<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
Datascope Corp.
- --------------------------------------------------------------------------------
(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/ No fee required.
/ / 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:
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
/ / 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:
------------------------------------------------------------------------
<PAGE> 2
DATASCOPE CORP.
14 PHILIPS PARKWAY
MONTVALE, NEW JERSEY 07645
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 10, 1996
------------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Datascope
Corp. (the "Corporation") will be held at 11:00 o'clock A.M., local time, on
December 10, 1996, at The Harmonie Club, 4 East 60th Street, New York, New York,
for the following purposes:
1. To elect two directors of the Corporation to hold office until the
Annual Meeting of Shareholders occurring in 1999 and until the election and
qualification of their respective successors;
2. To vote upon stockholder proposals that are opposed by the Board of
Directors; and
3. To transact such other business as may properly come before the
meeting.
Only holders of record of the Corporation's Common Stock at the close of
business on October 28, 1996 are entitled to notice of, and to vote at, the
meeting and any adjournment thereof. Such shareholders may vote in person or by
proxy.
SHAREHOLDERS WHO FIND IT CONVENIENT ARE CORDIALLY INVITED TO ATTEND THE
MEETING IN PERSON. IF YOU ARE NOT ABLE TO DO SO AND WISH THAT YOUR STOCK BE
VOTED, YOU ARE REQUESTED TO FILL IN, SIGN, DATE AND RETURN THE ACCOMPANYING
PROXY IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
By Order of the Board of Directors,
MURRAY PITKOWSKY,
Secretary
Dated: November 8, 1996
<PAGE> 3
DATASCOPE CORP.
14 PHILIPS PARKWAY
MONTVALE, NEW JERSEY 07645
------------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Datascope Corp. (the "Corporation") of proxies to be
used at the Annual Meeting of Shareholders of the Corporation to be held at
11:00 o'clock A.M., local time, on December 10, 1996, at The Harmonie Club, 4
East 60th Street, New York, New York, and at any adjournments thereof. The
purposes of the meeting are:
1. To elect two directors of the Corporation to hold office until the
Annual Meeting of Shareholders occurring in 1999 and until the election and
qualification of their respective successors;
2. To vote upon stockholder proposals that are opposed by the Board of
Directors; and
3. To transact such other business as may properly come before the
meeting.
If proxy cards in the accompanying form are properly executed and returned,
the shares of Common Stock represented thereby will be voted as instructed on
the proxy. If no instructions are given, such shares will be voted (i) for the
election as directors of the nominees of the Board of Directors named below,
(ii) against the stockholder proposals described below, and (iii) in the
discretion of the Proxies named in the proxy card on any other proposals to
properly come before the meeting or any adjournment thereof. Any proxy may be
revoked by a stockholder prior to its exercise upon written notice to the
Secretary of the Corporation, or by the vote of a stockholder cast in person at
the meeting. The approximate date of mailing of this Proxy Statement is November
8, 1996.
VOTING
Holders of record of the Corporation's Common Stock on October 28, 1996,
will be entitled to vote at the Annual Meeting or any adjournment thereof. As of
that date, there were 16,135,268 shares of Common Stock outstanding and entitled
to vote, and a majority, or 8,067,635 of these shares, will constitute a quorum
for the transaction of business. Abstentions and broker non-votes are counted
for purposes of determining the presence or absence of a quorum for the
transaction of business. Each share of Common Stock entitles the holder thereof
to one vote on all matters to come before the meeting, including the election of
directors.
The favorable vote of a majority of the votes cast at the meeting is
necessary to elect each director of the Corporation and to adopt the stockholder
proposals. Abstentions and broker non-votes are not considered votes cast and
will have no effect on the outcome of the matters scheduled to be considered at
the Annual Meeting. The Board of Directors recommends a vote FOR each of the
nominees named below, and AGAINST the stockholder proposals.
INFORMATION AS TO NOMINEES AND OTHER DIRECTORS
Two directors are to be elected at the Annual Meeting. The Board of
Directors has recommended the persons named in the table below as nominees for
election as directors. Both such persons are presently directors of the
Corporation. Unless otherwise specified in the accompanying proxy, the shares
voted pursuant to it will be voted for the persons named below as nominees for
election as directors. If, for any reason, at the time of the election any of
the nominees should be unable or unwilling to accept election, it is intended
that such proxy will be voted for the election, in such nominee's place, of a
substitute nominee recommended by the Board of Directors. However, the Board of
Directors has no reason to believe that any nominee will be unable or unwilling
to serve as a director.
