/or other affiliates.
(4) The number of shares beneficially owned as of December 31, 1995 according
to a statement on Schedule 13G filed with the Securities and Exchange
Commission. J.P. Morgan & Co. Incorporated, a holding company, has sole
power to vote or direct the vote of 1,751,817 of such shares, shared power
to vote or direct the vote of 29,400 of such shares, sole power to dispose
of or to direct the disposition of 2,504,812 of such shares and shared
power to dispose of or direct the deposition of 45,300 of such shares.
Virtually all of the accounts of J.P. Morgan & Co. Incorporated involve
outside persons who have the right to receive or direct the receipt of
dividends from or the proceeds from the sale of securities in such
accounts. No such person's rights related to more than 5% percent of
such shares.
(5) The number of shares benefically owned as of December 31, 1995 according to
a statement on Schedule 13G filed with the Securities and Exchange
Commission. Jennison Associates Capital Corp., an investment advisor, has
sole power to vote or direct the vote of 527,400 of such shares, shared
power to vote or direct the vote of 1,720,900 of such shares, and shared
power to dispose of or direct the disposition of 2,499,300 of such shares.
No one client owns more than 5% of such shares.
(6) The number of shares beneficially owned as of December 31, 1995 according
to a statement on Schedule 13G filed with the Securities and Exchange
Commission. Forstmann-Leff Associates Inc. and subsidiaries, investment
advisors, have sole power to vote or direct the vote of 887,700 of such
shares, shared power to vote or direct the vote of 314,000 of such shares,
sole power to dispose of or to direct the disposition of 938,700 of such
shares and shared power to dispose of or direct the disposition of 745,500
of such shares.
4
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of February 15, 1996
with respect to the Common Stock of the Corporation beneficially owned by (i)
all directors and nominees, (ii) the executive officers listed in the
following Summary Compensation Table, and (iii) all executive officers and
directors as a group:
AMOUNT AND NATURE OF PERCENT OF
NAME OF INDIVIDUAL OR IDENTITY OF GROUP BENEFICIAL OWNERSHIP(1) COMMON STOCK
- ----------------------------------------------- ------------------------ --------------
Jerome Swartz .................................. 861,438(2) 3.3
Harvey P. Mallement ............................ 57,048(3) *
Frederic Heiman ................................ 88,820(4) *
Raymond R. Martino ............................. 255,000(5) *
Saul P. Steinberg .............................. 3,589,884(6) 14.0
Lowell C. Freiberg ............................. 36,250(7) *
George Bugliarello ............................. 2,750(8) *
Jan Lindelow ................................... 30,000(9) *
Charles Wang ................................... 15,000(10) *
Tomo Razmilovic ................................ 50,990(11) *
Thomas G. Amato ................................ 69,750(12) *
Leonard H. Goldner ............................. 194,050(13) *
All executive officers and directors as a group 5,311,518(14) 19.7
(consisting of 16 individuals)
- ------------
* Less than 1%
(1) The persons identified in this table have sole voting and investment
power with respect to the shares set forth opposite their names,
except as otherwise disclosed in the footnotes to the table,
according to information furnished to the Corporation by each of
them.
(2) Includes (i) 579,250 shares which may be acquired pursuant to the
exercise of options within 60 days of February 15, 1996, (ii) 50,000
shares held in trust for the benefit of Dr. Swartz and his family,
(iii) 5,509 shares owned by his wife, and (iv) 14,600 shares held by
a charitable lead trust of which he is a co-trustee and his adult
children are ultimate beneficiaries. Dr. Swartz disclaims beneficial
ownership of the shares held by or for the benefit of members of his
family.
(3) Includes 11,250 shares that may be acquired pursuant to the exercise
of an option or warrants within 60 days of February 15, 1996. Also
includes 23,798 shares which are owned by a limited partnership in
which he is a General Partner. Mr. Mallement has an indirect
beneficial ownership of 1,831 of such shares. Mr. Mallement disclaims
beneficial ownership of any other shares held by this partnership.
(4) Represents 73,820 shares that may be acquired pursuant to the
exercise of options within 60 days of February 15, 1996 and 15,000
shares owned jointly by Dr. Heiman and his wife.
(5) Represents 235,000 shares that may be acquired pursuant to the
exercise of options within 60 days of February 15, 1996 and 20,000
shares owned by Mr. Martino.
(6) Represents 3,578,634 shares owned by Reliance Financial and its
subsidiaries and 11,250 shares that may be acquired by Mr. Steinberg
pursuant to the exercise of an option and a warrant within 60 days of
February 15, 1996. See "Principal Shareholders."
(7) Represents 17,500 shares that may be acquired pursuant to the
exercise of an option and warrants within 60 days of February 15,
1996 and 18,750 shares owned by Mr. Freiberg. Mr. Freiberg disclaims
beneficial ownership of the shares owned by Reliance Financial. See
"Principal Shareholders."
(8) Represents 1,500 shares owned jointly by Dr. Bugliarello and his wife
and 1,250 shares that may be acquired pursuant to the exercise of an
option within 60 days of February 15, 1996.
(9) Represents 30,000 shares that may be acquired pursuant to the
exercise of an option within 60 days of February 15, 1996.
(10) Represents 5,000 shares that may be acquired pursuant to the exercise
of an option within 60 days of February 15, 1996 and 10,000 shares
owned by Mr. Wang.
5
(11) Represents 40,990 shares that may be acquired pursuant to the
exercise of options within 60 days of February 15, 1996 and 10,000
shares owned by Mr. Razmilovic.
(12) Represents 57,750 shares that may be acquired pursuant to the
exercise of options within 60 days of February 15, 1996 and 12,000
shares owned by Mr. Amato.
