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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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Rule 14a-6(e)(2))
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[ x ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
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Teledyne Technologies Incorporated
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[ x ] No fee required.
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TELEDYNE TECHNOLOGIES LOGO
Teledyne Technologies Incorporated
2049 Century Park East, Suite 1500
Los Angeles, CA 90067-3101
April 5, 2000
Dear Stockholder:
We are pleased to invite you to attend the 2000 Annual Meeting of
Stockholders of Teledyne Technologies Incorporated. The meeting will be held on
June 1, 2000, at the Century Plaza Hotel, 2025 Avenue of the Stars, Los Angeles,
California 90067.
This booklet includes the notice of meeting as well as the Company's Proxy
Statement.
Enclosed with this booklet are the following:
- Proxy or voting instruction card (including instructions for telephone
and Internet voting).
- Proxy or voting instruction card return envelope (postage paid if mailed
in the U.S.).
If you are a stockholder of record, you will also receive an admission
ticket request card.
A copy of the Company's Annual Report for 1999 has been mailed separately
to you.
Please read the Proxy Statement and vote your shares as soon as possible.
We encourage you to take advantage of voting by telephone or Internet as
explained on the enclosed proxy or voting instruction card. Or, you may vote by
completing, signing and returning your proxy or voting instruction card in the
enclosed postage-paid envelope. It is important that you vote, whether you own a
few or many shares and whether or not you plan to attend the meeting.
If you are a stockholder of record and plan to attend the meeting, please
return the enclosed postage-paid admission ticket request card so that we can
send your admission ticket to you before the meeting.
Thank you for your investment in our Company. We look forward to seeing you
at the 2000 Annual Meeting.
Sincerely,
/s/ Robert Mehrabian
Robert Mehrabian
President and Chief Executive Officer
/s/ Thomas A. Corcoran
Thomas A. Corcoran
Chairman of the Board
<PAGE> 3
TELEDYNE TECHNOLOGIES LOGO
TELEDYNE TECHNOLOGIES INCORPORATED
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MEETING DATE: June 1, 2000
TIME: 9:00 a.m. (Pacific Daylight Time)
PLACE: The Century Plaza Hotel
Pacific Palisades Room
2025 Avenue of the Stars
Los Angeles, California 90067-4696
RECORD DATE: April 3, 2000
AGENDA
1) Election of a class of three directors for a three-year term;
2) Approval of the Teledyne Technologies Incorporated 1999 Incentive Plan,
as amended;
3) Ratification of the appointment of Ernst & Young LLP as the Company's
independent auditors for 2000; and
4) Transaction of any other business properly brought before the meeting.
STOCKHOLDER LIST
A list of stockholders entitled to vote will be available during business
hours for 10 days prior to the meeting at the Company's executive offices, 2049
Century Park East, Suite 1500, Los Angeles, California 90067, for examination by
any stockholder for any legally valid purpose.
ADMISSION TO THE MEETING
Teledyne Technology stockholders or their authorized representatives by
proxy may attend the meeting. If you are a stockholder of record and you plan to
attend the meeting, please complete and promptly return the enclosed
postage-paid ticket request card so that an admission ticket can be mailed to
you. If your shares are held through an intermediary, such as a broker or a
bank, you should present proof of your ownership at the meeting. Proof of
ownership could include a proxy from your bank or broker or a copy of your
account statement.
By Order of the Board of Directors,
/s/ John T. Kuelbs
John T. Kuelbs
Senior Vice President, General Counsel
and Secretary
April 5, 2000
<PAGE> 4
PROXY STATEMENT
TABLE OF CONTENTS
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<TABLE>
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PAGE
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Voting Procedures........................................... 2
Board Composition and Practices............................. 3
Item A on Proxy Card -- Election of Directors............... 4
Committees of our Board of Directors........................ 7
Director Compensation....................................... 9
Item B on Proxy Card -- Approval of 1999 Incentive Plan..... 10
Item C on Proxy Card -- Ratification of Independent
Auditors.................................................. 19
Other Business.............................................. 19
Stock Ownership Information................................. 20
Section 16(a) Beneficial Ownership Reporting Compliance... 20
Five Percent Owners of Common Stock....................... 20
Stock Ownership of Management............................. 21
1999 Report on Executive Compensation....................... 22
Executive Compensation...................................... 27
Summary Compensation Table................................ 27
Option Grants in Last Fiscal Year......................... 29
ATI Performance Share Program Awards...................... 30
Pension Plan.............................................. 31
Employment/Change in Control Agreements................... 32
Certain Transactions........................................ 33
Cumulative Total Stockholder Return......................... 34
Other Information........................................... 35
Annual Report on Form 10-K................................ 35
2001 Annual Meeting and Stockholder Proposals............. 35
Proxy Solicitation........................................ 35
Annex A - 1999 Incentive Plan
</TABLE>
YOUR VOTE IS IMPORTANT
Please vote as soon as possible. You can help Teledyne Technologies reduce
expenses by voting your shares by telephone or Internet; your proxy card
contains the instructions. Or, complete, sign and date your proxy card and
return it as soon as possible in the enclosed postage-paid envelope.
DEFINED TERMS
In this Proxy Statement, Teledyne Technologies Incorporated is sometimes
referred to as the "Company", "Teledyne Technologies" or "TDY". References to
"ATI" mean Allegheny Technologies Incorporated, formerly known as Allegheny
Teledyne Incorporated, the company from which we were spun off on November 29,
1999.
<PAGE> 5
PROXY STATEMENT
FOR 2000 ANNUAL MEETING OF STOCKHOLDERS
VOTING PROCEDURES
WHO MAY VOTE
If you were a stockholder on the books of the Company at the close of
business on April 3, 2000 you may vote at the Annual Meeting. On that day, there
were 26,760,927 shares of our Common Stock outstanding.
Each share is entitled to one vote. In order to vote, you must either
designate a proxy to vote on your behalf or attend the meeting and vote your
shares in person. The Board of Directors requests your proxy so that your shares
will count toward a quorum and be voted at the meeting.
METHODS OF VOTING
All stockholders may transmit their proxy votes by mail. Stockholders of
record can also vote by telephone or Internet. Stockholders who hold their
shares through a bank or broker can vote by telephone or Internet if their bank
or broker offers those options.
- By Mail. Stockholders may complete, sign, date and return their proxy
cards in the postage-paid envelope provided. If you sign, date and return
your proxy card without indicating how you want to vote, your proxy will
be voted as recommended by the Board of Directors.
- By Telephone or Internet. Stockholders of record may vote by using the
toll-free number or Internet website address listed on the proxy card.
Participants who hold stock in Company employee benefit plans also may
vote by telephone or the Internet. Your proxy card contains a Control
Number that will identify you as a stockholder when you vote by telephone
or Internet. You may use the telephone and Internet procedures to vote
your shares and to confirm that your votes were properly recorded. Please
see your proxy card for specific instructions.
REVOKING YOUR PROXY
You may change your mind and revoke your proxy at any time before it is
voted at the meeting by:
- sending a written notice to revoke your proxy to the Secretary of the
Company;
- transmitting a proxy at a later date than your prior proxy either by
mail, telephone or Internet;
- attending the Annual Meeting and voting in person or by proxy (except for
shares held in the employee plans described below).
VOTING BY EMPLOYEE BENEFIT PLAN PARTICIPANTS
Participants who hold Common Stock in the Company's defined contribution
savings plan may tell the plan trustee how to vote the shares of Common Stock
allocated to their accounts. You may either sign and return the voting
instruction card provided by the plan or transmit your instructions by telephone
or Internet. If you do not transmit instructions, your shares will be voted as
the plan administrator directs or as otherwise provided in the plan.
VOTING SHARES HELD BY BROKERS, BANKS AND OTHER NOMINEES
If you hold your shares in a broker, bank or other nominee account, you are
a "beneficial owner" of TDY Common Stock. In order to vote your shares, you must
give voting instructions to your bank, broker or other intermediary who is the
"nominee holder" of your shares. The Company asks brokers, banks and other
nominee holders to obtain voting instructions from the beneficial owners of
shares that are registered in the nominee's name. Proxies that are transmitted
by nominee holders on behalf of beneficial owners will count toward a quorum
and, except
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as otherwise provided below, will be voted as instructed by the nominee holder.
CONFIDENTIAL VOTING POLICY
The Company maintains a policy of keeping stockholder votes confidential.
BOARD COMPOSITION AND PRACTICES
INFORMATION AND MEETINGS
The Board of Directors directs the management of the business and affairs
of the Company as provided in the Amended and Restated By-laws of the Company
and by the laws of the State of Delaware. The Board is not involved in
day-to-day operations. Members of the Board keep informed about the Company's
business through discussions with the senior management and other officers and
managers of the Company and its subsidiaries, by reviewing analyses and reports
sent to them, and by participating in Board and committee meetings.
Since we were spun off from Allegheny Technologies Incorporated (formerly
known as Allegheny Teledyne Incorporated) and became a public company on
November 29, 1999, there has been one regular meeting of the Board in 1999.
Special meetings are scheduled when required; none were held since November 29,
1999, although our Board acted by unanimous written consent in lieu of holding a
meeting on one occasion.
In 1999, attendance at Board and committee meetings was unanimous.
NUMBER OF DIRECTORS
The Board of Directors determines the number of directors. The Board
currently consists of eight members.
DIRECTOR TERMS
The directors are divided into three classes and the directors in each
class serve for a three-year term. The term of one class of directors expires
each year at the Annual Meeting of Stockholders. The Board may fill a vacancy by
electing a new director to the same class as the director being replaced. The
Board may also create a new director position in any class and elect a director
to hold the newly created position until the term of the class expires.
SPIN-OFF REQUIREMENTS
In connection with our spin-off from ATI, we agreed (and our Amended and
Restated Bylaws provide) that until our Annual Meeting of Stockholders in 2002,
at least a majority of our Board of Directors must also be directors of ATI.
The Separation and Distribution Agreement that we entered into with ATI in
connection with the spin-off also provides that we will nominate Thomas A.
Corcoran, Diane C. Creel and C. Fred Fetterolf (or, if any such director is
unable or unwilling to serve, such other candidates as Robert P. Bozzone, Frank
V. Cahouet and Charles J. Queenan, Jr. or the survivor of them may designate)
for reelection as a Class I director at this Annual Meeting.
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ITEM A ON PROXY CARD -- ELECTION OF DIRECTORS
The Board of Directors has nominated for election this year the class of
three incumbent directors whose terms expire at the 2000 Annual Meeting. This
nomination is in accordance with the Separation and Distribution Agreement that
we entered into with ATI in connection with the spin-off.
The three-year term of the class of directors nominated this year will
expire at the 2003 Annual Meeting. The three individuals who receive the highest
number of votes cast will be elected. Broker non-votes are not counted as votes
cast.
If you sign and return your proxy card, the individuals named as proxies in
the card will vote your shares for the election of the three named nominees,
unless you provide other instructions. You may withhold authority for the
proxies to vote your shares on any or all of the nominees by following the
instructions on your proxy card. If a nominee becomes unable to serve, the
proxies will vote for a Board-designated substitute or the Board may reduce the
number of directors. The Board of Directors has no reason to believe that any
nominee will be unable to serve.
Background information about the nominees and continuing directors follows.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE THREE NOMINEES.
NOMINEES -- TERMS EXPIRE AT THE 2003 ANNUAL MEETING (CLASS I)
<TABLE>
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Thomas A. Corcoran Thomas A. Corcoran has been the Chairman of the
President and Chief Executive Board of the Company since the spin-off. He has
Officer of Allegheny Technologies been the President and Chief Executive Officer of
Incorporated ATI since October 1999. He served as the
Director since 1999 President and Chief Operating Officer of the
Age: 55 Electronics Sector of Lockheed Martin Corporation
from March 1995 through October 1998 and he was
President and Chief Operating Officer of the
Lockheed Martin Space Sector from October 1998
through September 1999. Previously, he was
President of Martin Marietta Corporation's Elec-
tronics Group beginning in 1993, and prior to
that, he was a Vice President of General
Electric. Mr. Corcoran is also a director of ATI,
L-3 Communications Holdings, Inc., Lincoln
Electric Holdings, Inc. and REMEC, Inc. Mr.
Corcoran is a member of our Governance Committee.
Diane C. Creel Diane C. Creel is Chief Executive Officer and
President and President of Earth Tech, an international
Chief Executive Officer of Earth Tech consulting engineering firm. Ms. Creel is also a
Director since 1999 director of ATI and The B.F. Goodrich Company and
Age: 51 a member of the Boards of the Corporations and
Trusts that comprise the Fixed Income funds of
the American Funds Group. Ms. Creel is a member
of our Personnel and Compensation Committee and
Chair of its Stock Incentive Award Subcommittee.
</TABLE>
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C. Fred Fetterolf C. Fred Fetterolf was President and Chief
Retired President and Operating Officer of Alcoa, Inc. prior to his
Chief Operating Officer of Alcoa, Inc. retirement in 1991. He is also a director of ATI,
Director since 1999 Commonwealth Industries, Dentsply International
Age: 71 Inc., Union Carbide Corporation and Praxair, Inc.
Mr. Fetterolf is a member of our Personnel and
Compensation Committee and its Stock Incentive
Award Subcommittee. He is Chair of our Governance
Committee.
</TABLE>
CONTINUING DIRECTORS -- TERMS EXPIRE AT 2001 ANNUAL MEETING (CLASS II)
<TABLE>
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Paul S. Brentlinger Paul S. Brentlinger is a Partner of Morgenthaler
Partner, Ventures, a venture capital group located in
Morganthaler Ventures Cleveland, Ohio and Menlo Park, California. He
Director since 1999 led Morganthaler's investment in such companies
Age: 72 such as Microchip Technology, Inc. and Dispatch
Communications (now part of Nextel
Communications, Inc.). Prior to joining Morgan-
thaler, he was Senior Vice President -- Finance
of Harris Corporation, a manufacturer of
communications equipment. Mr. Brentlinger is also
a director of ATI. Mr. Brentlinger is a member of
our Audit Committee.
Robert Mehrabian Robert Mehrabian has been the President and Chief
President and Executive Officer of TDY since its formation.
Chief Executive Officer of the Company Prior to the spin-off, Dr. Mehrabian was the
Director since 1999 President and Chief Executive Officer of ATI's
Age: 58 Aerospace and Electronics segment since July 1999
and had served ATI in various senior executive
capacities since July 1997. Before joining ATI,
Dr. Mehrabian served as President of Carnegie
Mellon University. He is also a director of
Mellon Financial Corporation and PPG Industries,
Inc.
</TABLE>
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CONTINUING DIRECTORS -- TERMS EXPIRE AT 2002 ANNUAL MEETING (CLASS III)
<TABLE>
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Robert P. Bozzone Robert P. Bozzone has been Vice Chairman of the
Vice Chairman of the Board of Board of ATI since August 1996. He had served as
Allegheny Technologies Incorporated Vice Chairman of Allegheny Ludlum Corporation, a
Director since 1999 subsidiary of ATI, since August 1994 and
Age: 66 previously was President and Chief Executive
Officer of Allegheny Ludlum. He is also a
director of ATI, Water Pik Technologies, Inc. and
DQE, Inc., whose principal subsidiary is Duquesne
Light Company. Mr. Bozzone is a member of our
Audit Committee.
Frank V. Cahouet Frank V. Cahouet served as the Chairman,
Retired Chairman and Chief Executive President and Chief Executive Officer of Mellon
Officer of Mellon Financial Corporation Financial Corporation, a bank holding company,
Director since 1999 and Mellon Bank, N.A., prior to his retirement on
Age: 67 December 31, 1998. He is also a director of Avery
Dennison Corporation, Mellon Financial
Corporation and Saint-Gobain Corporation. Mr.
Cahouet is Chair of our Audit Committee and a
member of our Governance Committee.
Charles J. Queenan, Jr. Charles J. Queenan, Jr. is Senior Counsel to
Senior Counsel, Kirkpatrick & Lockhart LLP, attorneys-at-law.
Kirkpatrick & Lockhart LLP Prior to January 1996, he was a partner of that
Director since 1999 firm. He is also a director of ATI, Water Pik
Age: 69 Technologies, Inc. and Crane Co. Mr. Queenan is
Chair of our Personnel and Compensation
Committee.
</TABLE>
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COMMITTEES OF OUR BOARD OF DIRECTORS
Our Board of Directors has established an Audit Committee, a Governance
Committee, a Personnel and Compensation Committee and a Stock Incentive Award
Subcommittee. From time to time, our Board of Directors may establish other
committees.
AUDIT COMMITTEE
The members of the Audit Committee are:
Frank V. Cahouet, Chair
Robert P. Bozzone
Paul S. Brentlinger
The Audit Committee did not meet in 1999.
The primary responsibility of the Audit Committee is to assist the Board in
monitoring the integrity of our financial statements and the independence of our
external auditors. In carrying out its responsibility, the Audit Committee
undertakes to do many things, including:
- - Making recommendations to the Board of Directors regarding the appointment of
the independent auditor to audit the books, records and accounts of the
Company.
- - Evaluating the performance of the independent auditor.
- - Receiving written periodic reports from the independent auditor delineating
all relationships between the independent auditor and the Company.
- - Reviewing with the independent auditor any problems or difficulties the
auditor may have encountered and any management letter provided by the auditor
and the Company's response to that letter.
- - Reviewing the Company's annual audited financial statements and the report
thereon with the independent auditor and management prior to publication of
such statements.
- - Reviewing with management and the independent auditor the Company's quarterly
financial statements prior to the release of quarterly earnings.
- - Reviewing major changes to the Company's auditing and accounting principles
and practices as suggested by the independent auditor, internal auditors or
management.
- - Meeting periodically with management to review the Company's financial risk
exposures and the steps management has taken to monitor and control such
exposures.
- - Reviewing with the Company's General Counsel legal matters that may have a
material impact on the financial statements, the Company's compliance policies
and any material reports or inquiries received from regulators or governmental
agencies.
The Audit Committee meets the size, independence and experience requirements of
the New York Stock Exchange.
GOVERNANCE COMMITTEE
The members of the Governance Committee are:
C. Fred Fetterolf, Chair
Frank V. Cahouet
Thomas A. Corcoran
Diane C. Creel
The Governance Committee did not meet in 1999.
The Governance Committee undertakes to:
- - Make recommendations to the Board of Directors with respect to candidates for
nomination as new Board members and with respect to incumbent directors for
nomination as continuing board members.
- - Make recommendations to the Board of Directors concerning the memberships of
committees of the Board and the Chairpersons of the respective committees.
- - Make recommendations to the Board of Directors with respect to the
remuneration paid and
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benefits provided to members of the Board in connection with their service on
the Board and its committees.
- - Administer our formal compensation programs for directors, including the
Teledyne Technologies Incorporated 1999 Non-Employee Director Stock
Compensation Plan.
- - Make recommendations to the Board of Directors concerning the composition,
organization and operations of the Board of Directors, including the
orientation of new members and the flow of information.