The following information is supplied with respect to the nominees for
election as directors of the Corporation in class II, and for the directors in
classes I and III whose terms expire at the Annual Meeting of Shareholders
occurring in 1998 and 1997, respectively, and until the election and
qualification of their
<PAGE> 4
respective successors. Unless otherwise indicated below, each director has had
the principal occupation(s) indicated on the table for five years or more.
NOMINEES FOR DIRECTOR
CLASS II (If elected each director will hold office until the Annual
Meeting of Shareholders occurring in 1999 and until the election and
qualification of their respective successors.)
<TABLE>
<CAPTION>
HAS BEEN A DIRECTOR
PRINCIPAL OCCUPATION OF THE CORPORATION
NAME OF NOMINEE AGE OR EMPLOYMENT DURING
- ------------------------------- --- ----------------------------------- -------------------
<S> <C> <C> <C>
David Altschiller.............. 55 Chairman/Chief Executive Officer of 1982-present
Altschiller, Reitzfield(1)
Joseph Grayzel, M.D. .......... 65 Consultant to the Corporation and 1969-present
Physician
</TABLE>
DIRECTORS WHOSE TERM OF OFFICE
WILL CONTINUE AFTER THE ANNUAL MEETING
CLASS I
<TABLE>
<CAPTION>
HAS BEEN A DIRECTOR
PRINCIPAL OCCUPATION OF THE CORPORATION
NAME OF DIRECTOR AGE OR EMPLOYMENT DURING
- ------------------------------- --- ----------------------------------- -------------------
<S> <C> <C> <C>
George Heller.................. 74 Director(2) 1970-1979;
1980-present
William L. Asmundson........... 59 Senior Investment Manager of 1969-present
Rockefeller & Co. Inc.
</TABLE>
CLASS III
<TABLE>
<CAPTION>
HAS BEEN A DIRECTOR
PRINCIPAL OCCUPATION OF THE CORPORATION
NAME OF DIRECTOR AGE OR EMPLOYMENT DURING
- ------------------------------- --- ----------------------------------- -------------------
<S> <C> <C> <C>
Lawrence Saper................. 68 Chairman of the Board and President 1964-present
of the Corporation
Alan B. Abramson............... 50 Attorney(3) 1996-present
Arno Nash...................... 69 Chairman of Iterman Industrial 1965-1967;
Products Ltd.(4) 1996-present
</TABLE>
- ---------------
(1) Mr. Altschiller is the Chairman of the Board and a principal of Hill,
Holliday/Altschiller which is the New York office of Hill, Holliday,
Connors, Cosmopulos, Inc., a Boston advertising agency.
(2) Mr. Heller also served as Senior Vice President of the Corporation from 1970
through 1979 and from 1980 through October 19, 1992 and as Secretary of the
Corporation from 1970 through 1979 and from 1980 through December 31, 1992.
(3) Mr. Abramson has served as President of Abramson Brothers Incorporated since
1972.
(4) Mr. Nash has served as Chairman of Iterman Industrial Products Ltd. since
1965.
MEETINGS OF THE BOARD
During the fiscal year ended June 30, 1996, five meetings of the Board of
Directors were held. Each of the directors attended 75% or more of the aggregate
number of meetings of the Board of Directors and committees on which he served.
2
<PAGE> 5
The Board of Directors has an audit committee consisting of Messrs.
Altschiller, Asmundson and Abramson. The primary functions of the committee are
to review the Corporation's financial statements, recommend the appointment of
the Corporation's independent auditors and review the overall scope of the
audit. This committee held two meetings during the Corporation's last fiscal
year.
The Corporation has a stock bonus committee consisting of Dr. Grayzel and
Messrs. Saper and Heller. This committee is empowered to authorize the issuance
of up to 100 shares of the Corporation's Common Stock to each of certain
employees of the Corporation or of its subsidiaries who have been employed for
at least 10 years or who have provided outstanding services on behalf of the
Corporation. This committee held one meeting during the Corporation's last
fiscal year.
The Board of Directors also has a compensation committee consisting of
Messrs. Altschiller, Asmundson and Abramson. The primary responsibility of this
committee is to administer and make recommendations to the Board regarding the
Corporation's bonus plans, to review the compensation arrangements relating to
officers who are members of the Board of Directors and to administer the
Datascope Corp. 1981 Incentive Stock Option Plan (the "1981 Plan") and the
Datascope Corp. 1995 Stock Option Plan (the "1995 Plan"). This committee held
five meetings during the Corporation's last fiscal year.
The Board of Directors has no standing nominating committee.
