SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
WATKINS-JOHNSON COMPANY
(Name of Registrant as Specified In Its Charter)
RICHARD G. BELL
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
[ ] 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 number, or
the Form or Schedule and the date of its filing.
<PAGE>
WATKINS-JOHNSON COMPANY
3333 HILLVIEW AVENUE
STANFORD RESEARCH PARK
PALO ALTO, CALIFORNIA 94304
DEAN A. WATKINS W. KEITH KENNEDY, JR.
CHAIRMAN OF THE BOARD PRESIDENT
H. RICHARD JOHNSON
VICE CHAIRMAN
MARCH 6, 1995
Dear Shareowner:
We, as well as all of the other officers and directors of Watkins-Johnson
Company, cordially invite you to attend the Company's Annual Meeting of
Shareowners, to be held at 10:00 o'clock in the morning on Saturday, April 8,
1995, at the main office of the Company, 3333 Hillview Avenue, Stanford Research
Park, Palo Alto, California 94304.
In addition to conducting the business of the meeting, we will report to you
on the progress of the Company and attempt to answer any questions you may have.
Please plan to come, but whether you can or cannot, please complete and
return the enclosed proxy card--your participation is important.
Sincerely yours,
/s/ Dean Watkins
-------------------------
Dean A. Watkins
/s/ Dick Johnson
-------------------------
H. Richard Johnson
/s/ W. Keith Kennedy
-------------------------
W. Keith Kennedy, Jr.
<PAGE>
WATKINS-JOHNSON COMPANY
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
SATURDAY, APRIL 8, 1995
10:00 A.M.
TO THE SHAREOWNERS:
The Annual Meeting of Shareowners of Watkins-Johnson Company will be held
at the Company's main office, 3333 Hillview Avenue, Stanford Research Park, Palo
Alto, California 94304 on Saturday, April 8, 1995, at 10:00 a.m. to take action
upon the following matters:
1. The election of directors for the ensuing year.
2. The approval of the appointment of independent public accountants for
1995.
3. The transaction of such other business as may properly come before the
meeting.
Only shareowners of record at the close of business on February 9, 1995 are
entitled to notice of and to vote at this meeting and any adjournment or
postponement thereof.
By Order of the Board of Directors
Carol H. Roosen, Secretary
Palo Alto, California
March 6, 1995
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE MARK, SIGN, DATE AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
<PAGE>
PROXY STATEMENT
The accompanying proxy is solicited on behalf of the Board of Directors of
Watkins-Johnson Company, a California corporation (the "Company"), for use at
the Annual Meeting of Shareowners of the Company to be held at 10:00 a.m. on
Saturday, April 8, 1995, and at any adjournment of the annual meeting, to act
upon the matters set forth in the accompanying notice. This Proxy Statement and
the form of proxy, together with the Company's 1994 Annual Report, were first
mailed to shareowners on or about March 6, 1995.
VOTING SECURITIES
Only shareowners of record at the close of business on February 9, 1995 are
entitled to notice of and to vote at the annual meeting. On that date, the
Company had outstanding 7,597,731 shares of common stock. Owners of common stock
are entitled to one vote for each share held. In the election of directors, each
shareowner has cumulative voting rights and is entitled to as many votes as
equal the number of shares held by such shareowner multiplied by the number of
directors to be elected, which votes may be cast for a single candidate or
distributed among any or all of the candidates. However, no shareowner is
entitled to cumulate votes unless the shareowner, or any other shareowner, has
given notice at the meeting before the voting of such intention to cumulate
votes.
SOLICITATION AND REVOCABILITY OF PROXIES
If the enclosed proxy card is properly signed and returned, the shares
represented thereby will be voted at the annual meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted as recommended by
the Board of Directors. If the shares are held in trust under the Company's
employee stock ownership plans, the shares represented will be voted by the
Trustee, as directed by the participant, pursuant to the plans. Any shareowner
signing a proxy in the form accompanying this proxy statement has the power to
revoke it prior to or at the annual meeting. A proxy may be revoked by a written
notice delivered to the Secretary of the Company stating that the proxy is
revoked, by a subsequent proxy signed by the person who signed the earlier
proxy, or by attendance at the annual meeting and voting in person.
The expense of soliciting proxies will be paid by the Company. Following
the original mailing of the proxies and soliciting materials, employees of the
Company may solicit proxies by mail, telephone, telegraph and personal
interviews. The Company will request brokers, custodians, nominees and other
record holders to forward copies of the proxies and soliciting materials to
persons for whom they hold shares of the Company's common stock and to request
authority for the exercise of proxies; in such cases the Company will reimburse
such holders for their reasonable expenses. Proxies will also be solicited on
behalf of management by the firm of D. F. King & Co., Inc., whose fee ($8,500)
and out-of-pocket expenses will be paid by the Company.
VOTING RESULTS AT LAST ANNUAL MEETING
There were 6,801,444 shares present and voting or withholding authority to
vote at the Company's Annual Meeting of Shareowners held on April 9, 1994, for
the purpose of electing directors, and for approval of the appointment of
independent public accountants. A majority vote was required for each of these
proposals. All nominees for director were elected by 98% or more of the votes
cast, and the appointment of Deloitte & Touche as the Company's independent
public accountants was approved by 99.8% of the votes cast.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS & MANAGEMENT
The following table sets forth information as of December 31, 1994 with
respect to the ownership of the Company's common stock by any person who is
known to the Company to be the beneficial owner of more than 5% of the Company's
common stock, by all directors, by the chief executive officer and four other
highly compensated officers, and by all directors and officers of the Company as
a group.