- - Evaluate Board tenure policies as well as policies covering the retirement or
resignation of incumbent directors.
PERSONNEL AND COMPENSATION COMMITTEE
The members of the Personnel and Compensation Committee are:
Charles J. Queenan, Jr., Chair
Diane C. Creel
C. Fred Fetterolf
The Personnel and Compensation Committee held one meeting in 1999.
The Personnel and Compensation Committee's principal responsibilities
include:
- - Making recommendations to the Board of Directors concerning general executive
management organizational matters.
- - Making recommendations to the Board of Directors concerning compensation and
benefits for employees who are also our directors, consult with our Chief
Executive Officer on compensation and benefit matters relating to other
executive officers who are required to file reports under Section 16 of the
Securities Exchange Act of 1934, as amended (except to the extent such matters
relate to the stock-based compensation of our executive officers, which are
within the powers and authority of the Stock Incentive Award Subcommittee),
and make recommendations to the Board of Directors concerning compensation
policies and procedures relating to our executive officers.
- - Making recommendations to the Board of Directors concerning policy matters
relating to employee benefits and employee benefit plans.
- - Administering our formal incentive compensation plans.
STOCK INCENTIVE AWARD SUBCOMMITTEE
The members of the Stock Incentive Award Subcommittee are:
Diane C. Creel, Chair
C. Fred Fetterolf
The Stock Incentive Award Subcommittee held one meeting in 1999.
The Stock Incentive Award Subcommittee is responsible for administering and
making awards under our stock-based incentive compensation programs for our
executive officers, who are required to file reports under Section 16 of the
Securities Exchange Act of 1934, as amended.
None of the subcommittee members is an employee of Teledyne Technologies.
Each member is a "non-employee director" for the purposes of Rule 16b-3 of the
Securities and Exchange Commission and an "outside director" for the purposes of
the compensation provisions of the Internal Revenue Code.
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DIRECTOR COMPENSATION
Directors who are not our employees are paid an annual retainer fee of
$24,000. The non-executive chairman of the Board of Directors is paid an
additional annual retainer fee of $25,000. Directors are also paid $1,200 for
each Board meeting and $1,000 for each committee meeting attended, although the
Chairman of the Board of Directors does not receive any compensation for
attending Board meetings. Each non-employee chair of a committee is paid an
annual fee of $2,500. Directors who are our employees do not receive any
compensation for their services on our Board or its committees.
Annual retainer and chair fees were prorated in 1999 to cover the period
from November 12, 1999 through December 31, 1999. Excluding meeting attendance
fees paid, the average fee of a non-employee director was $3,892.
The non-employee directors also participate in the 1999 Non-Employee
Director Stock Compensation Plan (the "Director Stock Plan"). The purpose of the
Director Stock Plan is to provide non-employee directors with an increased
personal interest in our performance.
Under the Director Stock Plan, options to purchase 2,000 shares of our
Common Stock were granted to non-employee directors on the date of our spin-off
from ATI. Under the Director Stock Plan, options to purchase 2,000 shares of our
Common Stock are granted at the conclusion of each Annual Meeting of
Stockholders. If a non-employee director first becomes a director on a date
other than an Annual Meeting date, an option covering 2,000 shares of our Common
Stock will be granted to such non-employee director on his or her first date of
Board service. The purchase price of our Common Stock covered by these options
is the fair market value of our Common Stock on the date the option is granted.
The Director Stock Plan also provides that each non-employee director will
receive at least 25% of the annual retainer fee in the form of our Common Stock
and/or options to acquire our Common Stock. Each director may elect a greater
percentage. Options granted under this part of the Director Stock Plan are
intended to provide each electing director with options having an exercise value
on the date of grant equal to the foregone fees; that is, the difference between
the exercise price and the market price of the underlying shares of Common Stock
on the date of grant is intended to be equal to the foregone fees.
In order to continue to attract and retain non-employee directors of
exceptional ability and experience, we also maintain a Fee Continuation Plan for
Non-Employee Directors. Under the plan, benefits will be payable to a person who
serves as a non-employee director for at least five years. The annual benefit
will equal the annual retainer fee in effect when the director retires from the
Board. Benefits will be paid for each year of the participant's credited service
as a director up to a maximum of 10 years.
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ITEM B ON PROXY CARD -- APPROVAL OF 1999 INCENTIVE PLAN
Our Board of Directors has adopted and approved a compensation plan
sponsored and maintained by the Company, namely the Teledyne Technologies
Incorporated 1999 Incentive Plan, as amended (the "Incentive Plan"). The
continued effectiveness of the Incentive Plan after the date of the Annual
Meeting is subject to the approval of the Incentive Plan by our stockholders.
Stockholder approval of the Incentive Plan is desired, among other reasons, to
ensure the tax deductibility by the Company of awards under the Incentive Plan
under Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code").
Approval of the Incentive Plan by the stockholders requires the affirmative
vote of at least a majority of the shares present in person or by proxy at the
meeting and entitled to vote on the proposal. If you sign and return your proxy
card, your shares will be voted (unless you indicate to the contrary) to approve
the Incentive Plan. If you abstain from voting on the proposal, your shares
will, in effect, be voted against the proposal. Broker non-votes will not be
counted as being entitled to vote on the proposal and will not affect the
outcome of the vote. Brokers will not have any discretionary voting privilege
with respect to this proposal.
The following summary of the Incentive Plan is qualified in its entirety by
reference to the complete text of such plan, which appears as Annex A to this
Proxy Statement.
1999 INCENTIVE PLAN
ADMINISTRATION. The Incentive Plan is administered by the Personnel and
Compensation Committee of the Board of Directors of the Company (the
"Committee"). The Committee has sole discretion to interpret the Incentive Plan,
establish and modify administrative rules, impose conditions and restrictions on
awards, issue new options in substitution for previously granted options, and
take such other actions as it deems necessary or advisable. With respect to
participants who are not subject to Section 16 of the Securities Exchange Act of
1934, as amended, the Committee may delegate its authority under the Incentive
Plan to one or more officers or employees of the Company.
AMOUNT OF STOCK. The Incentive Plan provides for awards of up to 4,000,000
shares of TDY Common Stock, 2,650,000 of which may be allocated to awards of
incentive stock options as defined in Section 422 of the Code ("incentive stock
options"). If the number of shares of Common Stock issued and outstanding is
increased after January 26, 2000, the number of shares available for issuance
under the Incentive Plan will be increased by an amount equal to 10% of the
increase. The number of shares available for issuance under the Incentive Plan
is subject to anti-dilution adjustments upon the occurrence of significant
corporate events. The shares of Common Stock offered under the Incentive Plan
will be either authorized and unissued shares or issued shares which have been
reacquired by the Company. Shares underlying awards that are terminated,
canceled or forfeited may be subject to new awards under the Incentive Plan.
ELIGIBILITY AND PARTICIPATION. All officers and key employees of the
Company or any of its subsidiaries are eligible to participate, including
officers who are also directors of the Company or its subsidiaries. The
Committee may also grant awards to non-employees who, in the judgment of the
Committee, render significant service to the Company or any of its subsidiaries.
No participant can receive awards under the Incentive Plan in any calendar year
in respect of more than 750,000 shares of our Common Stock and $3 million in
cash. At March 15, 2000, approximately 200 employees participated in one or more
programs under the Incentive Plan.
ASSUMPTION OF ATI AWARDS. The Company has reserved shares of Common Stock
for issuance under the Incentive Plan that may be issued with respect to the
assumption by the Company of stock awards previously issued by ATI under an
Employee Benefits Agreement entered into in connection with the spin-off of the
Company by ATI on November 29, 1999.
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In accordance with the Employee Benefits Agreement, outstanding options to
acquire ATI common stock issued under ATI benefit plans and held by our
employees at the time of the spin-off were converted into options to purchase
shares of TDY Common Stock. The number of shares the option holder is able to
purchase and the exercise price of the options were adjusted in the conversion
based on the relationship of the ATI stock price at the close of business on
November 29, 1999 (the distribution date) ($14.3125) and the TDY stock price at
the opening of business on November 30, 1999 (the first day of "regular way"
trading of TDY Common Stock on the New York Stock Exchange) ($9.375). While the
shares underlying the converted options will be issued under the Incentive Plan,
the converted options otherwise continue to be and become exercisable on the
terms and conditions set forth in the original ATI benefit plans.
The following table describes options to purchase our Common Stock issued
as a result of such conversion and otherwise granted after the spin-off under
the Incentive Plan as of March 15, 2000. As a point of reference, the closing
price of TDY Common Stock as reported by the New York Stock Exchange on April 3,
2000 was $15.8125 per share.
11
<PAGE> 15
OUTSTANDING OPTIONS UNDER THE 1999 INCENTIVE PLAN
<TABLE>
<CAPTION>
NUMBER OF
SHARES
UNDERLYING
OPTIONS EXERCISE PRICE
NAME GRANTED ($/SHARE) EXPIRATION DATE
- ---- ---------- -------------- ------------------
<S> <C> <C> <C>
Robert Mehrabian......................... 1,527 $13.59 August 16, 2006
1,487 $ 9.41 December 12, 2006
7,031 $ 9.96 January 2, 2007
1,527 $17.60 May 1, 2007
1,652 $11.50 January 2, 2008
30,534 $16.95 February 11, 2008
30,534 $13.35 December 17, 2008
300,000 $ 8.94 November 30, 2009
60,000 $ 9.67 January 25, 2010
Stefan C. Riesenfeld..................... 75,000 $ 8.94 November 30, 2009
20,000 $ 9.67 January 25, 2010
John T. Kuelbs........................... 70,000 $ 8.94 November 30, 2009
20,000 $ 9.67 January 25, 2010
Nicholas L. Blauwiekel................... 20,000 $ 8.81 March 9, 2010
Dale A. Schnittjer....................... 14,695 $ 8.42 June 29, 2005
11,450 $16.95 February 11, 2008
11,450 $13.35 December 17, 2008
10,000 $ 9.67 January 25, 2010
Executive Group (5 persons).............. 686,887 (a) (b)
Non-Executive Officer Employee Group (197
persons)............................... 2,020,686 (c) (d)
</TABLE>
- -------------------------
(a) Exercise prices range from $8.42 per share to $17.60 per share.
(b) Expiration dates range from June 29, 2005 to March 9, 2010.
(c) Exercise prices range from $5.57 per share to $16.95 per share.
(d) Expiration dates range from May 1, 2000 to March 9, 2010.
12
<PAGE> 16
In addition, as a result of the spin-off and in accordance with the
Employee Benefits Agreement, the three-year award period under the ATI
Performance Share Program (the "ATI PSP") established in 1998 was terminated and
the award period shortened to cover the two-year period of January 1, 1998
through December 31, 1999. Shares of TDY Common Stock were issued under the
Incentive Plan with respect to the first installment of the terminated and
shortened ATI PSP award, effective February 22, 2000, as follows:
<TABLE>
<CAPTION>
NUMBER OF
SHARES
POTENTIALLY
ISSUABLE
NUMBER OF (REMAINING
NAME SHARES ISSUED INSTALLMENTS)
- ---- ------------- -------------
<S> <C> <C>
Robert Mehrabian......... 7,646 15,291
Dale A. Schnittjer....... 1,807 3,612
Executive Group (2
persons)............... 9,453 19,533
Non-Executive Officer
Employee Group (17
persons)............... 32,258 69,048
</TABLE>
See also the table entitled "ATI Performance Share Program Awards" at page
30.
As a result of the spin-off, in accordance with the Employee Benefits
Agreement and the ATI Stock Acquisition and Retention Program, 24,921 restricted
shares were issued under the Incentive Plan to Dr. Mehrabian and an aggregate of
71,167 shares to six other TDY employees who had been participants in the ATI
Stock Acquisition and Retention Program.
AMENDMENT OR TERMINATION. The Incentive Plan has no fixed expiration date.
The Committee establishes expiration and exercise dates on an award-by-award
basis. However, for the purpose of awarding incentive stock options, the
Incentive Plan will expire 10 years from its effective date. The Board of
Directors of the Company has the power to amend or terminate the Incentive Plan
at any time. However, the Board will seek stockholder approval of any amendment
requiring such approval and no amendment or termination of the Incentive Plan
will, without the applicable participant's consent, adversely affect an award
under the Incentive Plan.
STOCK OPTIONS. The Committee may grant to a participant incentive stock
options, options which do not qualify as incentive stock options ("non-qualified
stock options") or a combination of incentive and non-qualified stock options.
The terms and conditions of stock option grants, including the quantity, price,
waiting periods, and other conditions on exercise, are determined by the
Committee. Incentive stock option grants are to be made in accordance with
Section 422 of the Code.
The exercise price for stock options is determined by the Committee at its
discretion, provided that the exercise price per share for each incentive stock
option must be at least equal to 100% of the fair market value of one share of
Common Stock on the date when the stock option is granted.
Restoration options may be granted in connection with the exercise of
non-qualified stock options which a participant exercises by delivering shares
of Common Stock or by having withheld shares from those otherwise issuable upon
the exercise of non-qualified stock option, or with respect to which the
participant's tax withholding liability is met by delivering shares or having
shares withheld. In general, a restoration option entitles the holder to
purchase a number of shares of Common Stock equal to the number of shares so
delivered or withheld upon exercise of the original option. A restoration option
will have a per share exercise price of not less than the fair market value of
the underlying shares of Common Stock on the date of grant of the restoration
option and have a term equal to the remaining term of the original option at the
time that the original option is exercised.
Generally, the Committee has discretion to establish in each award
agreement under the Incentive Plan the circumstances in which a participant's
termination of employment with the Company or one of its subsidiaries will
affect the participant's options. Currently, it is anticipated that the
following rules will apply to the treatment of options upon a termination of
employment.
Except as described below, if an option holder's employment ends, any
options that are not then vested will terminate immediately. Any
13
<PAGE> 17
options that are then vested will terminate on the earlier of:
- - The scheduled expiration date set forth in the award agreement under which the
options were granted; or
- - Whichever of the following dates is applicable to the option holder:
- Death -- options vest in full and are exercisable by the option holder's
beneficiary for one year after the date of death.
- Retirement or Disability -- options will continue to vest and become
exercisable in accordance with the stock option agreement for the
remaining term of the option.
- Any Reason Other than Death, Disability or Retirement -- vested options
will continue to be exercisable for 30 days after the date the option
holder's employment ends.
Subject to the Committee's discretion, payment for Common Stock on the
exercise of stock options may be made in cash, Common Stock, a combination of
cash and Common Stock or in any other form of consideration acceptable to the
Committee (including one or more "cashless" exercise forms).
STOCK APPRECIATION RIGHTS. Stock appreciation rights ("SARs") may be
granted by the Committee to a participant either separate from or in tandem with
non-qualified stock options or incentive stock options. SARs may be granted at
the time of the stock option grant or, with respect to non-qualified stock
options, at any time prior to the exercise of the stock option. SARs entitle a
participant to receive, upon exercise of the SAR, a payment equal to (i) the
excess of the fair market value of a share of Common Stock on the exercise date
over the SAR exercise price, multiplied by (ii) the number of shares of Common
Stock with respect to which the SAR is exercised. Upon exercise of SARs issued
in tandem with stock options, the number of shares of Common Stock covered by
the SAR's related stock option, if any, are correspondingly reduced.
SARs granted in tandem with options are generally governed by the same
terms and conditions as govern the related stock option and may only be
exercised to the extent the related stock option is exercisable.
The exercise prices of SARs are determined by the Committee, but in the
case of SARs granted in tandem with stock options, may not be less than the
exercise price of the related stock option. Upon exercise of SARs, payment is
made in cash or in shares of Common Stock, or a combination of cash and shares
of Common Stock, as determined at the discretion of the Committee.
RESTRICTED SHARES. The Committee may award to a participant shares of
Common Stock subject to specified restrictions ("Restricted Shares"). The
Restricted Shares are subject to forfeiture if the participant does not meet
certain conditions such as continued employment over a specified forfeiture
period (the "Forfeiture Period") and/or the attainment of specified performance
targets over the Forfeiture Period. The Committee determines the terms and
conditions of Restricted Share awards.
Participants who have been awarded Restricted Shares will have all of the
rights of a holder of outstanding Common Stock, including the right to vote such
shares and to receive dividends. During the Forfeiture Period, the Restricted
Shares are nontransferable and may be held in custody by the Company or its
designated agent, or if the certificate contains a proper restrictive legend, by
the participant. Upon the lapse or release of all restrictions, an unrestricted
certificate will be provided to the participant.
The Committee, in its sole discretion, may waive all restrictions with
respect to a Restricted Share award under certain circumstances (including the
death, disability, or retirement of a participant, or a material change in
circumstances arising after the date of grant) subject to such terms and
conditions as it deems appropriate.
In or about mid-2000, we contemplate establishing a Restricted Share
Program under the Incentive Plan to replace the ATI Stock Acquisition and
Retention Program.
14
<PAGE> 18
PERFORMANCE AWARDS. The Committee may grant performance awards to
participants under such terms and conditions as the Committee deems appropriate.
A performance award entitles a participant to receive a payment from the
Company, the amount of which is based upon the attainment of predetermined
performance targets over a specified award period. Performance awards may be
paid in cash, Common Stock or a combination thereof, as determined by the
Committee.
Award periods will be established at the discretion of the Committee. The
performance targets will also be determined by the Committee and may, but need
not, include specified levels of earnings per share, return on investment,
return on stockholders' equity and/or such other goals related to the Company's
or the individual's performance as are deemed appropriate by the Committee. When
circumstances occur which cause predetermined performance targets to be an
inappropriate measure of achievement, the Committee, in its discretion, may
adjust the performance targets.
If a participant terminates employment prior to the end of an award period,
the participant generally will forfeit all rights to any performance award,
unless otherwise provided by the Committee. The Committee, in its discretion,
may determine to pay all or any portion of a performance award to a participant
who has terminated employment prior to the end of an award period under certain
circumstances (including death, disability, retirement or a material change in
circumstances arising after the date of grant).
In January 2000, the Committee established a three-year award performance
cycle commencing January 1, 2000. There are 31 participants in the Performance
Share Program for this cycle. The following table sets forth for the 2000-2003
award period. The amounts included in the Estimated Future Payout columns
represent the potential payments of Common Stock and cash to the named officers
depending on the level of achievement (i.e., threshold, target or maximum) of
the performance goals for the three-year award period. Participants will not
receive any payment of Common Stock or cash under the program if TDY and/or the
designated business unit do not achieve the threshold level of performance
objectives during the award period.
15
<PAGE> 19
PERFORMANCE SHARE PROGRAM -- ESTIMATED POTENTIAL PAYOUTS
<TABLE>
<CAPTION>
NUMBER OF ESTIMATED FUTURE PAYOUTS UNDER
SHARES, NON-STOCK PRICE-BASED PLANS
UNITS OR PERFORMANCE OR OTHER -----------------------------------
OTHER PERIOD UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#) OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
- ---- ------------- ------------------------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Robert Mehrabian..... * 2000-2002 award period $ 62,500 $ 250,000 $ 500,000
(2003-2005 payout period) 12,940 51,760 103,520
Stefan C.
