<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C> <C>
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PANAVISION INC.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14(a)-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total Fee Paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
</TABLE>
<PAGE>
PANAVISION INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1997
------------------------
To the Stockholders of
PANAVISION INC.
The first annual meeting of stockholders (the "Annual Meeting") of
Panavision Inc., a Delaware corporation (the "Company"), will be held at The
Chase Manhattan Bank, 270 Park Avenue, 11th Floor, Conference Room C, New York,
New York on Tuesday, May 13, 1997, at 10:00 a.m., for the following purposes:
1. To elect six Directors to the Company's Board of Directors;
2. To approve an amendment to the Company's Stock Option Plan to
increase from 2,190,150 to 3,000,000 the number of shares of the Company's
Common Stock, par value $.01 per share, reserved for issuance thereunder;
3. To ratify the appointment by the Board of Directors of Ernst & Young
LLP as independent auditors for the Company for the fiscal year ending
December 31, 1997; and
4. To act upon such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
The Board of Directors has fixed the close of business on March 21, 1997, as
the record date for the determination of stockholders entitled to receive notice
of and to vote at the Annual Meeting and any adjournment or postponement
thereof.
By order of the Board of Directors,
/s/ Christopher M.R. Phillips
Christopher M.R. Phillips
Secretary
March 26, 1997
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE
ANNUAL MEETING, PLEASE DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY
IN THE ENCLOSED ENVELOPE. YOU MAY REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS
VOTED AT THE ANNUAL MEETING. IN THE EVENT YOU ATTEND THE ANNUAL MEETING AND VOTE
IN PERSON, THE PROXY WILL NOT BE USED.
<PAGE>
PANAVISION INC.
6219 DE SOTO AVENUE
WOODLAND HILLS, CALIFORNIA 91367
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement (the "Proxy Statement") is furnished in connection with
the solicitation of proxies by the Board of Directors of Panavision Inc., a
Delaware corporation (the "Company"), to be voted at the annual meeting of
stockholders of the Company to be held on Tuesday, May 13, 1997, at 10:00 a.m.,
at The Chase Manhattan Bank, 270 Park Avenue, 11th Floor, Conference Room C, New
York, New York, and at any adjournment or postponement thereof (the "Annual
Meeting"). A copy of the Company's Annual Report to Stockholders for the fiscal
year ended December 31, 1996, this Proxy Statement and the accompanying proxy
card are first being sent or given to stockholders on or about March 26, 1997.
Properly executed proxies received prior to the Annual Meeting, unless
revoked, will be voted in accordance with the specified instructions. Regarding
the election of Directors, stockholders may vote in favor of all nominees or
withhold their votes as to all nominees or withhold their votes as to specific
nominees. With respect to all other proposals to be voted upon, stockholders may
vote in favor of a proposal, against a proposal or may abstain from voting.
Stockholders should specify their choices on the enclosed proxy card. If no
instructions are given with respect to the matters to be acted upon, the persons
named in the proxy solicited by the Company's Board of Directors (the "Board of
Directors") intend to vote FOR the election of the Directors listed below, FOR
approval of the amendment to the Company's Stock Option Plan (the "Stock Option
Plan"), and FOR ratification of the appointment by the Board of Directors of
Ernst & Young LLP as independent auditors for the Company for the fiscal year
ending December 31, 1997. If any other matter should be presented at the Annual
Meeting upon which a vote may properly be taken, the shares represented by the
proxy will be voted with respect thereto by the person or persons holding such
proxy as in their judgment is in the best interests of the Company and its
stockholders. The Company does not know of any matters other than as described
in the Notice of Annual Meeting that are to come before the Annual Meeting.
Stockholders may vote by either completing and returning the enclosed proxy
card prior to the Annual Meeting, voting in person at the Annual Meeting or
submitting a signed proxy card at the Annual Meeting. Stockholders who execute
proxies may revoke them at any time before they are voted at the Annual Meeting
by written notice to the Secretary of the Company, by submitting a new proxy or
by personal ballot at the Annual Meeting.
The Board of Directors has fixed the close of business on March 21, 1997 as
the Record Date (the "Record Date") for determining stockholders entitled to
notice of and to vote at the Annual Meeting.
As of the Record Date, the Company had 18,155,000 shares of Common Stock,
par value $.01 per share ("Common Stock"), outstanding and entitled to vote at
the Annual Meeting. Each share of Common Stock entitles the holder thereof to
one vote on each proposal to be acted upon at the Annual Meeting.
The presence in person or by proxy of the holders of the shares representing
a majority of the outstanding voting power of the Common Stock is necessary to
constitute a quorum in connection with the transaction of business at the Annual
Meeting. The affirmative vote of a majority of shares of Common Stock present in
person or by proxy and entitled to vote at the Annual Meeting, is required for
election of Directors, approval of the amendment to the Stock Option Plan and
ratification of the appointment of Ernst & Young LLP as auditors for the
Company. Broker "non-votes" (i.e., proxies from brokers or nominees indicating
that such persons have not received instructions from the beneficial owner or
other persons entitled to vote shares as to a matter with respect to which the
brokers or nominees do not have discretionary power to vote) and shares for
which duly executed proxies have been received but with
<PAGE>
respect to which holders of shares have abstained from voting will be treated as
present for purposes of determining the presence of a quorum at the Annual
Meeting. Broker "non-votes" will have no effect on the outcome of the votes on
the proposals to be acted upon at the Annual Meeting. With respect to the
approval of the amendment of the Stock Incentive Plan and the ratification of
the appointment of Ernst & Young LLP as independent auditors for the Company,
abstentions will have the effect of a negative vote.
PROPOSAL ONE
ELECTION OF DIRECTORS
Six Directors are to be elected to hold office until the next annual meeting
of stockholders and until their successors have been duly elected and qualified.
If the proxy is executed in such a manner as not to withhold authority for the
election of any or all of the nominees for Directors, then the persons named in
the proxy will vote the shares represented by the proxy for the election of the
following six nominees. If the proxy indicates that the stockholder wishes to
withhold a vote from one or more nominees for Directors, such instructions will
be followed by the persons named in the proxy. All of the nominees are currently
members of the six member Board of Directors. Messrs. Scott and Lapidus and Ms.
Wenig have been members of the Board of Directors since the Company's inception
in 1990; and Messrs. Farrand and Payson have been members of the Board of
Directors since October 1996 and November 1996, respectively, when, concurrently
with the consummation of the initial public offering of the Common Stock on
November 20, 1996, the size of the Board of Directors was increased from four to
five members. Mr. Ryckman has been a member of the Board of Directors since
December 1996 when the Board of Directors was increased from five to six
members.
Should any one or more of these nominees become unable to serve for any
reason or will not serve, neither of which is anticipated, the Board of
Directors may, unless the Board of Directors by resolution provides for a lesser
number of Directors, designate substitute nominees, in which event the persons
named in the enclosed proxy card will vote for the election of such substitute
nominee or nominees.
The respective ages, positions with the Company, business experience during
the past five years and directorships in other companies of the nominees for
election as Directors of the Company are set forth below.
WILLIAM C. SCOTT, 62 years old, has been the Chairman and Chief
Executive Officer of the Company since 1988. From 1972 until 1987, Mr. Scott
was President and Chief Operating Officer of Western Pacific Industries
Inc., a company listed on the New York Stock Exchange. Prior to 1972, Mr.
Scott was a Group Vice President of Cordura Corporation (a business
information company) for three years, a Vice President of Booz Allen &
Hamilton Inc. (management consulting firm) for five years and an
owner/operator of several small businesses for eight years.
JOHN S. FARRAND, 52 years old, has been the President and Chief
Operating Officer of the Company since 1985 and a director of the Company
since October 1996. From 1980 to 1985, Mr. Farrand was employed by Warner
Communications Inc. in several senior executive positions. He was President
of their Atari Coin-Operated Games Division and subsequently was appointed
President and Chief Operating Officer of Atari Holdings, Inc. Prior to 1980,
Mr. Farrand spent 14 years with Music Hire Group Limited, a U.K. company
specializing in coin-operated music systems (juke boxes), and since 1973
served as Managing Director. Mr. Farrand is a member of the Academy of
Motion Picture Arts and Sciences, a member of the Society of Motion Picture
and Television Engineers and an associate member of the American Society of
Cinematographers.
SIDNEY LAPIDUS, 59 years old, has been a director of the Company since
1990. Mr. Lapidus has been employed since 1967 by E.M. Warburg, Pincus &
Co., LLC, and its predecessors, a private investment firm, where he has
served as a Managing Director since 1982. He is also a director of Pacific
Greystone Corporation, Caribiner International, Inc. and a number of
privately held companies.
2
<PAGE>
MARTIN D. PAYSON, 61 years old, has been a director of the Company since
November 1996. Mr. Payson has been active in investment and philanthropic
activities since December 1992. From January 1990 to December 1992, he was
Vice Chairman of the Board of Directors of Time Warner, Inc., and from 1970
to December 1990, he was an executive officer of Warner Communications Inc.