AMOUNT AND
NATURE OF
BENEFICIAL
BENEFICIAL OWNER OWNERSHIP PERCENT
------------------------------------- ------------- ---------
None
DIRECTORS AND OFFICERS
Dean A. Watkins ...................... 255,860 3.4
H. Richard Johnson ................... 30,259 *
W. Keith Kennedy, Jr. ................ 141,761(1) 1.9
John J. Hartmann ..................... 7,647(1) *
Rita Ricardo-Campbell ................ 9,037(1) *
Jack L. Shepard ...................... 11,947(1) *
Von R. Eshleman ...................... 12,047(1) *
Raymond F. O'Brien ................... 13,047(1) *
William R. Graham .................... 11,347(1) *
Gary M. Cusumano ..................... 100 *
Robert L. Prestel .................... 100 *
Keith D. Gilbert ..................... 111,656(1) 1.5
James L. Schram ...................... 46,424(1) *
Richard G. Bell ...................... 22,509(1) *
All directors and officers as a group
(18 persons) ........................ 709,534(1) 9.4
----------
* less than 1% of shares outstanding
(1) The amounts shown include shares covered by options exercisable within 60
days of December 31, 1994, as follows: 104,300 shares, W. Keith Kennedy;
7,047 shares each, John J. Hartmann, and Rita Ricardo-Campbell; 11,047
shares, Jack L. Shepard, Von R. Eshleman, Raymond F. O'Brien and William R.
Graham; 96,467 shares, Keith D. Gilbert; 44,000 shares, James L. Schram;
20,700 shares, Richard G. Bell; and 351,448 shares, all directors and
officers as a group. Also included are 649, 649, 509, and 1,809 shares for
Messrs. Kennedy, Gilbert, Schram, and Bell, respectively, which are
allocated to their accounts, and 5,720 shares allocated to the accounts of
all officers under the Company's employee stock ownership plans as of
December 31, 1994, according to the plans' administrator. Dr. Watkins does
not participate in the employee stock ownership plans.
2
<PAGE>
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
At the annual meeting in 1995, there are eight nominees standing for
election, each to hold office until his successor is elected, or until death,
resignation or removal. All of the nominees are presently directors who were
elected by the shareholders, except for Mr. Gary M. Cusumano and Mr. Robert L.
Prestel, who were elected by the Board in September 1994. Directors Rita
Ricardo-Campbell, a director since 1974, and Von R. Eshleman, a director since
1980, have decided not to stand for reelection to the Board. In addition, the
Company is saddened to report the death of Director Jack L. Shepard in December
1994. Pursuant to the Company's Bylaws, the number of directors may not be less
than seven nor more than eleven. The number currently fixed by resolution is
eight. Shares represented by the accompanying proxy will be voted for the
election of the nominees recommended by the Board of Directors, who are named in
the following table, unless the proxy is marked in such a manner as to withhold
authority so to vote. The affirmative vote of a majority of the common stock
voting at the annual meeting is required to elect any director. The Company has
no reason to believe that the nominees will not be available for election to
serve their prescribed terms. However, if any nominee for any reason is unable
to serve or for good cause will not serve, the proxy may be voted for such
substitute nominee as the persons appointed in the proxy may in their discretion
determine.
The following sets forth certain information concerning the nominees as of
December 31, 1994, which is based on data furnished by them.
NOMINEES FOR ELECTION AS DIRECTORS
PHOTO DEAN A. WATKINS
OF
DEAN Chairman of the Board, Watkins-Johnson Company.
A.
WATKINS Director since 1957.
Dr. Watkins, 72, has been Chairman of the Board since 1967. He is a
member of the Board of Regents, University of California (Chairman,
1972-74); and the Board of Overseers, Hoover Institution on War,
Revolution and Peace (Chairman, 1971-73 and 1985-86). He is a Fellow
of the Institute of Electrical and Electronics Engineers and of the
American Association for the Advancement of Science, and a member of
the National Academy of Engineering. He is a former member of the
Board of Directors, California Chamber of Commerce (President, 1981);
a former Trustee of Stanford University, and a former member of the
White House Science Council.
PHOTO H. RICHARD JOHNSON
OF
H. Vice Chairman of the Board, Watkins-Johnson Company.
RICHARD
JOHNSON Director since 1957.
Dr. Johnson, 68, was President and Chief Executive Officer of the
Company from 1973 through 1987, and became Vice Chairman on December
31, 1987. He is a member of the National Academy of Engineering and a
Fellow of the Institute of Electrical and Electronics Engineers. He is
past President of the Stanford Area Council, Boy Scouts of America;
and has served as a Director of the National Association of
Manufacturers, the Santa Clara County Manufacturing Group and the Tech
Museum of Innovation.
3
<PAGE>
PHOTO W. KEITH KENNEDY, JR.
OF
W. President and Chief Executive Officer, Watkins-Johnson Company.
KEITH
KENNEDY, Director since 1987.
JR.
Dr. Kennedy, 51, has been President and Chief Executive Officer of the
Company since December 31, 1987. Dr. Kennedy joined the Company in
1968, and was a Division Manager, Group Vice President and Vice
President of Planning Coordination and Shareowner Relations prior to
becoming President. He is a member of the Board of Directors of the
Joint Venture Silicon Valley Network; a member of the Executive Board
of the Stanford Area Council, Boy Scouts of America; a member of the
Norcal Council Executive Committee, American Electronics Association;
a member of the Executive Board of The Center for Quality
Management--West; and is a senior member of the Institute of
Electrical and Electronics Engineers.
PHOTO JOHN J. HARTMANN
OF
JOHN Financial Consultant.
J.
HARTMANN Director since 1966.
Mr. Hartmann, 76, is Chairman of the Audit Committee of the Board of
Directors of the Company. He was a member of the Board of Directors of
the Company from 1958 to 1961. From 1967 to 1970 he was a general
partner of J. Barth & Company, investment bankers, and prior to that
was Chief Financial and Planning Officer of Kern County Land Company.
Since 1970, Mr. Hartmann has had extensive experience as a director of
and consultant to developing companies involving widely-diverse fields
of activity. He has also been active as a board member and executive
in civic organizations, primarily in the areas of youth activities and
minority affairs.