Riesenfeld......... * 2000-2002 award period $ 31,250 $ 125,000 $ 250,000
(2003-2005 payout period) 6,470 25,880 51,760
John T. Kuelbs....... * 2000-2002 award period $ 28,646 $ 114,583 $ 229,167
(2003-2005 payout period) 5,931 23,723 47,447
Nicholas L.
Blauwiekel......... * 2000-2002 award period $ 21,875 $ 87,500 $ 175,000
(2003-2005 payout period) 4,529 18,116 36,232
Dale A. Schnittjer... * 2000-2002 award period $ 13,750 $ 55,000 $ 110,000
(2003-2005 payout period) 2,847 11,387 22,774
Executive Group...... * 2000-2002 award period $158,021 $ 632,083 $1,264,167
(5 persons) (2003-2005 payout period) 32,717 130,866 261,732
Non-Executive
Officer............ * 2000-2002 award period $279,341 $1,117,364 $2,234,727
Group (26 persons) (2003-2005 payout period) 57,835 231,338 462,676
</TABLE>
- -------------------------
* The amount of the award is based on the base salary at the beginning of the
award period. Two-thirds of the award is to be paid in TDY Common Stock, with
the number of shares based on the average of the high and low sale prices of a
share of Common Stock on the New York Stock Exchange on the date the Committee
approved the award period (January 25, 2000). One-third of the award is to be
paid in cash.
OTHER AWARDS. The Committee is authorized to grant any stock purchase
rights (with or without loans to participants by the Company) or any other cash
awards, Common Stock awards or other types of awards which are valued in whole
or in part by reference to the value of Common Stock. The Committee at its
discretion will determine the terms and conditions of such awards and the
participants eligible for such awards.
SHORT-TERM CASH AWARDS. The Incentive Plan authorizes performance-based
annual cash incentive compensation to be paid to covered employees subject to
Section 162(m) of the Code. The material terms of the annual incentive
compensation feature of the Incentive Plan are as follows:
- - The class of persons covered consists of those senior executives of the
Company who are from time to time determined by the Committee to be subject to
Section 162(m) of the Code.
- - The targets for annual incentive payments to "covered employees" (as defined
in Section 162(m) of the Code), will consist only of the performance targets
discussed under the section titled "Performance Awards" above. Use of any
other target will require ratification by the stockholders if failure to
obtain such approval would jeopardize tax deductibility of future incentive
payments. Such performance targets will be established by the Committee on a
timely basis to ensure that the targets are considered "preestablished" for
purposes of Section 162(m) of the Code.
- - In administering the incentive program and determining incentive awards, the
Committee will not have the flexibility to pay a covered
16
<PAGE> 20
executive more than the incentive amount indicated by his or her attainment
under the applicable payment schedule. The Committee will have the
flexibility, based on its business judgment, to reduce this amount.
- - The annual incentive award feature of the Incentive Plan will not be
operational until fiscal year 2000.
CHANGE IN CONTROL. In general, events that constitute a change in control
include:
- - acquisition by a person, other than the Company, one of its subsidiaries or a
Company benefit plan, of 25% or more of the outstanding Common Stock;
- - the individuals who constitute the Board as of the effective date of the
Incentive Plan (the "Incumbent Board") no longer constitute at least
two-thirds of the Board without prior approval by a majority vote of the
Incumbent Board;
- - approval by the stockholders of the Company of a reorganization, merger or
consolidation; or
- - approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company or sale or other disposition of substantially all
of the assets of the Company.
In the event of a change in control, stock options and SARs immediately
become exercisable, the restrictions on all Restricted Shares lapse and all
performance awards immediately become payable.
TAX CONSEQUENCES. The following is a summary of the principal federal
income tax consequences of Incentive Plan benefits under present tax law. The
summary is not intended to be exhaustive. It does not describe state, local or
foreign tax consequences.
STOCK OPTIONS. The participant incurs no tax, and no amount is deductible
by the Company, upon the grant of a stock option. At the time of exercise of a
non-qualified stock option, the difference between the exercise price and the
fair market value of Common Stock will constitute ordinary income to the
participant. The Company will be allowed a deduction equal to the amount of
ordinary income recognized by the participant as a result of the exercise of the
option.
In the case of incentive stock options, although no income is recognized
upon exercise and the Company is not entitled to a deduction, the excess of the
fair market value of Common Stock on the date of exercise over the exercise
price is counted in determining the participant's alternative minimum taxable
income. If the participant does not dispose of the shares acquired on the
exercise of an incentive stock option within one year after their receipt and
within two years after the grant of the incentive stock option, gain or loss
recognized on the disposition of the shares will be treated as long-term capital
gain or loss.
In the event of an earlier disposition of shares acquired upon the exercise
of an incentive stock option, the participant may recognize ordinary income, to
the extent of the excess of the fair market value of Common Stock on the date of
exercise over the exercise price, and capital gain, to the extent of the excess
of the amount realized on the sale of the Common Stock over the optionee's basis
in the Common Stock (generally, the exercise price plus any ordinary income paid
with respect to such earlier disposition) and the Company will be entitled to a
deduction, equal to the amount of ordinary income recognized by the participant,
when recognized by the participant. Whether the capital gain recognized is
long-term or short-term will depend upon whether the one-year capital gain
holding period has been met.
SARs. A participant will not recognize any income at the time of grant of
SARs. Upon the exercise of SARs, the cash and the value of any Common Stock
received will constitute ordinary income to the participant. The Company will be
entitled to a deduction in the amount of such income at the time of exercise.
RESTRICTED SHARES. A participant will normally not recognize taxable income
upon an award of Restricted Shares, and the Company will not be entitled to a
deduction, until the lapse of the applicable restrictions. Upon the lapse of the
restrictions, the participant will recognize
17
<PAGE> 21
ordinary taxable income in an amount equal to the fair market value of Common
Stock as to which the restrictions have lapsed, and the Company will be entitled
to a deduction in the same amount. However, a participant may elect under
Section 83(b) of the Code to recognize taxable ordinary income in the year the
Restricted Shares are awarded in an amount equal to the fair market value of the
shares at that time, determined without regard to the restrictions. In that
event, the Company will then be entitled to a deduction in the same amount. Any
gain or loss subsequently recognized by the participant will be a capital gain
or loss. If, after making a Section 83(b) election, any Restricted Shares are
forfeited, or if the fair market value at vesting is lower than the amount on
which the participant was taxed, the participant cannot then claim a tax
deduction for the loss.
PERFORMANCE AWARDS AND OTHER AWARDS. Normally, a participant will not
recognize taxable income upon the award of such grants. Subsequently, when the
conditions and requirements for the grants have been satisfied and the payment
determined, any cash received and the fair market value of any Common Stock
received will constitute ordinary income to the participant. The Company will
also then be entitled to a deduction in the same amount.
DISCRETIONARY GROSS-UP FOR TAXES. The Committee has discretion as to any
award under the Incentive Plan to grant a participant a separate cash amount at
exercise, vesting or lapse of restrictions to meet mandatory tax withholding
obligations or reimburse a participant for any individual taxes paid.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL OF THE 1999 INCENTIVE PLAN.
18
<PAGE> 22
ITEM C ON PROXY CARD -- RATIFICATION OF INDEPENDENT AUDITORS
Ernst & Young LLP has served as independent auditors for the Company since
the November 29, 1999 spin-off. Ernst & Young LLP had served as independent
auditors for ATI since August 15, 1996, when Allegheny Ludlum Corporation
combined with Teledyne, Inc. Prior to the combination, it had served as
independent auditors of Allegheny Ludlum Corporation since 1980. The Board of
Directors believes that Ernst & Young LLP is knowledgeable about the Company's
operations and accounting practices and is well qualified to act in the capacity
of independent auditors.
The proposal to ratify the selection of Ernst & Young LLP will be approved
by the stockholders if it receives the affirmative vote of a majority of the
shares present in person or represented by proxy at the meeting and entitled to
vote on the proposal. If you sign and return your proxy card, your shares will
be voted (unless you indicate to the contrary) to ratify the selection of Ernst
& Young LLP as independent auditors for 2000. If you specifically abstain from
voting on the proposal, your shares will, in effect, be voted against the
proposal. Broker non-votes will not be counted as being entitled to vote on the
proposal and will not affect the outcome of the vote. If the stockholders do not
ratify the selection of Ernst & Young LLP, the Board will reconsider the
appointment of independent auditors. It is expected that representatives of
Ernst & Young LLP will be present at the meeting and will have an opportunity to
make a statement and respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR RATIFICATION OF THE SELECTION
OF THE INDEPENDENT AUDITORS.
OTHER BUSINESS
The Company knows of no business that may be presented for consideration at
the meeting other than the three action items indicated in the Notice of Annual
Meeting. If other matters are properly presented at the meeting, the persons
designated as proxies in your proxy card may vote at their discretion.
Following adjournment of the formal business meeting, Dr. Robert Mehrabian,
President and Chief Executive Officer of TDY, will address the meeting and will
hold a general discussion period during which the stockholders will have an
opportunity to ask questions about the Company and its business.
19
<PAGE> 23
STOCK OWNERSHIP INFORMATION
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The rules of the Securities and Exchange Commission require that Teledyne
Technologies disclose late filings of reports of stock ownership (and changes in
stock ownership) by its directors and statutory insiders. To the best of the
Company's knowledge, all of the filings for the Company's directors and
statutory insiders were made on a timely basis in 1999.
FIVE PERCENT OWNERS OF COMMON STOCK
As of February 15, 2000, the Company had received notice that the
individuals and entities listed in the following table are beneficial owners of
five percent or more of TDY Common Stock.
In general, "beneficial ownership" includes those shares a person has the
power to vote or transfer, and options to acquire Common Stock that are
exercisable currently or within 60 days.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- ------------------------------------ -------------------- --------
<S> <C> <C>
Richard P. Simmons(1)................................... 2,529,667 shs. 9.5%
1000 Six PPG Place
Pittsburgh, PA 15222
Caroline W. Singleton(2)................................ 1,999,900 shs. 7.5%
Sole Trustee of the Singleton Family Trust
335 North Maple Drive, Suite 177
Beverly Hills, CA 90210
</TABLE>
- -------------------------
(1) Mr. Simmons filed an amendment to his Schedule 13G on February 14, 2000. Mr.
Simmons has the sole power to direct the voting of 2,495,682 shares, and
sole power to direct the disposition of 1,341,198 of these shares. Mrs.
Richard P. Simmons has the sole power to direct the disposition of 1,154,484
of these shares. Mr. Simmons disclaims beneficial ownership of 33,985
shares, shown in the table, that are owned by R.P. Simmons Family
Foundation, a private charitable foundation with respect to which Mr.
Simmons serves as trustee.
(2) Caroline W. Singleton, as sole trustee of the Singleton Family Trust, filed
a Schedule 13G dated February 10, 2000. Mrs. Singleton has the sole voting
power to direct the voting of, and the sole power to direct the disposition
of, all 1,999,900 shares.
20
<PAGE> 24
STOCK OWNERSHIP OF MANAGEMENT
The following table shows the shares of Common Stock reported to the
Company as beneficially owned as of February 15, 2000
by the nominees for director, the continuing directors and other statutory
insiders of the Company.
<TABLE>
<CAPTION>
SHARES SHARES THAT TOTAL SHARES
BENEFICIALLY MAY BE ACQUIRED PERCENTAGE IF 1% OR MORE
BENEFICIAL OWNER OWNED WITHIN 60 DAYS OF SHARES OUTSTANDING
- ---------------- ------------ --------------- -------------------------
<S> <C> <C> <C>
Robert Mehrabian................... 47,464(a) 36,112 *
Stefan C. Riesenfeld............... 19,500 0 *
John T. Kuelbs..................... 20,000 0 *
Nicholas L. Blauwiekel............. 0 0 *
Dale A. Schnittjer................. 175 26,143 *
Robert P. Bozzone (b).............. 759,525 0 2.8%
Paul S. Brentlinger (b)............ 8,076 0 *
Frank V. Cahouet................... 527(c) 0 *
Thomas A. Corcoran................. 22,569 0 *
Diane C. Creel..................... 648 0 *
C. Fred Fetterolf (b).............. 3,244 0 *
Charles J. Queenan, Jr. (b)........ 109,544 0 *
All directors and executive
officers as a group (12
persons)......................... 991,272 62,255 3.9%
</TABLE>
- -------------------------
(a) This amount includes 7,646 shares of TDY Common Stock issued to Dr.
Mehrabian on February 22, 2000 in connection with the first installment paid
under the terminated and shorted ATI PSP.
(b) The amounts shown include shares to which beneficial ownership is disclaimed
as follows: 34,285 shares owned by Mr. Bozzone's wife; 28 shares held by Mr.
Brentlinger's wife; 371 shares owned by the Fetterolf Family Foundation; and
12,428 shares owned by Mr. Queenan's wife.
(c) The amount includes 500 shares of TDY Common Stock purchased on March 14,
2000.
21
<PAGE> 25
1999 REPORT ON EXECUTIVE COMPENSATION
This report on executive compensation is furnished by the Personnel and
Compensation Committee and the Stock Incentive Award Subcommittee (together, the
"Committee") of the Board of Directors of Teledyne Technologies Incorporated
("TDY" or the "Company"). In some discussions of the stock awards to the named
officers in the Summary Compensation Table, the term "Committee" refers to the
Stock Incentive Award Subcommittee. This report is not incorporated by reference
into any of the Company's registration statements filed under the Securities Act
of 1933.
Effective November 29, 1999, the Company was spun-off from Allegheny
Teledyne Incorporated, now known as Allegheny Technologies Incorporated ("ATI").
In connection with the spin-off, TDY's executive compensation program was
established, having its genesis in the program established by ATI. Pursuant to
the Employee Benefits Agreement dated November 29, 1999, between the Company and
ATI executed in connection with the spin-off (the "Employee Benefits
Agreement"), the Company was contractually required to take various actions with
respect to certain executive benefit plans and programs. Since the spin-off, the
Committee has recognized that the Company may need to modify, and has begun to
modify, its executive compensation program to be more competitive and aligned
with high technology businesses (as compared to specialty metals), which in turn
it believes would better assure attraction and retention of quality management.
The Committee did not engage any outside executive compensation consultant with
respect to TDY's current executive compensation program. The Committee has
considered publicly available market and other data on executive compensation
matters.
EXECUTIVE COMPENSATION PHILOSOPHY
The Committee has determined that total compensation for TDY executives
would be comprised of three general characteristics:
- - It will be competitive in the aggregate, using a set of business and labor
market competitors (by industry segment, as appropriate) to gauge the
competitive market place.
- - It will be performance oriented, with a substantial portion of the total
compensation tied to internal and external measures of company performance.
- - It will promote long-term careers at TDY.
Consistent with these characteristics, the Committee adopted the following
policy for base salaries, short-term incentives and long-term incentives.
- - Base Salary: Base salary for all management positions will be at the unit's
industry/market median for comparable positions unless there are sound
reasons, such as competitive factors, for varying significantly from industry
medians. "Judgment" will always be the guiding factor in base salary
determinations, as well as any other compensation issue. No system should be
so rigid that it prevents the use of judgment.
- - Short-Term Incentives: Annual Incentive Plan ("AIP") awards will allow for
competitive cash compensation, based on the achievement of predefined
performance measures, with up to 200 percent of the target award paid in the
case of significant over-achievement. The majority of the award will be based
on financial performance achievement, with a smaller portion tied to the
achievement of pre-established individual goals. Commencing with the AIP for
2000, 40 percent of the award will be tied to the achievement of predetermined
levels of operating profit, 25 percent to the achievement of predetermined
levels of revenue, 15 percent to the achievement of predetermined levels of
managed working capital and 20 percent to the achievement of specific
individual performance objectives. A discretionary adjustment of +/- 20
percent will be allowed, though aggregate adjustments will not exceed +5
percent. All awards will be paid from a pool equal to 7.5 percent of operating
profit, subject to modification by the Committee. No AIP bonus, however, will
be
22
<PAGE> 26
earned unless the operating profit is positive, after accruing for bonus
payments and that operating profit is at least 75 percent of the operating
plan, subject in each case to modification by the Committee.
- - Long-Term Incentives: Long-term incentives will consist of three components:
- Stock options, which will be awarded annually to all key employees who
are nominated by management to receive an award and approved by the
Committee. In practice, the amount of the award generally will depend on
the executive's salary grade and position.
- A three-year Performance Share Program ("PSP") opportunity, with a new
"cycle" beginning every three years for selected officers and key
executives. The PSP provides grants of performance share units which key
Company officers and executives may earn if specified performance
objectives are met over a three-year period. Beginning with the
three-year award period commencing January 1, 2000, 40 percent of the PSP
award will be based on the achievement of specified levels of operating
profit, 30 percent on the achievement of specified levels of revenue and
30 percent on the achievement of specified levels of return to
shareholders. For the three-year aggregate return to shareholders
performance measure, the S&P SmallCap 600 Index (on which TDY is
included) is the benchmark. No awards will be made if the three-year
aggregate operating profit is less than 75 percent of target. A maximum
of 200 percent for each component can be earned if 120 percent of target
is achieved. Awards will generally be paid to the participants in three
annual installments after the conclusion of the performance cycle so long
as they remain employed by TDY (with exceptions for retirement,
disability and death). If the units are earned, two-thirds will be paid
in TDY Common Stock and one-third will be paid in cash.
- A Restricted Stock Plan opportunity, which will be granted to selected
officers and key executives. The Committee expects to implement the
Restricted Stock Plan by mid-2000. It will replace the Stock Acquisition
and Retention Program established by ATI.
1999 COMPENSATION
Short-Term Incentives
Annual Incentive Plan. In 1999, awards under the AIP ranged from zero to
189 percent of the target incentives because the targets and levels of
achievement varied by business unit. For 1999, 40 percent of the award was based
on the achievement of predetermined levels of operating income, 40 percent was
based on the achievement of predetermined levels of return on capital employed
and 20 percent was tied to the achievement of specific individual objectives.
The bonus column of the Summary Compensation Table contains the award for 1999
for each of the named officers.
Long-Term Incentives
Stock Options. ATI made one annual award of stock options at the beginning
of 1999. At the time of the spin-off, under the Employee Benefits Agreement,
outstanding options to acquire ATI common stock issued under ATI benefit plans
and held by TDY employees were converted into options to purchase shares of TDY
Common Stock. The number of shares the option holder is able to purchase and the
exercise price of the options were adjusted in the conversion based on the
relationship of ATI stock price at the close of business on November 29, 1999
(the distribution date) ($14.3125) and the TDY stock price at the opening of
business on November 30, 1999 (its first day of "regular way" trading on the New
York Stock Exchange) ($9.375).