Mr. Payson is a director of Bestform Group, Inc., Meridian Sports, Inc.,
Delta Financial Corporation and Unapix Entertainment, Inc.
WILLIS G. RYCKMAN, 51 years old, has been a director of the Company
since December 1996. In 1990, Mr. Ryckman founded WGR, Inc., an acquisition
fund, and in 1994 he formed WGR Golf, L.P. which currently owns and operates
golf courses in the United States and the Caribbean. Mr. Ryckman has served
as Chairman of Tri Tech Labs, Inc. since 1992 and has served as a director
since 1992. He is also Chairman of Irma Shorell, Inc. and has served as a
director since 1992. Mr. Ryckman has been Managing Director of Associated
Capital, a hedge fund since 1995. He is Chairman of the Board of Omni
Capital, and has served as a director since 1995. Mr. Ryckman is also a
director of National Propane Corporation, Banyon Hotel Management
Corporation and Krasdale Foods, Inc.
JOANNE R. WENIG, 42 years old, has served as a director of the Company
since 1990. Ms. Wenig has been employed since 1986 by E.M. Warburg, Pincus &
Co., LLC, and its predecessors, a private investment firm, where she has
served as a Managing Director since 1991. She is also a director of a number
of privately held companies.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF
THE NOMINEES NAMED ABOVE.
The following persons serve as executive officers of the Company: Mr. Scott,
Chairman of the Board and Chief Executive Officer; Mr. Farrand, President and
Chief Operating Officer; Mr. Jeffrey J. Marcketta, Executive Vice President,
Chief Financial Officer and Treasurer; and Mr. Christopher M.R. Phillips,
Controller and Secretary. The officers of the Company serve at the pleasure of
the Board of Directors. The respective ages, positions with the Company,
business experience during the past five years and directorships in other
companies of Messrs. Marcketta and Phillips are set forth below.
JEFFREY J. MARCKETTA, 42 years old, has been Executive Vice President
and Chief Financial Officer of the Company since 1993 and Treasurer since
1996. From 1991 to 1993, Mr. Marcketta served as the President of Panavision
Europe Limited, a wholly owned subsidiary of the Company, and was
responsible for the general management of the Company's European operations.
From 1989 until 1991, he was Vice President of Corporate Development,
assisting the Chief Executive Officer in the restructuring and
rationalization of the Company's business operations. Prior to joining the
Company in 1989, he worked for Ernst & Young LLP for almost ten years, the
last three of which were spent in the Mergers and Acquisitions Consulting
Group of the New York office.
CHRISTOPHER M.R. PHILLIPS, 37 years old, has served as Controller of the
Company since 1993 and Secretary since 1996. Mr. Phillips was the controller
for the domestic operations of the Company from 1989 to 1993 and the
assistant controller for the domestic operations of the Company from 1986 to
1989.
OTHER KEY EMPLOYEES
The following individuals are key employees within the Company's Woodland
Hills division. A brief description of their responsibilities is provided below.
PHILIP RADIN has been Executive Vice President Marketing for the
Woodland Hills division of the Company since 1989. Mr. Radin joined
Panavision as a trainee in 1975. During his first five years with the
Company, he was responsible for instructing film crews on the use and
benefits of Panavision products. In 1980, he became the manager of the
camera rental department and in 1986 became a Vice President Marketing.
3
<PAGE>
ROBERT HARVEY has served as Vice President Sales for the Woodland Hills
division of the Company since he joined Panavision in 1985. He has managed
the expansion into new markets, including independent feature films,
television movies and syndicated projects for television. From 1979 through
1985, Mr. Harvey worked as Director of Sales for the Atari Coin-Operated
Games Division. Mr. Harvey is a member of the Screen Actors Guild and has
served on numerous industry boards and steering committees.
LARRY HEZZELWOOD has been Vice President Marketing and Operations for
the Woodland Hills division of the Company since 1991. He joined Panavision
in 1975 where he worked in Panavision's camera rental department for five
years before moving to Paramount Pictures Corporation to manage its camera
department. In 1985, Mr. Hezzelwood became a freelance assistant cameraman.
In 1989 Mr. Hezzelwood returned to Panavision, and he assumed his current
position of Vice President Marketing and Operations in 1991.
IAIN NEIL has served as Senior Vice President Optics for the Woodland
Hills division of the Company since he joined Panavision in 1986 after
spending two years with Hughes ELCAN Optical Technologies in Toronto and
eight years at Barr & Stroud Limited in Scotland as head of optical design.
Mr. Neil holds over 150 existing worldwide patents and is the recipient of
six awards for lenses and optical systems from the Academy of Motion Picture
Arts and Sciences. He is currently a member of the International Society for
Optical Engineering, the Optical Society of America, the American Society of
Cinematographers and the Academy of Motion Picture Arts and Sciences.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of March 21, 1997, certain information
regarding the beneficial ownership of Common Stock by (i) each of the Company's
executive officers, (ii) each Director of the Company, (iii) each person who is
known to the Company to own beneficially more than 5% of the Common Stock and
(iv) all officers and Directors of the Company as a group. Such information is
based, in part, upon information provided by certain stockholders of the
Company. In the case of persons other than the officers and Directors of the
Company, such information is based solely on a review of Schedules 13D and 13G
filed with the Securities and Exchange Commission (the "Commission").
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
SHARES SHARES
BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1)(2) OWNED(1)(3)
- - ---------------------------------------------------------------------------------- ------------- -----------------
<S> <C> <C>
Warburg, Pincus Capital Company, L.P.(4).......................................... 12,717,000 70.0%
466 Lexington Avenue
New York, New York 10017
William C. Scott.................................................................. 1,208,572 6.6
Panavision Inc.
140 East 45th Street
New York, New York 10017
John S. Farrand................................................................... 551,520 3.0
Jeffrey J. Marcketta.............................................................. 230,296 1.3
Christopher M.R. Phillips......................................................... 7,558 *
Sidney Lapidus(5)................................................................. 12,717,000 70.0
Martin D. Payson.................................................................. 10,000 *
Willis G. Ryckman................................................................. -- --
Joanne R. Wenig(5)................................................................ 12,717,000 70.0
All directors and executive officers as a group (8 persons)....................... 14,724,946 78.6
</TABLE>
The above persons have sole voting and investment power, unless otherwise
indicated below.
4
<PAGE>
- - ------------------------
* Less than 1%.
(1) Except as otherwise indicated, the persons in this table have sole voting
and investment power with respect to all shares of Common Stock shown as
beneficially owned by them, subject to community property laws where
applicable and subject to the information contained in the footnotes to this
table. Mr. Scott has shared investment power with respect to 6,000 shares of
Common Stock.
(2) Amounts shown for each stockholder include all shares of Common Stock
subject to stock options for 213,372, 268,920, 82,996 and 7,058 shares of
Common Stock granted to Messrs. Scott, Farrand, Marcketta and Phillips
exercisable within 60 days. Not included are additional shares of Common
Stock subject to options granted to Messrs. Scott, Farrand, Marcketta,
Phillips, Payson and Ryckman that are not exercisable within 60 days.
(3) Based upon 18,155,000 shares of Common Stock outstanding as of March 21,
1997. Shares not outstanding but deemed beneficially owned by virtue of the
right of a person or group to acquire them within 60 days are treated as
outstanding only for purposes of determining the number of and percent owned
by such person or group.
(4) The sole general partner of Warburg, Pincus Capital Company, L.P. ("WPCC"
and together with its wholly owned subsidiaries "Warburg, Pincus") is
Warburg, Pincus & Co., a New York general partnership ("WP"). E.M. Warburg,
Pincus & Co., LLC, a New York limited liability company ("EMW LLC"), manages
WPCC. The members of EMW LLC are substantially the same as the partners of
WP. Lionel I. Pincus is the managing partner of WP and the managing member
of EMW LLC and may be deemed to control both WP and EMW LLC. WP, as the sole
general partner of WPCC, has a 20% interest in the profits of WPCC. Mr.
Lapidus and Ms. Wenig, directors of the Company, are each a Managing
Director and a member of EMW LLC and a general partner of WP. As such, Mr.
Lapidus and Ms. Wenig may be deemed to have an indirect pecuniary interest
(within the meaning of Rule 16a-1 under the Securities Exchange Act of 1934)
in an indeterminate portion of the shares beneficially owned by WPCC and WP.
See Note 5 below.