PHOTO RAYMOND F. O'BRIEN
OF
RAYMOND Chairman of the Board, Consolidated Freightways, Inc., Palo Alto,
F. California.
O'BRIEN
Director since 1986.
Mr. O'Brien, 71, is Acting Chairman of the Compensation Committee of
the Board of Directors of the Company. He is a Director of Champion
Road Machinery, Ltd., and a Director of Transamerica Corporation. He
is a former Director of Union Bank and the Mont La Salle Vineyards. He
is also a former member of the Executive Committee of the American
Trucking Association, a former Trustee of the ATA Foundation and
former Chairman of the Western Highway Institute.
PHOTO WILLIAM R. GRAHAM
OF
WILLIAM Senior Vice President, The Defense Group, Inc., Falls Church,
R. Virginia.
GRAHAM
Director since 1989.
Dr. Graham, 56, is a member of the Audit and Compensation Committees
of the Board of Directors of the Company. He was formerly a Director
and President of C-COR Electronics, Inc., and has served as a business
and management consultant. He left government service in 1989 after
having been Science Advisor to the President and Director of the
Office of Science and Technology Policy; Chairman of the Federal
Coordinating Council on Science, Engineering and Technology; and
Chairman of the Joint Telecommunications Resources Board from 1986 to
1989. He is former Deputy Administrator of the National Aeronautics
and Space Administration, and former Chairman of the President's
General Advisory Committee on Arms Control and Disarmament. In 1971 he
was a founder of R&D Associates, a defense technology company, where
he served until 1985.
4
<PAGE>
PHOTO GARY M. CUSUMANO
OF
GARY President, The Newhall Land and Farming Company, Valencia, California.
M.
CUSUMANO Mr. Cusumano, 51, was elected to the Board of Directors on September
29, 1994 to fill one of the vacancies created when the Board increased
the number of directors to eleven. He is a Director of the Zero
Corporation, and is Chairman of the Henry Mayo Newhall Memorial
Hospital Board of Directors. He is a member of the California Chamber
of Commerce Board of Directors, and Chairman of the Chamber's Economic
and Job Development Committee; he is also a member of the Stanford
Sloan Alumni Advisory Board. He is a former Regent of the University
of California (1984-1986), a former Chairman of the University of
California Davis Foundation, and former President of the University of
California Davis Alumni Association.
PHOTO ROBERT L. PRESTEL
OF
ROBERT Business and Management Consultant.
L.
PRESTEL Mr. Prestel, 58, was elected to the Board of Directors on September
29, 1994 to fill the other vacancy created when the Board increased
the number of directors to eleven. He retired as Deputy Director of
the National Security Agency in February 1994 after serving the Agency
since 1962. During his career he was Director of Education and
Training from 1981 to 1983, and Deputy Director for Research and
Engineering from 1985 to 1990. He is the recipient of the President's
Distinguished Executive Award in 1988; the Department of Defense's
highest civilian award, the Distinguished Civilian Service Medal in
1988; and the National Intelligence Distinguished Service Medal in
1991. In 1994 he was named as a "Reinvention Hero" by President
Clinton for instilling quality management into the National Security
Agency and for being a quality mentor throughout government service.
He is a member of the Johns Hopkins University Engineering Advisory
Council and a member of the Board of Trustees for the Institute of
Defense Analysis; and formerly was a consultant for the Joint Advisory
Committee of the Massachusetts Institute of Technology Lincoln
Laboratories. He teaches mathematics part-time at the University of
Maryland.
FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors met eight times during 1994. Standing committees of
the Board include an Audit Committee, which met two times during 1994, and a
Compensation Committee, which also met two times during 1994. At its
Organization Meeting held in April 1994, the Board disbanded the standing
committee, composed of all outside directors, formed in 1986 to monitor the
Share Purchase Rights Plan and other matters related to shareowner protection.
Since all regulatory changes and other information relating to shareowner rights
and protection are regularly brought to the attention of the full Board, the
Board concluded that there was no need to also have a separate standing
committee for this purpose. There is no nominating committee.
During the past year, the Audit Committee consisted of Directors Hartmann,
Ricardo-Campbell, Eshleman and Graham. Among the Committee's functions are
making recommendations to the Board of Directors regarding the continued
engagement of independent auditors, reviewing with the independent auditors and
Company financial management the plans for and results of the audit engagement,
reviewing the adequacy of the Company's system of internal accounting controls,
and reviewing and approving audit and nonaudit fees.
5
<PAGE>
The Compensation Committee consisted of Directors Shepard, O'Brien and
Graham. The Committee's primary functions are to establish and administer the
policies that govern the Company's executive compensation programs and to
regularly evaluate these programs for their effectiveness in relation to the
Company's financial performance.
Except for Messrs. Cusumano and Prestel, who became directors in September
1994, no incumbent director attended fewer than 75% 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 committees of the Board on which he or she served during
1994.
DIRECTOR COMPENSATION
Except for the Company's founders, Drs. Dean A. Watkins and H. Richard
Johnson, directors who are not employees of the Company each receive an annual
fee of $21,600 and a fee of $300 for each Board or Committee meeting attended.
In April 1994, Drs. Watkins and Johnson retired as employees of the Company
and the Board approved execution of certain consulting agreements with them, as
founders; the agreements specify an annual fee payable to Dr. Watkins in the
amount of $265,000, and an annual fee of $125,000 payable to Dr. Johnson, in
addition to the regular director's fees.
Directors who are not employees, except for Drs. Watkins and Johnson, also
participate in the 1989 Stock Option Plan for Nonemployee Directors (the "1989
Director Plan"), which was approved at the Company's 1989 Annual Shareowners'
Meeting. The 1989 Director Plan, provides that each nonemployee director is
automatically granted options to purchase shares of the Company's common stock
on the last Monday in April of each fiscal year, in accordance with the
following schedule:
SCHEDULE OF OPTION GRANTS
1990--3700 Shares 1995--2520 Shares
1991--3430 Shares 1996--2330 Shares
1992--3180 Shares 1997--2160 Shares
1993--2940 Shares 1998--2000 Shares
1994--2720 Shares
The 1989 Director Plan also provides that new directors shall, upon
election by the shareowners, receive an automatic, one-time grant of options to
purchase the same number of shares of the Company's common stock as shall have
been granted to the other directors in the year immediately preceding the new
director's election.
