<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NEWPORT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
NEWPORT CORPORATION
1791 DEERE AVENUE
IRVINE, CALIFORNIA 92714
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 7, 1995
----------------
To the Stockholders of Newport Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Newport
Corporation will be held at the Corporate Headquarters, 1791 Deere Avenue,
Irvine, California, on June 7, 1995, at 10:00 a.m., for the purpose of
considering and acting upon the following:
1. To elect two Class III Directors to serve for four years.
2. To approve and ratify the Employee Stock Purchase Plan (the "Purchase
Plan"), which authorizes the Company to issue, or purchase in open
market transactions, 250,000 shares of Common Stock of the Company for
purchase through payroll deductions by participating employees of the
Company.
3. To ratify the appointment of Ernst & Young LLP as the Company's
independent auditors for the year ending December 31, 1995.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business April 19, 1995, will be
entitled to notice of and to vote at the meeting.
All stockholders are cordially invited to attend the meeting. However, to
assure your representation at the meeting, you are urged to mark, sign, date
and return the enclosed proxy as promptly as possible in the post-prepaid
envelope enclosed for that purpose. Any stockholder attending the meeting may
vote in person even if he or she has returned a proxy.
By order of the Board of Directors
LOGO
/S/ ROBERT C. HEWITT
Robert C. Hewitt
Secretary
Irvine, California
May 3, 1995
PLEASE SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
<PAGE>
NEWPORT CORPORATION
1791 DEERE AVENUE
IRVINE, CALIFORNIA 92714
----------------
PROXY STATEMENT
----------------
SOLICITATION AND REVOCATION OF PROXIES
The enclosed Proxy is solicited by the Board of Directors of Newport
Corporation (the "Company") for use in connection with the Annual Meeting of
Stockholders to be held at the Corporate Headquarters, 1791 Deere Avenue,
Irvine, California on Wednesday, June 7, 1995, at 10:00 a.m., and at any and
all adjournments thereof for the purposes set forth herein and in the
accompanying Notice of Annual Meeting of Stockholders.
The persons named as proxies were designated by the Board of Directors and
are officers or directors of the Company. Any Proxy may be revoked or
superseded by executing a later Proxy or by giving notice of revocation in
writing prior to, or at, the Annual Meeting, or by attending the Annual
Meeting and voting in person. Attendance at the meeting will not in and of
itself constitute revocation of the Proxy. All Proxies which are properly
completed, signed and returned to the Company prior to the meeting, and not
revoked, will be voted in accordance with the instructions given in the Proxy.
If a choice is not specified in the Proxy, the Proxy will be voted FOR
election of the director nominees listed below (Proposal 1), FOR approval of
the Employee Stock Purchase Plan (Proposal 2) and FOR ratification of the
Company's appointment of Ernst & Young LLP as independent auditors for the
year ending December 31, 1995 (Proposal 3). An automated system administered
by the Company's transfer agent will tabulate votes cast at the Annual
Meeting. A majority of shares entitled to vote, represented in person or by
proxy, will constitute a quorum at the Annual Meeting. Abstentions and broker
non-votes are each included in the determination of the number of shares
present and voting for the purpose of determining whether a quorum is present,
and each is tabulated separately. In determining whether a proposal has been
approved, abstentions are counted as votes against a proposal and broker non-
votes are not counted as votes for or against a proposal or as votes present
and voting on a proposal.
If any other matters are properly presented at the Annual Meeting for
action, the persons named in the enclosed form of proxy will have discretion
to vote on such matters in accordance with their best judgment. The Company
does not know of any matters other than those set forth above that will be
presented at the Annual Meeting.
This Proxy Statement and the accompanying Proxy are being mailed to
stockholders on or about May 3, 1995. The entire cost of the solicitation of
Proxies will be borne by the Company. It is contemplated that this
solicitation will be primarily by mail. In addition, some of the officers,
directors and employees of the Company may solicit Proxies personally or by
telephone, telefax, telegraph or cable. The Company has retained D. F. King &
Co. to assist in the solicitation of Proxies for a fee estimated to be $5,000,
plus out-of-pocket expenses. In addition, the Company has agreed to indemnify
D.F. King & Co. against any losses or liabilities arising out of D.F. King &
Co.'s fulfillment of the contract, except for such losses or liabilities
arising out of D.F. King & Co.'s own negligence or willful misconduct.
<PAGE>
VOTING AT THE MEETING
As of April 19, 1995, the record date of the meeting, the Company had
outstanding 8,460,956 shares of Common Stock. Each share of Common Stock is
entitled to one vote.
PROPOSAL ONE
ELECTION OF DIRECTORS
At the 1987 Annual Meeting of Stockholders the Restated Articles of
Incorporation (the "Articles") of the Company were amended to provide that the
members of the Company's Board of Directors be divided into four classes
serving staggered four-year terms. The Articles also provide that the number
of directors shall be not less than five (5) and not more than nine (9) in
number, the exact number to be fixed from time to time by the Board of
Directors. The current authorized number is seven (7). One class of directors
is elected each year for a term extending to the fourth succeeding Annual
Meeting after such election.
At the 1995 Annual Meeting, two directors, constituting the Class III
directors, will be elected to hold office for a term expiring at the Annual
Meeting in 1999.
It is the intention of the persons named in the enclosed Proxy to vote to
elect R. Jack Aplin and Robert L. Guyett as the Class III directors to serve
for a term expiring at the Annual Meeting in 1999. The five remaining
directors will continue in office, in accordance with their previous
elections, until the expirations of the terms of the classes at the 1996, 1997
or 1998 Annual Meetings, as the case may be.
The holders of a plurality of the votes cast at the meeting shall have the
right to elect the directors. The Proxies may not be voted for a greater
number of persons than the number of nominees named.
The nominees have indicated that they are willing and able to serve as
directors if elected. If the nominees should become unable or unwilling to
serve, it is the intention of the persons designated as proxies to vote
instead, in their discretion, for such other persons as may be designated as
nominees by the Board of Directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE NOMINEES LISTED BELOW.
CLASS III
(Directors nominated for office with terms expiring in 1999)
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE
---- -------------------- --- --------
<S> <C> <C> <C>
R. Jack Alpin........... Independent Investor 63 1989
Robert L. Guyett........ Senior Vice President, Chief Financial Officer, 58 1990
Engelhard Corporation
</TABLE>
From 1989 to the present, Mr. Aplin has been an independent investor. Mr.
Aplin was Chairman of the Board, President and Chief Executive Officer of
Spectramed, Inc., an international medical products company, from 1986 to
1989.
Since September 1991, Mr. Guyett has served as Senior Vice President and
Chief Financial Officer and a member of the Board of Directors of Engelhard
Corporation, an international specialty chemicals and metals company. From
January 1987 to September 1991 he was the Senior Vice President and Chief
Financial Officer and a member of the Board of Directors of Fluor Corporation,
an international engineering firm.
2
<PAGE>
BIOGRAPHICAL INFORMATION FOR DIRECTORS CONTINUING IN OFFICE
Biographical information follows for each of the other directors of the
Company whose present terms will continue after the 1995 Annual Meeting.
CLASS I
(Director continuing in office with term expiring in 1997)
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE
---- -------------------- --- --------
<S> <C> <C> <C>
John T. Subak............... Of Counsel, Dechert Price & Rhoads 66 1992
</TABLE>
Mr. Subak has served as Of Counsel for Dechert Price & Rhoads, a national
law firm, since January 1994. Previously, Mr. Subak was Director, Group Vice
President and General Counsel for Rohm and Haas Company, an international
chemical products company, a position he held since 1976.
CLASS II
(Directors continuing in office with terms expiring in 1998)
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE
---- -------------------- --- --------
<S> <C> <C> <C>
Dan L. McGurk.............. Independent Investor and Consultant 68 1987
Louis B. Horwitz........... President, Datum, Inc. 67 1993
</TABLE>
Mr. McGurk has been an independent investor and consultant since 1977 and in
August 1985 became Chairman and Co-founder of Southland Title Corporation, a
title insurance company, where he currently serves as Treasurer.
Mr. Horwitz has served as Chairman and President of Datum, Inc., a precision
instruments manufacturer, since 1976.
CLASS IV
(Directors continuing in office with terms expiring in 1996)
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION AGE SINCE
---- -------------------- --- --------
<S> <C> <C> <C>
Richard E. Schmidt...... Chairman and Chief Executive Officer
of the Company 63 1991
C. Kumar N. Patel....... Vice Chancellor--Research, University of
California at Los Angeles 56 1986
</TABLE>
Mr. Schmidt joined the Company as Chairman and Chief Executive Officer in
September 1991. From August 1993 until February 1995, he held the additional
position as President. In September 1984, he left Warner-Lambert Company, an
international medical and consumer products company, to become President and
Chief Executive Officer of Milton Roy Company, an international manufacturer
of measuring instruments and systems. In 1986, with the retirement of the
founder, he also became Chairman. He held that position until December 1990
when Milton Roy was acquired by Sundstrand Corporation, an aerospace and power
transmission corporation. Prior to joining the Company he served as a
consultant to Sundstrand Corporation.