(13) Includes 118,450 shares that may be acquired pursuant to the exercise
of options within 60 days of February 15, 1996 and 64,600 shares held
by trusts of which he is co-trustee. Mr. Goldner disclaims beneficial
ownership of the shares held by these trusts.
(14) Includes an aggregate of 1,309,700 shares which may be acquired
pursuant to the exercise of options and warrants within 60 days of
February 15, 1996.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who own more than
10% of a registered class of the Corporation's equity securities, to file
with the Securities and Exchange Commission and the New York Stock Exchange,
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Corporation and to furnish the Corporation
with copies of all Section 16(a) forms they file.
Based on a review of the copies of such reports furnished to the
Corporation, the Corporation believes that, during the 1995 fiscal year, all
filing requirements applicable to its executive officers, directors and
greater than 10% shareholders were complied with.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Corporation's Compensation/Stock Option Committee (the "Committee") is
composed entirely of outside directors. Messrs. Mallement and Steinberg are
the current members of the Committee. Mr. Mallement was the Corporation's
Vice President-Finance from September 1977 until February 1982 and its
Secretary from November 1980 until February 1982. Mr. Steinberg has never
been an officer or employee of the Corporation.
COMPENSATION/STOCK OPTION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
A primary role of the Committee is to oversee compensation practices for
the Corporation's senior executive officers. The Committee's responsibilities
include reviewing the salaries, benefits and other compensation of the
Corporation's senior executive officers, making recommendations to the full
Board of Directors with respect to these matters and administering the
Corporation's stock option plans. In its oversight capacity, the Committee is
dedicated to ensuring that the Corporation's financial resources are used
effectively to support the achievement of its short- and long-term business
objectives. The Committee has available to it an outside compensation
consultant and access to independent compensation data.
In the course of its executive compensation decision making, the Committee
adheres to several guiding principles. Specifically, the Committee takes the
position that the executive compensation program should:
o Target pay levels at rates that are competitive in light of market
practices so as to ensure that the Corporation is positioned to attract
and retain high performing management talent, particularly in the areas of
technology in which it competes.
o Reflect a pay-for-performance orientation, linking overall compensation
paid to senior executives with the Corporation's financial performance.
o Encourage share ownership on the part of key employees with the
objective of aligning the interests of management and investors, thereby
promoting the maximization of shareholder value.
The Corporation's total compensation program is described below. The
Committee believes that the Corporation's executive compensation program is
structured to appropriately recognize the performance
6
and contribution of individual officers and to attract and retain top quality
management talent. The Committee further believes that the executive
compensation program is effective in supporting the Corporation's business
goals and human resource strategies.
DESCRIPTION OF COMPENSATION POLICIES
It is the Corporation's policy to pay its senior executives at levels that
reflect the Corporation's financial performance relative to comparable
organizations. This policy is implemented by means of a coordinated, total
pay program comprised of discrete elements that reward individual value added
to the Corporation, provide motivation to achieve corporate financial targets
that are consistent with shareholder expectations, and encourage long-term
share ownership by senior executives. These elements exist in the context of
a reward system that includes base salary, a bonus plan and awards of stock
options.
The Corporation, with the assistance of outside consulting firms,
periodically conducts comparisons of the compensation practices of
approximately 30 selected companies. This panel consists of "high tech"
companies with which the Corporation believes it competes in attracting and
retaining employees. Eleven of the panel companies are included in the S&P
High Tech Composite Index. The Corporation seeks to target the total
compensation (e.g. base salary, annual bonus and stock options) paid to its
senior executives at approximately the 75th percentile of the total
compensation paid for comparable positions at the panel companies, after
adjusting by regression analysis for the different magnitude of revenues.
Based on a review of recently implemented Internal Revenue Service
regulations, the Committee believes that all compensation paid in 1995 and
payable in 1996 to its senior executive officers (including Dr. Swartz) will
be fully deductible by the Corporation. The Committee will continue to review
the Corporation's compensation programs and may revise these programs as it
deems necessary.
RELATIONSHIP OF EXECUTIVE COMPENSATION TO PERFORMANCE
BASE SALARY
Executive officers' base salaries are normally reviewed each year. An
exception to this policy is made with respect to the consideration of base
salary for Dr. Swartz due to his employment agreement which requires that
salary reviews for him be undertaken biennially and salary increases be fixed
for a period of two consecutive years. Dr. Swartz' salary will again be
reviewed in July 1996.
In assessing the extent to which executive salary increases are warranted,
the Committee considers a number of factors, including performance on the
job, external market pay practices, the incremental value the executive adds
to the Corporation and the executive's level of experience and expertise.
Adjustments in base salary are generally not based upon the financial
performance of the Corporation. In the case of Dr. Swartz, the Committee
considered his effectiveness as Chairman of the Board and Chief Executive
Officer of the Corporation as well as his many noteworthy contributions to
the Corporation. These contributions include 71 issued U.S. patents which he
has assigned to the Corporation and which provide competitive advantages to
the Corporation and have also generated significant licensing revenues that
have materially added to the Corporation's profitability.
EXECUTIVE BONUS PLAN
The Corporation promotes a pay-for-performance philosophy wherein a
significant element of annual compensation is directly linked to the
financial performance of the Corporation. This was accomplished in years
before 1995 through the administration of the Profit Sharing Bonus Plan in
which most of the Corporation's North American-based management level
empoloyees, including all executive officers except Mr. Razmilovic
participated. Effective January 1, 1995, the Committee adopted and the
Board of Directors and shareholders ratified the creation of an Executive
Bonus Plan (the "Executive Bonus Plan"), the purpose of which is to more
directly tie the level of annual executive incentive compensation to the
financial performance of the Corporation than was possible under the prior
Profit Sharing Plan. All executive officers of the Corporation participate in
the Executive Bonus Plan. Under the Executive Bonus Plan, participants will
7
generally receive lower bonuses than they would have under the Profit Sharing
Plan if the Corporation's operating performance is below plan and higher than
they would have under the Profit Sharing Bonus Plan if the Corporation's
operating performance exceeds plan. The Committee has full authority to
construe, interpret and administer the Executive Bonus Plan, as well as to
determine the extent, if any, to which operating performance standards have
been met. The Committee also has authority to modify (prior to the beginning
of the calendar year for which the targets will be applicable) the specific
targets for the performance goals under the Executive Bonus Plan.