Options under the 1989 Director Plan provide for the purchase of shares at
not less than the fair market value of the stock on the grant date, begin to
vest and become exercisable after two years from grant at a rate of 33-1/3% per
year, and remain exercisable for a period of ten years from the date of grant.
Vested options expire one year after the optionee's service as a director ends.
The aggregate number of shares which may be issued under the Plan is
200,000 shares of common stock; and as of December 31, 1994, there were 111,820
shares subject to outstanding options, and there were 80,180 shares available
for future grants. At December 31, 1994, Directors Eshleman, Graham, O'Brien and
Shepard held exercisable in-the-money options in the amount of 11,047 shares
each and Directors Ricardo-Campbell and Hartmann held exercisable in-the-money
options of 7,047 shares each. Directors Cusumano and Prestel will become
eligible to participate in the Plan after their election to the Board at the
shareowners meeting. The term "in-the-money" means that the grant price of the
options was less than the market price of the Company's stock on December 31,
1994, which was $29.75 per share.
6
<PAGE>
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION
The following tables set forth all annual and long-term compensation,
including stock option awards, paid or to be paid to the Company's chief
executive officer and the four other most highly compensated executive officers
during the fiscal years indicated.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
-------------------------------------------- ------------------------
RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
COMPENSATION AWARD(S) OPTIONS/ COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)(2) ($)(3) ($)(4) SARS (#)(4) SATION($)(5)
- --------------------------- ---- ---------- ---------- -------------- ------------ ------------ -----------
<S> <C> <C> <C> <C> <C> <C> <C>
W. KEITH KENNEDY ........... 1994 $440,000 $213,579 -0- -0- 100,000 $210,120
President & Chief 1993 440,000 104,248 -0- -0- 80,000 399,535
Executive Officer 1992 440,000 36,145 -0- -0- 80,000 136,733
DEAN A. WATKINS ............ 1994 285,750 2,872 -0- -0- -0- 4,415
Chairman of the Board 1993 290,000 4,056 -0- -0- -0- 5,200
1992 290,000 1,946 -0- -0- -0- 2,280
KEITH D. GILBERT(6) ........ 1994 267,800 50,021 -0- -0- 30,000 54,439
Executive Vice President 1993 266,400 22,822 -0- -0- 30,000 83,708
1992 261,000 18,275 -0- -0- 40,000 70,310
JAMES L. SCHRAM ............ 1994 215,220 142,648 -0- -0- 30,000 131,259
Executive Vice President 1993 192,600 50,458 -0- -0- 30,000 196,976
1992 175,000 17,676 -0- -0- 40,000 69,302
RICHARD G. BELL ............ 1994 188,300 41,535 -0- -0- 15,000 44,122
Vice President & 1993 181,400 21,054 -0- -0- 15,000 79,759
General Counsel 1992 178,300 5,488 -0- -0- 15,000 20,504
<FN>
- ----------
(1) Represents total base salary earned by the five named officers, including
amounts earned but deferred at the officer's election.
(2) Represents the vested portion of the Top Management Incentive Bonus Plan in
the year awarded, and the bonus from the Employees' Cash Profit Sharing
Bonus Plan, in which all employees of the Company participate based on a
fixed percentage of pretax profits allocated over the salary base. Dr.
Watkins does not participate in the Top Management Incentive Bonus Plan.
(3) The aggregate amount of perquisites and other personal benefits, securities
or property, given to each named officer valued on the basis of aggregate
incremental cost to the Company, was less than either $50,000 or 10% of the
total of annual salary and bonus for that officer during each of these
years.
(4) Represents incentive stock option awards; although the Company's 1991 Stock
Option and Incentive Plan permits grants of restricted stock and stock
appreciation rights, no such grants have been made.
(5) Represents Company contributions to the Employees' Profit Sharing Investment
Plan and to the Employee Stock Ownership Plan for all named officers; also
includes the unvested, deferred portion of the Top Management Incentive
Bonus Plan in the year awarded for all named officers. Amounts shown for
1994 consist of the following: Profit sharing contributions of $5,541 each
for Messrs. Kennedy, Gilbert, Schram and Bell and $4,415 for Dr. Watkins;
ESOP contributions of $1,500 each to Messrs. Kennedy, Gilbert, Schram and
Bell, respectively; and the unvested, deferred Top Management Incentive
Bonus Plan awards of $203,079, $47,398, $124,218, and $37,081 for Messrs.
Kennedy, Gilbert, Schram and Bell, respectively. These awards are granted in
the form of "bonus units." The bonus units are determined by dividing the
dollar value of the award by the December 31 book value per share, based on
the Company's consolidated balance sheet. For 1994, the bonus units so
determined vest at 50% each year on the anniversary date of award, and are
fully vested after two years. For 1992 and 1993, the deferred bonus units
vest at 25% each year on the award anniversary date, and become fully vested
after four years. The unvested bonus units are subject to a risk of
forfeiture if the executive leaves the Company prior to the vesting dates.
Vested bonus units are valued as of December 31 of the fourth year for the
1992 and 1993 awards, and as of December 31 of the second year for the 1994
awards, based on the increase or decrease in the Company's book value from
the date the bonus units are granted. Dr. Watkins does not participate in
the ESOP or the Top Management Incentive Bonus Plan.
(6) In January 1995, Mr. Gilbert resigned as executive vice president of the
Company. He will continue his employment as a consultant for approximately
one year. Upon termination of his employment, Mr. Gilbert will be entitled
to receive the remaining compensation due under his employment agreement, as
well as certain accrued bonus amounts.