SECURITY OWNERSHIP OF CERTAIN SHAREHOLDERS
The following table provides information as to each person who is known to
the Corporation to be the beneficial owner of more than 5% of the Corporation's
voting securities as of October 1, 1996 (unless otherwise indicated):
<TABLE>
<CAPTION>
AMOUNT AND
NAME AND ADDRESS NATURE OF PERCENT OF
OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP(1) COMMON STOCK(2)
- -------------------------------------------------------- ----------------------- ---------------
<S> <C> <C>
Lawrence Saper.......................................... 2,973,848(3) 17.5%
14 Philips Parkway
Montvale, NJ 07645
Gardner Lewis Asset Management.......................... 815,700(4) 5.1%
28 Wilmington-West Chester Pike
Chadds Ford, PA 19317
Wellington Management Company........................... 956,200(5) 5.9%
75 State Street
Boston, MA 02109
</TABLE>
- ---------------
(1) This table identifies persons having sole voting and investment power with
respect to the shares set forth opposite their names as of October 1, 1996,
except as otherwise disclosed in the footnotes to the table, according to
information publicly filed or furnished to the Corporation by each of them.
(2) Shares beneficially owned, as recorded in this table, expressed as a
percentage of the shares of the Common Stock of the Corporation outstanding
as of October 1, 1996. For purposes of calculating Mr. Saper's beneficial
ownership, any shares issuable pursuant to options exercisable within 60
days of October 1, 1996 are deemed to be outstanding.
(3) Includes (i) 32,641 shares owned by Trusts created by Mr. Saper for his
minor children, (ii) 3,150 shares owned by Carol Saper, Mr. Saper's wife,
and (iii) 350,328 shares which are owned by an irrevocable trust of which
Carol Saper and Daniel Brodsky are Trustees. Mr. Saper will receive annual
distributions from that Trust equal to 34% of the Trust's initial fair
market value until September 28, 1997; thereafter the sole beneficiaries are
Carol Saper and Mr. Saper's descendants. The Trustees have the sole right to
vote and dispose of the shares. He disclaims beneficial ownership of all of
the foregoing shares. Includes 545,000 shares which are issuable pursuant to
currently exercisable options. This includes an option to purchase 500,000
shares, which option became exercisable on August 3, 1994, subject to the
condition that the average of the high and low bid price of the Common Stock
as quoted on NASDAQ on the date
3
<PAGE> 6
of exercise is at least $20. The exercise price of the option is $14.00,
which was the fair market value of the Common Stock on the date of grant.
(4) Number of shares beneficially owned by Gardner Lewis Asset Management
according to a Schedule 13G, dated February 9, 1996, filed with the
Securities and Exchange Commission.
(5) Numbers of shares beneficially owned by Wellington Management Company, and
its subsidiary Wellington Trust Company, N.A., according to Schedule 13G
dated February 3, 1996 filed with the Securities and Exchange Commission.
SECURITY OWNERSHIP OF MANAGEMENT
The following table provides information as of October 1, 1996 with respect
to the Common Stock of the Corporation beneficially owned by each director and
nominee (except Mr. Saper, whose holdings are shown in the preceding table) and
each of the Named Executive Officers (as defined in "Executive Compensation"
below), other than Mr. Saper, and by all directors and executive officers as a
group (including Mr. Saper):
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
NAME OF BENEFICIAL OWNER(1) BENEFICIAL OWNERSHIP COMMON STOCK(2)
- --------------------------------------------------------- -------------------- ---------------
<S> <C> <C>
Alan B. Abramson......................................... 5,000(3) *
David Altschiller........................................ 15,650(4) *
William L. Asmundson..................................... 28,250(4) *
Joseph Grayzel, M.D...................................... 267,992(5) 1.6%
George Heller............................................ 74,432(6) *
Arno Nash................................................ 7,000(3) *
Murray Pitkowsky......................................... 70,332(7) *
Timothy J. Haines........................................ 20,000(8) *
Russell Van Zandt........................................ 22,993(9) *
S. Arieh Zak............................................. 16,250(10) *
All executive officers and directors as a group
(consisting of 16 individuals)......................... 3,636,471(11) 21.4%
</TABLE>
- ---------------
* Less than 1%.
(1) This table identifies persons having sole voting and investment power with
respect to the shares set forth opposite their names, except as otherwise
disclosed in the footnotes to the table, according to information furnished
to the Corporation by each of them.