In connection with the spin-off, stock options were granted under the
Teledyne Technologies Incorporated 1999 Incentive Plan (the "1999 Incentive
Plan") to Robert Mehrabian (300,000 shares), Stefan C. Riesenfeld (75,000
shares), John T. Kuelbs (70,000 shares) and selected other members of executive
manage-
23
<PAGE> 27
ment, primarily as part of recruitment and retention initiatives.
Performance Share Program. As a result of the spin-off and in accordance
with the Employee Benefits Agreement, the three-year award period under the ATI
Performance Share Program ("ATI PSP") established in 1998 was terminated and the
award period shortened to cover the two-year period of January 1, 1998 through
December 31, 1999, with targets based on the 1998 and 1999 business plans. The
award was based on achievement of specified levels of revenue, earnings and
return on capital employed during the two-year period. Awards ranged from 72.6
percent to 154.5 percent of the target incentives because the targets and levels
of achievement varied by business unit. Under the circumstances and in
accordance with the plan, the Committee changed the manner of calculating the
stock portion of the award, determining that the stock price to be used for the
stock portion of the award would be based on the average of the high and low
stock prices of TDY's Common Stock on January 25, 2000. Of the named officers in
the Summary Compensation Table, only Dr. Mehrabian and Mr. Schnittjer
participated in the ATI PSP.
ATI Stock Acquisition and Retention Program (the "ATI SARP"). As a result
of the spin-off, under the Employee Benefits Agreement, participants employed by
TDY who had purchased or designated shares of ATI stock received distributions
of common stock of TDY and Water Pik Technologies, Inc. on the purchased or
designated ATI shares. The shares they received in the spin-off as well as the
original ATI shares continue to be held as collateral for loans for the
purchased shares, all of which were retained by ATI, until the loans are fully
paid. Restricted shares issued under the ATI SARP to TDY employees were
converted into shares of TDY Common Stock and continue to bear the restrictions
set forth in the original ATI SARP.
CHANGE IN CONTROL SEVERANCE AGREEMENTS
After the spin-off, the Committee recommended and the Board of Directors
approved Change in Control Severance Agreements for the named officers and
selected other key executives. In entering into the Agreements, the Committee
desired to assure that TDY will have the continued dedication of certain
executives and the availability of their advice and counsel, notwithstanding the
possibility of a change in control, and to induce such executives to remain in
the employ of the Company. The Committee believes that, should the possibility
of a change in control arise, it imperative that TDY be able to receive and rely
upon its executives' advice, if requested, as to the best interests of the
Company and its stockholders without the concern that he or she might be
distracted by the personal uncertainties and risks created by the possibility of
a change in control. The Committee also considered arrangements offered to
similarly situated executives of comparable companies. The Agreements have a
three-year, automatically renewing term. The executive is entitled to severance
benefits if (1) there is a change in control of the Company and (2) within three
months before or 24 months after the change in control, either the Company
terminates the executive's employment for reasons other than cause or the
executive terminates the employment for good reason. "Severance benefits"
consist of:
- - A cash payment equal to three times (in the case of Dr. Mehrabian and Messrs.
Riesenfeld and Kuelbs and three other executives) or two times (in the case of
eight other executives) the sum of (i) the executive's highest annual base
salary within the year preceding the change in control and (ii) the AIP bonus
target for the year in which the change in control occurs or the year
immediately preceding the change in control, whichever is higher.
- - A cash payment for the current AIP bonus based on the fraction of the year
worked times the AIP target objectives at 120 percent (with payment of the
prior year bonus if not yet paid).
- - Payment in cash for unpaid PSP awards, assuming applicable goals are met at
120 percent of performance.
- - Continued equivalent health and welfare (e.g., medical, dental, vision, life
insurance and disability) benefits at TDY's expense for a
24
<PAGE> 28
period of 36 months after termination (with the executive bearing any portion
of the cost the executive bore prior to the change in control); provided,
however, such benefits would be discontinued to the extent the executive
receives similar benefits from a subsequent employer.
- - Immediate vesting of all stock options, with options being exercisable for the
full remaining term.
- - Removal of restrictions on restricted stock issued by the Company under any
Stock Acquisition and Retention Program or any replacement plans (i.e. the
Restricted Stock Plan).
- - Full vesting under the Company's pension plans (within legal parameters).
- - Up to $25,000 reimbursement for actual professional outplacement services.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
The Committee determined the 1999 compensation of Robert Mehrabian,
President and Chief Executive Officer, in accordance with the general
compensation philosophy described above. The Committee recommended and the Board
of Directors approved an Employment Agreement dated as of December 21, 1999 (the
"Employment Agreement") between the Company and Dr. Mehrabian, which provides
that the Company shall employ him as the President and Chief Executive Officer
and which supplements his Change in Control Severance Agreement of the same
date. The Employment Agreement memorializes arrangements arising out of a
pre-spin-off letter agreement made by Richard Simmons, Chairman of ATI, when Dr.
Mehrabian first joined ATI. The Employment Agreement terminates on December 31,
2000, but effective November 1, 2000, it may be extended annually unless either
party gives the other written notice prior to October 31 of such term that it
will not be extended.
In setting Dr. Mehrabian's base salary of $500,000, the Committee
considered base salaries of comparably situated executives, finding that Dr.
Mehrabian's base salary was within the median range.
Dr. Mehrabian received an award of $450,000 under the Annual Incentive Plan
for 1999. In determining the AIP award to Dr. Mehrabian, the Committee
acknowledged and commended the efforts and leadership of Dr. Mehrabian and the
manner in which he handled the multitude of difficult issues associated with the
spin-off transaction. The Committee reviewed the AIP award paid by ATI to Dr.
Mehrabian in 1998. The Committee also determined that while the spin-off
occurred on November 29, 1999, Dr. Mehrabian had in effect acted as the chief
executive officer of the Company since July 1999. Consequently, the Committee
determined as permitted by the plan that Dr. Mehrabian's AIP bonus should be
calculated using the 80 percent factor applicable to the chief executive officer
for the five-month period from August 1999 through December 1999. In arriving at
the award amount, the Committee considered Dr. Mehrabian's performance in light
of the Company's performance against targeted levels of operating profit and
return on capital employed. The Committee noted that:
- - the Company's operating profit was 95.8 percent of plan.
- - the Company's return on capital employed was 102.3 percent of plan; and
- - Dr. Mehrabian had achieved 120 percent of his individual goals.
Hence, the Committee approved an award of $401,721. The full Board of Directors,
recognizing Dr. Mehrabian's exemplary service during the spin-off transition and
for his recruitment efforts, increased the amount paid to $450,000.
Under the shortened ATI PSP, the Committee determined Dr. Mehrabian had
achieved 113.5 percent of the target incentives. As a result, Dr. Mehrabian will
receive $110,899 in cash and 22,937 shares of TDY Common Stock, each payable in
one-third increments over the next three years.
25
<PAGE> 29
As a result of the spin-off, in accordance with the Employee Benefits
Agreement and under the ATI SARP, Dr. Mehrabian holds 24,921 restricted shares
of TDY Common Stock.
In connection with the spin-off, and in accordance with his Employment
Agreement, the Committee granted Dr. Mehrabian stock options for 300,000 shares
of TDY Common Stock, with an exercise price of $8.94, exercisable in one-third
increments commencing November 30, 2000 and having a 10-year term.
The Employment Agreement provides Dr. Mehrabian with a non-qualified
pension arrangement, continuing his agreement with ATI. The Company has agreed
to pay Dr. Mehrabian following his retirement, as payments supplemental to any
accrued pension under the Company's qualified pension plan, an annual amount
equal to 50 percent of his base compensation as in effect at retirement. The
number of years for which such annual amount shall be paid will be equal to the
number of years of his service to TDY (including service to ATI), but not more
than 10 years.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code imposes limits on tax
deductions for annual compensation paid to a chief executive officer and other
highly compensated officers unless the compensation qualifies as
"performance-based" or is otherwise exempt under the law. The 1999 Incentive
Plan is intended to meet the deductibility requirements of the regulations
promulgated under Section 162(m). However, the Committee may determine in any
year that it would be in the best interests of the Company for awards to be paid
under the 1999 Incentive Plan that would not satisfy the requirements of Section
162(m).
Submitted by:
The Personnel and Compensation Committee
Charles J. Queenan, Jr., Chair
Diane C. Creel
C. Fred Fetterolf
The Stock Incentive Award Subcommittee
Diane C. Creel, Chair
C. Fred Fetterolf
Dated: February 16, 2000
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Personnel and Compensation Committee or Stock Incentive
Award Subcommittee is an officer or employee of the Company. Mr. Queenan serves
as senior counsel to a law firm that provided services to the Company during
1999 and 2000. Mr. Queenan does not participate in the firm's earnings or
profits. No other member of the Committee has a current or prior relationship,
and no officer who is a statutory insider of the Company has a relationship to
any other company, that is required to be described under the Securities and
Exchange Commission rules relating to disclosure of executive compensation.
26
<PAGE> 30
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following Summary Compensation Table sets forth information about the
compensation paid by TDY and, pre-spin-off, by ATI to our President and Chief
Executive Officer for fiscal 1999, 1998 and 1997. It also sets forth information
about compensation paid to each officer of the Company required to file reports
under Section 16 of the Securities Exchange Act of 1934 (the "named officers")
for fiscal 1999. Dr. Mehrabian, our President and Chief Executive Officer, is
the only executive officer who was employed as an executive officer by ATI
during fiscal 1997 and 1998. Mr. Riesenfeld and Mr. Kuelbs joined ATI in
anticipation of the spin-off on July 26, 1999 and October 18, 1999,
respectively. Mr. Schnittjer became an executive officer of TDY on November 29,
1999, in connection with the spin-off.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -----------------------
----------------------------------------- RESTRICTED OPTIONS
NAME AND FISCAL OTHER ANNUAL STOCK (SHARES) ALL OTHER
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)(1) AWARDS($)(2) (3) COMPENSATION($)
------------------ ---------- --------- -------- ------------------ ------------ -------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert Mehrabian......... 1999 408,334 450,000 359,508(4) 166,566 300,000 740,421(5)
President and 1998 370,833 501,120 6,171 170,991 61,068 226,492(6)
Chief Executive Officer 1997 145,833 160,000 0 0 0 9,696
(5 months)
Stefan C. Riesenfeld..... 1999 $130,769 78,852 0 0 75,000 $87,663(7)
Executive Vice President
and Chief Financial
Officer
John T. Kuelbs........... 1999 92,497 34,498 0 0 70,000 0
Senior Vice President,
General Counsel
and Secretary
Dale A. Schnittjer....... 1999 144,655 65,113 0 0 0 14,309(8)
Controller
</TABLE>
- -------------------------
(1) In accordance with applicable regulations, the amounts do not include
perquisites and other personal benefits received by the named officers
because the aggregate value of such benefits did not exceed the lesser of
$50,000 or 10 percent of the total salary and bonus for the named officers.
(2) Represents the closing market price on the award date of ATI restricted
stock awarded to Dr. Mehrabian under the ATI Stock Acquisition and Retention
Program. Such shares were converted into shares of TDY Common Stock in
connection with the spin-off. ATI had paid dividends on the restricted
shares. On December 31, 1999, the number of shares (and closing price of
such shares, if unrestricted) held by Dr. Mehrabian under the Program were:
24,921 shares ($235,192). Prior to 1998, Dr. Mehrabian was not eligible to
participate in the Program.
(3) Reflects options granted under ATI's Incentive Plan as converted into
options to purchase shares of TDY Common Stock in connection with the
spin-off. Does not include options awarded to Dr. Mehrabian in 1998 under
ATI's Non-Employee Director Stock Compensation Plan for his service as a
director of ATI before becoming an employee of ATI.
(4) Includes one-time tax reimbursement of $353,658 relating to the ATI Stock
Acquisition and Retention Program.
27
<PAGE> 31
(5) Includes annual accruals for possible future payments to Dr. Mehrabian under
the ATI Supplemental Pension Plan in the amount of $314,846, company
contributions pursuant to the retirement portion of the ATI Retirement
Savings Plan in the amount of $10,400, company contributions to the ATI
Benefit Restoration Plan in the amount of $46,003, the dollar value of the
benefits to Dr. Mehrabian of company paid premiums of split dollar life
insurance in the amount of $11,960 and one-time non-cash imputed income of
$357,212 arising in connection with the ATI Stock Acquisition and Retention
Program.
(6) Includes annual accruals for possible future payments to Dr. Mehrabian under
the ATI Supplemental Pension Plan in the amount of $182,068, company
contributions pursuant to the retirement portion of the ATI Retirement
Savings Plan in the amount of $10,920, company contributions to the ATI
Benefit Restoration Plan in the amount of $24,104, and the dollar value of
the benefit to Dr. Mehrabian of the remainder of company-paid premiums for
split-dollar life insurance in the amount of $9,400.
(7) Reflects aggregate relocation expenses paid on behalf of Mr. Riesenfeld.
(8) Includes company contributions pursuant to the retirement portion of the ATI
Retirement Savings Plan of $10,400 and company contributions to the ATI
Benefit Restoration Plan in the amount of $3,908.83.
28
<PAGE> 32
OPTION GRANTS IN LAST FISCAL YEAR
Shown below is information on grants to Messrs. Mehrabian, Riesenfeld and
Kuelbs of options to purchase TDY Common Stock pursuant to the 1999 Incentive
Plan during the fiscal year ended January 2, 2000, which are reflected in the
Summary Compensation Table. No options were granted to Mr. Schnittjer during
such year.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED RATES OF STOCK PRICE
SECURITIES OPTIONS EXERCISE APPRECIATION FOR OPTION TERM(1)
UNDERLYING GRANTED TO OR BASE ---------------------------------
OPTIONS EMPLOYEES IN PRICE EXPIRATION 0% 5% 10%
NAME GRANTED FISCAL YEAR ($/SHARE) DATE $ $ $
- ---- ---------- ------------ --------- ---------- ----- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert Mehrabian....... 300,000 61.5 8.94 11/30/2009 0 1,686,695 4,274,417
Stefan C. Riesenfeld... 75,000 15.4 8.94 11/30/2009 0 421,674 1,068,604
John T. Kuelbs......... 70,000 14.4 8.94 11/30/2009 0 393,562 997,364
All Optionees (6 11/30/2009 -
persons)............. 487,500 100% 8.58-8.94 12/21/2009 0 2,740,880 6,945,928
</TABLE>
- -------------------------
(1) No gain to the optionee is possible without stock price appreciation, which
will benefit all stockholders commensurately. The assumed "potential
realizable values" are mathematically derived from certain prescribed rates
of stock price appreciation. The actual value of these option grants depends
on the future performance of TDY Common Stock and overall stock market
condition. There is no assurance that the values reflected in this table
will be realized.
Under the Employee Benefits Agreement, at the time of the spin-off of TDY
from ATI, options to purchase shares of ATI common stock that were held by Dr.
Mehrabian and other TDY employees were converted into options to purchase shares
of TDY Common Stock. See the subsection entitled "Assumption of ATI Awards" and
the table captioned "Outstanding Options under the 1999 Incentive Plan" under
"Item B on Proxy Card -- Approval of the 1999 Incentive Plan -- 1999 Incentive
Plan" at page 10.
29
<PAGE> 33
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
As shown in the table below, no options were exercised by Messrs.
Mehrabian, Riesenfeld, Kuelbs or Schnittjer during fiscal 1999.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY
-------------------------------------------- VALUE OF UNEXERCISED
SHARES UNEXERCISED OPTIONS AT OPTIONS AT FISCAL
ACQUIRED ON VALUE FISCAL YEAR END(#) YEAR END($)(2)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Robert Mehrabian(1).............. 0 0 33,580/340,712 45/150,000
Stefan C. Riesenfeld............. 0 0 0/75,000 */37,500
John T. Kuelbs................... 0 0 0/70,000 */35,000
Dale A. Schnittjer............... 0 0 22,327/15,268 14,989/*
</TABLE>
- -------------------------
(1) Includes options to purchase shares of TDY Common Stock converted from
options to purchase ATI common stock in connection with the spin-off under
the Employee Benefits Agreement, which included options granted to Dr.
Mehrabian under ATI's Non-Employee Director Stock Compensation Plan with
respect to his service as a non-employee director of ATI.
(2) The "value of unexercised in-the-money options" is calculated by subtracting
the exercise price per share from $9.44, which was the average of the high
and low sale prices of a share of TDY Common Stock on the New York Stock
Exchange on December 31, 1999. The "*" denotes that the relevant options
were "out-of-the-money" at December 31, 1999, meaning the exercise price per
share was greater than $9.44.
ATI PERFORMANCE SHARE PROGRAM AWARDS
The following table sets forth information about awards for the three-year
award period made in 1998 under the ATI Performance Share Program, which, as a
result of the spin-off and in accordance with the Employee Benefits Agreement,
was terminated and the award period shortened to cover the two-year period of
January 1, 1998 through December 31, 1999. The amounts included in the Estimated
Future Payouts columns represent the potential payment of TDY Common Stock and
cash to the named officers depending on whether they remain employed by TDY
(with exceptions for retirement, death and disability). The 2000 payout has been
made.
<TABLE>
<CAPTION>
NUMBER OF ESTIMATED FUTURE PAYOUTS UNDER
SHARES, PERFORMANCE NON-STOCK PRICE-BASED PLANS
UNITS OR OR OTHER PERIOD ---------------------------------------
OTHER UNTIL MATURATION 2000 PAYOUT 2001 PAYOUT 2002 PAYOUT
NAME RIGHTS(#) OR PAYOUT ($ OR #) ($ OR #) ($ OR #)
- ---- --------- ------------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Robert Mehrabian............. * 1998-1999 award period 7,646 shs. 7,646 shs. 7,645 shs.
(2000-2002 payout period) $ 36,967 $ 36,966 $ 36,966
Dale A. Schnittjer........... * 1998-1999 award period 1,807 shs. 1,806 shs. 1,806 shs.
(2000-2002 payout period) $ 8,733 $ 8,733 $ 8,732
</TABLE>
- -------------------------
* The amount of the award is based on base salary at the beginning of the award
period. Two-thirds of the award is to be paid in TDY Common Stock, with the
number of shares based on the average of the high and low sale prices of a
share of TDY Common Stock on the New York Stock Exchange on January 25, 2000
($9.67). One-third of the award is to be paid in cash.
30
<PAGE> 34
PENSION PLAN
In connection with the spin-off, we adopted the Teledyne Technologies
Incorporated Pension Plan on terms substantially similar to the parts of the ATI
Pension Plan applicable to all of our employees, both active and inactive at our
operations which perform government contract work and for our active employees
at our operations which do not perform government contract work. The annual
benefits payable under these parts of the pension plans to participating
salaried employees retiring at or after age 65 is calculated under a formula
which takes into account the participant's compensation and years
of service. The Code limits the amounts payable to participants under a
qualified pension plan. We have also adopted a Pension Equalization/Benefit
Restoration Plan, which is designed to restore benefits which would be payable
under the pension plan provisions but for the limits imposed by the Code, to the
levels calculated pursuant to the formulas contained in the pension plan
provisions.