(5) All of the shares indicated as owned by Mr. Lapidus and Ms. Wenig are owned
by Warburg, Pincus and are included because of their affiliation with
Warburg, Pincus. Mr. Lapidus and Ms. Wenig disclaim "beneficial ownership"
of these shares within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934. The address of Mr. Lapidus and Ms. Wenig is c/o
Warburg, Pincus Capital Company, L.P., 466 Lexington Avenue, New York, NY
10017.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information regarding compensation paid to or
accrued by all the executive officers of the Company for each of the last three
completed fiscal years. Compensation accrued during one year and paid in another
is recorded under the year of accrual.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------------------------
----------------------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) COMPENSATION(2) OPTIONS(#) COMPENSATION(3)
- - ---------------------------------------- --------- ---------- ------------ ---------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
William C. Scott........................ 1996 $ 800,000 $ 400,000 $ -- 576,681 $ 7,125
Chairman of the Board and Chief 1995 600,000 1,172,000 -- -- 6,930
Executive Officer 1994 800,000 600,000 -- -- 6,930
John S. Farrand......................... 1996 $ 600,000 $ 359,400 $ 54,163 726,812 $ 7,125
President and Chief Operating Officer 1995 400,000 785,000 -- -- 6,930
1994 400,000 400,000 -- -- 6,930
Jeffrey J. Marcketta.................... 1996 $ 228,846 $ 201,335 $ 27,081 224,314 $ 7,125
Executive Vice President, Chief 1995 218,769 314,000 -- -- 6,930
Financial Officer and Treasurer 1994 213,231 121,165 -- -- 6,930
Christopher M.R. Phillips............... 1996 $ 99,615 $ 24,904 $ -- 43,076 $ 6,504
Controller and Secretary 1995 88,077 45,000 -- -- 4,842
1994 78,077 18,000 -- -- 4,323
</TABLE>
- - ------------------------
(1) Bonuses are paid pursuant to the Company's Executive Incentive Compensation
Plan (the "Executive Incentive Compensation Plan"), in which the Chairman
and Chief Executive Officer is eligible to participate, as well as any other
employees selected by the Chief Executive Officer. The plan allows
participants to earn bonuses up to a stated percentage of their base salary.
The bonuses were paid in part based on the Company's achievement of
operating results, and in part based on achievement of individual goals
established for the participant. Mr. Farrand's and Mr. Marcketta's 1996
bonus also reflects the issuance of shares of Common Stock (the
"Recapitalization Stock") at the time of the Company's Recapitalization (as
defined), which shares at such time had a fair market value of $59,400 and
$29,700, respectively.
(2) Consists of tax reimbursement payments relating to the Recapitalization
Stock.
(3) Consists of matching contributions by the Company under its 401(k) plan.
6
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth options granted in 1996. The Company did not
issue any stock appreciation rights ("SARs") in 1996. This table also sets forth
the hypothetical gains that would exist for the options at the end of their
ten-year terms at assumed annual rates of stock price appreciation of 5% and
10%. The actual future value of the options will depend on the market value of
the Common Stock, continued employment with the Company and other factors.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
INDIVIDUAL STOCK APPRECIATION
GRANTS FOR OPTION TERM
------------------------------------------------------------------ ----------------------
<S> <C> <C> <C> <C> <C> <C>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED(#)(1) IN FISCAL YEAR ($/SHARE)(2) DATE 5%($) 10%($)
- - --------------------------------- --------------- --------------- ------------- ----------------- ---------- ----------
William C. Scott................. 576,681 27.00% $ 1.22 October 18, 2006 $15,265,443 $24,724,403
John S. Farrand.................. 726,812 34.00 1.22 October 18, 2006 19,239,592 31,161,063
Jeffrey J. Marcketta............. 224,314 10.50 1.22 October 18, 2006 5,937,863 9,617,154
Christopher M.R. Phillips........ 19,076 0.09 1.22 October 18, 2006 504,965 817,857
24,000 1.10 17.00 November 20, 2006 256,589 650,247
</TABLE>
- - ------------------------
(1) At the time the options to purchase 576,681, 726,812, 224,314 and 19,076
shares were granted to Messrs. Scott, Farrand, Marcketta and Phillips,
respectively, there was no public trading market for the Common Stock. In
order to calculate the potential realizable value at assumed annual rates of
stock appreciation for the option term, the initial public offering price of
$17.00 per share was used.
(2) The exercisability of options granted to the Company's executive officers is
subject to vesting conditions, which may be accelerated upon satisfaction of
certain performance conditions as described below. Options for 353,250
shares vested upon the completion of the initial public offering including
309,376 options for shares granted to Messrs. Scott, Farrand, Marcketta and
Phillips, and options for 300,263 shares vested as of the year ending
December 31, 1996 including 262,970 options for shares granted to Messrs.
Scott, Farrand, Marcketta and Phillips. Remaining options for 582,862 shares
will vest at the end of eight years from the date of grant. Of these
options, options for 300,262 and 282,600 shares will vest if the Company
achieves earnings before depreciation, interest and taxes ("EBDIT") of $50.4
million and $55.2 million, or Free Cash Flow (as defined in the Executive
Incentive Compensation Plan) of $30.7 million and $34.0 million,
respectively during its years ending December 31, 1997 and 1998,
respectively. Additional options for 529,875 shares will vest only if the
Company achieves EBDIT of $62.0 million in its year ending December 31, 1998
or the lower amount of $65.0 million or a 10% increase of its actual 1998
EBDIT in its year ending December 31, 1999. Additional options for 369,000
shares, including 24,000 shares held by Mr. Phillips, vest at an annual rate
of 20% per year commencing on the first anniversary of the Company's initial
public offering. The vesting of certain options granted under the Stock
Option Plan will also be accelerated upon a change of control of the
Company.
7
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
The following table sets forth the number of shares covered by options held
by Messrs. Scott, Farrand, Marcketta and Phillips and the value of the options
as of December 31, 1996. 572,346 of these options were exercisable in 1996.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-THE-MONEY
NUMBER OF SECURITIES OPTIONS AT
UNDERLYING UNEXERCISED FY-END
OPTIONS AT FY-END(#) ($)(1)
-------------------------- ------------
<S> <C> <C> <C> <C> <C>
SHARES ACQUIRED VALUE
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE
- - --------------------------------- ----------------------------- ----------------- ----------- ------------- ------------
William C. Scott................. 0 0 213,372 363,309 $ 4,427,469
John S. Farrand.................. 0 0 268,92 457,892 5,580,090
Jeffrey J. Marcketta............. 0 0 82,996 141,318 1,722,167
Christopher M.R. Phillips........ 0 0 7,058 36,018 146,454
<CAPTION>
<S> <C>
NAME UNEXERCISABLE
- - --------------------------------- -------------
William C. Scott................. $ 7,538,662
John S. Farrand.................. 9,501,259
Jeffrey J. Marcketta............. 2,932,349
Christopher M.R. Phillips........ 747,374
</TABLE>
- - ------------------------
(1) Based on a closing price of $20 3/4 per share of Common Stock on December
31, 1996.
EMPLOYMENT AGREEMENTS
WILLIAM C. SCOTT. Pursuant to an employment agreement with the Company,
William C. Scott agreed to serve as Chairman of the Board of Directors and Chief
Executive Officer of the Company for an annual salary of $800,000, subject to
annual increases as determined by the Company. The employment agreement provides
that Mr. Scott shall be granted bonuses pursuant to the Executive Incentive
Compensation Plan and Non-Statutory Options (as defined) pursuant to the terms
of the Stock Option Plan. The employment agreement expires on June 11, 1999. The
Company may terminate the employment agreement for cause. In the event of Mr.
Scott's voluntary termination (except during the six-month period commencing six
months after a change of control) or termination for cause by the Company, the
Company shall pay Mr. Scott only an amount equal to his annual base salary and
all previously unreimbursed expenses. Upon a voluntary termination by Mr. Scott
during such six-month period commencing six months after a change of control
through the date of termination, Mr. Scott is entitled to the greater of (x)
$1,600,000 or (y) twice his annual base salary, and all accrued but previously
unpaid salary, bonuses and unreimbursed expenses through the date of
termination. Upon a termination of Mr. Scott by death or disability, the Company
shall make a lump sum payment equal to the greater of $800,000 or Mr. Scott's
base salary currently then in effect, as well as all accrued but previously
unpaid salary, bonuses and unreimbursed expenses through the date of
termination.
The employment agreement contains a covenant prohibiting the improper
disclosure and use of the Company's confidential information. In addition, the
employment agreement contains a covenant prohibiting Mr. Scott from directly or
indirectly competing with the Company. This covenant expires two years following
Mr. Scott's voluntary termination.
JOHN S. FARRAND. The Company has entered into an employment agreement with
Mr. Farrand pursuant to which he is entitled to receive, upon termination of his
employment by the Company (other than for cause or upon his death or
disability), severance payments equal to the greater of (i) $600,000 or (ii) his
annual base salary in effect at the time.
JEFFREY J. MARCKETTA. The Company has entered into an employment agreement
with Mr. Marcketta pursuant to which he is entitled to receive, upon termination
of his employment by the Company (other than for cause or upon his death or
disability), severance payments equal to the greater of (i) $237,500 or (ii) his
annual base salary in effect at the time.
8
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES OF THE BOARD OF DIRECTORS
Messrs. Scott and Farrand, officers of the Company, and Mr. Lapidus and Ms.