Under the Executive Bonus Plan, the Committee each year, establishes
corporate financial performance objectives (exclusive of extraordinary
revenues and charges), expressed in terms of earnings per share. Three levels
of performance are identified: 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; target performance, at which the target award will
be earned and; maximum performance, at which the maximum award (twice a
participant's target bonus) will be earned and above which no additional
award will be earned. For 1996, threshold performance has been established at
results equal to 85% of the Corporation's 1996 Business Plan; target
performance has been established at results equal to 100% of the 1996
Business Plan; and maximum performance has been established at results equal
to or greater than 115% of the 1996 Business Plan.
Each participant in the Executive Bonus Plan has been assigned a target
bonus representing a percentage of the participant's base salary. The target
bonuses for 1996 for Messrs. Swartz, Razmilovic, Heiman, Amato and Goldner
are 100%, 75%, 55%, 45% and 45%, respectively, which is consistent with past
practice and in conformity with their individual employment agreements and
their levels of responsibility. The target bonuses for all other participants
in the Executive Bonus Plan are established by Messrs. Swartz and Razmilovic
based on the individual's performance and relative level of responsibility.
They range from 35% to 50% of base salary.
Messrs. Swartz and Razmilovic's bonuses will be determined solely on the
basis of corporate financial performance. In the case of all other
participants, 25% of their bonuses will be based on individual performance
during the year with the remainder being based on corporate financial
performance.
In 1995, all executive officers who participated in the Executive Bonus
Plan (including Dr. Swartz) received as their actual bonus payment an amount
approximating 134% of their Target Bonus. In 1994 and 1993, all executive
officers who participated in the Profit Sharing Bonus Plan received 129% and
61%, respectively, of their Target Bonus.
STOCK OPTIONS
The Corporation reinforces the importance of producing satisfactory
returns to shareholders over the long term through the operation of its 1990
Non-Executive Stock Option Plan and 1991 Employee Stock Option Plan (the
"Plans"). Stock options granted under the Plans provide employees with the
opportunity to acquire an equity interest in the Corporation, and to
participate in the creation of shareholder value as reflected in growth in
the price of the Corporation's Common Stock.
Option exercise prices are equal to 100% of the fair market value of the
Corporation's Common Stock on the date of option grant. This ensures that
participants will derive benefits only as shareholders realize corresponding
gains. To encourage a long-term decision making perspective, options are
generally assigned a 10-year term and options generally become exercisable
over four to five years following a two year waiting period.
The Committee grants, generally on a biennial basis, additional options to
selected employees based on an assessment of competitive compensation
practices, particularly in high technology industries, individual
contribution and performance. The Committee believes that in granting such
stock options, it is effectively reinforcing the Corporation's objective of
insuring a strong link between employee rewards and shareholder interests. In
1995, the Committee determined that it was appropriate and desirable to grant
Dr. Swartz (i) an option to purchase 100,000 shares of Common Stock under the
1991 Employee Stock Option Plan at an exercise price of $26.25 per share (the
fair market value of the Corporation's Common Stock on the date the option
was granted by the Committee) in connection with his periodic
8
review and (ii) an option to purchase 175,000 shares of Common Stock under
the 1991 Employee Stock Option Plan at an exercise price of $34.75 per share
(the fair market value of the Corporation's Common Stock on the date the
option was granted by the Committee) in connection with his entering into a
new five year employment agreement.
STOCK OWNERSHIP AND OPTION RETENTION PROGRAM
Effective January 1, 1995, the Committee established for executive
officers a stock ownership and option retention program which it administers.
The Committee firmly believes that the long term interests of the
Corporation's shareholders are best served when management maintains a
significant, equity-based interest in the Corporation. The Committee
considers both vested, unexercised options and shares owned as meaningful
expressions of such interest. Accordingly, the Committee developed a program
with target levels of equity interest for each executive officer. Under the
program, without prior permission of the Committee, unless and until an
executive has attained the minimum requirements described below, there will
exist significant limitations on an executive's freedom to reduce his equity
position. Executive officers must agree to participate in the program to be
eligible to receive option awards after January 1, 1995. 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 target cash compensation (annual base salary plus target bonus)
("TCC").
If the equity interest requirement is satisfied, the program allows for
the exercise of vested options but within strict limits. At least 50% of the
net after tax proceeds obtainable upon the exercise of any option (other than
options awarded after January 1, 1994 in connection with an executive's
initial hire or initial promotion to an executive officer position) must be
retained in the form of shares of the Corporation's Common Stock unless and
until the executive then owns shares of Common Stock having a market value
equal to a specified multiple of his base salary.