3
<PAGE>
Dr. Patel was elected to the Board in January 1986. Dr. Patel has been in
his current position since 1993. Previously he was Executive Director--
Research, Materials Science, Engineering and Academic Affairs Division at AT&T
Bell Laboratories, a telecommunications corporation, since 1987 and for six
years previously was Executive Director, Physics and Academic Affairs
Division. He joined Bell Laboratories in 1961.
The following directors and director nominees presently serve as directors
of the following public corporations:
<TABLE>
<S> <C>
Louis B. Horwitz Datum, Inc.
Dan L. McGurk Bomar Instrument Corporation, an aerospace
company; and Datum, Inc.
Robert L. Guyett Engelhard Corporation; and Canonie
Environmental Services Corporation, an
environmental services company
</TABLE>
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during 1994. Each of the
directors, except Mr. Aplin, attended at least 75% of the aggregate number of
meetings of the Board and committees of the Board on which they served during
each such period they were directors.
During 1994 the Audit Committee met four times. The committee, comprised of
Messrs. Guyett (Chairman), McGurk, Patel and Subak, has the responsibility to
review and approve the scope and results of the annual audit; to recommend to
the Board the appointment of the independent auditors; to review with the
independent auditors the Company's financial staff and the adequacy and
effectiveness of the Company's systems and internal financial controls; to
review the internal audit plan and findings for completed internal audits; to
discuss with management and the independent auditors the content of financial
statements presented to stockholders; to review significant changes in
accounting policies; and to provide sufficient opportunity for the internal
auditor and independent auditors to meet with the committee without management
present.
The Compensation Committee, comprised of Messrs. Aplin, Horwitz and McGurk
(Chairman) and which held two meetings during 1994, has the responsibility for
administering the Company's various stock option plans, reviewing and
evaluating the Company's compensation programs and plans, and making
recommendations concerning compensation for key personnel and amendments to
the stock option and certain compensation plans.
The Nominating Committee, comprised of Messrs. Guyett, Patel and Schmidt
(Chairman) met once to consider nominations for directors. Stockholders may
recommend nominees for election as directors by writing to the Chief Executive
Officer of the Company.
EXECUTIVE OFFICERS
As of April 19, 1995, the Company has five Executive Officers elected on an
annual basis to serve at the pleasure of the Board of Directors:
<TABLE>
<S> <C>
Richard E. Schmidt Chairman and Chief Executive Officer
Edmund K. Langley President and Chief Operating Officer
Robert C. Hewitt Vice President, Secretary, Treasurer and
Chief Financial Officer
Linda L. Kirkbride Vice President
Alain Danielo President and General Manager,
Micro-Controle S.A.
</TABLE>
4
<PAGE>
A biographical summary regarding Mr. Schmidt has been presented earlier.
Biographical information on other Executive Officers follows:
<TABLE>
<CAPTION>
NAMES AND PRINCIPAL OCCUPATION AGE
------------------------------ ---
<S> <C>
EDMUND K. LANGLEY......................................................... 51
President and Chief Operating Officer. Mr. Langley joined the Company on
April 1, 1994 as Executive Vice President and Chief Operating Officer. In
February 1995, he was elected President. From December 1991 to March
1994, Mr. Langley served as Vice President and General Manager of the OEM
Products Division of Schuller International, Inc., a subsidiary of Man-
ville Corporation, manufacturing glass and polymeric fibers. From 1987 to
1991, he was Chief Executive of Norton Opax, Inc., a printing and graph-
ics arts company.
ROBERT C. HEWITT.......................................................... 49
Vice President, Secretary, Treasurer and Chief Financial Officer. Mr.
Hewitt joined the Company in January 1987 as Vice President with respon-
sibility for finance. In February 1987, he was elected to the additional
positions of Secretary and Treasurer and in January 1989 he was elected
Senior Vice President. In February 1995, he was elected to the position
of Vice President and Chief Financial Officer. Prior to joining the Com-
pany, Mr. Hewitt held various financial management positions with General
Electric Company, an international industrial and consumer products com-
pany.
LINDA L. KIRKBRIDE........................................................ 47
Vice President. Ms. Kirkbride joined the Company in June 1991 as Vice
President with responsibility for human and administrative resources.
Prior to joining the Company, Ms. Kirkbride was Vice President of Human
Resources at Long Beach Bank, a savings and loan and mortgage bank, from
1988 to 1991. From 1978 through 1988, she was Director of Human Resource
Planning at Avery Dennison Corporation, a manufacturer of pressure sensi-
tive products and base materials.
ALAIN DANIELO............................................................. 48
President and General Manager, Micro-Controle S.A.. Mr. Danielo joined
the Company in January 1995 as President and General Manager of the
Company's French subsidiary Micro-Controle S.A.. Prior to joining the
Company, Mr. Danielo was Managing Director of the Electronics Division of
Valeo S.A., an automobile parts company, from 1989 to 1995. From 1985 to
1989, he was General Manager of Molex France S.A.R.L., a manufacturer of
electronic components.
</TABLE>
5
<PAGE>
PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth certain information as of April 19, 1995, with
respect to all those known by the Company to be the beneficial owners of more
than 5% of its outstanding common stock, each director, each executive officer
named on the Summary Compensation Table and other current executive officers
who own shares of common stock, and all directors and current executive
officers of the Company as a group:
<TABLE>
<CAPTION>
PERCENT
AMOUNT AND NATURE OF OF
NAME AND ADDRESS OF BENEFICIAL OWNERS BENEFICIAL OWNERSHIP(1) CLASS
------------------------------------- ---------------------- -------
<S> <C> <C>
Prudential Insurance Company of America
Gateway Center Three, 100 Mulberry Street,
Newark, NJ 07102.............................. 696,100(2) 8.23
Brinson Partners, Inc.
70 West Madison, Chicago, IL 60602............ 657,585(2) 7.77
Charles M. Royce and related entities
1414 Avenue of the Americas, New York, NY
10019......................................... 546,400(2)(3) 6.46
College Retirement Equities Fund
730 Third Avenue, New York, NY 10017.......... 473,200(2) 5.59
R. Jack Aplin.................................. 23,000(4) *
Alain Danielo.................................. -0- -0-
Robert L. Guyett............................... 24,000(5) *
Robert C. Hewitt............................... 93,391(6) 1.10
Louis B. Horwitz............................... 11,000(7) *
Linda L. Kirkbride............................. 27,855(8) *
Edmund K. Langley.............................. 29,914(9) *
Dan L. McGurk.................................. 28,000(10) *
C. Kumar N. Patel.............................. 23,000(4) *
Richard E. Schmidt............................. 150,669(11) 1.76
John T. Subak.................................. 19,000(12) *
All 11 directors and current executive officers
of the Company as a group..................... 429,829(13) 4.89
</TABLE>
- --------
* Less than one percent.
(1) In all cases, the beneficial owner has sole voting and investment power
with respect to the shares shown as beneficially owned by them, subject to
community property laws, where applicable, the information contained in
the footnotes to this table or otherwise as noted herein.
(2) The information is based upon a filing made with the Securities and
Exchange Commission on Schedule 13D or 13G.
(3) Quest Advisory Corp. ("Quest"), Quest Management Company ("QMC") and
Charles M. Royce filed a joint Schedule 13G reporting the beneficial
ownership of 546,400 shares. Mr. Royce may be deemed to be a controlling
person of Quest and QMC, and as such may be deemed to beneficially own the
shares of Common Stock of Newport Corporation beneficially owned by Quest
and QMC. Mr. Royce does not own any shares outside of Quest and QMC, and
disclaims beneficial ownership of the shares held by Quest and QMC.
(4) Consists of 23,000 shares for options exercisable within 60 days.
(5) Includes 23,000 shares for options exercisable within 60 days.
(6) Includes 64,750 shares for options exercisable within 60 days.
(7) Includes 8,000 shares for options exercisable within 60 days.
(8) Includes 18,250 shares for options exercisable within 60 days.
(9) Includes 12,500 shares for options exercisable within 60 days.
(10) Includes 23,000 shares for options exercisable within 60 days.
(11) Includes 110,000 shares for options exercisable within 60 days.
(12) Includes 16,000 shares for options exercisable within 60 days.
(13) Includes 321,500 shares for options exercisable within 60 days.