Wenig receive no remuneration for serving on the Board of Directors. Each of the
other independent Directors receive an annual fee of $20,000 and a meeting fee
of $1,000 for each of the Board of Directors or Committee meetings attended. All
directors will be reimbursed for out-of-pocket expenses. Under the Stock Option
Plan, the Company may, from time to time and in the sole discretion of the Board
of Directors, grant options to directors. During 1996, members of the Board of
Directors received no directors' fees.
The Board of Directors did not formally meet during 1996. Until the
Company's initial public offering, there were only four directors and a number
of informal discussions were held over the course of the year. On several
occasions in 1996, the Board of Directors took action by unanimous written
consent in lieu of a meeting.
The Company has, as standing committees, an Audit Committee, a Stock Option
Committee and a Compensation Committee. The Company does not have a Nominating
Committee.
The current members of the Audit Committee are Messrs. Payson and Ryckman.
The Audit Committee provides assistance to the Board of Directors with respect
to corporate accounting, reporting practices of the Company and the quality and
integrity of the financial reports of the Company. The Audit Committee
recommends to the Board of Directors the engagement of the independent auditors
of the Company and oversees audits and investigations of the business and
financial affairs of the Company, including, without limitation, any audits or
investigations which may be required by any governmental regulatory authority.
The current members of the Stock Option Committee are Messrs. Scott,
Farrand, Lapidus, Payson and Ryckman and Ms. Wenig. The Stock Option Committee
is the committee responsible for administering the Stock Option Plan and has the
authority to grant awards to individuals pursuant to the Stock Option Plan, to
determine the number of awards to be so granted, the term of such awards, any
vesting requirements and any other administrative determinations required in
connection therewith.
The current members of the Compensation Committee are Messrs. Scott and
Lapidus and Ms. Wenig. The Compensation Committee provides assistance to the
Board of Directors to ensure that the Company's officers, key executives and
Directors are compensated in accordance with the Company's total compensation
objectives and executive compensation policies, strategies and pay levels
necessary to support organizational objectives.
The Audit Committee, Stock Option Committee and Compensation Committee did
not meet in 1996. Certain of such committees, however, had informal discussions
amongst their members prior to the Company's initial public offering.
COMPENSATION COMMITTEE AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
No officer or employee of the Company, other than Messrs. Scott and Farrand,
who serve on the Board of Directors of the Company, participated in the
deliberations of the Board of Directors of the Company concerning executive
compensation.
The Stock Option Committee and the Compensation Committee were formed on May
8, 1996, upon the consummation of the Company's 1996 Recapitalization (the
"Recapitalization"). Set forth below is a description of the policies and
practices that the Compensation Committee will implement with respect to future
compensation determinations.
COMPENSATION PHILOSOPHY. The Company's compensation program is designed to
attract, reward and retain highly qualified executives and to encourage the
achievement of business objectives and superior corporate performance. The
program ensures the Board of Directors and stockholders that (1) the
9
<PAGE>
achievement of the overall goals and objectives of the Company can be supported
by adopting an appropriate executive compensation policy and implementing it
through an effective total compensation program and (2) the total compensation
program and practices of the Company are designed with full consideration of all
accounting, tax, securities law and other regulatory requirements and are of the
highest quality.
The Company's executive compensation program consists of two key elements:
(1) an annual compensation component composed of base salary and bonus, and (2)
a long-term compensation component composed of equity-based awards pursuant to
the Stock Option Plan.
ANNUAL COMPENSATION. Base salaries will be determined by evaluating the
responsibilities associated with the position being evaluated and the
individual's overall level of experience. In addition, the compensation of the
Chief Executive Officer determined by the Compensation Committee is subject to
the terms of Mr. Scott's existing employment agreement. Annual salary
adjustments will be determined by giving consideration to the Company's
performance and the individual's contribution to that performance.
Bonuses are paid pursuant to the Company's Executive Incentive Compensation
Plan, in which the Chairman and Chief Executive Officer is eligible to
participate, as well as any other employees selected by the Chief Executive
Officer. The plan allows participants to earn bonuses up to a stated percentage
of their base salary. The bonuses are paid in part based on the Company's
achievement of operating results, and in part based on achievement of individual
goals established for the participant.
With the exception of Mr. Phillips, all of the Company's named executive
officers are currently under employment contracts. See "Employment Agreements."
The annual compensation for Messrs. Farrand, Marcketta and Phillips and the
bonus portion of Mr. Scott's annual compensation will be based upon the
considerations noted above. Mr. Scott's base salary is determined pursuant to
his employment agreement.
LONG-TERM COMPENSATION. In order to align stockholder and executive officer
interests, the long-term component of the Company's executive compensation
program utilizes equity-based awards whose value is directly related to the
value of the Common Stock. These equity-based awards will be granted by the
Stock Option Committee pursuant to the Stock Option Plan. Individuals to whom
equity-based awards are to be granted and the amount of Common Stock related to
equity-based awards will be determined solely at the discretion of the Stock
Option Committee. Because individual equity-based award levels will be based on
a subjective evaluation of each individual's overall past and expected future
contribution, no specific formula is used to determine such awards for any
executive.
In 1996, in connection with the Recapitalization, Messrs. Scott, Farrand,
Marcketta and Phillips received options to purchase 576,681, 726,812, 224,314
and 19,076 shares of Common Stock, respectively. Mr. Phillips was granted an
additional 24,000 shares upon the consummation of the initial public offering.
Messrs. Farrand and Marcketta were also issued 282,600 and 141,300 shares of
Common Stock in 1996 in connection with the Recapitaliztion.
TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION. Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), limits the tax deductibility of
compensation in excess of $1 million paid to certain members of senior
management, unless the payments are made under a performance-based plan as
defined in Section 162(m). The Company's general policy is to structure its
compensation programs to preserve the tax deductibility of compensation paid to
its executive officers and other members of management. All compensation paid
pursuant to the Stock Option Plan is exempt from the application of Section
162(m) and will continue to be exempt therefrom until after the Annual Meeting.
Thereafter, assuming the amendment to the Stock Option Plan is approved by the
stockholders, it is designed to allow for the grant of equity-based awards that
will be performance-based and therefore exempt from the application of Section
162(m). Although Messrs. Scott's and Farrand's total annual salary and bonus in
1996 exceeded $1 million, such amounts were exempt from the application of
Section 162(m) because of certain grandfather provisions and therefore were
fully deductible by the Company. While the Company
10
<PAGE>
currently intends to pursue a strategy of maximizing deductibility of senior
management compensation, it also believes it is important to maintain the
flexibility to take actions it considers to be in the best interests of the
Company and its stockholders, which may be based on considerations in addition
to Section 162(m).
<TABLE>
<S> <C>
COMPENSATION COMMITTEE STOCK OPTION COMMITTEE
William C. Scott William C. Scott
Sidney Lapidus John S. Farrand
Joanne R. Wenig Sidney Lapidus
Martin D. Payson
Willis G. Ryckman
Joanne R. Wenig
</TABLE>
COMPARATIVE STOCK PRICE PERFORMANCE GRAPH
The graph below compares the total cumulative return of the Common Stock
from November 21, 1996 (the date trading of the Common Stock commenced) to
December 31, 1996, to the Standard & Poor's 500 Index and the Standard & Poor's
Entertainment Index. The graph assumes that dividends were reinvested and is
based on an investment of $100 on November 21, 1996 in each of the Common Stock,
the stocks comprising the Standard & Poor's 500 Index, the stocks comprising the
Standard & Poor's Entertainment Index representing an industry peer group
consisting of the following companies: Disney Co., King World Productions, Time
Warner Inc. and Viacom Inc.--B.
Comparison of Total Return Among
Panavision Inc.,
Standard & Poor's 500 Index and
Standard & Poor's Entertainment Index
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PANAVISION INC.
STOCK S&P 500 INDEX S&P ENTERTAINMENT INDEX
<S> <C> <C> <C>
11/21/1996 100.0 100.0 100.0
12/31/1996 122.1 99.7 94.6
</TABLE>
<TABLE>
<CAPTION>
CUMULATIVE TOTAL
RETURN
----------------------
<S> <C> <C>
11/21/96 12/31/96
----------- ---------
Panavision Inc........................................................... $ 100 $ 122.06
Standard & Poor's 500 Index.............................................. $ 100 $ 99.70
Standard & Poor's Entertainment Index.................................... $ 100 $ 94.60
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the last completed fiscal year, Messrs. Scott and Lapidus and Ms.
Wenig served as members of the Compensation Committee. Mr. Scott is Chief
Executive Officer of the Company.