EQUITY INTEREST SHARE OWNERSHIP
POSITION REQUIREMENT REQUIREMENT
- ------------------------- ------------------- -----------------------
Chairman of the Board 7 times TCC 5 times Base Salary
- ------------------------- ------------------- -----------------------
President 5 times TCC 3 times Base Salary
- ------------------------- ------------------- -----------------------
Executive and
Senior Vice President 3 times TCC 2 times Base Salary
- ------------------------- ------------------- -----------------------
Vice President 2 times TCC 1 times Base Salary
- ------------------------- ------------------- -----------------------
SUMMARY
The Committee is responsible for recommending to the Board, for its
approval, compensation decisions affecting the Corporation's senior executive
officers. The Committee ensures that the overall compensation offered to
senior executive officers is consistent with the Corporation's interest in
providing competitive pay opportunities, reflective of its
pay-for-performance orientation, encourages share ownership on the part of
executives and is generally supportive of the Corporation's short- and
long-term business goals. The Committee will continue to actively monitor the
effectiveness of the Corporation's senior executive compensation plans and
assess the appropriateness of senior executive pay levels to assure prudent
application of the Corporation's resources.
Compensation /Stock Option Committee
Harvey P. Mallement, Chairman
Saul P. Steinberg
9
MANAGEMENT REMUNERATION AND TRANSACTIONS
The following Summary Compensation Table sets forth compensation
information with respect to the Corporation's Chief Executive Officer and the
four other executive officers who in 1995 were the most highly paid executive
officers, for services rendered in all capacities during the fiscal years
ended December 31, 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
------------------------------------------------
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY BONUSD COMPENSATIONE
- ------------------------ ------ ----------- ---------- ---------------
Jerome Swartz ........... 1995 $656,250B $881,823 $0
Chairman of the Board, 1994 $640,462B $824,915 $0
Chief Executive Officer 1993 $562,500C $346,361 $0
and Director
Tomo Razmilovic ......... 1995 $308,673 $254,523 $0
President, Chief 1994 $262,500 $196,875 $0
Operating Officer 1993 $250,000 $125,000 $0
and DirectorA
Frederic P. Heiman ...... 1995 $375,000B $276,930 $0
Executive Vice 1994 $359,000B $254,316 $0
President and Director 1993 $309,375C $104,780 $0
Thomas G. Amato ......... 1995 $212,035B $128,215 $0
Senior Vice President 1994 $201,448B $103,780 $0
and Chief Financial 1993 $190,050C $ 46,808 $0
Officer
Leonard H. Goldner ...... 1995 $210,454B $127,259 $0
Senior Vice President, 1994 $200,034B $115,933 $0
General Counsel and 1993 $177,403C $ 49,155 $0
Secretary
(RESTUBBED TABLE CONTINUED FROM ABOVE)
LONG TERM COMPENSATION
----------------------
NAME AND SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITION OPTIONS (#) COMPENSATIONE
- ------------------------ ---------------------- ---------------
Jerome Swartz ........... 275,000 $ 19,760F
Chairman of the Board, 100,000 $ 13,621F
Chief Executive Officer 195,000 $ 11,912F
and Director
Tomo Razmilovic ......... 132,500 $111,344G
President, Chief 0 $118,839G
Operating Officer 101,500 $234,644G
and DirectorA
Frederic P. Heiman ...... 27,500 $ 4,620H
Executive Vice 0 $ 4,620H
President and Director 58,000 $ 4,497H
Thomas G. Amato ......... 25,000 $ 4,620H
Senior Vice President 0 $ 4,620H
and Chief Financial 25,000 $ 4,497H
Officer
Leonard H. Goldner ...... 25,000 $ 4,620H
Senior Vice President, 0 $ 4,620H
General Counsel and 27,500 $ 4,497H
Secretary
- ------------
A Until October 15, 1995 he served as Senior Vice President World Wide
Sales and Services and in such capacity he received an annual base
salary of $278,000, which was increased to $437,500 upon his
appointment as President.
B Includes $9,240 in contributions to the Corporation's 401(k) deferred
compensation plan.
C Includes $8,994 in contributions to the Corporation's 401(k) deferred
compensation plan.
D Represents amounts earned and accrued pursuant to the Corporation's
Executive Bonus Plan in 1995 and Bonus Profit Sharing Plan in 1994 and
1993. Amounts indicated are earned and accrued in the fiscal year
indicated but generally paid in the first quarter of the next
succeeding year. Mr. Razmilovic participated in the Executive Bonus
Plan in 1995 but was not a participant in the Bonus Profit Sharing
Plan. His bonuses in 1994 and 1993 were based upon his attainment of
certain sales related goals established by the President.
E Not included are the amounts of certain perquisites and other personal
benefits provided by the Corporation since such amounts do not exceed
the lesser of (i) $50,000 or (ii) 10% of the total annual salary and
bonus reported in the table for any named executive officer.
F Represents $4,497 in 1993 and $4,620 in 1994 and 1995 for contributions
to the Corporation's 401(k) deferred compensation plan and $7,415 in
1993, $9,001 in 1994 and $15,140 in 1995 for (i) premiums paid on his
behalf on a term life insurance policies for which members of his
family are the beneficiary and (ii) the estimated dollar value of the
economic benefit to Dr. Swartz for insurance premium payments made by
the Corporation on a split dollar whole life policies for which the
Corporation will eventually recover all premiums paid.
10
G Represents (i) $140,000 for a disturbance allowance to reimburse Mr.
Razmilovic for a portion of the expenses incurred in connection with
his relocation to the Long Island area due to his promotion in 1993 to
Senior Vice President--World Wide Sales and Services, (ii) $33,462 in
1993, $48,000 in 1994 and $40,385 in 1995 to reimburse him for a
portion of his duplicate housing expenses when his duties for the
Corporation and its subsidiaries required that he maintain a home in
both the United Kingdom and Long Island, and (iii) $61,184 in 1993,
$70,839 in 1994 and $70,959 in 1995 for contributions to a defined
contribution retirement plan maintained by the Corporation's UK
subsidiary on his behalf.
H Represents contributions to the Corporation's 401(k) deferred
compensation plan.