6
<PAGE>
EXECUTIVE COMPENSATION AND OTHER
TRANSACTIONS WITH MANAGEMENT AND OTHERS
REMUNERATION OF OFFICERS AND OTHERS
The following table and narrative text discuss compensation paid in the
years ended December 31, 1994 and 1993, the five-month transition period ended
December 31, 1992, and the fiscal year ended July 31, 1992 to the Company's
Chief Executive Officer and the Company's other most highly compensated
executive officers whose salary and bonus exceeded $100,000 for the year ended
December 31, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
---------------------------- --------------------- -------
OTHER RESTRICTED SECURITIES
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
PRINCIPAL POSITION YEARLY (1) ($) ($) ($)(2) ($)(3) (#) ($) ($)(4)
------------------ ---------- ------- ------- ------------ ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard E. Schmidt 1994 251,186 279,675 18,020 84,375 15,000 0 9,000
Chairman of the 1993 232,868 125,000 18,019 0 0 0 21,006
Board, and Chief 1992T 95,765 101,298 6,706 46,000 0 0 21,525
Executive Officer 1992 203,360 0 7,700 0 150,000 0 1,558
Edmund K. Langley 1994 156,923 93,750 6,300 0 50,000 0 8,538
President and Chief 1993 0 0 0 0 0 0 0
Operating Officer 1992T 0 0 0 0 0 0 0
1992 0 0 0 0 0 0 0
Robert C. Hewitt 1994 143,442 78,043 18,503 28,125 5,000 0 9,000
Vice President, 1993 136,620 36,000 17,578 0 0 0 10,712
Secretary, Treasurer 1992T 56,184 29,712 6,257 28,750 0 0 3,151
and Chief Financial 1992 134,385 0 4,760 0 12,500 0 5,090
Officer
Linda L. Kirkbride 1994 126,368 47,447 13,118 16,875 3,000 0 8,720
Vice President 1993 118,194 15,000 3,029 0 0 0 6,654
1992T 46,684 12,589 1,262 17,250 0 0 2,070
1992 107,635 0 3,029 0 4,000 0 3,865
</TABLE>
- -------
(1) The fiscal years represent the twelve months ended December 31, 1994 and
1993, the five-month transition period ended December 31, 1992 and the
twelve months ended July 31, 1992.
(2) Other annual compensation for 1994 consists of the following:
<TABLE>
<CAPTION>
Richard E. Schmidt Edmund K. Langley Robert C. Hewitt Linda L. Kirkbride
------------------ ----------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Disability Insurance
Premiums $ 9,620 $ 0 $13,034 $ 5,918
Automobile Allowance 8,400 6,300 5,469 7,200
------- ------ ------- -------
Total $18,020 $6,300 $18,503 $13,118
======= ====== ======= =======
</TABLE>
(3) Restricted stock was granted on December 1, 1992, and February 9, 1994 and
vests at 25% per year beginning December 1, 1994 and February 9, 1996,
respectively. Amounts represent fair market value on grant dates.
Dividends totaling $0.04 per share were paid on the restricted stock
during the year 1994, the same rate as on the common stock. The number of
shares and value of restricted stock holdings at December 31, 1994, are as
shown below:
<TABLE>
<CAPTION>
Richard E. Schmidt Edmund K. Langley Robert C. Hewitt Linda L. Kirkbride
------------------ ----------------- ---------------- ------------------
<S> <C> <C> <C> <C>
Number of shares
granted 21,000 0 8,750 5,250
Shares value at
December 31, 1994 $160,125 $0 $66,719 $40,031
</TABLE>
(4) All other compensation for 1994 consists of the following:
<TABLE>
<CAPTION>
Richard E. Schmidt Edmund K. Langley Robert C. Hewitt Linda L. Kirkbride
------------------ ----------------- ---------------- ------------------
<S> <C> <C> <C> <C>
401(k) Matching
Contribution $4,500 $4,038 $4,500 $4,220
401(k) Profit Sharing 4,500 4,500 4,500 4,500
------ ------ ------ ------
Total $9,000 $8,538 $9,000 $8,720
====== ====== ====== ======
</TABLE>
7
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning grants of
options to Executive Officers named in the Summary Compensation Table during
the year ended December 31, 1994. The amounts shown as potential realizable
values on these options are based on arbitrarily assumed annualized rates of
appreciation in the price of Newport Common Stock of five percent and ten
percent over the term of the options, as set forth in Securities and Exchange
Commission ("SEC") rules. The Executive Officers will realize no gain on these
options without an increase in the price of Newport Common Stock which will
benefit all Stockholders proportionately. No stock appreciation rights were
granted during 1994.
STOCK OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE
% OF AT ASSUMED ANNUAL
TOTAL RATES OF STOCK
OPTIONS PRICE
NUMBER OF GRANTED APPRECIATION FOR
SECURITIES TO EXERCISE TEN-YEAR OPTION
UNDERLYING EMPLOYEES PRICE TERM (2)
OPTIONS IN FISCAL PER EXPIRATION -----------------
NAME GRANTED (1) YEAR SHARE DATE 5% 10%
- ---- ----------- --------- -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Richard E. Schmidt... 15,000 8.0% $5.625 02/09/04 $ 53,063 $134,472
Edmund K. Langley.... 50,000 26.7 5.25 04/01/04 165,085 418,357
Robert C. Hewitt..... 5,000 2.7 5.625 02/09/04 17,688 44,825
Linda L. Kirkbride... 3,000 1.6 5.625 02/09/04 10,613 26,894
</TABLE>
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Increase in market value of Newport common 5% (to $9.16/share) 10% (to $14.59/share)
stock for all stockholders at assumed
rates of stock price appreciation (as used $24.8 million $62.9 million
in the table above) from $5.625 per share,
over the ten-year period, based on
7,011,000 shares outstanding at December
31, 1994(2).
</TABLE>
- --------
(1) Options granted in 1994 are exercisable starting 12 months after the grant
date, with 25% of the shares covered thereby becoming exercisable at that
time and with an additional 25% of the option shares becoming exercisable
on each successive anniversary date, with full vesting occurring on the
fourth anniversary date. All options become exercisable on a change-in-
control as defined in their Employment Agreements (described below). The
options were granted for a term of 10 years, subject to earlier
termination in certain events related to termination of employment.
(2) The dollar amounts in these columns are the result of calculations at the
five percent and ten percent rates set by the SEC and are not intended to
forecast future appreciation of Newport Common Stock.
8
<PAGE>
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUE
The following table sets forth certain information concerning the exercise
of options by each of the Company's Executive Officers named in the Summary
Compensation Table during the year ended December 31, 1994, including the
aggregate value of gains on the date of exercise. In addition, the table
includes the number of shares covered by both exercisable and unexercisable
stock options as of December 31, 1994. Also reported are the values for "in-
the-money" options that represent the positive spread between the exercise
price of any of such existing stock options and the closing price of the
Company's common stock as of December 31, 1994.
<TABLE>
<CAPTION>
SHARES VALUE OF UNEXERCISED
ACQUIRED ON VALUE NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
EXERCISE REALIZED OPTIONS AT FY-END (#) FY-END ($)(1)
NAME (#) ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ----------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Richard E. Schmidt...... 0 0 106,250 / 58,750 34,375 / 66,250
Edmund K. Langley....... 0 0 0 / 50,000 0 / 125,000
Robert C. Hewitt........ 0 0 57,375 / 16,125 25,312 / 20,937
Linda L. Kirkbride...... 0 0 15,000 / 10,500 10,312 / 16,687
</TABLE>
- --------
(1) Market value of underlying securities at exercise date or year end, as the
case may be, minus the exercise or base price on "in-the-money" options.
The closing sale price for the Company's Common Stock as of December 31,
1994, on the NASDAQ National Market System was $7.75.
PERFORMANCE GRAPH FOR FIVE YEARS
ENDED DECEMBER 31, 1993
Comparison of Five Year Cumulative Total Return Among the
Newport Corporation, NASDAQ National Market Index
and the Scientific Instruments Group Index published by
Media General Financial Services, Inc.
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period NEWPORT INDUSTRY BROAD
(Fiscal Year Covered) CORPORATION INDEX MARKET
- --------------------- ---------- -------- ------
<S> <C> <C> <C>
Measurement Pt-1989 $100 $100 $100
FYE 1990 $ 79.43 $105.54 $ 81.12
FYE 1991 $ 86.30 $140.02 $104.14
FYE 1922 $ 59.36 $131.79 $105.16
FYE 1993 $ 58.40 $145.68 $126.14
FYE 1994 $ 86.75 $141.37 $132.44
</TABLE>
The graph compares the cumulative total shareholder return on a $100
investment in the Company's common stock for the five years ended December 31,
1994, with the cumulative total return on $100 invested in each of (i) the
NASDAQ National Market Index and (ii) the Scientific Instruments Group Index
published
9
<PAGE>
by Media General Financial Services, Inc. (A listing of the companies
comprising this index is available from the Company.). The graph assumes all
investments were made at market value on December 31, 1989 and the
reinvestment of all dividends.
COMPENSATION OF DIRECTORS
Each of the outside directors is paid an annual fee of $12,000 and is
reimbursed for expenses in connection with Board meetings. In addition, each
outside director is paid $1,000 for each Board meeting attended and $400 for
each committee meeting attended, or $600 for the Committee Chairman.
Also, each outside director receives annually, on January 1, options for
4,000 shares of common stock which vest on the anniversary of the grant. Each
new outside director receives options on 16,000 shares.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Messrs. Schmidt,
Langley, Hewitt and Danielo and Ms. Kirkbride providing for certain payments
and benefits in the event their employment with the Company is terminated
within two years of a change of control of the Company, unless such
termination is as a result of death, disability or retirement of such officer
or is a termination for cause. Each of these officers may be entitled to a
severance payment equal to twelve months of such officer's highest salary
within the one-year period preceding termination plus a bonus payment equal to
such officer's incentive compensation bonus paid under the Company's Incentive
Plan, or other bonus plans, assuming 100% satisfaction of all performance
goals. In addition, the officer is entitled to the continuation of benefits
under the Company's medical, dental and vision plans, and long-term disability
insurance for two years, the removal of all restrictions on restricted stock
held by the officer, the payment of an amount equal to the difference between
the exercise price and fair market price of stock options held by the officer
and certain other benefits, including payment of an amount sufficient to
offset any "excess parachute payment" excise tax payable by the officer
pursuant to the provisions of the Internal Revenue Code or any comparable
provision of state or foreign law.
INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company has entered into agreements (the "Indemnification Agreements")
with each officer and director of the Company providing for contractual
protection of certain rights of indemnification from the Company.
The Indemnification Agreements provide for indemnification of officers and
directors to the fullest extent permitted by its Articles of Incorporation,
By-Laws and applicable law. They cover all fees, expenses, liabilities and
losses (including attorney's fees, judgments, fines, and amounts paid in any
settlement approved by the Company) actually and reasonably incurred in
connection with any investigation, claim, action, suit or proceeding to which
the officer or director is a party by reason of any action or inaction in the
officer's or director's capacity as an officer or director of the Company or
by reason of the fact that the officer or director is or was serving as a
director, officer, employee, agent or fiduciary of the Company, or of any
subsidiary or division, or is or was serving at the request of the Company as
the Company's representative with respect to another entity. Indemnification
would not be available, however, for expenses and the payment of profits
arising from the purchase and sale by the officer or director of securities in
violation of Section 16(b) of the Securities Exchange Act of 1934, as amended.
10
<PAGE>
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent of
a registered class of the Company's equity securities to file with the SEC
initial reports of ownership and reports of changes in ownership of Common
Stock and other equity securities of the Company. Officers, directors and
greater than ten percent stockholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. To the
Company's knowledge, based solely on the review of copies of such reports
furnished to the Company and written representations that no other reports
were required, during the years ended December 31, 1993 and 1994, all Section
16(a) filing requirements applicable to the Company's officers, directors and
greater than ten percent stockholders were complied with.
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
COMMITTEE
The Compensation Committee of the Board of Directors is comprised entirely
of non-employee, independent Directors. The Committee is responsible for
reviewing, recommending and approving changes to the Company's compensation
policies and programs, as applicable to the Company's officers and senior
personnel.
COMPENSATION POLICY AND OBJECTIVES
Our primary goal as members of the Compensation Committee is to assure that
the compensation provided to executives is linked to the Company's business
strategies and objectives, thereby aligning the financial interest of senior
management with that of the stockholders. Beyond that, our priorities are to
assure that the executive compensation programs enable the Company to attract,
retain and motivate the high caliber executives required for the success of
the business. These objectives are achieved through a variety of compensation
programs, summarized below, which support the current and long-term
performance of the business. The Company has not paid, and does not expect to
pay any qualifying compensation under Section 162(m) of the Internal Revenue
Code, but is considering a policy with regard to such compensation in response
to enacted regulations.
BASE SALARY
Base salaries for executive officers are determined by evaluating the
responsibilities of the position and comparing it with other similar executive
positions in other companies in the Company's industry which are similar in
size and profitability to the Company. These companies may be, but are not
necessarily, included in the Scientific Instruments Group Index. From time to
time the Company's compensation consultant surveys senior executive salaries
from a representative sampling of such similar companies and compares this
data with published surveys of national scope encompassing electronics and
other high technology organizations. The Company's pay grade levels are set at
approximately the competitive mid- to 75th percentile range. Individual
salaries may then vary somewhat below or above this range, based upon the
individual's performance and contributions to Company success, time on the job
and internal equity. Annual salary adjustments are determined by individual
performance within an annual budget approved by the Committee. The CEO's
salary increase is separately determined and approved by the Committee based
upon the factors given. During December 1994, the Committee approved increases
averaging 5.2% and ranging from 0% to 10% effective December 1, 1994.
11
<PAGE>
ANNUAL INCENTIVES
Officers have an opportunity to earn annual incentives ("Incentive Plan")
based on performance targets. The Compensation Committee may also award
bonuses in cases where such performance targets are not met if it determines
that the circumstances warrant such action. Since 1987, the Company has
generally used corporate operating income as its primary measure of corporate
performance. Individual officers may have other measures of performance for
the annual incentive such as sales, inventory turns and earnings per share,
the identity and relative importance of which generally vary depending upon
the position of the officer in question, so that the officer's incentives are
based as closely as possible upon those areas of corporate performance which
are most directly affected by the officer. Additionally, each officer has a
discretionary portion of the annual incentive linked to achievement of non-
financial goals, which differ depending upon the responsibilities of the
officer in question. The target incentives for each officer range from 25% to
100% of such officer's annual salary. For overachievement of goals, officers
can earn up to 150% of the target incentive. For 1994, the Compensation
Committee awarded incentive payments based upon performance to specific goals
established at the beginning of the year. Specifically, although some of the
Company's other performance goals were not met completely, based upon the fact
that the Company reached 104.5% of planned earnings per share, the
Compensation Committee awarded incentive payments ranging from 94% to 103% of
the target incentive amount to executive officers.
LONG-TERM INCENTIVES
To further align the interests of stockholders and managers, the Company
grants stock options and restricted stock generally on an annual basis. Stock
options are granted to approximately thirty employees. The number of shares
awarded is established based upon a recommendation by the employee's
supervisor and approved by the Compensation Committee. The exercise price for
stock options is the fair market value of the stock on the date of the grant.
Options generally vest at a rate of 25% per year starting on the anniversary
date of the option grant. Options totaling 32,000 shares were granted on
February 9, 1994, to six officers and executive officers. In addition, on
April 1, 1994, options on 50,000 shares were granted to Mr. Langley as part of
his employment offer. Restricted stock grants generally vest at a rate of 25%
per year starting on the second anniversary of the restricted stock grant.
Restricted stock grants totaled 32,000 shares and were granted on February 9,
1994, to six officers and executive officers.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officer participates in the compensation program
discussed above. His base salary is set, in the same way as other executive
officers, as determined by comparable positions in companies of similar size
and profitability to the Company in the marketplace. His base salary was
raised 10% effective December 1, 1994.
Each year the Compensation Committee approves a performance based bonus plan
for the Chief Executive linked to operating income and various non-financial
objectives including improving the management team and product quality. Based
on his performance against his objectives for 1994 on asset management,
strengthening the management team, enhancing the profitability of the French
operations, improving Newport quality and reaching 104.5% of planned earnings
he was awarded a bonus of $279,675.
Respectfully submitted,
Dan L. McGurk, Chairman
R. Jack Aplin
Louis B. Horwitz
Notwithstanding anything to the contrary set forth in any of the Company's
previous or future filings under the Securities Act of 1933, as amended, or
the Securities Exchange Act of 1934, as amended, that might incorporate by
reference previous or future filings, including the Proxy Statement, in whole
or in part, the preceding report and the Performance Graph on page 9 shall not
be incorporated by reference into any such filings.
12
<PAGE>
PROPOSAL TWO
APPROVAL OF THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN
At the Meeting, the Company's stockholders will be asked to approve and
ratify the adoption of the Company's Employee Stock Purchase Plan (the
"Purchase Plan"). Subject to approval by the Company's stockholders at the
Meeting, the Purchase Plan was adopted by the Board of Directors on November
15, 1994 to be effective on January 1, 1995 (the "Effective Date"). The
primary purpose of the Purchase Plan is to provide employees of the Company
and its subsidiaries with an opportunity to purchase Common Stock through
payroll deductions and to increase their proprietary interest in the Company.
Approval and ratification of the Purchase Plan will require the affirmative
vote of the holders of a majority of the outstanding shares of the Company's
Common Stock present or represented and voting at the Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL AND RATIFICATION
OF THE PURCHASE PLAN.
The following description of the Purchase Plan is qualified by reference to
the complete text of the Purchase Plan. A copy of the Purchase Plan is
attached hereto as Exhibit A.
THE PURCHASE PLAN
GENERAL NATURE AND PURPOSE
The Purchase Plan authorizes the Company to issue and reserve for the
Purchase Plan, or purchase in open market transactions up to an aggregate of
250,000 shares of Common Stock for the benefit of participating employees
("Participants") during the term of the Purchase Plan.
The Purchase Plan is not a qualified plan under Section 401(a) of the
Internal Revenue Code. The Purchase Plan is designed to be an employee stock
purchase plan under Section 423 of the Internal Revenue Code, providing the
Participants the benefits afforded under Section 421 of the Internal Revenue
Code. See "Summary of Federal Income Tax Consequences" below.
The primary purpose of the Purchase Plan is to provide employees of the
Company and selected subsidiaries with an opportunity to purchase Common Stock
through payroll deductions and to increase their proprietary interest in the
Company. Shares of Common Stock covered by the Purchase Plan will either be
issued by the Company pursuant to the Purchase Plan or purchased in open
market transactions.
The Purchase Plan has been designed in a manner so that the Purchase Plan is
exempt from the provisions of the Employment Retirement Income Security Act of
1974 ("ERISA").
ADMINISTRATION
The Purchase Plan will be administered by the Board of Directors. All
questions of interpretation of the Purchase Plan are to be determined by the
Board of Directors and its decisions are to be final and binding on all
Participants. The Board of Directors has the authority to designate agents to
carry out responsibilities relating to the Purchase Plan.