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1996, the Company effected the Recapitalization, pursuant to which it
acquired all of the equity interests in PILP it did not previously own and
retired all of PILP's outstanding debt securities for a total of $126.1 million
in cash. As part of the Recapitalization:
(i) Warburg, Pincus and Messrs. Scott, Farrand and Marcketta contributed
$11,608,000, $580,400, $165,829 and $82,914, respectively, to the Company
for subordinated demand notes which had an interest rate of 6.83% per annum
and ranked pari passu with each other. The notes to Messrs. Scott, Farrand
and Marcketta were issued on May 8, 1996. The notes to Warburg, Pincus were
issued on May 8, July 16, and July 31, 1996. Mr. Lapidus and Ms. Wenig are
Managing Directors of Warburg, Pincus which holds 70% of the shares of
Common Stock;
(ii) Mr. Scott exchanged his interests in PILP for 989,100 shares of
Common Stock;
(iii) Messrs. Farrand and Marcketta were issued 282,600 and 141,300
shares of Common Stock, respectively; and
(iv) the Company, Warburg, Pincus and Messrs. Scott, Farrand and
Marcketta entered into an Amended and Restated Stockholders Agreement dated
June 12, 1996, pursuant to which the parties have agreed to cause the Board
of Directors to include (i) three persons designated by Warburg, Pincus,
(ii) William C. Scott or, if he is not an employee of the Company or is
otherwise unavailable, one person designated by the holders of a majority of
the shares of Common Stock held by management who are then employed by the
Company and (iii) John S. Farrand or, if he is not an employee of the
Company or is otherwise unavailable, one person designated by the holders of
a majority of the shares of Common Stock held by management who are then
employed by the Company. The Stockholders Agreement imposes certain
restrictions on the transfer of shares of Common Stock by the management
stockholders prior to the second anniversary of the Offerings. The
Stockholders Agreement also provides such stockholders with certain
registration rights. The Stockholders Agreement terminates on the date when
Warburg, Pincus and its affiliates beneficially own less than 5% of the
outstanding shares of Common Stock of the Company.
Effective July 1, 1996, Warburg, Pincus acquired substantially all of the
assets of Lee Lighting Limited for approximately $8.0 million and contributed
those assets to the Company. The purchase price equaled the book value of the
acquired assets.
Mr. Farrand, an executive officer of the Company, is the obligor in respect
of a promissory demand note issued to the Company in January 1987. The principal
amount of and accrued interest on this note were $540,000 and $0, respectively,
as of December 31, 1996. The note accrues interest at a rate of 7.04% per annum,
and, as of December 31, 1996, no payments of principal had been paid. Mr.
Farrand may pre-pay the note at any time. This note was originally issued in
connection with Mr. Farrand's purchase of a residence and is secured by a
mortgage thereon.
Certain executive management services have been provided by the Company to
Lee International, Inc. ("LII"), an indirect, wholly owned subsidiary of
Warburg, Pincus. The amount received by the Company from LII was $996,000,
$854,000, $687,000 and $510,000 for the years ended December 31, 1993, 1994,
1995 and 1996, respectively. The amounts received have been offset against
selling, general and administrative expenses in the Company's consolidated
statement of income. The agreement with LII expired on September 30, 1996.
12
<PAGE>
PROPOSAL TWO
INCREASE OF SHARES OF COMMON STOCK
RESERVED UNDER STOCK OPTION PLAN
AMENDMENT
On June 12, 1996, the Board of Directors of the Company adopted the Stock
Option Plan which was subsequently approved by the stockholders of the Company.
As adopted and approved, the Stock Option Plan allows for the issuance of
2,190,150 shares of Common Stock pursuant to awards granted thereunder. As of
March 21, 1997, a total of 42,900 shares of Common Stock remained available for
future grants under the Stock Option Plan. In order to provide for sufficient
shares of Common Stock for future grants under the Stock Option Plan, the Stock
Option Committee has amended and restated the Stock Option Plan, subject to
stockholder approval, to provide that the number of shares of Common Stock
reserved for issuance under the Stock Option Plan be increased from 2,190,150 to
3,000,000. In addition, the Stock Option Plan as amended and restated provides
that the maximum number of shares for which options may be granted to any single
optionee during any calendar year shall not exceed 500,000. The Stock Option
Plan as so amended is hereby submitted to the stockholders of the Company for
approval.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF
THE AMENDMENT TO THE STOCK OPTION PLAN ALLOWING FOR THE INCREASE OF SHARES OF
COMMON STOCK RESERVED FOR ISSUANCE THEREUNDER.
A general description of the basic features of the Stock Option Plan is set
forth below. Such description is qualified in its entirety by reference to the
full text of the Stock Option Plan, a copy of which may be obtained without
charge upon written request to Christopher M.R. Phillips, Secretary of the
Company.
PURPOSE
The purpose of the Stock Option Plan is to provide a means through which the
Company and its subsidiaries and affiliates may attract able persons to enter
and remain in the employ of the Company and its subsidiaries and affiliates and
to provide a means whereby those key persons upon whom the responsibilities of
successful administration and management of the Company and its subsidiaries and
affiliates rest can acquire and maintain stock ownership, thereby strengthening
their commitment to the welfare of the Company and its subsidiaries and
affiliates.
ADMINISTRATION
The Stock Option Plan is administered by the Stock Option Committee, which
is appointed by the Board of Directors. The Stock Option Committee, subject to
the provisions of the Stock Option Plan, in its sole discretion, may grant
awards under the Stock Option Plan, and has the power to construe the Stock
Option Plan, to determine all questions thereunder and to adopt and amend such
rules and regulations for the administration of the Stock Option Plan as it may
deem desirable.
ELIGIBILITY, GRANT OF AWARDS
Pursuant to the Stock Option Plan, Directors, officers, consultants, other
key employees of the Company or its subsidiaries or Panavision International,
L.P. ("PILP") and certain other key persons who have been selected by the Stock
Option Committee as participants are eligible to receive awards of incentive
stock options. The Company and its subsidiaries and PILP currently have
approximately 100 persons who are so eligible (comprising Directors, officers,
consultants, other key employees of the Company or its subsidiaries or PILP and
certain other key persons).
13
<PAGE>
Options granted under the Stock Option Plan may be "incentive stock options"
("Incentive Options"), within the meaning of Section 422 of the Code, or
"non-qualified stock options" ("Non-Statutory Options"); provided, however, that
Incentive Options may only be granted to participants who are also employees of
the Company and its subsidiaries. The exercise price of the options will be
determined by the Stock Option Committee when the options are granted, but shall
not be less than the fair market value (as defined in the Stock Option Plan) of
the Common Stock on the date of grant. Options vest and become exercisable as
determined by the Stock Option Committee. The option exercise price may be paid
in cash or by any other means specified by the Stock Option Committee.
No option may be exercised after the date ten years from the date of grant
of such option (five years in the case of Incentive Options of individuals
holding more than ten percent of the total combined voting power of all classes
of stock of the Company or of the parent or subsidiary thereof
("greater-than-ten-percent-stockholders")) (the "Termination Date").
Options are non-transferable except by will or the laws of descent and
distribution. Generally, options granted under the Stock Option Plan terminate
upon the earliest of: (i) the expiration date of the option, (ii) the date of
voluntary termination of the optionee's employment by the optionee, (iii) the
date of termination of the optionee's employment by the Company for cause, (iv)
three months after the date of termination of the optionee's employment by the
Company without cause, (v) one year after the cessation of the optionee's
employment by reason of a disability within the meaning of Section 22(e)(3) of
the Code and (vi) one year after the death of an optionee prior to the
Termination Date and while employed by the Company or a subsidiary thereof or
while entitled to exercise an option pursuant to (v) above (such option shall be
exercisable by the person to whom the optionee's rights under the option pass by
will or the applicable laws of descent and distribution). If an option may be
exercised during any period after the termination of an optionee's employment
with the Company, such option may be exercised only to the extent that the
optionee was entitled to exercise such option at the time of such termination.
The market value of the Common Stock as of March 21, 1997 was $16 3/4 per
share.
AMENDMENT OR DISCONTINUANCE
The Board of Directors may, without the consent of the Company's
stockholders or optionees under the Stock Option Plan, at any time terminate the
Stock Option Plan entirely and at any time or from time to time amend or modify
the Stock Option Plan, provided that no such action shall adversely affect any
option theretofore granted thereunder without the optionee's consent, and
provided further that no such action by the Board of Directors, without approval
of the stockholders, may increase the total number of shares of Common Stock
which may be purchased pursuant to options granted under the Stock Option Plan,
except as contemplated thereby.
FEDERAL TAX CONSEQUENCES
Set forth below is a brief description of the federal income tax
consequences applicable to Incentive Options and Non-Statutory Options granted
under the Stock Incentive Plan.
INCENTIVE OPTIONS. No taxable income is realized by the optionee upon the
grant or exercise of an Incentive Option. If Common Stock is issued to an
optionee pursuant to the exercise of an Incentive Option, and if no
disqualifying disposition of such shares is made by such optionee within two
years after the date of grant or within one year after the transfer of such
shares to such optionee, then (1) upon sale of such shares, any amount realized
in excess of the option price will be taxed to such optionee as a long-term
capital gain and any loss sustained will be a long-term capital loss, and (2) no
deduction will be allowed to the optionee's employer for federal income tax
purposes.