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
1994 OPTION/SAR GRANTS TABLE
The following table sets forth incentive stock options granted to the named
officers during 1994 under the Company's 1991 Stock Option and Incentive Plan.
No stock appreciation rights (SARs) were granted in 1994.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------- POTENTIAL REALIZABLE VALUE
NUMBER OF % OF TOTAL AT ASSUMED ANNUAL RATES
SECURITIES OPTIONS/SARS OF STOCK PRICE APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(3)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ----------------------------
NAME GRANTED (#)(1) FISCAL YEAR ($/SH)(2) DATE 5%($) 10%($)
---- -------------- -------------- ------------- ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
W. Keith Kennedy ........100,000 17.8% $22.75 2/28/2004 $ 1,430,000 $ 3,625,000
Dean A. Watkins ......... -0-
Keith D. Gilbert ........ 30,000 5.3% 22.75 2/28/2004 429,000 1,088,000
James L. Schram ......... 30,000 5.3% 22.75 2/28/2004 429,000 1,088,000
Richard G. Bell ......... 15,000 2.7% 22.75 2/28/2004 215,000 544,000
All Optionees(4) ........561,000 100.0% 22.75 -- 8,028,000 20,336,000
All Shareholders(5) .... -- -- -- -- 103,258,000 261,756,000
All Optionees' Gain as a
percentage of All
Shareholders' Gain ..... 7.8% 7.8%
<FN>
- ----------
(1) Options granted in 1994 were incentive stock options up to the maximum
allowed for each officer under Internal Revenue Code 422. The remaining
awards were nonqualified stock options. Both incentive and nonqualified
options are exercisable after 2 years from the grant date at a rate of
33-1/3% per year, with full vesting occurring after the 4th anniversary
date; however, all options become immediately exercisable in the event of a
change in control of the Company. The options were granted for a term of 10
years, subject to earlier termination in certain events related to
termination of employment.
(2) Exercise or base price is the fair market value of the underlying shares on
the date of grant. Options may be exercised with cash or by delivery of
already-owned shares of Watkins-Johnson Company common stock.
(3) The 5% and 10% assumed annual rate of stock price appreciation would result
from per share prices of $37.06 and $59.00, respectively. Said assumed rates
are not intended to represent a forecast of possible future appreciation of
the Company's common stock or total shareholder return.
(4) For "All Optionees," the number of options granted is the total of all
options granted to Company employees in fiscal year 1994, and the potential
realizable value is based on the $22.75 per share price of the options
granted to the named executive officers on February 28, 1994 and a ten-year
option term (the term of all options granted in fiscal year 1994).
(5) For "All Shareholders," the potential realizable value is based on a
ten-year appreciation of the 7,220,861 shares outstanding on February 28,
1994 and on the $22.75 per share price of the options granted to the named
executive officers on that date.
</TABLE>
8
<PAGE>
1994 OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth stock options exercised by any of the named
executive officers during 1994, and the number and value of all unexercised
options at year end. The value of "in-the-money" options refers to options
having an exercise price which is less than the market price of Watkins-Johnson
stock on December 31, 1994.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS
AT FY-END(#) AT FY-END($)(2)
------------- ---------------
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
- ---------------- --------------- ------------ ------------- ---------------
W. Keith Kennedy..... 125,898 $1,593,997 34,300/ $ 78,750/
250,002 3,366,284
Dean A. Watkins...... 18,100 133,325 -0-/ -0-/
-0- -0-
Keith D. Gilbert..... 29,300 485,213 61,900/ 456,570/
97,900 1,313,643
James L. Schram...... 20,833 440,217 26,000/ 160,000/
89,667 1,304,048
Richard G. Bell...... 19,350 188,874 8,000/ 95,625/
42,700 694,013
- -----------
(1) Based on the market price of the underlying shares at exercise date less the
exercise price.
(2) Based on the market price of the Company's common stock at 12/31/94, which
was $29.75 per share, less the exercise price.
EXECUTIVE EMPLOYEE AGREEMENTS
The Company has executed five-year employment agreements with Messrs.
Kennedy, Gilbert and Schram which, in addition to providing for a base salary,
contain the following terms: The agreement may be terminated for cause, in which
case compensation ceases as of the date of notice. If the agreement is
terminated without cause, compensation for the remainder of the term plus six
months severance becomes immediately payable. The employee may not thereafter,
for a period of two years, engage in competition with the Company. In the event
of a change in control, as defined in the agreement, the employee may cancel the
agreement for breach, upon 30 days' written notice, and immediately collect the
compensation due for the remainder of the term. Although the term of the
agreement is five years, each agreement is renewed each year in order to reflect
the officer's current salary and, in effect, extend the agreement term for an
additional year. The agreements for Messrs. Kennedy, Gilbert and Schram were
renewed in 1994 for five years each after their respective base salaries were
determined using the financial performance criteria and factors set forth under
the compensation programs and policies described for the chief executive and
other officers in the Compensation Committee report.
The Company maintains three-year severance agreements with other executives
which provide that if after a change in control, the employee is terminated
other than for good cause, as defined in the agreement, or suffers a substantial
alteration in the terms of employment and terminates his or her own employment
because of such alteration, the Company is obligated to pay the terminated
employee 299.999% of the employee's yearly base salary compensation. The
employee also has the right to terminate employment after 90 days and within 120
days of the change in control and receive from the Company one-half of the
amount described above.
9
<PAGE>
REPORT OF THE BOARD OF DIRECTORS' COMPENSATION COMMITTEE
COMPENSATION PROGRAM AND POLICIES
The Compensation Committee is responsible for establishing and
administering the policies which govern base salaries, short- and long-term
incentive compensation and stock ownership programs for the Chief Executive
Officer and other executive officers. During the past year, the Committee was
composed of three outside directors, Jack L. Shepard, Chairman, Raymond F.