ELIGIBILITY
Each employee of the Company who had completed a year of employment with the
Company on the Effective Date became eligible to become a Participant in the
Purchase Plan on the Effective Date. All other employees of the Company become
eligible to become a Participant in the Purchase Plan on the next Grant Date
(as defined below) coincident with or next following the employee's completion
of one year of employment with the Company. "Grant Date" means the first day
of each calendar quarter (January 1, April 1, July 1 and October 1).
13
<PAGE>
Under the Purchase Plan, no employee will be granted a right to purchase any
Common Stock under the Purchase Plan if immediately after the purchase of any
Common Stock under the Purchase Plan the employee would own stock or hold
outstanding options to purchase stock representing in the aggregate 5% or more
of the total combined voting power of all classes of stock of the Company, or
if the grant would permit the employee to purchase stock which, when
aggregated with purchases under all other employee stock purchase plans of the
Company, would exceed $25,000 worth of Common Stock of the Company (determined
using the fair market value of such stock at the time such right is granted)
for any calendar year in which the right is outstanding at any time.
The approximate number of persons who are eligible to be Participants is 593
as of December 31, 1994.
PARTICIPATION
On each Grant Date, the Company grants to each eligible employee who has
elected in writing to participate in the Purchase Plan a right to purchase, at
the Purchase Price described below, that number of shares and partial shares
of Common Stock that can be purchased by the Company at the Purchase Price
with the amounts held in such employee's payroll deduction account. The Common
Stock will be purchased on the next Purchase Date. "Purchase Date" means the
last day of each Offering Period (March 31, June 30, September 30 or December
31). The initial Offering Period under the Purchase Plan commenced on January
1, 1995 and terminated on March 31, 1995. Thereafter, the Purchase Plan
provides for consecutive 3-month offering periods commencing on each Grant
Date and ending on the next following Purchase Date.
An employee who has satisfied the eligibility requirements of the Purchase
Plan may become a Participant upon his or her completion and delivery to the
Company of a Subscription Agreement authorizing payroll deductions. Subject to
the other limitations contained in the Purchase Plan, a Participant may elect
to defer only whole dollar amounts of his or her compensation up to an
aggregate maximum of 15% of his or her total compensation in any calendar
year. A Participant may terminate participation in the Purchase Plan at any
time but will forfeit the ability to participate in at least one future
Offering Period (see "Payment of Purchase Price; Payroll Deductions" below).
BENEFITS OR AMOUNTS RECEIVABLE UNDER THE PURCHASE PLAN
The Company believes that the benefits or amounts that will be received by
any Participant or group of Participants under the Purchase Plan cannot be
determined. The Company also believes that the benefits or amounts that would
have been received by any person or group of persons under the Purchase Plan
in 1994 if the Purchase Plan had been in effect during that period cannot be
determined.
AMENDMENT AND TERMINATION OF THE PURCHASE PLAN
The Purchase Plan will terminate on December 31, 2004. The Board of
Directors at any time may amend or terminate the Purchase Plan, except that
termination of the Purchase Plan will not affect a Participant's right to
purchase Common Stock at a Purchase Price for any current Offering Period, nor
may any amendment to the Purchase Plan make any change in a right to purchase
Common Stock that adversely affects the rights of any Participant. No
amendment may be made to the Purchase Plan without prior approval of the
stockholders of the Company if such amendment would increase the number of
shares reserved under the Purchase Plan, materially modify the eligibility
requirements of the Purchase Plan or materially increase the benefits that may
accrue to Participants under the Purchase Plan.
PURCHASE PRICE
The purchase price per share (the "Purchase Price") for which shares of
Common Stock will be sold in an Offering Period under the Purchase Plan is the
lesser of 85% of the fair market value of a share of Common Stock on the Grant
Date or 85% of the fair market value of a share of Common Stock on the
Purchase Date.
14
<PAGE>
The fair market value of the Common Stock under the Purchase Plan will be
the per share price of the last sale of the Common Stock as reported on the
NASDAQ National Market System or, if the Common Stock is listed or admitted to
trading on any stock exchange, the last reported sale price on such date on
the principal stock exchange on which the Common Stock is listed or admitted
to trading. If no trading occurred on such date, the fair market value shall
be the mean between the representative closing bid and asked prices for the
Common Stock on such exchange or in the over-the-counter market, as the case
may be, on that date, or, if such securities' markets were closed on that
date, on the next preceding date on which such securities' markets were open
for trading.
The fair market value of the Common Stock on the Record Date was $8.375 per
share.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
The Purchase Price of shares is paid by means of payroll deductions
accumulated on behalf of a Participant during an Offering Period. For the
purposes of the Purchase Plan, a Participant's compensation is the amount
indicated on the Form W-2 issued to the Participant by the Company. A
Participant may either (i) terminate participation in the Purchase Plan, (ii)
discontinue deductions and have accumulated deductions applied to the purchase
of shares at the end of the Offering Period or (iii) decrease the rate of
payroll deductions during any Offering Period. If a Participant terminates
participation in the Purchase Plan, however, such Participant will be
precluded from participating in the Purchase Plan from the date of termination
through the remainder of the Offering Period within which the termination
occurred and the next succeeding Offering Period.
The Company intends to administer the Purchase Plan in order to ensure that
any affiliate Participant's discontinuation of participation in the Purchase
Plan, increase or decrease of payroll deductions or commencement or
termination of participation in the Purchase Plan will be effected in
compliance with the exemptions from liability under Section 16(b) of the
Exchange Act as set forth in Rule 16b-3 promulgated thereunder.
Payroll deductions for a Participant commence on the Grant Date coincident
with or next following the date on which a Participant's payroll deduction
authorization is properly filed and continue thereafter unless such rate is
changed or the Participant's participation is terminated.
The Company will establish and maintain a separate account for each
Participant. All payroll deductions that are credited to a Participant's
account under the Purchase Plan do not accrue any interest or earnings and are
deposited with the general funds of the Company. All payroll deductions
received or held by the Company may be used by the Company for any corporate
purpose.
PURCHASE OF STOCK
A Participant may elect to have shares purchased under the Purchase Plan and
issued directly to him or her. Unless the Participant's participation is
terminated or the Participant directs the Company otherwise, shares will be
purchased automatically on his or her behalf with all amounts held in his or
her account on each Purchase Date at the Purchase Price in open market
transactions. If the Participant elects to have the shares issued directly to
him or her, the shares purchased for the Participant will be delivered to him
or her as promptly as practicable after each Purchase Date. If such election
is not made by the Participant, the shares will be issued to an administrator
engaged by the Company to administer the Plan, which administrator will
maintain accounts reflecting each Participant's interest in the shares held by
the administrator. Any cash remaining in the Participant's account will remain
in the account and be applied to the purchase of shares at the next Purchase
Date.
15
<PAGE>
WITHDRAWAL
A Participant may terminate his or her participation in the Purchase Plan by
signing and delivering to the Company a notice of withdrawal. Such withdrawal
may be elected at any time before the end of the applicable Offering Period.
As soon as practicable after such withdrawal, the payroll deductions credited
to the Participant's account will be returned to the Participant, without
interest. A Participant who has withdrawn from the Purchase Plan will be
excluded from participation for the remainder of the Offering Period in which
the withdrawal occurred and the next succeeding Offering Period but may be
reinstated as a Participant thereafter by executing and delivering a new
Subscription Agreement.
TERMINATION OF EMPLOYMENT
Termination of a Participant's employment for any reason, including
retirement, death or discharge, immediately cancels his or her participation
in the Purchase Plan. In such event, the payroll deductions credited to the
Participant's account will be returned to such Participant or, in the case of
death, to the Participant's beneficiary, without interest.
ADJUSTMENT UPON CHANGES IN CAPITALIZATION; MERGER, CONSOLIDATION OR
REORGANIZATION
In the event of any change in the capitalization of the Company, such as a
stock split or stock dividend, or in the event of any merger, sale or other
reorganization, appropriate adjustments will be made by the Company in the
shares subject to purchase under the Purchase Plan and in the Purchase Price
per share.
In the event that the Company at any time proposes to merge into,
consolidate with or to enter into any other reorganization (including the sale
of substantially all of its assets or a "reverse" merger in which the Company
is the surviving entity), the Purchase Plan will terminate, unless provision
is made in writing in connection with such transaction for the continuance of
the Purchase Plan, with appropriate adjustments made as to the number and kind
of shares and prices. If upon any of such events provision is not made for the
continuance of the Purchase Plan, the Board of Directors is obligated to cause
written notice of the proposed transaction to be given to the Participants not
less than ten days before the anticipated effective date of the proposed
transaction, and all Participant accounts will purchase Common Stock as if the
day before the effective date of the proposed transaction were a Purchase
Date.
NONASSIGNABILITY
Benefits and/or accumulated payroll deductions under the Purchase Plan may
not be pledged, assigned or transferred for any reason (other than upon the
death of a Participant), and any such attempt may be treated by the Company as
an election to withdraw from the Purchase Plan.