If the Common Stock acquired upon the exercise of an Incentive Option is
disposed of prior to the expiration of either holding period described above,
generally (1) the optionee will realize ordinary income
14
<PAGE>
in the year of disposition in an amount equal to the excess (if any) of the fair
market value of such shares at exercise (or, if less, the amount realized on the
disposition of such shares) over the option price paid for such shares, and (2)
the optionee's employer will be entitled to deduct such amount for federal
income tax purposes if the amount represents an ordinary and necessary business
expense. Any further gain (or loss) realized by the optionee will be taxed as
short-term or long-term capital gain (or loss), as the case may be, and will not
result in any deduction by the employer.
Subject to certain exceptions for disability or death, if an Incentive
Option is exercised more than three months following termination of employment,
the exercise of the Option will generally be taxed as the exercise of a
Non-Statutory Option.
For purposes of determining whether an optionee is subject to any
alternative minimum tax liability, an optionee who exercises an Incentive Option
generally would be required to increase his or her alternative minimum taxable
income, and compute the tax basis in the stock so acquired, in the same manner
as if the optionee had exercised a Non-Statutory Option. Each optionee is
potentially subject to the alternative minimum tax. In substance, a taxpayer is
required to pay the higher of his/her alternative minimum tax liability or
his/her "regular" income tax liability. As a result, a taxpayer has to determine
his/ her potential liability under the alternative minimum tax.
In general, for purposes of the alternative minimum tax, the exercise of an
Incentive Option will be treated essentially as if it were the exercise of a
Non-Statutory Option. As a result, the rules of Section 83 of the Code relating
to transfers of property, including restricted property, will apply in
determining the optionee's alternative minimum taxable income. Consequently, an
optionee exercising an Incentive Option with respect to unrestricted Common
Stock will have income, for purposes of determining the base for the application
of the alternative minimum tax, in an amount equal to the spread between the
option price for the shares and the fair market value of the shares on the date
of exercise.
NON-STATUTORY OPTIONS. With respect to Non-Statutory Options: (1) no income
is realized by the optionee at the time the Option is granted; (2) generally, at
exercise, ordinary income is realized by the optionee in an amount equal to the
difference between the option price paid for the shares and the fair market
value of the shares, if unrestricted, on the date of exercise, and the
optionee's employer is generally entitled to a tax deduction in the same amount
subject to applicable tax withholding requirements; and (3) at sale,
appreciation (or depreciation) after the date of exercise is treated as either
short-term or long-term capital gain (or loss) depending on how long the shares
have been held.
NEW PLAN BENEFITS
Because the Stock Option Plan is a discretionary plan, it is not possible to
determine what awards the Stock Option Committee will grant under the Stock
Option Plan in the future.
PROPOSAL THREE
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has, upon recommendation of the Audit Committee and
subject to ratification by the stockholders, appointed Ernst & Young LLP as
independent certified public accountants to report on the consolidated financial
statements of the Company for the fiscal year ending December 31, 1997, and to
perform such other services as may be required of Ernst & Young LLP. Although
stockholder ratification of the Board of Directors' selection is not required,
the Board of Directors considers it desirable for the stockholders to pass upon
the selection of the independent auditors. If the stockholders disapprove of the
selection of Ernst & Young LLP as independent auditors, the Board of Directors
will consider the selection of other independent certified public accountants.
One or more representatives of
15
<PAGE>
Ernst & Young LLP will be present at the Annual Meeting, will have the
opportunity to make a statement if he or she desires to do so and will be
available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" RATIFICATION OF
ERNST & YOUNG LLP AS THE COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS FOR
1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
Directors and executive officers, and persons who beneficially own more than 10%
of the Common Stock, to file with the Commission initial reports of ownership
and reports of changes in ownership of Common Stock and the New York Stock
Exchange. Officers, Directors and greater than 10% beneficial owners are
required by Commission regulation to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company, all Section 16(a) filing requirements
applicable to its officers, Directors and greater than 10% beneficial owners
were complied with during the fiscal year ended December 31, 1996 except that
one report covering one transaction which was filed approximately six weeks late
on behalf of Mr. Payson, a Director of the Company. The report filed covered the
purchase by Mr. Payson of 10,000 shares of Common Stock at the time of the
initial public offering.
STOCKHOLDER PROPOSALS -- 1998 ANNUAL MEETING
Any proposals of stockholders of the Company intended to be included in the
Company's proxy statement and form of proxy relating to the Company's next
annual meeting of stockholders must be in writing and received by the Secretary
of the Company at the Company's office at 6219 De Soto Avenue, Woodland Hills,
California 91367 no later than November 28, 1997. In the event that the next
annual meeting of stockholders is called for a date that is not within 30 days
before or after May 13, 1998, in order to be timely, notice by the stockholder
must be received not later than the close of business on the tenth day following
the day on which such notice of the date of the annual meeting was mailed or
such public disclosure of the date of the annual meeting was made, whichever
first occurs.
OTHER MATTERS
Management does not know of any matters other than the foregoing that will
be presented for consideration at the Annual Meeting. However, if other matters
properly come before the Annual Meeting, it is the intention of the persons
named in the enclosed proxy card to take such action as is in the best interests
of the Company and its stockholders.
The entire cost of soliciting proxies from its stockholders will be borne by
the Company. In addition to the use of the mails, proxies may be solicited by
personal interview, telephone or telegram by Directors, officers or regular
employees of the Company, who will not receive additional compensation for such
solicitation but may be reimbursed for reasonable out-of-pocket expenses
incurred in connection therewith. Arrangements may also be made with brokerage
firms and other custodians, nominees and fiduciaries to forward proxy
solicitation materials to the beneficial owners of shares of Common Stock held
of record by such persons, in which case the Company will reimburse such
brokerage firms, custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses incurred by them in connection therewith which are not
expected to exceed $10,000.
16
<PAGE>
The Company will provide to any stockholder of record and beneficial owners
at the close of business on March 21, 1997, without charge upon written request
to its Secretary at 6219 De Soto Avenue, Woodland Hills, California 91367, a
copy of the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996.
The principal executive offices of the Company are located at 6219 De Soto
Avenue, Woodland Hills, California 91367 and the Company's telephone number is
(818) 316-1000.
By order of the Board of Directors,
/s/ Christopher M.R. Phillips
Christopher M.R. Phillips
Secretary
17
<PAGE>
APPENDIX A
PANAVISION INC.
FIRST AMENDED AND RESTATED STOCK OPTION PLAN
ARTICLE I
PURPOSE
This First Amended and Restated Stock Option Plan (the "Plan") is intended
as an incentive and to encourage stock ownership by officers and certain other
key employees of Panavision Inc. (the "Company") in order to increase their
proprietary interest in the Company's success and to encourage them to remain in
the employ of the Company.
The term "Company," when used in the Plan with reference to eligibility and
employment, shall include the Company, its subsidiaries, and Panavision
International L.P. ("PILP"). The word "subsidiary," when used in the Plan, shall
mean any subsidiary of the Company within the meaning of Section 424(f) of the
Internal Revenue Code of 1986, as amended (the "Code").
It is intended that certain options granted under this Plan will qualify as
"incentive stock options" under Section 422 of the Code.
ARTICLE II
ADMINISTRATION
The Plan shall be administered by a Stock Option Committee (the "Committee")
appointed by the Board of Directors of the Company (the "Board") and shall
consist of not less than two members. Subject to the provisions of the Plan, the
Committee shall have sole authority, in its absolute discretion: (a) to
determine which of the eligible employees of the Company shall be granted
options; (b) to authorize the granting of both incentive stock options and
nonqualified options; (c) to determine the times when options shall be granted
and the number of shares to be optioned; (d) to determine the option price of
the shares subject to each option, which price shall be not less than the
minimum specified in ARTICLE V; (e) to determine the time or times when each
option becomes exercisable, the duration of the exercise period and any other
restrictions on the exercise of options issued hereunder; (f) to prescribe the
form or forms of the option agreements under the Plan (which forms shall be
consistent with the terms of the Plan but need not be identical); (g) to adopt,
amend and rescind such rules and regulations as, in its opinion, may be
advisable in the administration of the Plan; and (h) to construe and interpret
the Plan, the rules and regulations and the option agreements under the Plan and
to make all other determinations deemed necessary or advisable for the
administration of the Plan. All decisions, determinations and interpretations of
the Committee shall be final and binding on all optionees.
ARTICLE III
STOCK
The stock to be purchased under the Plan shall be shares of authorized but
unissued common stock of the Company, par value $0.01 per share, or previously
issued shares of common stock reacquired by the Company (the "Stock"). Under the
Plan, the total number of shares of Stock which may be purchased pursuant to
options granted hereunder shall not exceed 3,000,000, and the maximum number of
shares for which options may be granted to any single optionee during any
calendar year shall not exceed 500,000. Such numbers of shares shall be adjusted
in accordance with the provisions of ARTICLE X hereof.