In 1995, Dr. Swartz and the Corporation entered into an employment
agreement which terminates on June 30, 2000, pursuant to which Dr. Swartz
will receive an annual base salary of $656,250 which is subject to
renegotiation on July 1, 1996 for a two year period. Dr. Swartz also
participates in the Corporation's Executive Bonus Plan. The target amount of
his bonus is 100% of his base salary. In addition, if his employment with the
Corporation 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, 1998, two year's, if such termination occurs before such date) annual
base salary and bonus during the last completed fiscal year immediately
preceding any such termination.
In 1995, Mr. Razmilovic and the Corporation entered into an employment
agreement which terminates on December 31, 2000, pursuant to which Mr.
Razmilovic will receive an annual base salary of $437,500 for the year ending
December 31, 1996, subject to annual renegotiation thereafter. Mr. Razmilovic
also participates in the Corporation's Executive Bonus Plan. The target
amount of his bonus is 75% of his base salary. In addition, if his employment
with the Corporation is terminated for any reason (other than due to his
death or disability or for cause, or his voluntary resignation), Mr.
Razmilovic will receive payments equal to one year's (if such termination
occurs after October 30, 1998, two year's, if such termination occurs before
such date) annual base salary and bonus during the last completed fiscal year
immediately preceding any such termination.
In 1995, Dr. Heiman and the Corporation entered into an employment
agreement pursuant to which Dr. Heiman will receive an annual base salary of
$397,000 for the year ending December 31, 1996, subject to annual
renegotiation thereafter. Dr. Heiman also participates in the Corporation's
Executive Bonus Plan. The target amount of his bonus is 55% of his base
salary.
In 1995, Mr. Goldner and the Corporation entered into an employment
agreement which terminates on October 31, 2000, pursuant to which Mr. Goldner
will receive an annual base salary of $249,000 for the year ending December
31, 1996, subject to annual renegotiation thereafter. Mr. Goldner also
participates in the Corporation's Executive Bonus Plan. The target amount of
his bonus is 45% of his base salary. In addition, if his employment with the
Corporation 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
October 31, 1998, two year's, if such termination occurs before such date)
annual base salary and bonus during the last completed fiscal year
immediately preceding any such termination.
Mr. Martino and the Corporation have entered into an employment agreement
which terminates on December 31, 2000 pursuant to which he is employed on a
part-time and consulting basis, assisting the Chairman of the Board and
President. His salary during this period is $150,000 per annum.
The Corporation and Jan Lindelow, the Corporation's former President and
Chief Operating Officer, entered into a separation agreement in October,
1995. Under the terms of the Agreement, for services rendered in 1995, Mr.
Lindelow received a base salary of $437,500 and a bonus of $587,900. In 1996
and 1997, Mr. Lindelow will receive a base salary of $437,500 and a bonus of
$437,500. These expenses were included in the $2,500,000 provision the
Corporation made in the third quarter of 1995. The Corporation has also
purchased Mr. Lindelow's residence on Long Island for a purchase price of
$260,000, which was the price determined by independent third party
appraisal. The Corporation intends to resell the residence to an unaffiliated
third party.
11
Directors who are not employees of the Corporation receive an annual
retainer of $10,000, payable in quarterly installments as well as a fee of
$2,500 for each Board of Directors meeting attended or each meeting of a
committee which is not held in conjunction with a Board of Directors meeting.
Directors who are employees receive no additional compensation for serving as
directors or for attending Board or committee meetings. The Corporation
reimburses Directors for expenses incurred in connection with attending
meetings of the Board of Directors or committees of the Board.
In addition, Directors who are not employees of the Corporation
participate in the Corporation's 1994 Directors' Stock Option Plan (the "1994
Plan"). Pursuant to the 1994 Plan, when a person is initially elected to the
Board of Directors, he is awarded an option to purchase 10,000 shares.
Moreover, commencing in 1994, every person who has been a Director for more
than 11 months is, upon re-election at the annual meeting of shareholders,
granted an option to purchase 2,500 shares of the Corporation's Common Stock.
Each option has a term of ten years, becomes exercisable in two equal annual
installments beginning on the first anniversary of the date of grant and has
an exercise price equal to 100% of the fair market value of shares of the
Corporation's Common Stock on the date of grant. Pursuant to the 1994 Plan,
in 1995 Messrs. Mallement, Steinberg, Freiberg and Bugliarello each received
options to purchase 2,500 shares. If re-elected at the 1996 Annual Meeting,
Messrs. Mallement, Steinberg, Freiberg, Bugliarello and Wang will each be
awarded an option to purchase an additional 2,500 shares in 1996.
OPTION GRANTS
Currently, the Corporation maintains two stock option plans, the 1990
Non-Executive Stock Option Plan (the "1990 Plan") and the 1991 Employee Stock
Option Plan (the "1991 Plan") pursuant to which options may be granted to
employees of the Corporation. The 1990 Plan and the 1991 Plan authorize the
Compensation/Stock Option Committee of the Board of Directors to grant
options, from time to time, to key employees of the Corporation and of its
subsidiaries (and in the case of the 1991 Plan, key officers, including those
who are executive officers of the Corporation). Under the 1991 Plan, no
individual may be awarded options to purchase more than 275,000 shares in any
calendar year. Certain of the options, by their terms, as determined by the
Committee at the time of grant, may be qualified under the Internal Revenue
Code of 1986 (the "Code") as Incentive Stock Options ("ISO's") and certain of
the options may be non-qualified options. No option granted under the 1990
Plan or the 1991 Plan is exercisable for a period exceeding ten years. No ISO
granted under the 1991 Plan to owners of 10% or more of the Common Stock of
the Corporation is exercisable for a period exceeding five years. The
exercise price of an option under the Plans must be at least 100% of the fair
market value of the underlying Common Stock on the date of grant.