RESALES OF COMMON STOCK
Subject to certain limitations set forth below that pertain to affiliates of
the Company, as defined in Rule 405 promulgated by the Securities and Exchange
Commission under the Securities Act, shares of Common Stock purchased under
the Purchase Plan generally may be resold from time to time in the over-the-
counter market or otherwise. Persons who are affiliates of the Company may
resell shares purchased under the Purchase Plan only (i) in accordance with
the provisions of Rule 144 promulgated under the Securities Act (exclusive of
the two-year holding period) or some other available exemption from
registration under the Securities Act or (ii) pursuant to an effective
registration statement. An affiliate usually includes officers, directors and
principal stockholders of the Company.
16
<PAGE>
SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES
The following is a brief description of the federal income tax consequences
of participation in the Purchase Plan. State and local income taxes, which may
vary from locality to locality, are not discussed.
The Purchase Plan and the right of Participants to make purchases thereunder
are intended to qualify under the provisions of Sections 421 and 423 of the
Internal Revenue Code. Under such provisions, no income will be taxable to a
Participant at the time of grant or purchase of shares. However, a Participant
may become liable for tax upon disposition of shares acquired under the
Purchase Plan, and the tax consequences will depend on how long a Participant
has held the shares before disposition.
If the shares are disposed of at least two years after the Grant Date and at
least one year after the Purchase Date, then the lesser of (i) the excess of
the fair market value of the shares at the time of such disposition over the
Purchase Price of the shares or (ii) the excess of the fair market value of
the shares on the Grant Date over the Purchase Price will be treated as
ordinary income to the Participant. Any further gain upon such disposition
will be taxed as long-term capital gain. Any long-term capital gain will be
taxed as capital gain at the rates then in effect. If the shares are sold and
the sale price is less than the Purchase Price, there is no ordinary income
and the Participant will have a long-term capital loss equal to the difference
between the sale price and the Purchase Price. The ability of a Participant to
utilize such a capital loss will depend on the Participant's other tax
attributes and the statutory limitation on capital loss deductions not
discussed herein.
If the shares are sold or disposed of (including any disposition by way of
gift) before the expiration of the two-year holding period described above or
within one year after the shares are transferred to the Participant, then the
excess of the fair market value of the shares on the Purchase Date over the
Purchase Price will be treated as ordinary income to the Participant. This
excess will constitute ordinary income for the year of sale or other
disposition even if no gain is realized on the sale or a gratuitous transfer
of shares is made. The balance of the gain will be taxed as capital gain at
the rates then in effect. If the shares are sold for less than their fair
market value on the Purchase Date, the same amount of ordinary income will be
attributed to the Participant and a capital loss recognized equal to the
difference between the sale price and the value of the shares on such Purchase
Date. As indicated above, the ability of the Participant to utilize such a
capital loss will depend on the Participant's other tax attributes and the
statutory limitation on capital losses not discussed herein.
The ordinary income reported under the rules described above, added to the
actual Purchase Price of the shares, determines the tax basis of the shares
for the purpose of determining gain or loss on the sale or exchange of the
shares.
The Company is entitled to a deduction for amounts taxed as ordinary income
to a Participant only to the extent that ordinary income must be reported upon
disposition of shares by the Participant before the expiration of the holding
periods described above.
PROPOSAL THREE
INDEPENDENT AUDITORS
Ernst & Young LLP was selected to audit the financial statements of the
Company as of December 31, 1994, and for the year then ended, and has been
selected by the Board of Directors to audit the financial statements of the
Company for 1995. Nevada General Corporation Law does not require the approval
of the selection of the independent auditors by the Company's stockholders,
but in view of the importance of the financial statements to stockholders, the
Board of Directors deems it desirable that stockholders pass upon the
selection of auditors.
17
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR "FOR" THIS PROPOSAL.
Proxies received in response to this solicitation will be voted in favor of
the approval of such firm unless otherwise specified in the Proxy. A
representative of Ernst & Young LLP will be present at the Annual Meeting and
will be given the opportunity to make a statement if he so desires and will be
available to respond to appropriate questions. If this proposal is not
approved the Audit Committee shall reconsider the proposal and submit its
recommendation to the Board of Directors.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be submitted at the next annual meeting of
stockholders must be submitted in writing to the Company on or before December
15, 1995 in order for them to be included in the Company's Proxy Statement and
Proxy form relating to such meeting. The Company anticipates that its next
annual meeting will be held in June 1996.
OTHER MATTERS
The Company has enclosed with this Proxy Statement a copy of the Annual
Report to Stockholders for the year ended December 31, 1994.
Management knows of no other matters to come before the meeting. If,
however, any other matter properly comes before the meeting, the persons named
in the enclosed Proxy form will vote in accordance with their judgment upon
such matter.
Stockholders who do not expect to attend in person are urged to promptly
execute and return the enclosed Proxy.
By order of the Board of Directors
LOGO
/S/ ROBERT C. HEWITT
Robert C. Hewitt
Secretary
Irvine, California
May 3, 1995
18
<PAGE>
EXHIBIT A
THE NEWPORT CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
This EMPLOYEE STOCK PURCHASE PLAN (the "Plan") is hereby established by
NEWPORT CORPORATION (the "Company") effective January 1, 1995 (the "Effective
Date").
ARTICLE I
PURPOSE OF THE PLAN
1.1 PURPOSE. The Company has determined that it is in its best interests to
provide an incentive to attract and retain employees and to increase employee
morale by providing a program through which employees may acquire a
proprietary interest in the Company through the purchase of shares of the
common stock of the Company ("Company Stock"). The Plan is hereby established
by the Company to permit employees to subscribe for and purchase directly from
the Company shares of the Company Stock at a discount from the market price,
and to pay the purchase price in installments by payroll deductions. The Plan
is intended to qualify as an "employee stock purchase plan" under Section 423
of the Internal Revenue Code of 1986, as amended from time to time (the
"Code"). The provisions of the Plan are to be construed in a manner consistent
with the requirements of Section 423 of the Code. The Plan is not intended to
be an employee benefit plan under the Employee Retirement Income Security Act
of 1974, and therefore is not required to comply with that Act.
ARTICLE II
DEFINITIONS
2.1 COMPENSATION. "Compensation" means the amount indicated on the Form W-2,
including any elective deferrals with respect to a plan of the Company
qualified under either Section 125 or Section 401(a) of the Internal Revenue
Code of 1986, issued to an employee by the Company.
2.2 EMPLOYEE. "Employee" means each person currently employed by the Company
or any of its operating subsidiaries on a full time basis (persons who average
at least thirty hours per week), any portion of whose income is subject to
withholding of income tax or for whom Social Security retirement contributions
are made by the Company and any person qualifying as a common law employee of
the Company.
2.3 EFFECTIVE DATE. "Effective Date" means January 1, 1995.
2.4 5% OWNER. "5% Owner" means an Employee who, immediately after the grant
of any rights under the Plan, would own Company Stock or hold outstanding
options to purchase Company Stock possessing 5% or more of the total combined
voting power of all classes of stock of the Company. For purposes of this
Section, the ownership attribution rules of Code Section 425(d) shall apply.
2.5 GRANT DATE. "Grant Date" means the first day of each Offering Period
(January 1, April 1, July 1 and October 1) under the Plan.
2.6 PARTICIPANT. "Participant" means an Employee who has satisfied the
eligibility requirements of Section 3.1 and has become a participant in the
Plan in accordance with Section 3.2.
2.7 PLAN YEAR. "Plan Year" means the twelve consecutive month period ending
on December 31.
2.8 OFFERING PERIOD. "Offering Period" means the three consecutive month
periods coinciding with the calendar quarter (January 1 through March 31,
April 1 through June 30, July 1 through September 30 and October 1 through
December 31) each Plan Year.
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2.9 PURCHASE DATE. "Purchase Date" means the last day of each Offering
Period (March 31, June 30, September 30 or December 31).
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY. Each Employee of the Company who has completed a year of
employment with the Company on the Effective Date may become a Participant in
the Plan on the Effective Date. All other Employees of the Company may become
a participant in the Plan on the Grant Date coincident with or next following
his completion of one year of employment with the Company.
3.2 PARTICIPATION. An Employee who has satisfied the eligibility
requirements of Section 3.1 may become a Participant in the Plan upon his
completion and delivery to the Human Resources Department of the Company of a
subscription agreement provided by the Company (the "Subscription Agreement")
authorizing payroll deductions. Payroll deductions for a Participant shall
commence on the Grant Date coincident with or next following the filing of the
Participant's Subscription Agreement and shall remain in effect until revoked
by the Participant by the filing of a notice of withdrawal from the Plan under
Article VIII or by the filing of a new Subscription Agreement providing for a
change in the Participant's payroll deduction rate under Section 5.2.
3.3 SPECIAL RULES. Under no circumstances shall:
(a) A 5% Owner be granted a right to purchase Company Stock under the
Plan; or
(b) A Participant be entitled to purchase Company Stock under the Plan
which, when aggregated with all other employee stock purchase plans of the
Company, exceeds an amount equal to the Aggregate Maximum. "Aggregate Maximum"
means an amount equal to $25,000 worth of Company Stock (determined using the
fair market value of such Company Stock at each applicable Grant Date) during
each Plan Year.