The number of shares of Stock available for grant of options under the Plan
shall be decreased by the sum of the number of shares with respect to which
options have been issued and are then outstanding and the number of shares
issued upon exercise of options. In the event that any outstanding option under
the
<PAGE>
Plan for any reason expires, is terminated or is cancelled prior to the end of
the period during which options may be granted, the shares of Stock called for
by the unexercised portion of such option may again be subject to an option
under the Plan.
ARTICLE IV
ELIGIBILITY OF PARTICIPANTS
Subject to ARTICLE VII, officers and other key employees of the Company, its
subsidiaries and PILP shall be eligible to receive options under the Plan,
provided that incentive stock options may be granted only to employees of the
Company and its subsidiaries. In addition, options which are not incentive stock
options may be granted to directors, consultants or other key persons who the
Committee determines shall receive options under the Plan.
ARTICLE V
OPTION EXERCISE PRICE
Subject to ARTICLE VII, the exercise price of options granted under the Plan
shall be not less than the fair market value of the Stock at the time the option
was granted. The fair market value shall be deemed for all purposes of the Plan
to be the last sale price reported as having occurred on any exchange on which
the Company's Common Stock may be listed and traded on the date prior to the
date the option is granted, or, if there is no such sale on that date, then on
the last preceding date on which such a sale was reported. If the Company's
Common Stock is not listed on any exchange but the Common Stock is quoted in the
National Market System of the National Association of Securities Dealers
Automated Quotation System on a last sale basis then the fair market value of
the Stock shall be deemed to be the average between the high bid price and low
ask price reported on the date prior to the date the option is granted, or, if
there is no such sale on that date, then on the last preceding date on which a
sale was reported. If the Common Stock is not quoted in the National Market
System of the National Association of Securities Dealers Automated Quotation
System on a last sale basis, then the fair market value of the Stock shall mean
the amount determined by the Committee to be the fair market value based upon a
good faith attempt to value the Stock accurately and computed in accordance with
applicable regulations of the Internal Revenue Service.
ARTICLE VI
EXERCISE AND TERMS OF OPTIONS
Subject to this ARTICLE VI, the Committee shall determine the dates after
which options may be exercised, in whole or in part. If an option is exercisable
in installments, installments or portions thereof which are exercisable and not
exercised shall remain exercisable.
Any other provision of the Plan to the contrary notwithstanding, but subject
to ARTICLE VII in the case of incentive stock options, no option shall be
exercised after the date ten years from the date of grant of such option (the
"Termination Date"). Unless otherwise determined by the Committee, the following
provisions shall apply upon an optionee's termination of employment prior to the
Termination Date:
(i) If prior to the Termination Date, an optionee shall cease to be
employed by the Company by reason of a disability, as defined in Section
22(e)(3) of the Code, the option shall remain exercisable until the earlier
of the Termination Date or one year after the date of cessation of
employment, to the extent the option was exercisable at the time of
cessation of employment.
(ii) In the event of the death of an optionee prior to the Termination
Date and while employed by the Company, or while entitled to exercise an
option pursuant to the preceding paragraph or the subsequent paragraph, the
option shall remain exercisable until the earlier of the Termination Date or
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one year after the date of death, by the person or person to whom the
optionee's rights under the option pass by will or the applicable laws of
descent and distribution, to the extent the option was exercisable on the
date of death.
(iii) If an optionee voluntarily terminates employment with the Company
for reasons other than death or disability, or if an optionee's employment
with the Company is terminated for Cause, the option shall remain
exercisable until the earlier of the Termination Date or ten days after the
date of such termination, to the extent the option was exercisable on the
date of such termination.
(iv) If the Company terminates an optionee's employment without Cause,
as hereinafter defined, the option shall remain exercisable until the
earlier of the Termination Date or three months after the date of such
termination, to the extent the option was exercisable on the date of such
termination.
For purposes of the Plan, the Company shall have "Cause" to terminate an
optionee's employment if the Company has cause to terminate the optionee's
employment under any existing employment agreement between the optionee and the
Company or, in the absence of an employment agreement between the optionee and
the Company, in accordance with the definition of cause set forth in the
optionee's option agreement.
The Committee may provide, in its discretion, that it shall be a condition
precedent to the exercise of an option that the optionee execute a written
stockholders' agreement in such form as may be designated by the Committee.
ARTICLE VII
SPECIAL PROVISIONS APPLICABLE TO INCENTIVE STOCK OPTIONS ONLY
To the extent the aggregate fair market value (determined as of the time the
option is granted) of the Stock with respect to which any options granted
hereunder which are intended to be incentive stock options may be exercisable
for the first time by the optionee in any calendar year (under this Plan or any
other stock option plan of the Company or any parent or subsidiary thereof)
exceeds $100,000, such options shall not be considered incentive stock options.
No incentive stock option may be granted to an individual who, at the time
the option is granted, owns directly, or indirectly within the meaning of
Section 424(d) of the Code, stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or of any parent or
subsidiary thereof, unless such option (i) has an option price of at least 110
percent of the fair market value of the Stock on the date of the grant of such
option; and (ii) cannot be exercised more than five years after the date it is
granted.
Each optionee who receives an incentive stock option must agree to notify
the Company in writing immediately after the optionee makes a disqualifying
disposition of any Stock acquired pursuant to the exercise of an incentive stock
option. A disqualifying disposition is any disposition (including any sale) of
such Stock before the later of (a) two years after the date the optionee was
granted the incentive stock option or (b) one year after the date the optionee
acquired Stock by exercising the incentive stock option.
ARTICLE VIII
PAYMENT FOR SHARES
Payment for shares of Stock purchased under an option granted hereunder
shall be made in full upon exercise of the option, by certified or bank
cashier's check payable to the order of the Company, by delivery of shares of
Stock which have been held by the optionee for at least six months of the time
of exercise, or by any other means specified by the Committee. The Stock
purchased shall thereupon be promptly delivered; provided, however, that the
Company may, in its discretion, require that an optionee pay to the Company, at
the time of exercise, such amount as the Company deems necessary to satisfy its
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<PAGE>
obligation to withhold Federal, state or local income or other taxes incurred by
reason of the exercise or the transfer of shares thereupon.
ARTICLE IX
NON-TRANSFERABILITY OF OPTION RIGHTS
No option shall be transferable except by will or the laws of descent and
distribution. During the lifetime of the optionee, the option shall be
exercisable only by him.
ARTICLE X
ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC.
The aggregate number of shares of Stock which may be purchased pursuant to
options granted hereunder, the maximum number of shares for which options may be
granted to any single optionee during any calendar year, the number of shares of
Stock covered by each outstanding option and the price per share thereof in each
such option shall be appropriately adjusted for any increase or decrease in the
number of outstanding shares of stock resulting from a stock split or other
subdivision or consolidation of shares of Stock or for other capital adjustments
or payments of stock dividends or distributions or other increases or decreases
in the outstanding shares of Stock without receipt of consideration by the
Company. Any adjustment shall be conclusively determined by the Committee.
In the event of any change in the outstanding shares of Stock by reason of
any recapitalization, merger, consolidation, spin-off, combination or exchange
of shares or other corporate change, or any distributions to common shareholders
other than ordinary cash dividends, the Committee shall make such substitution
or adjustment, if any, as it deems to be equitable, as to the number or kind of
shares of Stock or other securities issued or reserved for issuance pursuant to
the Plan, the maximum number of shares for which options may be granted to any
single optionee during any calendar year, and the number or kind of shares of
Stock or other securities covered by outstanding options, and the option price
thereof. In instances where another corporation or other business entity is
being acquired by the Company, and the Company has assumed outstanding employee
option grants and/or the obligation to make future or potential grants under a
prior existing plan of the acquired entity, similar adjustments are permitted at
the discretion of the Committee. The Committee shall notify optionees of any
intended sale of all or substantially all of the Company's assets within a
reasonable time prior to such sale.
The foregoing adjustments and the manner of application of the foregoing
provisions shall be determined by the Committee in its sole discretion. Any such
adjustment may provide for the elimination of any fractional share which might
otherwise become subject to an option.
ARTICLE XI
NO OBLIGATION TO EXERCISE OPTION
Granting of an option shall impose no obligation on the recipient to
exercise such option.
ARTICLE XII
USE OF PROCEEDS
The proceeds received from the sale of Stock pursuant to the Plan shall be
used for general corporate purposes.
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<PAGE>
ARTICLE XIII
RIGHTS AS A STOCKHOLDER
An optionee shall have no rights as a stockholder with respect to any share
covered by his or her option until such optionee shall have become the holder of
record of such share, and shall not be entitled to any dividends or
distributions or other rights in respect of such share for which the record date
is prior to the date on which he or she shall have become the holder of record
thereof.
Notwithstanding anything herein to the contrary, the Committee, in its sole
discretion, may restrict the transferability of all or any number of shares
issued under the Plan upon the exercise of an option by legending the stock
certificate as it deems appropriate.