The following table illustrates the approximate annual pension that may
become payable to a Teledyne Technologies employee in the higher salary
classifications under our regular and supplemental pension plans.
ESTIMATED ANNUAL PENSIONS(1)
<TABLE>
<CAPTION>
AVERAGE PAY IN HIGHEST YEARS OF SERVICE(3)
60 MONTHS OF LAST 120 ------------------------------
MONTHS OF EMPLOYMENT(2) 15 20 30
- ----------------------- -------- -------- --------
<S> <C> <C> <C>
$ 200,000...................................... $ 46,277 $ 61,702 $ 92,553
300,000..................................... 71,027 94,702 142,053
400,000..................................... 95,777 127,702 191,553
500,000..................................... 120,527 160,702 241,053
600,000..................................... 145,277 193,702 290,553
700,000..................................... 170,027 226,702 340,053
800,000..................................... 194,777 259,702 389,553
1,000,000..................................... 244,277 325,702 488,553
</TABLE>
- -------------------------
(1) The estimated amounts assume retirement at age 65 (normal retirement age)
with a straight-life annuity without reduction for a survivor annuity or for
optional benefits. They are not subject to deduction for Social Security
benefits.
(2) For the period through December 31, 1994, for TDY employees who are in the
higher salary classifications, compensation for the purposes of the plan was
limited to an individual's base salary. Thereafter, plan compensation for
those employees includes base salary and up to five annual incentive
payments received on and after January 1, 1995.
(3) The maximum amount of service credited under the pension provisions
applicable to our employees is 30 years of credited service.
31
<PAGE> 35
EMPLOYMENT/CHANGE IN CONTROL AGREEMENTS
The Company has an Employment Agreement with Dr. Mehrabian, which provides
that the Company shall employ him as the President and Chief Executive Officer.
The agreement terminates on December 31, 2000, but effective November 1, 2000
will be extended annually unless either party gives the other written notice
prior to October 31 of each year of such term that it will not be extended. The
agreement provides for a base salary of $500,000 and entitles Dr. Mehrabian to
participate in Teledyne Technologies' annual incentive bonus plan and other
executive compensation and benefit programs. The agreement provides Dr.
Mehrabian with a non-qualified pension arrangement, under which the Company will
pay Dr. Mehrabian following his retirement, as payments supplemental to any
accrued pension under our qualified pension plan, an amount equal to 50 percent
of his base compensation as in effect at retirement. The number of years for
which such annual amount shall be paid will be equal to the number of years of
his service to TDY (including service to ATI), but not more than 10 years.
Messrs. Riesenfeld, Kuelbs and Blauwiekel were retained at annual base
salaries of $300,000, $275,000 and $210,000, respectively, and are entitled to
certain additional payments. Each of them is also entitled to participate in
Teledyne Technologies' annual incentive bonus plan. In addition, at the spin-off
date, Messrs. Riesenfeld and Kuelbs received options to purchase 75,000 shares
and 70,000 shares, respectively, of TDY Common Stock.
The Company has entered into Change in Control Severance Agreements with
Dr. Mehrabian, each of the other named executive officers and 11 other key
employees. The agreements have a three-year, automatically renewing term. Under
the agreements, the executive is entitled to severance benefits if (1) there is
a change in control of the Company and (2) within three months before or 24
months after the change in control, either the Company terminates the
executive's employment for reasons other than for cause or the executive
terminates the employment for good reason. "Severance benefits" consist of:
- - A cash payment equal to three times (in the case of Messrs. Mehrabian,
Riesenfeld, Kuelbs and Blauwiekel and three other executives) or two times (in
the case of eight other executives) the sum of (i) the executive's highest
annual base salary within the year preceding the change in control and (ii)
the Annual Incentive Plan ("AIP") bonus target for the year in which the
change in control occurs or the year immediately preceding the change in
control, whichever is higher.
- - A cash payment for the current AIP bonus based on the fraction of the year
worked times the AIP target objectives at 120 percent (with payment of the
prior year bonus if not yet paid).
- - Payment in cash for unpaid PSP awards, assuming applicable goals are met at
120 percent of performance.
- - Continued equivalent health and welfare (e.g., medical, dental, vision, life
insurance and disability) benefits at TDY's expense for a period of 36 months
after termination (with the executive bearing any portion of the cost the
executive bore prior to the change in control); provided, however, such
benefits would be discontinued to the extent the executive receives similar
benefits from a subsequent employer.
- - Immediate vesting of all stock options, with options being exercisable for the
full remaining term.
- - Removal of restrictions on restricted stock issued by the Company under any
Stock Acquisition and Retention Program or any replacement plans (i.e. the
Restricted Stock Plan).
- - Full vesting under the Company's pension plans (within legal parameters).
- - Up to $25,000 reimbursement for actual professional outplacement services.
32
<PAGE> 36
CERTAIN TRANSACTIONS
SPIN-OFF AGREEMENTS
We entered into several agreements with ATI in connection with the spin-off
under which we have continuing obligations, some of which are described below
and elsewhere in this Proxy Statement. These agreements are being described
because seven of our eight directors are also directors of ATI. Our
non-executive Chairman is also the President and Chief Executive Officer of ATI.
SEPARATION AND DISTRIBUTION AGREEMENT. The Separation and Distribution
Agreement provided for the principal corporate transactions required to effect
the separation of our businesses from ATI, the spin-off and certain other
matters governing the relationship among us following the spin-off. The
agreement requires that we initiate a public offering of our Common Stock within
eight months following the spin-off and complete the public offering within one
year following the spin-off. It also requires that we use proceeds of the
offering as contemplated by the tax-ruling request. In addition, it provides
that until the third Annual Meeting of our stockholders held following the
spin-off, at least a majority of our directors will also be members of the Board
of Directors of ATI.
EMPLOYEE BENEFITS AGREEMENT. The Employee Benefit Agreement contains
various agreements between ATI and us concerning employees, pension and employee
benefit plans and other compensation arrangements for current and former
employees of our businesses.
Under the terms of the ATI SARP, Dr. Robert Mehrabian had delivered
promissory notes, payable to ATI, as payment for the purchase price of ATI
common stock purchased under the program. Under the Employee Benefits Agreement,
notwithstanding the conversion of the restricted ATI shares into restricted TDY
Common Stock, the loans evidenced by the promissory notes remain payable to ATI.
On December 22, 1999, ATI reduced the total amount of the loans payable by Dr.
Mehrabian by $357,211.97. As of December 31, 1999, after this reduction, Dr.
Mehrabian was indebted to ATI under this program in the amount of $403,010.62.
TAX SHARING AND INDEMNIFICATION AGREEMENT. The Tax Sharing and
Indemnification Agreement allocates certain federal, state, local and foreign
tax responsibilities and liabilities between ATI and us. This agreement provides
that we will indemnify ATI and its directors, officers, employees, agents and
representatives for any taxes imposed on, or other amounts paid by, them, or
ATI's stockholders, if we take actions or fail to take actions (such as
completing the public offering) that result in the spin-off not qualifying as a
tax-free distribution.
INTERIM SERVICES AGREEMENT. Under the Interim Services Agreement, ATI
provides us with transitional administration and support services for a period
of time not expected to exceed 12 months. The Interim Services Agreement
provides that we pay ATI a fee approximating ATI's cost for such services plus
10 percent.
TRADEMARK LICENSE AGREEMENT. Pursuant to the Trademark License Agreement,
an affiliate of ATI granted us an exclusive license to use the "Teledyne" name
and related logos, symbols and marks in connection with our operations. We pay
an annual fee of $100,000 for this license and on November 24, 2004 have an
option to purchase all rights and interests in the Teledyne marks for $412,000.
OTHER RELATIONSHIPS
KIRKPATRICK & LOCKHART LLP. We retained the law firm of Kirkpatrick &
Lockhart LLP to perform services for the Company during 1999 and 2000. Charles
J. Queenan, Jr., a member of the Company's Board of Directors, is Senior Counsel
to that law firm. See "Compensation Committee Interlocks and Insider
Participation" on page 26.
MELLON BANK. Mr. Cahouet is a director of Mellon Financial Corporation. He
had served as
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<PAGE> 37
Chairman, President and Chief Executive Officer of Mellon Financial Corporation
and Mellon Bank, N.A., having retired on December 31, 1998. We maintain various
arms-length banking relationships with Mellon Bank, N.A. Mellon Bank, N.A. is
one of nine lenders under our $200 million credit facility, having committed to
lend up to $33,750,000 under the facility. Mellon Bank, N.A. also serves as
trustee under the Teledyne Technologies Incorporated Pension Plan. ChaseMellon
Shareholder Services L.L.C. serves as the transfer agent and registrar.
Notwithstanding these relationships, our Board of Directors has determined that
Mr. Cahouet is "independent," within the meaning of the rules of the New York
Stock Exchange, to serve on the Audit Committee of the Board of Directors.
AHERF BANKRUPTCY. On January 5, 1998, as a consequence of assuming a
position as the Chairman of the Board of Trustees of Allegheny General Hospital
("AGH"), Mr. Cahouet became a Trustee of AGH's parent entity, the Allegheny
County Health Education and Research Foundation ("AHERF"). AHERF filed for
bankruptcy in July 1998. AGH has not filed for bankruptcy. Several civil suits
have been filed against the former officers and trustees of AHERF, including Mr.
Cahouet, in connection with its bankruptcy.
CUMULATIVE TOTAL STOCKHOLDER RETURN
The graph set forth below shows the cumulative total stockholder return
(i.e., price change plus reinvestment of dividends) on the Common Stock from
November 30, 1999, the first day of "regular way" trading in the Common Stock
following the spin-off through December 31, 1999, as compared to the Standard &
Poor's 500 Composite Index, the Standard & Poor's SmallCap 600 Index and the Dow
Jones Aerospace & Defense Index. The graph assumes that $100 was invested on
November 30, 1999.
[GRAPH]
<TABLE>
<CAPTION>
NOVEMBER 30, 1999 DECEMBER 31, 1999
----------------- -----------------
<S> <C> <C>
Teledyne Technologies $100 $102.03
Standard & Poor's 500
Composite Index $100 $104.46
Standard & Poor's
SmallCap 600 Index $100 $107.75
Dow Jones Aerospace &
Defense Index $100 $103.38
</TABLE>
In accordance with the rules of the Securities and Exchange Commission,
this presentation is not incorporated by reference into any of the Company's
registration statements under the Securities Act of 1933.
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<PAGE> 38
OTHER INFORMATION
ANNUAL REPORT ON FORM 10-K
Copies of the Company's Annual Report on Form 10-K, without exhibits, can
be obtained without charge from the Senior Vice President, General Counsel and
Secretary, at Teledyne Technologies Incorporated, 2049 Century Park East, Suite
1500, Los Angeles, CA 90067, or (310)551-4302.
2001 ANNUAL MEETING AND STOCKHOLDER PROPOSALS
Under Rule 14a-8 of the Securities and Exchange Commission, proposals of
stockholders intended to be presented at the 2001 Annual Meeting of Stockholders
must be received no later than December 9, 2000 for inclusion in the proxy
statement and proxy card for that meeting. In addition, the Company's Restated
Certificate of Incorporation provides that in order for nominations or other
business to be properly brought before an Annual Meeting by a stockholder, the
stockholder must give timely notice thereof in writing to the Corporate
Secretary. To be timely, a stockholder's notice must be delivered to the
Secretary not less than 75 days and not more than 90 days prior to the first
anniversary of the preceding year's Annual Meeting which, in the case of the
2001 Annual Meeting of Stockholders, would be no earlier than March 2, 2001 and
no later than March 17, 2001. If, however, the date of the Annual Meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, to be timely, notice by the stockholder must be so delivered
not earlier than the 90th day prior to such Annual Meeting and not later than
the later of the 60th day prior to such Annual Meeting or the 10th day following
the day on which public announcement of the date of such meeting is first made.
The Company's Restated Certificate of Incorporation also requires that such
notice contain certain additional information. Copies of the Restated
Certificate of Incorporation can be obtained without charge from the Senior Vice
President, General Counsel and Secretary.
PROXY SOLICITATION
The Company pays the cost of preparing, assembling and mailing this
proxy-soliciting material. We will reimburse banks, brokers and other nominee
holders for reasonable expenses they incur in sending these proxy materials to
our beneficial stockholders whose stock is registered in the nominee's name.
The Company has engaged Morrow & Co. to help solicit proxies from brokers,
banks and other nominee holders of the Common Stock at a cost of $8,000, plus
expenses. Our employees may also solicit proxies for no additional compensation.
By Order of the Board of Directors,
/s/ John T. Kuelbs
John T. Kuelbs
Senior Vice President, General Counsel
and Secretary
April 5, 2000
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<PAGE> 39
ANNEX A
TELEDYNE TECHNOLOGIES INCORPORATED
1999 INCENTIVE PLAN
(AS AMENDED THROUGH JANUARY 26, 2000)
ARTICLE I
PURPOSE AND ADOPTION OF THE PLAN
1.01. PURPOSE. The purpose of the Teledyne Technologies Incorporated 1999
Incentive Plan (hereinafter referred to as the "Plan") is to assist in
attracting and retaining highly competent employees, to act as an incentive in
motivating selected officers and other key employees of Teledyne Technologies
Incorporated and its Subsidiaries to achieve long-term corporate objectives and
to enable cash incentive awards to qualify as performance-based for purposes of
the tax deduction limitations under Section 162(m) of the Code.
1.02. ADOPTION AND TERM. The Plan has been approved by the Board of
Directors of Teledyne Technologies Incorporated, to be effective as of the
effective date of the distribution by Allegheny Teledyne Incorporated to its
stockholders of Teledyne Technologies Incorporated Common Stock (the "Effective
Date"), but is subject to the approval of the stockholders of the Company. The
Plan shall remain in effect until terminated by action of the Board; provided,
however, that no Incentive Stock Option may be granted hereunder after the tenth
anniversary of the Effective Date and the provisions of Articles VII, VIII, IX
and X with respect to performance-based awards to "covered employees" under
Section 162(m) of the Code shall expire as of the fifth anniversary of the
Effective Date.
ARTICLE II
DEFINITIONS
For the purpose of this Plan, capitalized terms shall have the following
meanings:
2.01. AWARD means any one or a combination of Non-Qualified Stock Options
or Incentive Stock Options described in Article VI, Stock Appreciation Rights
described in Article VI, Restricted Shares described in Article VII, Performance
Awards described in Article VIII, Awards of cash or any other Award made under
the terms of the Plan.
2.02. AWARD AGREEMENT means a written agreement between the Company and a
Participant or a written acknowledgment from the Company to a Participant
specifically setting forth the terms and conditions of an Award granted under
the Plan.
2.03. AWARD PERIOD means, with respect to an Award, the period of time set
forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.
2.04. BENEFICIARY means an individual, trust or estate who or which, by a
written designation of the Participant filed with the Company or by operation of
law, succeeds to the rights and obligations of the Participant under the Plan
and the Award Agreement upon the Participant's death.
2.05. BOARD means the Board of Directors of the Company.
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2.06. CHANGE IN CONTROL means, and shall be deemed to have occurred upon
the occurrence of, any one of the following events:
(a) The acquisition in one or more transactions, other than from the
Company, by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of a number of Company
Voting Securities in excess of 25% of the Company Voting Securities unless such
acquisition has been approved by the Board;
(b) Any election has occurred of persons to the Board that causes
two-thirds of the Board to consist of persons other than (i) persons who were
members of the Board on the Effective Date and (ii) persons who were nominated
for elections as members of the Board at a time when two-thirds of the Board
consisted of persons who were members of the Board on the Effective Date,
provided, however, that any person nominated for election by a Board at least
two-thirds of whom constituted persons described in clauses (i) and/or (ii) or
by persons who were themselves nominated by such Board shall, for this purpose,
be deemed to have been nominated by a Board composed of persons described in
clause (i);
(c) Approval by the stockholders of the Company of a reorganization,
merger or consolidation, unless, following such reorganization, merger or
consolidation, all or substantially all of the individuals and entities who were
the respective beneficial owners of the Outstanding Common Stock and Company
Voting Securities immediately prior to such reorganization, merger or
consolidation, following such reorganization, merger or consolidation
beneficially own, directly or indirectly, more than seventy five (75%) of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors or trustees, as the case may be, of the
entity resulting from such reorganization, merger or consolidation in
substantially the same proportion as their ownership of the Outstanding Common
Stock and Company Voting Securities immediately prior to such reorganization,
merger or consolidation, as the case may be; or
(d) Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) a sale or other disposition of
all or substantially all the assets of the Company.
2.07. CODE means the Internal Revenue Code of 1986, as amended. References
to a section of the Code shall include that section and any comparable section
or sections of any future legislation that amends, supplements or supersedes
said section.
2.08. COMMITTEE means the Committee defined in Section 3.01.
2.09. COMPANY means Teledyne Technologies Incorporated, a Delaware
corporation, and its successors.
2.10. COMMON STOCK means Common Stock of the Company, par value $0.01 per
share.
2.11. COMPANY VOTING SECURITIES means the combined voting power of all
outstanding voting securities of the Company entitled to vote generally in the
election of directors to the Board.
2.12. DATE OF GRANT means the date designated by the Committee as the date
as of which it grants an Award, which shall not be earlier than the date on
which the Committee approves the granting of such Award.
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2.13. EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
2.14. EXERCISE PRICE means, with respect to a Stock Appreciation Right, the
amount established by the Committee in the Award Agreement which is to be
subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.02(b).
2.15. FAIR MARKET VALUE means, on any date, the average of the high and low
quoted sales prices of a share of Common Stock, as reported on the Composite
Tape for New York Stock Exchange Listed Companies on such date or, if there were
no sales on such date, on the last date preceding such date on which a sale was
reported.
2.16. INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of the Code.
2.17. MERGER means any merger, reorganization, consolidation, exchange,
transfer of assets or other transaction having similar effect involving the
Company.
2.18. NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.
2.19. OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Plan.
2.20. OUTSTANDING COMMON STOCK means, at any time, the issued and
outstanding shares of Common Stock.
2.21. PARTICIPANT means a person designated to receive an Award under the
Plan in accordance with Section 5.01.
2.22. PERFORMANCE AWARDS means Awards granted in accordance with Article
VIII.
2.23. PERFORMANCE GOALS means operating income, operating profit (earnings
from continuing operations before interest and taxes), earnings per share,
return on investment or working capital, return on stockholders' equity,
economic value added (the amount, if any, by which net operating profit after
tax exceeds a reference cost of capital), reductions in inventory, inventory
turns and on-time delivery performance, any one of which may be measured with
respect to the Company or any one or more of its Subsidiaries and divisions and
either in absolute terms or as compared to another company or companies, and
quantifiable, objective measures of individual performance relevant to the
particular individual's job responsibilities.