ARTICLE IV
OFFERING PERIODS
4.1 OFFERING PERIODS. The initial grant of the right to purchase Company
Stock under the Plan shall commence on the Effective Date and terminate on the
next Purchase Date. Thereafter, the Plan shall provide for Offering Periods
commencing on each Grant Date and terminating on the next following Purchase
Date.
ARTICLE V
PAYROLL DEDUCTIONS
5.1 PARTICIPANT ELECTION. Upon the Subscription Agreement, each Participant
shall designate the amount of payroll deductions to be made from his or her
paycheck to purchase Company Stock under the Plan. The amount of payroll
deductions shall be designated in whole dollar amounts of Compensation, not to
exceed 15% of Compensation for any Plan Year. The amount so designated upon
the Subscription Agreement shall be effective as of the next Grant Date and
shall continue until terminated or altered in accordance with Section 5.2
below.
5.2 CHANGES IN ELECTION. A Participant may terminate participation in the
Plan at any time prior to the close of an Offering Period as provided in
Article VIII. A Participant may decrease the rate of payroll deductions at any
time during any Offering Period by completing and delivering to the Human
Resources Department of the Company a new Subscription Agreement setting forth
the desired change. A Participant may also terminate payroll deductions and
have accumulated deductions for the Offering Period applied to the purchase of
Company Stock as of the next Purchase Date by completing and delivering to the
Human Resources Department a new Subscription Agreement setting forth the
desired change. Any change under this Section shall become effective on the
next payroll period (to the extent practical under the Company's payroll
practices) following the delivery of the new Subscription Agreement.
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5.3 PARTICIPANT ACCOUNTS. The Company shall establish and maintain a
separate account ("Account") for each Participant. The amount of each
Participant's payroll deductions shall be credited to his Account. No interest
will be paid or allowed on amounts credited to a Participant's Account. All
payroll deductions received by the Company under the Plan are general
corporate assets of the Company and may be used by the Company for any
corporate purpose. The Company is not obligated to segregate such payroll
deductions.
ARTICLE VI
GRANT OF PURCHASE RIGHTS
6.1 RIGHT TO PURCHASE SHARES. On each Grant Date, each Participant shall be
granted a right to purchase at the price determined under Section 6.2 that
number of shares and partial shares of Company Stock that can be purchased or
issued by the Company based upon that price with the amounts held in his
Account. In the event that there are amounts held in a Participant's Account
that are not used to purchase Company Stock, such amounts shall remain in the
Participant's Account and shall be eligible to purchase Company Stock in any
subsequent Offering Period.
6.2 PURCHASE PRICE. The purchase price for any Offering Period shall be the
lesser of:
(a) 85% of the Fair Market Value of Company Stock on the Grant Date; or
(b) 85% of the Fair Market Value of Company Stock on the Purchase Date.
6.3 FAIR MARKET VALUE. "Fair Market Value" on any given date means the value
of one share of Company Stock, determined as follows:
(a) If the Company Stock is then listed or admitted to trading on the
Nasdaq National Market System or a stock exchange which reports closing sale
prices, the Fair Market Value shall be the closing sale price on the date of
valuation on the Nasdaq National Market System or principal stock exchange on
which the Company Stock is then listed or admitted to trading, or, if no
closing sale price is quoted or no sale takes place on such day, then the Fair
Market Value shall be the closing sale price of the Company Stock on the
Nasdaq National Market System or such exchange on the next preceding day on
which a sale occurred.
(b) If the Company Stock is not then listed or admitted to trading on the
Nasdaq National Market System or a stock exchange which reports closing sale
prices, the Fair Market Value shall be the average of the closing bid and
asked prices of the Company Stock in the over-the-counter market on the date
of valuation.
(c) If neither (a) nor (b) is applicable as of the date of valuation, then
the Fair Market Value shall be determined by the Administrator in good faith
using any reasonable method of evaluation, which determination shall be
conclusive and binding on all interested parties.
ARTICLE VII
PURCHASE OF STOCK
7.1 PURCHASE OF COMPANY STOCK. Absent an election by the Participant to
terminate and have his or her Account returned, on each Purchase Date, the
Plan shall purchase on behalf of each Participant the maximum number of shares
and partial shares of Company Stock at the purchase price determined under
Section 6.2 above as can be purchased with the amounts held in each
Participant's Account. In the event that there are amounts held in a
Participant's Account that are not used to purchase Company Stock, all such
amounts shall be held in the Participant's Account and carried forward to the
next Offering Period.
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7.2 DELIVERY OF COMPANY STOCK.
(a) Company Stock acquired under the Plan may either be issued directly to
Participants or may be issued to a contract administrator ("Administrator")
engaged by the Company to administer the Plan under Article IX. If the Company
Stock is issued in the name of the Administrator, all Company Stock so issued
("Plan Held Stock") shall be held in the name of the Administrator for the
benefit of the Plan. The Administrator shall maintain accounts for the benefit
of the Participants which shall reflect each Participant's interest in the
Plan Held Stock. Such accounts shall reflect the number of whole and partial
shares of Company Stock that are being held by the Administrator for the
benefit of each Participant.
(b) Any Participant may elect to have the Company Stock purchased under the
Plan from his or her Account be issued directly to the Participant. Any
election under this paragraph shall be on the forms provided by the Company
and shall be issued in accordance with paragraph (c) below.
(c) In the event that Company Stock under the Plan is issued directly to a
Participant, the Company will deliver to each Participant a stock certificate
or certificates issued in his name for the number of shares of Company Stock
purchased as soon as practicable after the Purchase Date. Where Company Stock
is issued under this paragraph, only full shares of stock will be issued to a
Participant. The time of issuance and delivery of shares may be postponed for
such period as may be necessary to comply with the registration requirements
under the Securities Act of 1933, as amended, the listing requirements of any
securities exchange on which the Company Stock may then be listed, or the
requirements under other laws or regulations applicable to the issuance or
sale of such shares.
ARTICLE VIII
WITHDRAWAL
8.1 IN SERVICE WITHDRAWALS. At any time prior to the Purchase Date of an
Offering Period, any Participant may withdraw the amounts held in his Account
by executing and delivering to the Human Resources Department for the Company
written notice of withdrawal on the form provided by the Company. In such a
case, the entire balance of the Participant's Account shall be paid to the
Participant, without interest, as soon as is practicable. Upon such
notification, that Participant shall cease to participate in the Plan for the
remainder of the Offering Period in which the notice is given. Any Employee
who has withdrawn under this Section shall be excluded from participation in
the Plan for the remainder of the Offering Period and the next succeeding
Offering Period, but may then be reinstated as a Participant for a subsequent
Offering Period by executing and delivering a new Subscription Agreement to
the Committee.
8.2 TERMINATION OF EMPLOYMENT.
(a) In the event that a Participant's employment with the Company terminates
for any reason, the Participant shall cease to participate in the Plan on the
date of termination. As soon as is practical following the date of
termination, the entire balance of the Participant's Account shall be paid to
the Participant or his beneficiary, without interest.
(b) A Participant may file a written designation of a beneficiary who is to
receive any shares of Company Stock purchased under the Plan or any cash from
the Participant's Account in the event of his or her death subsequent to a
Purchase Date, but prior to delivery of such shares and cash. In addition, a
Participant may file a written designation of a beneficiary who is to receive
any cash from the Participant's Account under the Plan in the event of his
death prior to a Purchase Date under paragraph (a) above.
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(c) Any beneficiary designation under paragraph (b) above may be changed by
the Participant at any time by written notice. In the event of the death of a
Participant, the Committee may rely upon the most recent beneficiary
designation it has on file as being the appropriate beneficiary. In the event
of the death of a Participant and no valid beneficiary designation exists or
the beneficiary has predeceased the Participant, the Committee shall deliver
any cash or shares of Company Stock to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has been
appointed to the knowledge of the Committee, the Committee, in its sole
discretion, may deliver such shares of Company Stock or cash to the spouse or
any one or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Committee, then to such other person as
the Committee may designate.
ARTICLE IX
PLAN ADMINISTRATION
9.1 PLAN ADMINISTRATION.
(a) Authority to control and manage the operation and administration of the
Plan shall be vested in the Board of Directors (the "Board") for the Company,
or a committee ("Committee") thereof. The Board or Committee shall have all
powers necessary to supervise the administration of the Plan and control its
operations.
(b) In addition to any powers and authority conferred on the Board or
Committee elsewhere in the Plan or by law, the Board or Committee shall have
the following powers and authority:
(i) To designate agents to carry out responsibilities relating to the
Plan;
(ii) To administer, interpret, construe and apply this Plan and to
answer all questions which may arise or which may be raised under this
Plan by a Participant, his beneficiary or any other person whatsoever;
(iii) To establish rules and procedures from time to time for the
conduct of its business and for the administration and effectuation of
its responsibilities under the Plan; and
(iv) To perform or cause to be performed such further acts as it may
deem to be necessary, appropriate, or convenient for the operation of
the Plan.