ISO's must comply with certain provisions of the Code relating to, among
other matters, the maximum amount that can be vested by an optionee in any
one calendar year and the minimum exercise price of an ISO. The 1990 Plan
terminates on April 30, 2000 and the 1991 Plan terminates on October 13,
2001.
12
The following table shows, as to each individual named in the Summary
Compensation Table, certain information with respect to stock options granted
to such individuals under all stock option plans administered by the
Corporation:
INDIVIDUAL GRANTS IN 1995
-------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE EXPIRATION
NAME GRANTED (#)B IN FISCAL YEARC PRICED DATE
---- ------------ --------------- -------- ----------
All Shareholders ...... -- -- --
Jerome Swartz ......... 100,000 $26.25 2/5/05
175,000 22.12 $34.75 10/15/05
CEO's Gain as % of All
Shareholders' Gain ..
Tomo Razmilovic ....... 32,500 $26.25 2/5/05
100,000 10.80 $34.75 10/15/05
Frederic P. Heiman ... 27,500 2.24 $26.25 2/5/05
Thomas G. Amato ....... 25,000 2.04 $26.25 2/5/05
Leonard H. Goldner ... 25,000 2.04 $26.25 2/5/05
(RESTUBBED TABLE CONTINUED FROM ABOVE)
POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE APPRECIATION FOR OPTION TERMA
--------------------------------------------------
5% 10%
----- -----
STOCK STOCK
NAME PRICEE DOLLAR GAIN PRICEE DOLLAR GAIN
- ---------------------- -------- ----------- ------ -----------
All Shareholders ...... $51.57 $510,117,714 $82.12 $1,292,844,793
Jerome Swartz ......... $42.76 $ 1,651,000 $68.09 $ 4,184,000
$56.60 $ 3,823,750 $90.13 $ 9,691,500
CEO's Gain as % of All
Shareholders' Gain .. 1.07% 1.07%
Tomo Razmilovic ....... $42.76 $ 536,575 $68.09 $ 1,359,800
$56.60 $ 2,185,000 $90.13 $ 5,538,200
Frederic P. Heiman ... $42.76 $ 454,025 $68.09 $ 1,150,600
Thomas G. Amato ....... $42.76 $ 412,750 $68.09 $ 1,046,000
Leonard H. Goldner ... $42.76 $ 412,750 $68.09 $ 1,046,000
- ------------
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, 1995 The
actual value, if any, an executive will realize will depend on the
excess of the market price over the exercise price on the date the
option is actually exercised. There can be no assurance that the value
actually realized by an executive or any shareholder will be at or near
the values estimated in this table.
B The options awarded vest in three annual installments commencing two
years after date of grant. If a change in control of the Corporation
were to occur, all of the then unvested portion of each option would
become immediately exercisable.
C Based on 1,226,500 options granted to all employees in 1995.
D 100% of the closing price of the Corporation's Common Stock on the date
of grant.
E The stock price represents the price of the Corporation's Common Stock
if the assumed annual rates of stock price appreciation are achieved
over the term of the options. In the case of all shareholders, the
weighted average share price of the options awarded to Dr. Swartz was
used.
13
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to the unexercised options to
purchase the Corporation's Common Stock as of December 31, 1995 and the value
realized upon the exercise in 1995 of any option by the individuals named in
the Summary Compensation Table.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED OPTIONS
NUMBER OF SHARES HELD AT DECEMBER 31, 1995
ACQUIRED ON VALUE --------------------------------
NAME EXERCISE IN 1995 REALIZED EXERCISABLE UNEXERCISABLE
- ------------------ ---------------- ---------- --------------------------------
Jerome Swartz 0 $ 0 429,100 554,850
Tomo Razmilovic 15,000 $325,534 19,405 201,845
Frederic P. Heiman 0 $ 0 28,490 78,110
Thomas G. Amato 29,000 $704,121 35,925 49,825
Leonard H. Goldner 0 $ 0 95,560 51,640
(RESTUBBED TABLE CONTINUED FROM ABOVE)
VALUE OF UNEXERCISED,
IN-THE-MONEY OPTIONS
HELD AT DECEMBER 31, 1995A
------------------------------
NAME EXERCISABLE UNEXERCISABLE
- ------------------ ------------- ---------------
Jerome Swartz $12,551,775 $8,260,600
Tomo Razmilovic $ 480,585 $2,754,990
Frederic P. Heiman $ 730,530 $1,706,545
Thomas G. Amato $ 996,925 $ 978,575
Leonard H. Goldner $ 2,831,010 $1,025,690
<FN>
- ------------
A Based on the closing price of the Corporation's Common Stock on the New
York Stock Exchange on that date of $39.50.
Employees of the Corporation and certain of its subsidiaries are eligible
to participate in a 401(k) deferred compensation plan after 90 days of
service. A participant may elect to make pre-tax contributions, subject to
certain limitations, with a maximum contribution of $9,240 in 1995 and $9,500
in 1996. The first 6% contributed by each participant during each pay period
is eligible for a matching 50% contribution by the Corporation. There is
immediate vesting of the individual's contribution and 100% vesting of the
Corporation's contribution after one year of service. Amounts accumulated
under this plan are normally paid to a participant on retirement or
termination of employment and depend, among other factors, on the amounts
contributed by the participant, the manner in which contributions have been
invested, and the amount of any prior withdrawal.