O'Brien and William R. Graham. After the death of Mr. Shepard in December 1994,
Mr. O'Brien was appointed Acting Chairman until the Board's annual organization
meeting, to be held immediately following the shareowners meeting, when the
Board will form its committees for the ensuing year.
Watkins-Johnson's compensation program is designed to attract and retain
employees at all levels who will contribute to the long-range success of the
Company. At the executive level, the program is broadened to reward key managers
for achieving both short- and long-term strategic Company goals, to link
executive and shareholder interests through stock-based plans, and to provide
compensation packages that recognize individual contributions as well as overall
business results. Therefore, a significant portion of each executive's total
compensation is intended to be variable and is contingent upon overall Company
results, success of the executive's business unit, and accomplishment of
individual performance goals.
Each year, the Committee conducts a careful review and evaluation of
Watkins-Johnson's corporate performance, its executive compensation, and its
incentive programs compared with two broad-based surveys of high-technology
companies, as well as a smaller selection of geographically related peer
companies of similar size and organizational structure. These surveys are used
to ensure that the Company's compensation practices are competitive in the
markets in which it operates, and that its employees are fairly paid. The first
two surveys present comparative information on all aspects of executive
compensation used by high-technology companies nationwide, while data from the
selection of peer companies presents compensation practices of companies that
are closely aligned to Watkins-Johnson in terms of size, revenues and product
lines. Analysis of all information combined enables the Company and the
Committee to make well-informed decisions.
The three principal components of the Company's executive compensation
program in 1994 were base salary, stock options, and a combined short- and
long-term incentive award. Following are discussions of the Committee's
philosophy and action in each area.
Base Salaries. Base salaries are designed primarily to attract and retain
individuals, and to be competitive in our marketplace. Based on the information
obtained from the salary surveys referenced above, base salary levels are deemed
competitive if they are between the 50th and 75th percentiles of the marketplace
for similar positions. The Company strives to pay its executives within this
range, with salaries falling at low, high or medium-range depending on the
following performance considerations. To arrive at base salary adjustments for
1994, the Committee considered the Company's financial performance in 1993,
including the executive's business unit performance against the annual profit
plan. Three factors--achieving planned profit, obtaining additional profitable
orders, and developing new business for the long term--were considered. These
factors were not assigned specific weights, but profit was considered most
important, with orders secondary. Other factors considered in arriving at base
salary adjustments related to the executive's individual performance and
included overall managerial effectiveness, success in promoting teamwork and an
ability to recognize and act upon the changing requirements of the workplace.
Adjustments to executive base salaries in 1994 were also based on a qualitative
analysis of each position's current responsibilities and expected contribution
to the Company's continuing advance into new areas of business.
Stock Options. Under the 1991 Stock Option and Incentive Plan, stock
options may be granted to executive officers and other key employees of the
Company. The purpose of the awards is to align the executives' interests with
those of shareowners. The size of stock option grants is measured by the same
financial and individual performance criteria used to determine base salaries,
and by the individual's position and responsibilities in the Company. In
addition, some consideration is given to the amount and term of options already
held. All stock options awarded to date under this plan have been granted with
10
<PAGE>
an exercise price equal to the fair market value of the Company's stock on the
date of grant, with current grants beginning to vest after two years and
becoming fully vested after four years. This is designed to encourage the
creation of shareholder value over the long term, since no benefit is realized
from the option grant unless the price of the Company's stock rises over a
period of years.
The Company does not have a policy that requires the Committee to qualify
stock options awarded to executive officers for deductibility under Section
162(m) of the Internal Revenue Code of 1986, as amended. However, consideration
of the net cost to the Company is always a factor in making compensation
decisions.
Short- and Long-term Incentive Awards. The Top Management Incentive Bonus
Plan is designed to reward executives based on achievement of certain
predetermined goals, which include overall corporate results, business unit
performance, and certain qualitative factors such as organizational and
management development. These goals are formula-based, and weighted so that 80%
of the award is made on performance against financial objectives of
profitability and new business, and 20% is based on qualitative goals relating
to strategic planning, development of staff, and positioning of the business
unit for future growth. The performance criteria were individually tailored to
each executive and his or her area of responsibility, and the awards could range
from zero to a multiple of an executive's base salary, based on progressively
difficult levels of achievement. In order to encourage attainment of the
Company's long-term goals for continued growth and profitability, the award is
paid in two increments. In 1994, as a result of continued analysis of similar
programs provided by our peer companies, the incremental percentages were
changed from 20% to 50% for the first portion, and from 80% to 50% for the
second. The first part, or 50% of the award, is paid in cash during the first
quarter of the year after it is earned. The second increment, the remaining 50%
of the award, is deferred in the form of bonus units, which are valued based on
the Company's net book value at year end. The bonus units now vest over a
two-year period at 50% annually as of each December 31 following the award date.
If the executive leaves the Company during this period, any unvested amounts are
forfeited. At the end of the second year the bonus units are valued at the
Company's then book value per share and are paid out in February of the third
year. Thus, executives' interests are aligned with shareowners by allowing the
bonus units to appreciate or depreciate with the Company's book value. Both the
50% vested portion of the award and the 50% deferred amount earned in 1994 by
the five named officers are shown under the Summary Compensation Table on page
7.
Short- and Long-term Profit Sharing Plans. In order to encourage employees'
interest and alignment with the Company's business objectives and performance
goals, the Company has established two profit-sharing plans under which it
shares a portion of its profits with all eligible employees, including executive
officers. The Employees' Cash Profit Sharing Bonus Plan distributes 6% of annual
pretax profits to all employees who have been employed for more than 90 days
during the prior fiscal year. Before 1994, the pretax profit amount was
calculated on consolidated, companywide profits allocated by fixed percentage
over all employees' base pay. In order to more fairly compensate employees
individually, the 6% profit amount for 1994 and beyond is based on each business
unit's annual pretax profit, thereby giving employees a better understanding of
and reward for the achievements made within their own work areas. The Employees'
Profit Sharing and Investment Plan contributes 9% of annual companywide pretax
profits to the trust accounts of employees, who are eligible to participate
after 90 days of service. Under the Profit Sharing and Investment Plan, an
ERISA-based plan, participants' accounts become fully vested after seven years,
and all vested amounts are distributed upon retirement, or earlier termination
from the Company. Annual contributions under both plans are distributed by
applying the designated percentage to each participant's eligible base salary.