(c) Any action taken in good faith by the Board or Committee in the exercise
of authority conferred upon it by this Plan shall be conclusive and binding
upon a Participant and his beneficiaries. All discretionary powers conferred
upon the Board shall be absolute.
9.2 LIMITATION ON LIABILITY. No Employee of the Company nor member of the
Board or Committee shall be subject to any liability with respect to his
duties under the Plan unless the person acts fraudulently or in bad faith. To
the extent permitted by law, the Company shall indemnify each member of the
Board or Committee, and any other Employee of the Company with duties under
the Plan who was or is a party, or is threatened to be made a party, to any
threatened, pending or completed proceeding, whether civil, criminal,
administrative, or investigative, by reason of the person's conduct in the
performance of his duties under the Plan.
ARTICLE X
COMPANY STOCK
10.1 LIMITATIONS ON PURCHASE OF SHARES. The maximum number of shares of
Company Stock that shall be made available for sale under the Plan shall be
250,000 shares, subject to adjustment under Section 10.4 below. The shares of
Company Stock to be sold to Participants under the Plan will be either
purchased in broker's transactions in accordance with the requirements of
federal securities laws or issued by the Company. If the total number of
shares of Company Stock that would otherwise be issuable or purchasable
pursuant to rights granted pursuant to Section 6.1 of the Plan at the Purchase
Date exceeds the
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number of shares then available under the Plan, the Company shall make a pro
rata allocation of the shares remaining available in as uniform and equitable
a manner as is practicable. In such event, the Company shall give written
notice of such reduction of the number of shares to each participant affected
thereby and any unused payroll deductions shall be returned to such
participant if necessary.
10.2 VOTING COMPANY STOCK. The Participant will have no interest or voting
right in shares to be purchased under Section 6.1 of the Plan until such
shares have been purchased.
10.3 REGISTRATION OF COMPANY STOCK. Shares to be delivered to a Participant
under the Plan will be registered in the name of the Participant unless
designated otherwise by the Participant.
10.4 CHANGES IN CAPITALIZATION OF THE COMPANY. Subject to any required
action by the shareholders of the Company, the number of shares of Company
Stock covered by each right under the Plan which has not yet been exercised
and the number of shares of Company Stock which have been authorized for
issuance under the Plan but have not yet been placed under rights or which
have been returned to the Plan upon the cancellation of a right, as well as
the Purchase Price per share of Company Stock covered by each right under the
Plan which has not yet been exercised, shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Company Stock
resulting from a stock split, stock dividend, spin-off, reorganization,
recapitalization, merger, consolidation, exchange of shares or the like. Such
adjustment shall be made by the Board of Directors for the Company, whose
determination in that respect shall be final, binding and conclusive. Except
as expressly provided herein, no issue by the Company of shares of stock of
any class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Company Stock subject to any right granted
hereunder.
10.5 MERGER OF COMPANY. In the event that the Company at any time proposes
to merge into, consolidate with or to enter into any other reorganization
pursuant to which the Company is not the surviving entity (including the sale
of substantially all of its assets or a "reverse" merger in which the Company
is the surviving entity), the Plan shall terminate, unless provision is made
in writing in connection with such transaction for the continuance of the Plan
and for the assumption of rights theretofore granted, or the substitution for
such rights of new rights covering the shares of a successor corporation, with
appropriate adjustments as to number and kind of shares and prices, in which
event the Plan and the rights theretofore granted or the new rights
substituted therefor, shall continue in the manner and under the terms so
provided. If such provision is not made in such transaction for the
continuance of the Plan and the assumption of rights theretofore granted or
the substitution for such rights of new rights covering the shares of a
successor corporation, then the Board of Directors or its committee shall
cause written notice of the proposed transaction to be given to the persons
holding rights not less than 10 days prior to the anticipated effective date
of the proposed transaction, and, concurrent with the effective date of the
proposed transaction, such rights shall be exercised automatically in
accordance with Section 7.1 as if such effective date were a Purchase Date of
the applicable Offering Period unless a Participant withdraws from the Plan as
provided in Section 8.1.
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ARTICLE XI
MISCELLANEOUS MATTERS
11.1 AMENDMENT AND TERMINATION. The Plan shall terminate on December 31,
2004. Since future conditions affecting the Company cannot be anticipated or
foreseen, the Company reserves the right to amend, modify, or terminate the
Plan at any time. Upon termination of the Plan, all benefits shall become
payable immediately. Notwithstanding the foregoing, no such amendment or
termination shall affect rights previously granted, nor may an amendment make
any change in any right previously granted which adversely affects the rights
of any Participant. In addition, no amendment may be made without prior
approval of the shareholders of the Company if such amendment would:
(a) Increase the number of shares of Company Stock that may be issued
under the Plan;
(b) Materially modify the requirements as to eligibility for
participation in the Plan; or
(c) Materially increase the benefits which accrue to Participants under
the Plan.
11.2 SHAREHOLDER APPROVAL. Continuance of the Plan and the effectiveness of
any right granted hereunder shall be subject to approval by the shareholders
of the Company, within twelve months before or after the date the Plan is
adopted by the Board.
11.3 BENEFITS NOT ALIENABLE. Benefits under the Plan may not be assigned or
alienated, whether voluntarily or involuntarily. Any attempt at assignment,
transfer, pledge or other disposition shall be without effect, except that the
Company may treat such act as an election to withdraw funds in accordance with
Article VIII.
11.4 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is strictly a voluntary
undertaking on the part of the Company and shall not be deemed to constitute a
contract between the Company and any Employee or to be consideration for, or
an inducement to, or a condition of, the employment of any Employee. Nothing
contained in the Plan shall be deemed to give the right to any Employee to be
retained in the employ of the Company or to interfere with the right of the
Company to discharge any Employee at any time.
11.5 GOVERNING LAW. To the extent not preempted by Federal law, all legal
questions pertaining to the Plan shall be determined in accordance with the
laws of the State of California.
11.6 NON-BUSINESS DAYS. When any act under the Plan is required to be
performed on a day that falls on a Saturday, Sunday or legal holiday, that act
shall be performed on the next succeeding day which is not a Saturday, Sunday
or legal holiday. Notwithstanding the above, Fair Market Value shall be
determined in accordance with Section 6.3.
11.7 COMPLIANCE WITH SECURITIES LAWS. Notwithstanding any provision of the
Plan, the Committee shall administer the Plan in such a way to insure that the
Plan at all times complies with any requirements of Federal Securities Laws.
For example, affiliates may be required to make irrevocable elections in
accordance with the rules set forth under Section 16b-3 of the Securities
Exchange Act of 1934.
IN WITNESS WHEREOF, NEWPORT CORPORATION has caused this instrument to become
effective as of January 1, 1995.
NEWPORT CORPORATION
By:__________________________________
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NEWPORT CORPORATION
1791 DEERE AVENUE, IRVINE, CALIFORNIA 92714
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS-JUNE 7, 1995
(THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS)
The undersigned hereby appoint RICHARD E. SCHMIDT and ROBERT C. HEWITT, and
each of them, as proxy or proxies for the undersigned, with full power of
substitution, who may act by unanimous vote of said proxies or their
substitutes as shall be present at the meeting, or, if only one be present,
then the one shall have all the powers hereunder, to represent and to vote, as
designated below, all of the shares of Newport Corporation (the "Company")
standing in the name of the undersigned on April 19, 1995, at the Annual
Meeting of Stockholders of the Company to be held on Wednesday, June 7, 1995, at
10:00 a.m. at the Company's Corporate Headquarters, 1791 Deere Avenue, Irvine,
California 92714, and any adjournment thereof.
(1) ELECTION OF DIRECTORS.
[_] FOR NOMINEE LISTED BELOW [_] WITHHOLD AUTHORITY
(EXCEPT AS MARKED TO to vote for nominees listed below
THE CONTRARY)
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE,
STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW.)
Class III: R. Jack Aplin Robert L. Guyett
(2) PROPOSAL TO APPROVE THE COMPANY'S EMPLOYEE STOCK PURCHASE PLAN.
[_] FOR [_] AGAINST [_] ABSTAIN
(3) PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE YEAR ENDING DECEMBER 31, 1995.
[_] FOR [_] AGAINST [_] ABSTAIN
(4) In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting. This Proxy when properly
executed will be voted in the manner directed herein by the undersigned
stockholder. If no direction is made, this Proxy will be voted FOR Proposals
1,2 and 3.
Dated: ________________________, 1995
-------------------------------------
Signature
-------------------------------------
Social Security Number
-------------------------------------
Signature if Held Jointly
-------------------------------------
Social Security Number
of Joint Holder
Please sign exactly as name appears
to the left. When signing as execu-
tor, administrator, attorney,
trustee or guardian, please give
full title as such. If a corpora-
tion, please sign in full corporate
name by president or other autho-
rized officer. If a partnership,
please sign in partnership name by
authorized person. Social security
numbers are required to be furnished
under authority of law.
NO POSTAGE IS REQUIRED IF RETURNED IN THE ENCLOSED ENVELOPE AND MAILED IN THE
UNITED STATES. STOCKHOLDERS WHO ARE PRESENT AT THE MEETING MAY REVOKE THEIR
PROXY AND VOTE IN PERSON IF THEY SO DESIRE.