The Corporation maintains an Executive Retirement Plan (the "Retirement
Plan"), which is a non-qualified deferred compensation arrangement for a
select group of senior management employees of the Corporation. Participants
are selected by the Compensation/Stock Option Committee of the Board of
Directors. Under the Retirement Plan, the maximum benefit payable to a
participant is the participant's average compensation (base salary plus
bonus) for the three year period ending on the date the participant ceases to
be a full time employee of the Corporation multiplied by five (the "Benefit
Ceiling Amount"). After five successive years of participation in the
Retirement Plan, a participant is entitled to 50% of the Benefit Ceiling
Amount. After each additional year of participation in the Retirement Plan up
to five additional years of participation, a participant is entitled to an
additional 10% of the Benefit Ceiling Amount. Benefits are normally payable
in equal monthly installments over a ten year period after retirement,
beginning after the participant attains age 65 (or age 62 with 20 years or
more of credited service). However, upon death or disability, payment is
accelerated and made in a lump sum but the amount is reduced to the then
present value of the benefit payments which would have been made under the
normal mode of payment. Messrs. Swartz, Heiman, Razmilovic, Amato and Goldner
are participants in the Retirement Plan.
The following table illustrates the estimated annual retirement benefits
payable under the Retirement Plan to a participant at specified average
compensation levels and years of service. There is no offset in benefits
under the Retirement Plan for Social Security benefits. However, benefits
payable under the Retirement Plan will be reduced by the value of any
retirement income of the participant attributable to contributions by the
Corporation to any qualified pension plan adopted by the Corporation
(excluding the Corporation's current 401(k) deferred compensation plan).
14
PENSION PLAN TABLE
YEARS OF SERVICE
3 YEAR AVERAGE -----------------------
ANNUAL COMPENSATION 5 10
- ------------------- ---------- ----------
$ 400,000 $ 100,000 $200,000
800,000 200,000 400,000
1,200,000 300,000 600,000
1,600,000 400,000 800,000
As of January 1, 1996, Messrs. Swartz, Heiman, Amato and Goldner had 20,
9, 5 and 5 years, respectively, of credited service. Mr. Razmilovic became a
participant in the Corporation's Executive Retirement Plan in October 1995.
He will not receive credit under the Plan for his prior service to the
Corporation but in lieu thereof, he will receive, for the first five years of
participation in the Plan, two years of credit service for each year of
employment after October 1995.
SHAREOWNER RETURN PERFORMANCE PRESENTATION
Set forth below is a graph comparing the yearly percentage change in the
cumulative total shareowner return on the Corporation's Common Stock against
the cumulative total return of the S&P Composite-500 Stock Index and the S&P
High Technology Composite Index for the period of five years commencing
January 1, 1991 and ending December 31, 1995, assuming in each case a fixed
investment of $100 at the respective closing prices on December 31, 1990 and
reinvestment on a quarterly basis of all dividends.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG SYMBOL TECHNOLOGIES, INC., THE S & P 500 INDEX
AND THE S & P HIGH TECH COMPOSITE INDEX
Cumulative Total Return
---------------------------------------------
12/90 12/91 12/92 12/93 12/94 12/95
Symbol Technologies, Inc. SBL 100 220 111 156 266 340
S & P 500 I500 100 130 140 155 157 215
S & P HIGH TECH COMPOSITE IHTC 100 114 119 146 170 245
- ---------------
* $100 INVESTED ON 12/31/90 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING DECEMBER 31.
15
PROPOSAL TO AMEND THE COMPANY'S CERTIFICATE OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
On February 12, 1996, the Board of Directors approved, subject to approval
by the shareholders at the Annual Meeting, an increase in the number of
shares of authorized Common Stock from 40,000,000 to 100,000,000 shares. This
increase would be accomplished by adopting an amendment (the "Amendment") to
the Certificate of Incorporation of the Corporation. As of February 1, 1996,
25,489,201 shares of Common Stock were issued and outstanding and 1,771,142
shares were issued and held by the Corporation as treasury shares. In
addition, 4,972,527 shares are reserved for issuance under the Corporation's
various stock option plans so that as of such date there were only 5,995,988
shares (in addition to the shares held as treasury shares) available for
issuance. The Amendment would increase the number of authorized, unissued and
unreserved shares of Common Stock by an additional 60,000,000 shares. The
text of the Amendment is set forth on attached Annex A.
The Board of Directors believes that it is in the best interest of the
Corporation and its shareholders that there be a sufficient reserve of
authorized but uncommitted shares of Common Stock, so it can rapidly take
advantage of opportunities that become available, including acquisitions,
financings and stock splits, among others.
The Corporation currently has no agreements or arrangements for the
issuance of shares of Common Stock other than the issuance of shares of
Common Stock pursuant to stock option plans. Authorized shares of Common
Stock in excess of those shares outstanding (including, if authorized, the
additional shares of Common Stock provided in the Amendment) will remain
available for general purposes, such as acquisitions, equity financings,
stock splits, stock dividends, management incentives and stock option plans.
Such issuances may not require shareholders approval. Under certain
circumstances, the Board of Directors could create impediments to, or
frustrate persons seeking to effect, a takeover or transfer of control of the
Corporation by causing such shares to be issued to holder or holders who
might side with the Board of Directors in opposing a takeover bid that the
Board of Directors determines is not in the best interest of the Corporation
and its shareholders. As of this date, the Board of Directors is unaware of
any specific effort to accumulate the Corporation's shares or to obtain
control of the Corporation by means of a merger, tender offer, solicitation
in opposition to management or otherwise.
If approved by the shareholders at the Annual Meeting, the increase in the
number of shares of Common Stock would become effective upon the filing of
the Amendment with the Secretary of State in the State of Delaware which
filing should take place shortly after the Annual Meeting.
The affirmative vote of the holders of a majority of the outstanding
shares of the Corporation's Common Stock present or represented and entitled
to vote at the meeting will be required for the approval of this proposal.
Accordingly, your Board of Directors recommends a vote FOR the proposal to
approve the foregoing amendment to the Corporation's Certificate of
Incorporation. Abstaining and broker non-votes will have the same effect as a
vote against this proposal.