ARTICLE XIV
EMPLOYMENT RIGHTS
Nothing in the Plan or in any option granted hereunder shall confer on any
optionee any right to continue in the employ of the Company, or to interfere in
any way with the right of the Company to terminate the optionee's employment at
any time.
ARTICLE XV
COMPLIANCE WITH THE LAW
The Company is relieved from any liability for the nonissuance or
non-transfer, or any delay in issuance or transfer, of any shares of Stock
subject to options under the Plan which results from the inability of the
Company to obtain, or from any delay in obtaining, from any regulatory body
having jurisdiction, all requisite authority to issue or transfer shares of
Stock of the Company if counsel for the Company deems such authority necessary
for the lawful issuance or transfer of any such shares. Appropriate legends may
be placed on the stock certificates evidencing shares issued upon exercise of
options to reflect such transfer restrictions.
Each option granted under the Plan is subject to the requirement that if at
any time the Committee determines, in its discretion, that the listing,
registration or qualification of shares of Stock issuable upon exercise of
options is required by any securities exchange or under any state or Federal
law, or that the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the grant of
options or the issuance of shares of Stock, no options or shares of Stock shall
be issued, in whole or in part, unless such listing, registration,
qualification, consent or approval has been effected or obtained free of any
conditions or with such conditions as are acceptable to the Committee.
ARTICLE XVI
CANCELLATION OF OPTIONS
The Committee, in its discretion, may, with the consent of an optionee,
cancel any outstanding option held by such optionee hereunder.
ARTICLE XVII
EFFECTIVE DATE AND EXPIRATION DATE OF PLAN
The Plan, as amended and restated, is effective as of March 19, 1997, the
date of adoption of the Plan by the Company's Board of Directors, subject to
approval by the stockholders of the Company in a manner which complies with both
Section 162(m)(4)(C)(ii) and Section 422(b)(1) of the Code and the Treasury
Regulations thereunder. The expiration date of the Plan, after which no option
may be granted hereunder, shall be March 19, 2007.
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<PAGE>
ARTICLE XVIII
AMENDMENT OR DISCONTINUANCE OF PLAN
The Board may, without the consent of the Company's stockholders or
optionees under the Plan, at any time terminate the Plan entirely and at any
time or from time to time amend or modify the Plan, provided that no such action
shall adversely affect any option theretofore granted hereunder without the
optionee's consent, and provided further that no such action by the Board,
without approval of the stockholders, may increase the total number of shares of
Stock which may be purchased pursuant to options granted under the Plan, except
as contemplated in ARTICLE X.
ARTICLE XIX
REPURCHASE OF OPTIONS
In granting options hereunder, the Committee may in its discretion, and on
terms it considers appropriate, include in an option agreement provisions
requiring an optionee, or the executors or administrators of an optionee's
estate, to sell back to the Company such options in the event such optionee's
employment with the Company is terminated.
ARTICLE XX
MISCELLANEOUS
(a) Options shall be evidenced by option agreements (which need not be
identical) in such forms as the Committee may from time to time approve. Such
agreements shall conform to the terms and conditions of the Plan and may provide
that the grant of any option under the Plan and Stock acquired pursuant to the
Plan shall also be subject to such other conditions (whether or not applicable
to the option or Stock received by any other optionee) as the Committee
determines appropriate, including, without limitation, provisions to assist the
optionee in financing the purchase of Stock through the exercise of options,
provisions for the forfeiture of, or restrictions on resale or other disposition
of, shares under the Plan, provisions giving the Company the right to repurchase
shares acquired under the Plan in the event the participant elects to dispose of
such shares, and provisions to comply with Federal and state securities laws and
Federal and state income tax withholding requirements.
(b) If the Committee shall find that any person to whom any amount is
payable under the Plan is unable to care for his affairs because of illness or
accident, or is a minor, or has died, then any payment due to such person or his
estate (unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to his
spouse, child, or other relative, an institution maintaining or having custody
of such person, or any other person deemed by the Committee to be a proper
recipient on behalf of such person otherwise entitled to payment. Any such
payment shall be a complete discharge of the liability of the Committee and the
Company therefor.
(c) No member of the Committee shall be personally liable by reason of any
contract or other instrument executed by such member or on his behalf in his
capacity as a member of the Committee nor for any mistake of judgment made in
good faith, and the Company shall indemnify and hold harmless each member of the
Committee and each other employee, officer or director of the Company to whom
any duty or power relating to the administration or interpretation of the Plan
may be allocated or delegated, against any cost or expense (including counsel
fees) or liability (including any sum paid in settlement of a claim) arising out
of any act or omission to act in connection with the Plan unless arising out of
such person's own fraud or bad faith; provided, however, that approval of the
Company's Board of Directors shall be required for the payment of any amount in
settlement of a claim against any such person. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's Certificate of
Incorporation or By-Laws, as a matter of law, or otherwise, or any power that
the Company may have to indemnify them or hold them harmless.
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<PAGE>
(d) The Plan shall be governed by and construed in accordance with the
internal laws of the State of Delaware without reference to the principles of
conflicts of law thereof.
(e) No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any
assets in a trust or other entity to which contributions are made or otherwise
to segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Optionees shall have no
rights under the Plan other than as unsecured general creditors of the Company,
except that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.
(f) Each member of the Committee and each member of the Company's Board of
Directors shall be fully justified in relying, in acting or failing to act, and
shall not be liable for having so relied, acted or failed to act in good faith,
upon any report made by the independent public accountant of the Company and
upon any other information furnished in connection with the Plan by any person
or persons other than such member.
(g) Except as otherwise specifically provided in the relevant plan document,
no payment under the Plan shall be taken into account in determining any
benefits under any pension, retirement, profit-sharing, group insurance or other
benefit plan of the Company.
(h) The expenses of administering the Plan shall be borne by the Company.
(i) Masculine pronouns and other words of masculine gender shall refer to both
men and women.
(i) Masculine pronouns and other words of masculine gender shall refer to
both men and women. * * *
As adopted by the Board of Directors of Panavision Inc. as of June 12, 1996
Amended and restated as of March 19, 1997
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<PAGE>
PANAVISION INC.
6219 De Soto Avenue
Woodland Hills, California 91367
PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS
10:00 a.m., New York City time, on May 13, 1997
The undersigned hereby appoints William C. Scott and John S. Farrand,
and each of them, with full power of substitution, as proxies of the
undersigned to vote all shares of stock which the undersigned is entitled in
any capacity to vote at the above-stated annual meeting, and at any and all
adjournments or postponements thereof (the Annual Meeting ), on the matters
set forth on the reverse side of this Proxy Card, and, in their discretion,
upon all matters incident to the conduct of the Annual Meeting and upon such
other matters as may properly be brought before the Annual Meeting. This
proxy revokes all prior proxies given by the undersigned.
All properly executed proxies will be voted as directed. If no
instructions are indicated on a properly executed proxy, such proxy will be
voted FOR approval of Proposals 1, 2 and 3. All ABSTAIN votes will be counted
in determining the existence of a quorum at the Annual Meeting, but will have
the same effect as a vote AGAINST Proposals 2 and 3.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PANAVISION INC.
Receipt of the Notice of Meeting and the Proxy Statement, dated March
26, 1997 (the Proxy Statement ), is hereby acknowledged.
PLEASE SIGN AND DATE ON THE REVERSE SIDE AND
MAIL THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
(Continued on reverse side)
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FOLD AND DETACH HERE
<PAGE>
Please mark
your votes as
indicated in
this example /X/
Please mark boxes in blue or black ink. FOR all nominees
listed below:
1. Election of Directors
Nominees: William C. Scott, John S.
Farrand, Sidney Lapidus, Martin D. Payson, / /
Willis G. Ryckman and Joanne R. Wenig
INSTRUCTION: IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THAT NOMINEE'S NAME ON THE LINE PROVIDED BELOW:
(Continued from reverse side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD
OF DIRECTORS OF PANAVISION INC.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
PROPOSALS 1,2 AND 3.
FOR against abstain
2. Proposal to approve an amendment to the
Company's Stock Option Plan to increase
the number of shares of Common Stock / / / / / /
reserved for issuance thereunder from
2,190,150 to 3,000,000.
3. Proposal to ratify the appointment of Ernst
& Young LLP as the independent public / / / / / /
auditors of the Company for the fiscal year
ending December 31, 1997.
4. In their discretion of the proxies with respect to any other matters that may
properly come before the Annual Meeting.
YOUR VOTE IS IMPORTANT. PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
Signature(s) __________________________________________ Dated ____________, 1997
(JOINT OWNERS SHOULD EACH SIGN. PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEARS
ON THIS CARD. WHEN SIGNING AS ATTORNEY, TRUSTEE, EXECUTOR, ADMINISTRATOR,
GUARDIAN OR CORPORATE OFFICER, PLEASE GIVE YOUR FULL TITLE BELOW.)
- - --------------------------------------------------------------------------------
FOLD AND DETACH HERE