There are no specific performance criteria relating to these plans.
Top Management Deferred Compensation Plan. In 1994, the Board approved
implementation of a non-qualified deferred compensation plan for the Company's
executives. Under the plan, participants may elect to defer up to 15% of their
base salary which will earn the prime rate in effect at the beginning of each
quarter. The election to defer must be made prior to the year during which the
compensation is earned and cannot be revoked once the elected year begins. Funds
so deferred will be distributed in a lump sum only upon the earlier of
retirement, termination, death, disability, hardship, or change in executive
status.
11
<PAGE>
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The same policies and programs described above were followed by the
Committee in determining the 1994 compensation for Dr. Kennedy. As with the
other executive officers, base salary is set, stock option awards are
considered, and performance criteria are developed for the incentive bonus plan
in February each year, based on the Company's financial performance and the
CEO's individual contributions in the previous year.
The criteria for considering Dr. Kennedy's base salary included the
Company's overall performance in 1993 and its continued profitability due to
constant monitoring of costs and elimination of nonvalue- added activities.
Company performance factors included the percentage of profitability achieved
against the annual profit plan, new orders booked, and the successful execution
of the corporate strategic plan to prepare the Company for future growth and
profitability. There were no specific weights assigned to these factors, but
profitability was considered to be of primary importance. He has continued his
strong leadership of the Company during this difficult period and set an example
for his staff and all Company employees. Nevertheless, after careful study of
chief executive officer salaries from the survey information described under
Compensation Programs and Policies, it was determined that Dr. Kennedy's base
salary remained at the high end of the range of compared companies, and
therefore, the Committee decided there should be no increase in Dr. Kennedy's
base salary for 1994.
Apart from salary, the Committee granted Dr. Kennedy a stock option for
100,000 shares at $22.75, the market value of the Company's common stock on the
date of grant. The specific factors considered in determining the size of the
award for Dr. Kennedy were the same financial and individual performance
criteria used when considering his base salary, and the responsibility of his
position as chief executive officer. It was also noted that the size was
reasonable compared to awards made to chief executive officers in the surveys
described above, falling at mid-range in the surveys.
The criteria established for Dr. Kennedy's incentive bonus award are the
same as those set for other executive officers. The award is based on
achievement of predetermined goals, with 80% based on financial objectives and
20% on certain qualitative goals. The Committee met at the beginning of 1994 to
approve the formula-based goals for Dr. Kennedy and other executive officers,
and to establish his qualitative goals for the year. As chief executive officer,
his financial measurements related to overall profitability and growth
objectives for the whole Company, rather than individual business units, and his
qualitative goals were based on development and execution of current and
long-term strategies, development of management, and strengthening the total
organization. The Committee then met after year end to review the Company's
financial results, and to evaluate his performance against his qualitative
objectives. As with the other executive officers, the extent to which the
formula factors are met, based on progressively difficult levels of achievement
relating to financial returns and individual goals, determines the size of the
award. Dr. Kennedy's corporate financial performance goals for 1994, together
with achievement of his qualitative goals, were met at a level that resulted in
an award to Dr. Kennedy under the incentive bonus plan equal to 92% of his base
salary. However, 50% of the award, the long-term portion, is subject to change
based on future appreciation or depreciation of the Company's book value.
During 1994, the Company under Dr. Kennedy's management has continued to
successfully implement its strategies, and increased its development of new
markets. These efforts have again led to a significant increase in shareowner
value, with an increase in the stock price in 1994 of 50%, following the
increase of 40% at the end of 1993.
The Compensation Committee
Raymond F. O'Brien, Acting Chairman
William R. Graham
12
<PAGE>
WATKINS-JOHNSON STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return
(change in stock price plus reinvestment of dividends) of $100 invested on
December 31, 1989 in the Company's common stock, the Standard & Poor's 500
Composite Index, and the Dow Jones Diversified Technology Index for a period of
five years. The Standard & Poors Composite Index was chosen as our broad equity
market index because of its wide distribution and recognition by shareholders.
The Dow Jones Diversified Technology Index was selected as having a
representative industry peer group of companies. The Dow Jones index includes 12
companies with at least 2 high-technology business segments.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
Cumulative Total Return
` ---------------------------------------------
1990 1991 1992 1993 1994
Watkins Johnson Co 69 56 77 109 165
S & P 500 97 126 136 150 152
D J DIVERSIFIED TECHNOLOGY 107 127 140 164 169
13
<PAGE>
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
(ITEM 2 ON PROXY CARD)
The Board of Directors has appointed the firm of Deloitte & Touche as
independent accountants of the Company for the current fiscal year, subject to
the approval of shareowners. The Board of Directors expects that a
representative of Deloitte & Touche will be present at the annual meeting of
shareowners, will be given an opportunity to make a statement at the meeting if
desired, and will be available to respond to appropriate questions.
The vote required for approval of such appointment is a majority of the
shares present in person or by proxy at the meeting.
The Board recommends that shareowners vote "FOR" the appointment.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
intend to bring any other business before the meeting and, so far as is known to
the Board of Directors, no matters are to be brought before the annual meeting
except as specified in the notice of the annual meeting. However, as to any
other business that may properly come before the annual meeting, it is intended
that proxies, in the form enclosed, will be voted in respect thereof, in
accordance with the judgment of the persons voting such proxies.
SHAREOWNER PROPOSALS--1996 ANNUAL MEETING
Shareowners are entitled to present proposals for action at a forthcoming
shareowners' meeting if they comply with the requirements of the proxy rules.