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche, independent certified public accountants, were selected
by the Board of Directors to audit the financial statements of the
Corporation for the fiscal year ended December 31, 1995 and the Board of
Directors and Audit Committee have recommended that they be retained to audit
the financial statements of the Corporation for the current fiscal year.
Representatives of Deloitte & Touche are expected to be present at the Annual
Meeting of Shareholders. They will have an opportunity to make a statement at
the meeting if they so desire and are expected to be available to respond to
appropriate questions raised orally by shareholders. In the event
shareholders do not ratify the appointment of Deloitte & Touche as the
Corporation's independent accountants for the current year, such appointment
will be reconsidered by the Audit Committee and the Board of Directors. The
Board recommends that you vote FOR the proposal to retain Deloitte & Touche
to audit the financial statements of the Corporation for fiscal 1996.
16
OTHER BUSINESS
The Board of Directors of the Corporation knows of no other matters that
may be presented at the Annual Meeting. However, if any other matters
properly come before the meeting or any adjournment thereof, it is intended
that proxies in the accompanying form will be voted in accordance with the
judgment of the persons named therein.
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next annual
meeting of the Corporation's shareholders must be received by the Corporation
for inclusion in the Corporation's Proxy Statement on or prior to November
13, 1996.
ANNUAL REPORT AND FINANCIAL STATEMENTS
The Annual Report to Shareholders of the Corporation for the year ended
December 31, 1995 is being furnished simultaneously herewith. Such report and
the financial statements included therein are not to be considered a part of
this Proxy Statement.
THE CORPORATION WILL MAKE AVAILABLE AT NO COST, UPON THE WRITTEN REQUEST
OF A SHAREHOLDER, A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED DECEMBER 31, 1995 (WITHOUT EXHIBITS) AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. COPIES OF EXHIBITS TO THE CORPORATION'S
FORM 10-K WILL BE MADE AVAILABLE, UPON WRITTEN REQUEST OF A SHAREHOLDER AND
THE PAYMENT TO THE CORPORATION OF THE REASONABLE COSTS OF REPRODUCTION AND
MAILING. REQUESTS SHOULD BE DIRECTED TO SYMBOL TECHNOLOGIES, INC., ONE SYMBOL
PLAZA, HOLTSVILLE, NEW YORK, 11742-1300, ATTENTION: VICE PRESIDENT--INVESTOR
RELATIONS.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the accompanying form has been or
will be borne by the Corporation. In addition to solicitation by mail,
arrangements may be made with brokerage houses and other custodians, nominees
and fiduciaries to send proxies and proxy material to their principals, and
the Corporation may reimburse them for any attendant expenses.
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
as promptly as possible.
By Order of the Board of Directors,
Leonard H. Goldner
Secretary
Dated: March 7, 1996
Holtsville, New York
17
ANNEX A
TEXT OF PROPOSED AMENDMENT OF THE CERTIFICATE OF INCORPORATION
The section (a) of Article FOUR of the Corporation's Certificate of
Incorporation is proposed to be amended. Sections (b) and (c) of Article
FOUR, relating to the Corporation's authorized Preferred Stock will remain
unchanged. If the proposed amendment is approved by shareholders, Section (a)
of Article FOUR will be as follows:
"FOURTH. The total number of shares of stock which the Corporation shall
have the authority to issue is one hundred and ten million (110,000,000),
consisting of one hundred million (100,000,000) shares of common stock, par
value $.01 per share (the "Common Stock") and ten million (10,000,000) shares
of preferred stock, par value $1.00 per share (the "Preferred Stock").
A-1
SYMBOL TECHNOLOGIES, INC.
PROXY COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE CORPORATION FOR ANNUAL MEETING OF SHAREHOLDERS
APRIL 29, 1996
The undersigned hereby constitutes and appoints JEROME SWARTZ and TOMO
RAZMILOVIC and each of them, with full power of substitution, attorneys and
proxies to represent and to vote all of the shares of Common Stock which the
undersigned would be entitled to vote, with all the powers the undersigned
would possess if personally present, at the Annual Meeting of Shareholders of
SYMBOL TECHNOLOGIES, INC. to be held at Chemical Banking Corp., World
Headquarters, 270 Park Avenue, New York, New York 10017, on April 29, 1996 at
11:00 A.M., local time, and at any adjournment thereof, on all matters coming
before said meeting.
1. ELECTION OF DIRECTORS:
Nominees: Jerome Swartz, Harvey P. Mallement, Frederic P. Heiman, Raymond
R. Martino, Saul P. Steinberg, Lowell C. Freiberg, George Bugliarello,
Charles Wang and Tomo Razmilovic
(Mark only one of the following boxes.)
[ ] VOTE FOR all nominees above, except vote withheld as to
[ ] VOTE WITHHELD from all nominees
the following nominees (if any):
- -----------------------------------------------------------------------------
2. To vote upon a proposal to amend the Corporation's Certificate of
Incorporation. (Mark only one.)
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the appointment of Deloitte & Touche, independent certified
public accountants, as auditors for fiscal 1996. (Mark only one.)
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, upon any other business which may properly come
before the meeting or any adjournment thereof.
(To be signed on other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS
1, 2, AND 3. The undersigned acknowledges
receipt of the accompanying Proxy Statement
dated March 7, 1996.
Dated: --------------------------------, 1996
--------------------------------------------
--------------------------------------------
Signature of Shareholder(s)
(When signing as attorney, trustee,
executor, administrator, guardian, corporate
officer, etc. please give full title. If
more than one trustee, all should sign.
Joint owners must each sign.)
PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS ABOVE.
I plan [ ] I do not plan [ ] to attend the Annual Meeting.