2.24. PLAN means the Teledyne Technologies Incorporated 1999 Incentive Plan
as described herein, as the same may be amended from time to time.
2.25. PURCHASE PRICE, with respect to Options, shall have the meaning set
forth in Section 6.01(b).
2.26. RESTORATION OPTION means a Non-Qualified Stock Option granted
pursuant to Section 6.01(f).
2.27. RESTRICTED SHARES means Common Stock subject to restrictions imposed
in connection with Awards granted under Article VII.
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2.28. RETIREMENT means early or normal retirement under a pension plan or
arrangement of the Company or one of its Subsidiaries in which the Participant
participates.
2.29. RULE 16b-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as the same may be
amended from time to time, and any successor rule.
2.30. STOCK APPRECIATION RIGHTS means Awards granted in accordance with
Article VI.
2.31. SUBSIDIARY means a subsidiary of the Company within the meaning of
Section 424(f) of the Code.
2.32. TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company or a Subsidiary for
any reason, including death, disability, retirement or as the result of the
divestiture of the Participant's employer or any similar transaction in which
the Participant's employer ceases to be the Company or one of its Subsidiaries.
Whether entering military or other government service shall constitute
Termination of Employment, or whether a Termination of Employment shall occur as
a result of disability, shall be determined in each case by the Committee in its
sole discretion.
ARTICLE III
ADMINISTRATION
3.01. COMMITTEE. The Plan shall be administered by a committee of the Board
("Committee") comprised of at least two persons. The Committee shall have
exclusive and final authority in each determination, interpretation or other
action affecting the Plan and its Participants. The Committee shall have the
sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate, to cancel Awards (including those made
pursuant to other plans of the Company) and to substitute new Options for
previously awarded Options which, at the time of such substitution, have an
exercise price in excess of the Fair Market Value of the underlying Common Stock
(including options granted under other incentive compensation programs of the
Company) with the consent of the recipient, and to take such steps in connection
with the Plan and Awards granted hereunder as it may deem necessary or
advisable. The Committee shall not, however, have or exercise any discretion
that would disqualify amounts payable under Article X as performance-based
compensation for purposes of Section 162(m) of the Code. The Committee may
delegate such of its powers and authority under the Plan as it deems appropriate
to a subcommittee of the Committee and/or designated officers or employees of
the Company. In addition, the full Board may exercise any of the powers and
authority of the Committee under the Plan. In the event of such delegation of
authority or exercise of authority by the Board, references in the Plan to the
Committee shall be deemed to refer, as appropriate, to the delegate of the
Committee or the Board. Actions taken by the Committee or any subcommittee
thereof, and any delegation by the Committee to designated officers or
employees, under this Section 3.01 shall comply with Section 16(b) of the
Exchange Act, the performance-based provisions of Section 162(m) of the Code,
and the regulations promulgated under each of such statutory provisions, or the
respective successors to such statutory provisions or regulations, as in effect
from time to time, to the extent applicable.
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ARTICLE IV
SHARES
4.01. NUMBER OF SHARES ISSUABLE. The total number of shares authorized to
be issued under the Plan shall be 4,000,000 shares of Common Stock. If the
number of issued and outstanding shares of Common Stock is increased after
January 26, 2000, the total number of shares available under the Plan will be
increased by 10% of such increase. No more than 2,650,000 shares of Common Stock
may be issued under the Plan as Incentive Stock Options. The number of shares
available for issuance under the Plan shall be further subject to adjustment in
accordance with Section 11.07. The shares to be offered under the Plan shall be
authorized and unissued Common Stock or issued Common Stock which shall have
been reacquired by the Company.
4.02. SHARES SUBJECT TO TERMINATED AWARDS. Common Stock covered by any
unexercised portions of terminated Options (including canceled Options) granted
under Article VI, Common Stock forfeited as provided in Section 7.02(a) and
Common Stock subject to any Awards which are otherwise surrendered by the
Participant may again be subject to new Awards under the Plan. Common Stock
subject to Options, or portions thereof, which have been surrendered in
connection with the exercise of Stock Appreciation Rights shall not be available
for subsequent Awards under the Plan, but Common Stock issued in payment of such
Stock Appreciation Rights shall not be charged against the number of shares of
Common Stock available for the grant of Awards hereunder.
ARTICLE V
PARTICIPATION
5.01. ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such
officers and other key employees of the Company and its Subsidiaries, whether or
not members of the Board, as the Committee, in its sole discretion, may
designate from time to time. The Committee's designation of a Participant in any
year shall not require the Committee to designate such person to receive Awards
or grants in any other year. The designation of a Participant to receive awards
or grants under one portion of the Plan does not require the Committee to
include such Participant under other portions of the Plan. The Committee shall
consider such factors as it deems pertinent in selecting Participants and in
determining the type and amount of their respective Awards. Notwithstanding any
provision herein to the contrary, the Committee may grant Awards under the Plan,
other than Incentive Stock Options, to non-employees who, in the judgment of the
Committee, render significant services to the Company or any of its
Subsidiaries, on such terms and conditions as the Committee deems appropriate
and consistent with the intent of the Plan. Subject to adjustment in accordance
with Section 11.07, in any calendar year, no Participant shall be granted Awards
in respect of more than 750,000 shares of Common Stock (whether through grants
of Options or Stock Appreciation Rights or other grants of Common Stock or
rights with respect thereto) and $3 million in cash.
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ARTICLE VI
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
6.01. OPTION AWARDS.
(a) GRANT OF OPTIONS. The Committee may grant, to such Participants as
the Committee may select, Options entitling the Participant to purchase shares
of Common Stock from the Company in such number, at such price, and on such
terms and subject to such conditions, not inconsistent with the terms of this
Plan, as may be established by the Committee. The terms of any Option granted
under this Plan shall be set forth in an Award Agreement.
(b) PURCHASE PRICE OF OPTIONS. The Purchase Price of each share of
Common Stock which may be purchased upon exercise of any Option granted under
the Plan shall be determined by the Committee; provided, however, that the
Purchase Price of the Common Stock purchased pursuant to Options designated by
the Committee as Incentive Stock Options shall be equal to or greater than the
Fair Market Value on the Date of Grant as required under Section 422 of the
Code.
(c) DESIGNATION OF OPTIONS. Except as otherwise expressly provided in
the Plan, the Committee may designate, at the time of the grant of each Option,
the Option as an Incentive Stock Option or a Non-Qualified Stock Option.
(d) INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant may be
granted Incentive Stock Options under the Plan (or any other plans of the
Company and its Subsidiaries) which would result in shares with an aggregate
Fair Market Value (measured on the Date of Grant) of more than $100,000 first
becoming exercisable in any one calendar year.
(e) RIGHTS AS A STOCKHOLDER. A Participant or a transferee of an
Option pursuant to Section 11.04 shall have no rights as a stockholder with
respect to Common Stock covered by an Option until the Participant or transferee
shall have become the holder of record of any such shares, and no adjustment
shall be made for dividends in cash or other property or distributions or other
rights with respect to any such Common Stock for which the record date is prior
to the date on which the Participant or a transferee of the Option shall have
become the holder of record of any such shares covered by the Option; provided,
however, that Participants are entitled to share adjustments to reflect capital
changes under Section 11.07.
(f) RESTORATION OPTIONS UPON THE EXERCISE OF A NON-QUALIFIED STOCK
OPTION. In the event that any Participant delivers to the Company, or has
withheld from the shares otherwise issuable upon the exercise of a Non-Qualified
Stock Option, shares of Common Stock in payment of the Purchase Price of any
Non-Qualified Stock Option granted hereunder in accordance with Section 6.04,
the Committee shall have the authority to grant or provide for the automatic
grant of a Restoration Option to such Participant. The grant of a Restoration
Option shall be subject to the satisfaction of such conditions or criteria as
the Committee in its sole discretion shall establish from time to time. A
Restoration Option shall entitle the holder thereof to purchase a number of
shares of Common Stock equal to the number of such shares so delivered or
withheld upon exercise of the original Option and, in the discretion of the
Committee, the number of shares, if any, delivered or withheld to the
Corporation to satisfy any withholding tax liability arising in connection with
the exercise of the original Option. A Restoration Option shall have a per share
Purchase
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Price of not less than 100% of the per share Fair Market Value of the Common
Stock on the date of grant of such Restoration Option, a term not longer than
the remaining term of the original Option at the time of exercise thereof, and
such other terms and conditions as the Committee in its sole discretion shall
determine.
6.02. STOCK APPRECIATION RIGHTS.
(a) STOCK APPRECIATION RIGHT AWARDS. The Committee is authorized to
grant to any Participant one or more Stock Appreciation Rights. Such Stock
Appreciation Rights may be granted either independent of or in tandem with
Options granted to the same Participant. Stock Appreciation Rights granted in
tandem with Options may be granted simultaneously with, or, in the case of
Non-Qualified Stock Options, subsequent to, the grant to such Participant of the
related Option; provided however, that: (i) any Option covering any share of
Common Stock shall expire and not be exercisable upon the exercise of any Stock
Appreciation Right with respect to the same share, (ii) any Stock Appreciation
Right covering any share of Common Stock shall expire and not be exercisable
upon the exercise of any related Option with respect to the same share, and
(iii) an Option and Stock Appreciation Right covering the same share of Common
Stock may not be exercised simultaneously. Upon exercise of a Stock Appreciation
Right with respect to a share of Common Stock, the Participant shall be entitled
to receive an amount equal to the excess, if any, of (A) the Fair Market Value
of a share of Common Stock on the date of exercise over (B) the Exercise Price
of such Stock Appreciation Right established in the Award Agreement, which
amount shall be payable as provided in Section 6.02(c).
(b) EXERCISE PRICE. The Exercise Price established under any Stock
Appreciation Right granted under this Plan shall be determined by the Committee,
but in the case of Stock Appreciation Rights granted in tandem with Options
shall not be less than the Purchase Price of the related Option. Upon exercise
of Stock Appreciation Rights granted in tandem with options, the number of
shares subject to exercise under any related Option shall automatically be
reduced by the number of shares of Common Stock represented by the Option or
portion thereof which are surrendered as a result of the exercise of such Stock
Appreciation Rights.
(c) PAYMENT OF INCREMENTAL VALUE. Any payment which may become due
from the Company by reason of a Participant's exercise of a Stock Appreciation
Right may be paid to the Participant as determined by the Committee (i) all in
cash, (ii) all in Common Stock, or (iii) in any combination of cash and Common
Stock. In the event that all or a portion of the payment is made in Common
Stock, the number of shares of Common Stock delivered in satisfaction of such
payment shall be determined by dividing the amount of such payment or portion
thereof by the Fair Market Value on the Exercise Date. No fractional share of
Common Stock shall be issued to make any payment in respect of Stock
Appreciation Rights; if any fractional share would be issuable, the combination
of cash and Common Stock payable to the Participant shall be adjusted as
directed by the Committee to avoid the issuance of any fractional share.
6.03. TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(a) CONDITIONS ON EXERCISE. An Award Agreement with respect to Options
and/or Stock Appreciation Rights may contain such waiting periods, exercise
dates and restrictions on exercise (including, but not limited to, periodic
installments) as may be determined by the Committee at the time of grant.
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(b) DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options and
Stock Appreciation Rights shall terminate upon the first to occur of the
following events:
(i) Expiration of the Option or Stock Appreciation Right as
provided in the Award Agreement; or
(ii) Termination of the Award in the event of a Participant's
disability, Retirement, death or other Termination of Employment as provided in
the Award Agreement; or
(iii) In the case of an Incentive Stock Option, ten years from
the Date of Grant; or
(iv) Solely in the case of a Stock Appreciation Right granted in
tandem with an Option, upon the expiration of the related Option.
(c) ACCELERATION OR EXTENSION OF EXERCISE TIME. The Committee, in its
sole discretion, shall have the right (but shall not be obligated), exercisable
on or at any time after the Date of Grant, to permit the exercise of an Option
or Stock Appreciation Right (i) prior to the time such Option or Stock
Appreciation Right would become exercisable under the terms of the Award
Agreement, (ii) after the termination of the Option or Stock Appreciation Right
under the terms of the Award Agreement, or (iii) after the expiration of the
Option or Stock Appreciation Right.
6.04. EXERCISE PROCEDURES. Each Option and Stock Appreciation Right granted
under the Plan shall be exercised by written notice to the Company which must be
received by the officer or employee of the Company designated in the Award
Agreement on or before the close of business on the expiration date of the
Award. The Purchase Price of shares purchased upon exercise of an Option granted
under the Plan shall be paid in full in cash by the Participant pursuant to the
Award Agreement; provided however, that the Committee may (but shall not be
required to) permit payment to be made by delivery to the Company of either (a)
Common Stock (which may include Restricted Shares or shares otherwise issuable
in connection with the exercise of the Option, subject to such rules as the
Committee deems appropriate) or (b) any combination of cash and Common Stock, or
(c) such other consideration as the Committee deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program under which, if so instructed by the Participant, Common Stock
may be issued directly to the Participant's broker or dealer upon receipt of an
irrevocable written notice of exercise from the Participant). In the event that
any Common Stock shall be transferred to the Company to satisfy all or any part
of the Purchase Price, the part of the Purchase Price deemed to have been
satisfied by such transfer of Common Stock shall be equal to the product derived
by multiplying the Fair Market Value as of the date of exercise times the number
of shares of Common Stock transferred to the Company. The Participant may not
transfer to the Company in satisfaction of the Purchase Price any fractional
share of Common Stock. Any part of the Purchase Price paid in cash upon the
exercise of any Option shall be added to the general funds of the Company and
may be used for any proper corporate purpose. Unless the Committee shall
otherwise determine, any Common Stock transferred to the Company as payment of
all or part of the Purchase Price upon the exercise of any Option shall be held
as treasury shares.
6.05. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Options
outstanding on the date of such Change in Control, and all Stock Appreciation
Rights shall become
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immediately and fully exercisable. The provisions of this Section 6.05 shall not
be applicable to any Options or Stock Appreciation Rights granted to a
Participant if any Change in Control results from such Participant's beneficial
ownership (within the meaning of Rule 13d-3 under the Exchange Act) of Common
Stock or Company Voting Securities.
ARTICLE VII
RESTRICTED SHARES
7.01. RESTRICTED SHARE AWARDS. The Committee may grant to any Participant
an Award of Common Stock in such number of shares, and on such terms, conditions
and restrictions, whether based on performance standards, periods of service,
retention by the Participant of ownership of purchased or designated shares of
Common Stock or other criteria, as the Committee shall establish. With respect
to performance-based Awards of Restricted Shares to "covered employees" (as
defined in Section 162(m) of the Code), performance targets will be limited to
specified levels of one or more of the Performance Goals. The terms of any
Restricted Share Award granted under this Plan shall be set forth in an Award
Agreement which shall contain provisions determined by the Committee and not
inconsistent with this Plan.
(a) ISSUANCE OF RESTRICTED SHARES. As soon as practicable after the
Date of Grant of a Restricted Share Award by the Committee, the Company shall
cause to be transferred on the books of the Company, or its agent, Common Stock,
registered on behalf of the Participant, evidencing the Restricted Shares
covered by the Award, but subject to forfeiture to the Company as of the Date of
Grant if an Award Agreement with respect to the Restricted Shares covered by the
Award is not duly executed by the Participant and timely returned to the
Company. All Common Stock covered by Awards under this Article VII shall be
subject to the restrictions, terms and conditions contained in the Plan and the
Award Agreement entered into by the Participant. Until the lapse or release of
all restrictions applicable to an Award of Restricted Shares, the share
certificates representing such Restricted Shares may be held in custody by the
Company, its designee, or, if the certificates bear a restrictive legend, by the
Participant. Upon the lapse or release of all restrictions with respect to an
Award as described in Section 7.01(d), one or more share certificates,
registered in the name of the Participant, for an appropriate number of shares
as provided in Section 7.01(d), free of any restrictions set forth in the Plan
and the Award Agreement shall be delivered to the Participant.
(b) STOCKHOLDER RIGHTS. Beginning on the Date of Grant of the
Restricted Share Award and subject to execution of the Award Agreement as
provided in Section 7.01(a), the Participant shall become a stockholder of the
Company with respect to all shares subject to the Award Agreement and shall have
all of the rights of a shareholder, including, but not limited to, the right to
vote such shares and the right to receive dividends; provided, however, that any
Common Stock distributed as a dividend or otherwise with respect to any
Restricted Shares as to which the restrictions have not yet lapsed, shall be
subject to the same restrictions as such Restricted Shares and held or
restricted as provided in Section 7.01(a).
(c) RESTRICTION ON TRANSFERABILITY. None of the Restricted Shares may
be assigned or transferred (other than by will or the laws of descent and
distribution, or to an inter vivos trust with respect to which the Participant
is treated as the owner under Sections 671 through 677 of the Code, except to
the extent that Section 16 of the Exchange
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<PAGE> 48
Act limits a participant's right to make such transfers), pledged or sold prior
to lapse of the restrictions applicable thereto.
(d) DELIVERY OF SHARES UPON VESTING. Upon expiration or earlier
termination of the forfeiture period without a forfeiture and the satisfaction
of or release from any other conditions prescribed by the Committee, or at such
earlier time as provided under the provisions of Section 7.03, the restrictions
applicable to the Restricted Shares shall lapse. As promptly as administratively
feasible thereafter, subject to the requirements of Section 11.05, the Company
shall deliver to the Participant or, in case of the Participant's death, to the
Participant's Beneficiary, one or more share certificates for the appropriate
number of shares of Common Stock, free of all such restrictions, except for any
restrictions that may be imposed by law.
7.02. TERMS OF RESTRICTED SHARES.
(a) FORFEITURE OF RESTRICTED SHARES. Subject to Sections 7.02(b) and
7.03, all Restricted Shares shall be forfeited and returned to the Company and
all rights of the Participant with respect to such Restricted Shares shall
terminate unless the Participant continues in the service of the Company or a
Subsidiary as an employee until the expiration of the forfeiture period for such
Restricted Shares and satisfies any and all other conditions set forth in the
Award Agreement. The Committee shall determine the forfeiture period (which may,
but need not, lapse in installments) and any other terms and conditions
applicable with respect to any Restricted Share Award.
(b) WAIVER OF FORFEITURE PERIOD. Notwithstanding anything contained in
this Article VII to the contrary, the Committee may, in its sole discretion,
waive the forfeiture period and any other conditions set forth in any Award
Agreement under appropriate circumstances (including the death, disability or
Retirement of the Participant or a material change in circumstances arising
after the date of an Award) and subject to such terms and conditions (including
forfeiture of a proportionate number of the Restricted Shares) as the Committee
shall deem appropriate.
7.03. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all
restrictions applicable to the Restricted Share Award shall terminate fully and
the Participant shall immediately have the right to the delivery of share
certificate or certificates for such shares in accordance with Section 7.01(d).