Any proposals intended to be presented at the 1996 Annual Meeting of Shareowners
of the Company must be received at the Company's offices on or before October
31, 1995, in order to be considered for inclusion in the Company's proxy
statement and form of proxy relating to such meeting.
Carol H. Roosen, Secretary
March 6, 1995
Palo Alto, California
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER
OR NOT YOU PLAN TO ATTEND THE ANNUAL MEETING, YOU ARE REQUESTED TO SIGN AND
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
14
<PAGE>
APPENDIX A
FORM OF PROXY FOR SHAREHOLDERS
WATKINS-JOHNSON COMPANY
ANNUAL MEETING OF SHAREOWNERS--APRIL 8, 1995
THIS PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Dr. Dean A. Watkins, Mr. John J.
Hartmann, and Dr. William R. Graham as proxies of the undersigned, each
with full power of substitution, to attend the Annual Meeting of
P Shareowners of Watkins-Johnson Company to be held at the main office of
the Company, 3333 Hillview Avenue, Palo Alto, California 94304, at 10:00
R o'clock in the morning on Saturday, April 8, 1995, and at any adjournment
or postponement thereof, and to vote the number of shares the undersigned
O would be entitled to vote if personally present on any of the following
matters and with discretionary authority as to any and all other matters
X that may properly come before the meeting.
Y THIS PROXY WILL BE VOTED AS SPECIFIED, OR IF NO CHOICE IS
SPECIFIED, WILL BE VOTED FOR THE NOMINEES FOR ELECTION AND FOR
PROPOSAL NO. 2
- ---------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK |
COMMENTS/ADDRESS BOX ON REVERSE SIDE | (Continued and to be signed
| on other side)
|
<PAGE>
/X/ Please mark
your votes
--------------- as this
COMMON
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW AND
FOR PROPOSALS 2 AND 3.
WITHHELD
FOR FOR ALL FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS: / / / / 2. To approve the / / / / / /
All nominees listed appointment of
below (except as Deloitte & Touche
indicated to the as independent
contrary below). accountants of the
Company for the fiscal year 1995.
Dean A. Watkins, H. Richard Johnson,
W. Keith Kennedy, John J. Hartmann,
Raymond F. O'Brien, William R. Graham 3. In their discretion, to vote upon any
Gary M. Cusumano, Robert L. Prestel and all such other matters as may
properly come before the meeting or
To withhold authority to vote for any postponement thereof.
individual nominee, write that
nominee's name in the space provided
below.
I PLAN TO ATTEND MEETING / /
COMMENTS/ADDRESS CHANGE / /
Please mark this box if you have
written comments/address change
on the reverse side.
Please sign exactly as name appears.
When shares are held by joint tenants,
both should sign. When signing as an
attorney, as executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by president
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
SIGNATURE(S)______________________________________________ DATE________________
SHAREOWNERS ARE URGED TO MARK,DATE, SIGN AND RETURN THIS PROXY IN THE
ENVELOPE IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES.
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO THE COMPANY
PLEASE SIGN AND RETURN YOUR PROXY
BY TEARING OFF THE TOP PORTION OF THE SHEET
AND RETURNING IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
<PAGE>
APPENDIX B
FORM OF PROXY FOR TRUSTEE
DIRECTION TO TRUSTEE
WATKINS-JOHNSON COMPANY EMPLOYEE STOCK OWNERSHIP PLAN
WATKINS-JOHNSON EMPLOYEES' PROFIT SHARING INVESTMENT PLAN
I hereby direct you as Trustee of the Watkins-Johnson Employee
Stock Ownership Plan and the Watkins-Johnson Employees' Profit Sharing
Investment Plan to vote the shares of Watkins-Johnson Company common
stock credited to my account under the aforementioned plans at the Annual
Meeting of Shareowners of Watkins-Johnson Company, to be held at the main
office of the Company, 3333 Hillview Avenue, Palo Alto, California 94304,
P at 10:00 o'clock in the morning on Saturday, April 8, 1995, and at any
adjournment or postponement thereof.
R
I have filled in the appropriate boxes on the other side of this
O card, and I authorize you to vote as indicated. Pursuant to the plans, in
the absence of any instructions from me as to any item, shares credited
X to my account shall be voted by you, as Trustee, in the same proportion
as shares are voted for which instructions are received.
Y
- ---------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK |
COMMENTS/ADDRESS BOX ON REVERSE SIDE | (Continued and to be signed
| on other side)
|
<PAGE>
/X/ Please mark
your votes
--------------- as this
COMMON
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW AND
FOR PROPOSALS 2 AND 3.
WITHHELD
FOR FOR ALL FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS: / / / / 2. To approve the / / / / / /
All nominees listed appointment of
below (except as Deloitte & Touche
indicated to the as independent
contrary below). accountants of the
Company for the fiscal year 1995.
Dean A. Watkins, H. Richard Johnson,
W. Keith Kennedy, John J. Hartmann,
Raymond F. O'Brien, William R. Graham 3. In their discretion, to vote upon any
Gary M. Cusumano, Robert L. Prestel and all such other matters as may
properly come before the meeting or
To withhold authority to vote for any postponement thereof.
individual nominee, write that
nominee's name in the space provided
below.
I PLAN TO ATTEND MEETING / /
COMMENTS/ADDRESS CHANGE / /
Please mark this box if you have
written comments/address change
on the reverse side.
Please sign exactly as name appears.
When shares are held by joint tenants,
both should sign. When signing as an
attorney, as executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by president
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person.
SIGNATURE(S)______________________________________________ DATE________________
SHAREOWNERS ARE URGED TO MARK,DATE, SIGN AND RETURN THIS PROXY IN THE
ENVELOPE IN THE ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES.
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT TO THE COMPANY
PLEASE SIGN AND RETURN YOUR PROXY
BY TEARING OFF THE TOP PORTION OF THE SHEET
AND RETURNING IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