ARTICLE VIII
PERFORMANCE AWARDS
8.01. PERFORMANCE AWARDS.
(a) AWARD PERIODS AND CALCULATIONS OF POTENTIAL INCENTIVE AMOUNTS. The
Committee may grant Performance Awards to Participants. A Performance Award
shall consist of the right to receive a payment (measured by the Fair Market
Value of a specified number of shares of Common Stock, increases in such Fair
Market Value during the Award Period and/or a fixed cash amount) contingent upon
the extent to which certain predetermined performance targets have been met
during an Award Period. Performance Awards may be made in conjunction with, or
in addition to, Restricted Share Awards made under Article VII. The Award Period
shall be two or more fiscal or calendar years as
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<PAGE> 49
determined by the Committee. The Committee, in its discretion and under such
terms as it deems appropriate, may permit newly eligible employees, such as
those who are promoted or newly hired, to receive Performance Awards after an
Award Period has commenced.
(b) PERFORMANCE TARGETS. The performance targets may include such
goals related to the performance of the Company or, where relevant, any one or
more of its Subsidiaries or divisions and/or the performance of a Participant as
may be established by the Committee in its discretion. In the case of
Performance Awards to "covered employees" (as defined in Section 162(m) of the
Code), the targets will be limited to specified levels of one or more of the
Performance Goals. The performance targets established by the Committee may vary
for different Award Periods and need not be the same for each Participant
receiving a Performance Award in an Award Period. Except to the extent
inconsistent with the performance-based compensation exception under Section
162(m) of the Code, in the case of Performance Awards granted to employees to
whom such section is applicable, the Committee, in its discretion, but only
under extraordinary circumstances as determined by the Committee, may change any
prior determination of performance targets for any Award Period at any time
prior to the final determination of the Award when events or transactions occur
to cause the performance targets to be an inappropriate measure of achievement.
(c) EARNING PERFORMANCE AWARDS. The Committee, at or as soon as
practicable after the Date of Grant, shall prescribe a formula to determine the
percentage of the Performance Award to be earned based upon the degree of
attainment of performance targets.
(d) PAYMENT OF EARNED PERFORMANCE AWARDS. Subject to the requirements
of Section 11.05, payments of earned Performance Awards shall be made in cash or
Common Stock, or a combination of cash and Common Stock, in the discretion of
the Committee. The Committee, in its sole discretion, may define such terms and
conditions with respect to the payment of earned Performance Awards as it may
deem desirable.
8.02. TERMS OF PERFORMANCE AWARDS.
(a) TERMINATION OF EMPLOYMENT. Unless otherwise provided below or in
Section 8.03, in the case of a Participant's Termination of Employment prior to
the end of an Award Period, the Participant will not have earned any Performance
Awards.
(b) RETIREMENT. If a Participant's Termination of Employment is
because of Retirement prior to the end of an Award Period, the Participant will
not be paid any Performance Awards, unless the Committee, in its sole and
exclusive discretion, determines that an Award should be paid. In such a case,
the Participant shall be entitled to receive a pro-rata portion of his or her
Award as determined under Subsection (d).
(c) DEATH OR DISABILITY. If a Participant's Termination of Employment
is due to death or disability (as determined in the sole and exclusive
discretion of the Committee) prior to the end of an Award Period, the
Participant or the Participant's personal representative shall be entitled to
receive a pro-rata share of his or her Award as determined under Subsection (d).
(d) PRO-RATA PAYMENT. The amount of any payment made to a Participant
whose employment is terminated by Retirement, death or disability (under
circumstances described in Subsections (b) and (c)) will be the amount
determined by multiplying the amount of the Performance Award which would have
been earned, determined at the end of
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the Award Period, had such employment not been terminated, by a fraction, the
numerator of which is the number of whole months such Participant was employed
during the Award Period, and the denominator of which is the total number of
months of the Award Period. Any such payment made to a Participant whose
employment is terminated prior to the end of an Award Period under this Section
8.02 shall be made at the end of the respective Award Period, unless otherwise
determined by the Committee in its sole discretion. Any partial payment
previously made or credited to a deferred account for the benefit of a
Participant as provided under Section 8.01(d) of the Plan shall be subtracted
from the amount otherwise determined as payable as provided in this Section.
(e) OTHER EVENTS. Notwithstanding anything to the contrary in this
Article VIII, the Committee may, in its sole and exclusive discretion, determine
to pay all or any portion of a Performance Award to a Participant who has
terminated employment prior to the end of an Award Period under certain
circumstances (including the death, disability or retirement of the Participant
or a material change in circumstances arising after the Date of Grant) and
subject to such terms and conditions as the Committee shall deem appropriate.
8.03. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Performance
Awards for all Award Periods shall immediately become fully payable to all
Participants and shall be paid to Participants in accordance with Section
8.02(d), within 30 days after such Change in Control.
ARTICLE IX
OTHER STOCK-BASED AWARDS
9.01. GRANT OF OTHER STOCK-BASED AWARDS. Other stock-based awards,
consisting of stock purchase rights (with or without loans to Participants by
the Company containing such terms as the Committee shall determine), Awards of
cash, Awards of Common Stock, or Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock, may be granted either alone or in
addition to or in conjunction with other Awards under the Plan. Subject to the
provisions of the Plan, the Committee shall have sole and complete authority to
determine the persons to whom and the time or times at which such Awards shall
be made, the number of shares of Common Stock to be granted pursuant to such
Awards, and all other conditions of the Awards. Any such Award shall be
confirmed by an Award Agreement executed by the Committee and the Participant,
which Award Agreement shall contain such provisions as the Committee determines
to be necessary or appropriate to carry out the intent of this Plan with respect
to such Award.
9.02. TERMS OF OTHER STOCK-BASED AWARDS. In addition to the terms and
conditions specified in the Award Agreement, Awards made pursuant to this
Article IX shall be subject to the following:
(a) Any Common Stock subject to Awards made under this Article IX may
not be sold, assigned, transferred, pledged or otherwise encumbered prior to the
date on which the shares are issued, or, if later, the date on which any
applicable restriction, performance or deferral period lapses; and
(b) If specified by the Committee in the Award Agreement, the
recipient of an Award under this Article IX shall be entitled to receive,
currently or on a deferred basis,
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interest or dividends or dividend equivalents with respect to the Common Stock
or other securities covered by the Award; and
(c) The Award Agreement with respect to any Award shall contain
provisions dealing with the disposition of such Award in the event of a
Termination of Employment prior to the exercise, realization or payment of such
Award, whether such termination occurs because of Retirement, disability, death
or other reason, with such provisions to take account of the specific nature and
purpose of the Award.
9.03. FOREIGN QUALIFIED AWARDS. Awards under the Plan may be granted to
such employees of the Company and its Subsidiaries who are residing in foreign
jurisdictions as the Committee in its sole discretion may determine from time to
time. The Committee may adopt such supplements to the Plan as may be necessary
or appropriate to comply with the applicable laws of such foreign jurisdictions
and to afford Participants favorable treatment under such laws; provided,
however, that no Award shall be granted under any such supplement with terms or
conditions inconsistent with the provision set forth in the Plan.
ARTICLE X
SHORT-TERM CASH INCENTIVE AWARDS
10.01. ELIGIBILITY. Executive officers of the Company who are from time to
time determined by the Committee to be "covered employees" for purposes of
Section 162(m) of the Code will be eligible to receive short-term cash incentive
awards under this Article X.
10.02. AWARDS.
(a) PERFORMANCE TARGETS. For each fiscal year of the Company after
fiscal year 1999, the Committee shall establish objective performance targets
based on specified levels of one or more of the Performance Goals. Such
performance targets shall be established by the Committee on a timely basis to
ensure that the targets are considered "preestablished" for purposes of Section
162(m) of the Code.
(b) AMOUNTS OF AWARDS. In conjunction with the establishment of
performance targets for a fiscal year, the Committee shall adopt an objective
formula (on the basis of percentages of Participants' salaries, shares in a
bonus pool or otherwise) for computing the respective amounts payable under the
Plan to Participants if and to the extent that the performance targets are
attained. Such formula shall comply with the requirements applicable to
performance-based compensation plans under Section 162(m) of the Code and, to
the extent based on percentages of a bonus pool, such percentages shall not
exceed 100% in the aggregate.
(c) PAYMENT OF AWARDS. Awards will be payable to Participants in cash
each year upon prior written certification by the Committee of attainment of the
specified performance targets for the preceding fiscal year.
(d) NEGATIVE DISCRETION. Notwithstanding the attainment by the Company
of the specified performance targets, the Committee shall have the discretion,
which need not be exercised uniformly among the Participants, to reduce or
eliminate the award that would be otherwise paid.
(e) GUIDELINES. The Committee shall adopt from time to time written
policies for its implementation of this Article X. Such guidelines shall reflect
the intention of the
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Company that all payments hereunder qualify as performance-based compensation
under Section 162(m) of the Code.
(f) NON-EXCLUSIVE ARRANGEMENT. The adoption and operation of this
Article X shall not preclude the Board or the Committee from approving other
short-term incentive compensation arrangements for the benefit of individuals
who are Participants hereunder as the Board or Committee, as the case may be,
deems appropriate and in the best of the Company.
ARTICLE XI
TERMS APPLICABLE GENERALLY TO AWARDS GRANTED UNDER THE PLAN
11.01. PLAN PROVISIONS CONTROL AWARD TERMS. Except as provided in Section
11.16, the terms of the Plan shall govern all Awards granted under the Plan, and
in no event shall the Committee have the power to grant any Award under the Plan
which is contrary to any of the provisions of the Plan. In the event any
provision of any Award granted under the Plan shall conflict with any term in
the Plan as constituted on the Date of Grant of such Award, the term in the Plan
as constituted on the Date of Grant of such Award shall control. Except as
provided in Section 11.03 and Section 11.07, the terms of any Award granted
under the Plan may not be changed after the Date of Grant of such Award so as to
materially decrease the value of the Award without the express written approval
of the holder.
11.02. AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award.
11.03. MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan
to a Participant may be modified (unless such modification does not materially
decrease the value of the Award) after the Date of Grant except by express
written agreement between the Company and the Participant, provided that any
such change (a) shall not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.
11.04. LIMITATION ON TRANSFER. Except as provided in Section 7.01(c) in the
case of Restricted Shares, a Participant's rights and interest under the Plan
may not be assigned or transferred other than by will or the laws of descent and
distribution, and during the lifetime of a Participant, only the Participant
personally (or the Participant's personal representative) may exercise rights
under the Plan. The Participant's Beneficiary may exercise the Participant's
rights to the extent they are exercisable under the Plan following the death of
the Participant. Notwithstanding the foregoing, to the extent permitted under
Section 16(b) of the Exchange Act with respect to Participants subject to such
Section, the Committee may grant Non-Qualified Stock Options that are
transferable, without payment of consideration, to immediate family members of
the Participant or to trusts or partnerships for such family members, and the
Committee may also amend outstanding Non-Qualified Stock Options to provide for
such transferability.
11.05. TAXES. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the
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Company with respect to any amount payable and/or shares issuable under such
Participant's Award, or with respect to any income recognized upon a
disqualifying disposition of shares received pursuant to the exercise of an
Incentive Stock Option, and the Company may defer payment or issuance of the
cash or shares upon exercise or vesting of an Award unless indemnified to its
satisfaction against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Committee and shall be
payable by the Participant at such time as the Committee determines in
accordance with the following rules:
(a) The Participant shall have the right to elect to meet his or her
withholding requirement (i) by having withheld from such Award at the
appropriate time that number of shares of Common Stock, rounded up to the next
whole share, whose Fair Market Value is equal to the amount of withholding taxes
due, (ii) by direct payment to the Company in cash of the amount of any taxes
required to be withheld with respect to such Award or (iii) by a combination of
shares and cash.
(b) The Committee shall have the discretion as to any Award, to cause
the Company to pay to tax authorities for the benefit of any Participant, or to
reimburse such Participant for the individual taxes which are due on the grant,
exercise or vesting of any share Award, or the lapse of any restriction on any
share Award (whether by reason of a Participant's filing of an election under
Section 83(b) of the Code or otherwise), including, but not limited to, Federal
income tax, state income tax, local income tax and excise tax under Section 4999
of the Code, as well as for any such taxes as may be imposed upon such tax
payment or reimbursement.
(c) In the case of Participants who are subject to Section 16 of the
Exchange Act, the Committee may impose such limitations and restrictions as it
deems necessary or appropriate with respect to the delivery or withholding of
shares of Common Stock to meet tax withholding obligations.
11.06. SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Committee and
the holder approve.
11.07. ADJUSTMENTS TO REFLECT CAPITAL CHANGES.
(a) RECAPITALIZATION. The number and kind of shares subject to
outstanding Awards, the Purchase Price or Exercise Price for such shares, the
number and kind of shares available for Awards subsequently granted under the
Plan and the maximum number of shares in respect of which Awards can be made to
any Participant in any calendar year shall be appropriately adjusted to reflect
any stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Plan or the Awards granted under the Plan. The Committee shall
have the power and sole discretion to determine the amount of the adjustment to
be made in each case.
(b) MERGER. After any Merger in which the Company is the surviving
corporation, each Participant shall, at no additional cost, be entitled upon any
exercise of all Options or receipt of other Award to receive (subject to any
required action by shareholders), in lieu of the number of shares of Common
Stock receivable or exercisable pursuant to such Award, the number and class of
shares or other securities to which such Participant would have been entitled
pursuant to the terms of the Merger if, at the time of the Merger, such
Participant had been the holder of record of a number of shares equal to the
number of
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<PAGE> 54
shares receivable or exercisable pursuant to such Award. Comparable rights shall
accrue to each Participant in the event of successive Mergers of the character
described above. In the event of a Merger in which the Company is not the
surviving corporation, the surviving, continuing, successor, or purchasing
corporation, as the case may be (the "Acquiring Corporation"), shall either
assume the Company's rights and obligations under outstanding Award Agreements
or substitute awards in respect of the Acquiring Corporation's stock for such
outstanding Awards. In the event the Acquiring Corporation fails to assume or
substitute for such outstanding Awards, the Board shall provide that any
unexercisable and/or unvested portion of the outstanding Awards shall be
immediately exercisable and vested as of a date prior to such Merger, as the
Board so determines. The exercise and/or vesting of any Award that was
permissible solely by reason of this Section 11.07(b) shall be conditioned upon
the consummation of the Merger. Any Options which are neither assumed by the
Acquiring Corporation nor exercised as of the date of the Merger shall terminate
effective as of the effective date of the Merger.
(c) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES. After
any Merger in which the Company or a Subsidiary shall be a surviving
corporation, the Committee may grant substituted options under the provisions of
the Plan, pursuant to Section 424 of the Code, replacing old options granted
under a plan of another party to the Merger whose shares or stock subject to the
old options may no longer be issued following the Merger. The foregoing
adjustments and manner of application of the foregoing provisions shall be
determined by the Committee in its sole discretion. Any such adjustments may
provide for the elimination of any fractional shares which might otherwise
become subject to any Options.
11.08. NO RIGHT TO EMPLOYMENT. No employee or other person shall have any
claim of right to be granted an Award under this Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.
11.09. AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
11.10. GOVERNING LAW. All determinations made and actions taken pursuant to
the Plan shall be governed by the laws of the State of Delaware and construed in
accordance therewith.
11.11. NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.
11.12. COMPLIANCE WITH RULE 16b-3. It is intended that, unless the
Committee determines otherwise, Awards under the Plan be eligible for exemption
under Rule 16b-3. The Board is authorized to amend the Plan and to make any such
modifications to Award Agreements to comply with Rule 16b-3, as it may be
amended from time to time, and to make any other such amendments or
modifications as it deems necessary or appropriate to better accomplish the
purposes of the Plan in light of any amendments made to Rule 16b-3.
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<PAGE> 55
11.13. CAPTIONS. The captions (i.e., all Section headings) used in the Plan
are for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions have been
used in the Plan.
11.14. SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.
11.15. AMENDMENT AND TERMINATION.
(a) AMENDMENT. The Board shall have complete power and authority to
amend the Plan at any time; provided, however, that the Board shall not, without
the requisite affirmative approval of shareholders of the Company, make any
amendment which requires shareholder approval under the Code or under any other
applicable law or rule of any stock exchange which lists Common Stock or Company
Voting Securities. No termination or amendment of the Plan may, without the
consent of the Participant to whom any Award shall theretofore have been granted
under the Plan, adversely affect the right of such individual under such Award.
(b) TERMINATION. The Board shall have the right and the power to
terminate the Plan at any time. No Award shall be granted under the Plan after
the termination of the Plan, but the termination of the Plan shall not have any
other effect and any Award outstanding at the time of the termination of the
Plan may be exercised after termination of the Plan at any time prior to the
expiration date of such Award to the same extent such Award would have been
exercisable had the Plan not terminated.
11.16. SPECIAL PROVISION RELATING TO CERTAIN STOCK ISSUANCES.
Notwithstanding anything to the contrary contained in this Plan, shares of
Common Stock authorized to be issued under this Plan may be issued to pay awards
originally made under and satisfy options originally granted under the Allegheny
Teledyne Incorporated 1996 Incentive Plan or any other stock option plan adopted
by ATI (an "ATI Plan"), as provided in the Employee Benefits Agreement dated as
of November 29, 1999, between the Company and Allegheny Teledyne Incorporated.
All shares of Common Stock issued in payment of an award or grant shall be
governed exclusively by the terms of such award or grant under the applicable
ATI Plan, and any terms of this Plan inconsistent therewith shall be
inapplicable to such shares.
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<PAGE> 56
TELEDYNE TECHNOLOGIES INCORPORATED
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF STOCKHOLDERS JUNE 1, 2000
The undersigned hereby appoints Stefan C. Reisenfeld, John T. Kuelbs and
Melanie S. Cibik and each of them, proxies and attorneys-in fact, with power of
substitution in each of them, to vote for and on behalf of the undersigned at
the Annual Meeting of Stockholders of Teledyne Technologies Incorporated to be
held on June 1, 2000, and at any adjournments thereof, upon matters properly
coming before the meeting, as set forth in the Notice of Meeting and Proxy
Statement, both of which have been received by the undersigned and upon all such
other matters that may properly be brought before the meeting, as to which the
undersigned hereby confers discretionary authority to vote upon said proxies.
Without otherwise limiting the general authorization given hereby, said proxies
and attorneys-in-fact are instructed to vote as follows:
Comments/Address Change:
_________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
(Please mark Comment/Address Box on reverse side.)
(This Proxy continues and must be signed on the reverse side)
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
<PAGE> 57
Please mark
your votes as
indicated in /X/
this example
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposals 2 and 3 and will vote
in accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (1), (2) AND (3).
<TABLE>
<CAPTION>
WITHHOLD
FOR FOR ALL FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
(1) The election of 3 Class 1 directors-Nominees: / / / / (2) Approval of 1999
01 Thomas A. Corcoran 02 Diane C. Creel Incentive Plan / / / / / /
03 C. Fred Fetterolf
(3) Ratification of
Appointment of
Auditors / / / / / /
Instruction: To withhold for any particular nominee, write such nominee's name
on the line below.
_______________________________________________________ YES NO
Comments/Address Change / / / /
on other side.
Signature _______________________ Signature if held jointly___________________________________ Date:________________ , 2000
In signing as attorney, executor, administrator, trustee or guardian, please give full title as such, and, if signing for a
corporation, please give your title. When shares are in the name of more than one person, each should sign the proxy. PLEASE SIGN,
DATE, AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
</TABLE>
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE AND READ THE REVERSE SIDE o
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
VOTE BY INTERNET: 24 HOURS A DAY, 7 DAYS A WEEK.
- ----------------
Follow the instructions at our Website Address: www.eproxy.com/tdy
OR
o VOTE BY TELEPHONE OR PROXY CARD o
QUICK *** EASY *** IMMEDIATE
VOTE BY PHONE: FOR U.S. STOCKHOLDERS ONLY, CALL TOLL-FREE 1-800-840-1208.
- ------------- ON A TOUCH TONE TELEPHONE 24 HOURS A DAY, 7 DAYS A WEEK.
THERE IS NO CHARGE TO YOU FOR THIS CALL. HAVE YOUR PROXY CARD
IN HAND.
o You will be asked to enter a Control Number, which is located in the box
in the lower right hand corner of this form.
OPTION 1: To vote as the Board of Directors recommends on ALL PROPOSALS:
Press 1.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OPTION 2: If you choose to vote on each proposal separately, Press 0.
You will hear these instructions:
Proposal 1, Director Election Proposal: To vote FOR ALL nominees, Press 1,
to WITHHOLD FOR ALL nominees,
Press 9.
To WITHHOLD FOR AN INDIVIDUAL
nominee, Press 0 and listen to the
instructions.
Proposal 2 and ALL Other Proposals: To vote FOR, Press 1, AGAINST, Press
9; ABSTAIN, Press 0
The instructions are the same for all other proposals.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
PRESS 1 to consent to view future Annual Reports and Proxy Materials for this
account via the Internet.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
OR
VOTE BY PROXY CARD: Mark, sign and date your proxy card and return it promptly
in the enclosed envelope.
NOTE: If you voted by Internet or telephone, THERE IS NO NEED TO MAIL BACK your
proxy card.
THANK YOU FOR VOTING.
TO VIEW OUR ANNUAL REPORT AND PROXY MATERIALS ONLINE GO TO: www.eproxy.com/tdy
<PAGE> 58
TELEDYNE TECHNOLOGIES INCORPORATED
VOTING INSTRUCTION CARD FOR 2000 ANNUAL MEETING
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF TELEDYNE
TECHNOLOGIES INCORPORATED
OREGON METALLURGICAL CORPORATION SAVINGS PLAN
OREGON METALLURGICAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
The undersigned hereby directs the Trustee of the above Plans to vote the
full number of shares of Common Stock allocated to the account of the
undersigned under the Plans, at the Annual Meeting of Stockholders of Teledyne
Technologies Incorporated on June 1, 2000, and at any adjournments thereof, upon
the matters set forth on the reverse of this card, and, in its discretion, upon
such other matters as may properly come before the meeting.
PLAN PARTICIPANTS MAY VOTE BY TOLL-FREE TELEPHONE OR INTERNET BY FOLLOWING THE
INSTRUCTIONS ON THE REVERSE SIDE. ALTERNATIVELY, PARTICIPANTS MAY VOTE BY
COMPLETING, DATING AND SIGNING THIS CARD AND RETURNING IT PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
IF YOU WISH TO USE THIS CARD TO VOTE YOUR SHARES, PLEASE COMPLETE, DATE AND SIGN
ON THE REVERSE SIDE.
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
[TELEDYNE TECHNOLOGIES LOGO]
2049 Century Park East, Suite 1500
Los Angeles, California 90067-3101
OREGON METALLURGICAL CORPORATION SAVINGS PLAN
OREGON METALLURGICAL CORPORATION EMPLOYEE STOCK OWNERSHIP PLAN
As a Plan participant, you have the right to direct the Plan Trustee how to vote
the shares of Teledyne Technologies Incorporated Common Stock that are allocated
to your Plan account and shown on the attached voting instruction card. The
Trustee will hold your instructions in complete confidence except as may be
necessary to meet legal requirements.
You may vote by telephone, by Internet or by completing, signing and returning
the voting instruction card (above). A postage-paid return envelope is enclosed.
The Trustee must receive your voting instructions by May 26, 2000. If the
Trustee does not receive your instructions by May 26, 2000, the Plan
administrator may instruct the Trustee to vote your shares as the administrator
directs.
You will receive a separate set of proxy solicitation materials for any shares
of Common Stock you own other than your Plan shares. Your non-plan shares must
be voted separately from your Plan shares.
<PAGE> 59
Please mark
your votes as
indicated in /X/
this example
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposals 2 and 3 and will vote
in accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (1), (2) AND (3).
<TABLE>
<CAPTION>
WITHHOLD
FOR FOR ALL FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
(1) Election of 3 Class 1 Directors-Nominees: / / / / (2) Approval of 1999
01 Thomas A. Corcoran 02 Diane C. Creel Incentive Plan / / / / / /
03 C. Fred Fetterolf
(3) Ratification of
Appointment of
Auditors / / / / / /
Instruction: To withhold for any particular nominee, write such nominee's name
on the line below.
_______________________________________________________
Signature ______________________________________________________________________ Date:________________ , 2000
Please sign exactly as your name appears above.
</TABLE>
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE AND READ THE REVERSE SIDE o
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
VOTE BY INTERNET: 24 HOURS A DAY, 7 DAYS A WEEK.
- ----------------
Follow the instructions at our Website Address: www.eproxy.com/tdy
OR
o VOTE BY TELEPHONE OR PROXY CARD o
QUICK *** EASY *** IMMEDIATE
VOTE BY PHONE: FOR U.S. STOCKHOLDERS ONLY, CALL TOLL-FREE 1-800-840-1208.
- ------------- ON A TOUCH TONE TELEPHONE 24 HOURS A DAY, 7 DAYS A WEEK.
THERE IS NO CHARGE TO YOU FOR THIS CALL. HAVE YOUR PROXY CARD
IN HAND.
o You will be asked to enter a Control Number, which is located in the box
in the lower right hand corner of this form.
OPTION 1: To vote as the Board of Directors recommends on ALL PROPOSALS:
Press 1.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OPTION 2: If you choose to vote on each proposal separately, Press 0.
You will hear these instructions:
Proposal 1, Director Election Proposal: To vote FOR ALL nominees, Press 1,
to WITHHOLD FOR ALL nominees,
Press 9.
To WITHHOLD FOR AN INDIVIDUAL
nominee, Press 0 and listen to the
instructions.
Proposal 2 and ALL Other Proposals: To vote FOR, Press 1, AGAINST, Press
9; ABSTAIN, Press 0
The instructions are the same for all other proposals.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
PRESS 1 to consent to view future Annual Reports and Proxy Materials for this
account via the Internet.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
OR
VOTE BY PROXY CARD: Mark, sign and date your proxy card and return it promptly
- ------------------ in the enclosed envelope.
NOTE: If you voted by Internet or telephone, THERE IS NO NEED TO MAIL BACK your
proxy card.
THANK YOU FOR VOTING.
TO VIEW OUR ANNUAL REPORT AND PROXY MATERIALS ONLINE GO TO: www.eproxy.com/tdy
<PAGE> 60
TELEDYNE TECHNOLOGIES INCORPORATED
VOTING INSTRUCTION CARD FOR 2000 ANNUAL MEETING
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
TELEDYNE TECHNOLOGIES INCORPORATED
TELEDYNE TECHNOLOGIES INCORPORATED 401(k) PLAN
TELEDYNE 401(k) PLAN
The undersigned hereby directs the Trustee of the above Plans to vote
the full number of shares of Common Stock allocated to the account of the
undersigned under the Plans, at the Annual Meeting of Stockholders of Teledyne
Technologies Incorporated on June 1, 2000, and at any adjournments thereof, upon
the matters set forth on the reverse of this card, and, in its discretion, upon
such other matters as may properly come before the meeting.
PLAN PARTICIPANTS MAY VOTE BY TOLL-FREE TELEPHONE OR INTERNET BY FOLLOWING THE
INSTRUCTIONS ON THE REVERSE SIDE. ALTERNATIVELY, PARTICIPANTS MAY VOTE BY
COMPLETING, DATING AND SIGNING THIS CARD AND RETURNING IT PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
IF YOU WISH TO USE THIS CARD TO VOTE YOUR SHARES, PLEASE COMPLETE, DATE AND SIGN
ON THE REVERSE SIDE.
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
[TELEDYNE TECHNOLOGIES LOGO]
2049 Century Park East, Suite 1500
Los Angeles, California 90067-3101
TELEDYNE TECHNOLOGIES INCORPORATED 401(k) PLAN
TELEDYNE 401(k)PLAN
As a Plan participant, you have the right to direct the Plan Trustee how to vote
the shares of Teledyne Technologies Incorporated Common Stock that are allocated
to your Plan account and shown on the attached voting instruction card. The
Trustee will hold your instructions in complete confidence except as may be
necessary to meet legal requirements.
You may vote by telephone, by Internet or by completing, signing and returning
the voting instruction card (above). A postage-paid return envelope is enclosed.
The Trustee must receive your voting instructions by May 26, 2000. If the
Trustee does not receive your instructions by May 26, 2000, the Plan
administrator may instruct the Trustee to vote your shares as the administrator
directs.
You will receive a separate set of proxy solicitation materials for any shares
of Common Stock you own other than your Plan shares. Your non-plan shares must
be voted separately from your Plan shares.
<PAGE> 61
Please mark
your votes as
indicated in /X/
this example
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposals 2 and 3 and will vote
in accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (1), (2) AND (3).
<TABLE>
<CAPTION>
WITHHOLD
FOR FOR ALL FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
(1) Election of 3 Class 1 Directors-Nominees: / / / / (2) Approval of 1999
01 Thomas A. Corcoran 02 Diane C. Creel Incentive Plan / / / / / /
03 C. Fred Fetterolf
(3) Ratification of
Appointment of
Auditors / / / / / /
Instruction: To withhold for any particular nominee, write such nominee's name
on the line below.
______________________________________________________
Signature ______________________________________________________________________ Date:________________ , 2000
Please sign exactly as your name appears above.
</TABLE>
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE AND READ THE REVERSE SIDE o
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
VOTE BY INTERNET: 24 HOURS A DAY, 7 DAYS A WEEK.
- ----------------
Follow the instructions at our Website Address: www.eproxy.com/tdy
OR
o VOTE BY TELEPHONE OR PROXY CARD o
QUICK *** EASY *** IMMEDIATE
VOTE BY PHONE: FOR U.S. STOCKHOLDERS ONLY, CALL TOLL-FREE 1-800-840-1208.
- ------------- ON A TOUCH TONE TELEPHONE 24 HOURS A DAY, 7 DAYS A WEEK.
THERE IS NO CHARGE TO YOU FOR THIS CALL. HAVE YOUR PROXY CARD
IN HAND.
o You will be asked to enter a Control Number, which is located in the box
in the lower right hand corner of this form.
OPTION 1: To vote as the Board of Directors recommends on ALL PROPOSALS:
Press 1.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OPTION 2: If you choose to vote on each proposal separately, Press 0.
You will hear these instructions:
Proposal 1, Director Election Proposal: To vote FOR ALL nominees, Press 1,
to WITHHOLD FOR ALL nominees,
Press 9.
To WITHHOLD FOR AN INDIVIDUAL
nominee, Press 0 and listen to the
instructions.
Proposal 2 and ALL Other Proposals: To vote FOR, Press 1, AGAINST, Press
9; ABSTAIN, Press 0
The instructions are the same for all other proposals.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
PRESS 1 to consent to view future Annual Reports and Proxy Materials for this
account via the Internet.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
OR
VOTE BY PROXY CARD: Mark, sign and date your proxy card and return it promptly
- ------------------ in the enclosed envelope.
NOTE: If you voted by Internet or telephone, THERE IS NO NEED TO MAIL BACK your
proxy card.
THANK YOU FOR VOTING.
TO VIEW OUR ANNUAL REPORT AND PROXY MATERIALS ONLINE GO TO: www.eproxy.com/tdy
<PAGE> 62
CONFIDENTIAL VOTING INSTRUCTION CARD FOR 2000 ANNUAL MEETING
REQUESTED BY MELLON BANK, N.A., IN CONJUNCTION WITH PROXY SOLICITATION
ON BEHALF OF THE BOARD OF DIRECTORS OF
TELEDYNE TECHNOLOGIES INCORPORATED
ALLEGHENY LUDLUM PERSONAL RETIREMENT AND 401(k) SAVINGS ACCOUNT PLAN
ALLEGHENY TECHNOLOGIES RETIREMENT SAVINGS PLAN
SAVINGS AND SECURITY PLAN OF THE LOCKPORT AND WATERBURY FACILITIES
THE 401(k) SAVINGS ACCOUNT PLAN OF ALLEGHENY LUDLUM CORPORATION
(WASHINGTON PLANT)
The undersigned hereby directs Mellon Bank, N.A., as the Trustee of the
above Plans, to vote the full number of shares of Common Stock allocated to the
account of the undersigned under the Plans, at the Annual Meeting of
Stockholders of Teledyne Technologies Incorporated on June 1, 2000, and at any
adjournments thereof, upon the matters set forth on the reverse of this card,
and, in its discretion, upon such other matters as may properly come before the
meeting.
PLAN PARTICIPANTS MAY VOTE BY TOLL-FREE TELEPHONE OR INTERNET BY FOLLOWING THE
INSTRUCTIONS ON THE REVERSE SIDE. ALTERNATIVELY, PARTICIPANTS MAY VOTE BY
COMPLETING, DATING AND SIGNING THIS CARD AND RETURNING IT PROMPTLY IN THE
ENCLOSED POSTAGE-PAID ENVELOPE.
IF YOU WISH TO USE THIS CARD TO VOTE YOUR SHARES, PLEASE COMPLETE, DATE AND SIGN
ON THE REVERSE SIDE.
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE o
ALLEGHENY LUDLUM PERSONAL RETIREMENT AND 401(k) SAVINGS ACCOUNT PLAN
ALLEGHENY TECHNOLOGIES RETIREMENT SAVINGS PLAN
SAVINGS AND SECURITY PLAN OF THE LOCKPORT AND WATERBURY FACILITIES
THE 401(k) SAVINGS ACCOUNT PLAN OF ALLEGHENY LUDLUM CORPORATION
(WASHINGTON PLANT)
As a Plan participant, you have the right to direct Mellon Bank, N.A., as the
Plan Trustee, how to vote the shares of Teledyne Technologies Incorporated
Common Stock that are allocated to your Plan account and shown on the attached
voting instruction card. The Trustee will hold your instructions in complete
confidence except as may be necessary to meet legal requirements.
You may vote by telephone, by Internet or by completing, signing and returning
the voting instruction card (above). A postage-paid return envelope is enclosed.
The Trustee must receive your voting instructions by May 26, 2000. If the
Trustee does not receive your instructions by 5:00 p.m., EDT on May 26, 2000,
the plan administrator may instruct the Trustee to vote your shares as the
administrator directs.
You will receive a separate set of proxy solicitation materials for any shares
of Common Stock you own other than your Plan shares. Your non-plan shares must
be voted separately from your Plan shares.
Mellon Bank, N.A. makes no recommendation regarding any voting instruction.
<PAGE> 63
Please mark
your votes as
indicated in /X/
this example
Where a vote is not specified, the proxies will vote the shares represented by
the proxy FOR the election of directors and FOR proposals 2 and 3 and will vote
in accordance with their discretion on such other matters as may properly come
before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS VOTES FOR (1), (2) AND (3).
<TABLE>
<CAPTION>
WITHHOLD
FOR FOR ALL FOR AGAINST ABSTAIN
<S> <C> <C> <C> <C> <C> <C>
(1) Election of 3 Class 1 Directors-Nominees: / / / / (2) Approval of 1999
01 Thomas A. Corcoran 02 Diane C. Creel Incentive Plan / / / / / /
03 C. Fred Fetterolf
(3) Ratification of
Appointment of
Auditors / / / / / /
Instruction: To withhold for any particular nominee, write such nominee's name
on the line below.
______________________________________________________
Signature ______________________________________________________________________ Date:________________ , 2000
Please sign exactly as your name appears above.
</TABLE>
- --------------------------------------------------------------------------------
o FOLD AND DETACH HERE AND READ THE REVERSE SIDE o
YOUR VOTE IS IMPORTANT!
YOU CAN VOTE IN ONE OF THREE WAYS:
VOTE BY INTERNET: 24 HOURS A DAY, 7 DAYS A WEEK.
- ----------------
Follow the instructions at Teledyne Technologies' Website Address:
www.eproxy.com/tdy
OR
o VOTE BY TELEPHONE OR PROXY CARD o
QUICK *** EASY *** IMMEDIATE
VOTE BY PHONE: FOR U.S. STOCKHOLDERS ONLY, CALL TOLL-FREE 1-800-840-1208.
- ------------- ON A TOUCH TONE TELEPHONE 24 HOURS A DAY, 7 DAYS A WEEK.
THERE IS NO CHARGE TO YOU FOR THIS CALL. HAVE YOUR PROXY CARD
IN HAND.
o You will be asked to enter a Control Number, which is located in the box
in the lower right hand corner of this form.
OPTION 1: To vote as the Board of Directors recommends on ALL PROPOSALS:
Press 1.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1.
OPTION 2: If you choose to vote on each proposal separately, Press 0.
You will hear these instructions:
Proposal 1, Director Election Proposal: To vote FOR ALL nominees, Press 1,
to WITHHOLD FOR ALL nominees,
Press 9.
To WITHHOLD FOR AN INDIVIDUAL
nominee, Press 0 and listen to the
instructions.
Proposal 2 and ALL Other Proposals: To vote FOR, Press 1, AGAINST, Press
9; ABSTAIN, Press 0
The instructions are the same for all other proposals.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
PRESS 1 to consent to view future Annual Reports and Proxy Materials for this
account via the Internet.
WHEN ASKED, PLEASE CONFIRM BY PRESSING 1
OR
VOTE BY PROXY CARD: Mark, sign and date your proxy card and return it promptly
- ------------------ in the enclosed envelope.
NOTE: If you voted by Internet or telephone, THERE IS NO NEED TO MAIL BACK your
proxy card.
THANK YOU FOR VOTING.
TO VIEW TELEDYNE TECHNOLOGIES' ANNUAL REPORT AND PROXY MATERIALS ONLINE GO TO:
www.eproxy.com/tdy