(2) Shares beneficially owned, as recorded in this table, expressed as a
percentage of the shares of the Common Stock of the Corporation outstanding
as of October 1, 1996. For the purpose of calculating each person's
beneficial ownership, any shares issuable pursuant to options exercisable
within 60 days of October 1, 1996 are deemed to be beneficially owned by,
and outstanding with respect to, such person.
(3) Includes 5,000 shares which are issuable pursuant to currently exercisable
options subject to shareholder approval.
(4) Includes 14,000 shares which are issuable pursuant to currently exercisable
options.
(5) Does not include 31,500 shares held in the name of Dr. Grayzel's children
(all of whom have attained majority) under the Uniform Gift to Minors Act,
as to which shares Dr. Grayzel disclaims beneficial ownership. Includes
51,000 shares which are issuable pursuant to currently exercisable options.
Does not include 25,000 shares which are issuable pursuant to options which
will vest on the attainment of certain milestones.
(6) Includes 8,000 shares which are issuable pursuant to currently exercisable
options.
(7) Includes 31,250 shares which are issuable pursuant to currently exercisable
options.
(8) Includes 20,000 shares which are issuable pursuant to currently exercisable
options.
4
<PAGE> 7
(9) Includes 19,250 shares which are issuable pursuant to currently exercisable
options.
(10) Includes 16,250 shares which are issuable pursuant to currently exercisable
options.
(11) Includes 854,500 shares which are issuable pursuant to currently
exercisable options.
EXECUTIVE OFFICERS OF THE CORPORATION
The following table sets forth the names, ages and all positions and
offices with the Corporation held by the Corporation's present executive
officers. Unless otherwise indicated below, each person has held the office
indicated for more than five years:
<TABLE>
<CAPTION>
NAME AGE POSITIONS AND OFFICES PRESENTLY HELD
- ------------------------ --- ---------------------------------------------------------
<S> <C> <C>
Lawrence Saper.......... 68 Chairman of the Board and President
Ernst Janzen............ 60 Senior Vice President
Murray Pitkowsky........ 65 Senior Vice President and Secretary(1)
Barry Cheskin........... 36 Vice President; President, Collagen Products Division(2)
Timothy Haines.......... 39 Vice President; President, Patient Monitoring Division(3)
Richard Monastersky..... 41 Vice President, Human Resources(4)
Stanton Rowe............ 45 Vice President, Business Development; Acting President,
Cardiac Assist Division(5)
Russell Van Zandt....... 55 Vice President; President, InterVascular, Inc.(6)
Stephen E. Wasserman.... 50 Vice President, Chief Financial Officer and Treasurer(7)
S. Arieh Zak, Esq. ..... 35 Vice President, Regulatory Affairs and Corporate
Counsel(8)
</TABLE>
- ---------------
(1) Mr. Pitkowsky has been employed by the Corporation as Senior Vice President
since October 19, 1992, and as Secretary since January 1, 1993. From April
1986 through October 19, 1992, Mr. Pitkowsky served as Vice President,
Finance and Treasurer of the Corporation. He also served as Treasurer from
February 28, 1994 to May 23, 1994, and as Chief Financial Officer from
August 17, 1994 to May 16, 1995.
(2) Mr. Cheskin has been employed by the Corporation as Vice President and
President of the Collagen Products Division (formerly the VasoSeal and
Bioplex Divisions) since May 18, 1994. Mr. Cheskin served as General Manager
of the VasoSeal and Bioplex Divisions from November 18, 1992 to May 18,
1994. Previously, he served as Director of Business Development for the
Corporation from April 1, 1992. Prior to joining the Corporation, Mr.
Cheskin was a Senior Associate at Booz, Allen & Hamilton, a consulting firm,
where he worked from 1988 until he joined the Corporation.
(3) Mr. Haines has been employed as a Vice President of the Corporation and as
the President of the Patient Monitoring Division since July 1, 1996. From
July 1993 to June 30, 1996, Mr. Haines served as the President of
InterVascular, Inc., a wholly owned subsidiary of the Corporation.
(4) Mr. Monastersky has been employed by the Corporation in his current position
since October 15, 1990. From August 1988 through such date, Mr. Monastersky
served as the Director of Human Resources of the Corporation.
(5) Mr. Rowe has been employed by the Corporation as Vice President, Business
Development and as the acting President of the Cardiac Assist Division since
September, 1996. Prior to his employment with the Corporation, Mr. Rowe
served as Vice President, New Business Development of Johnson & Johnson
Interventional Systems Company.
(6) Mr. Van Zandt has been employed by the Corporation as a Vice President of
the Corporation since July 16, 1992, and as the President of InterVascular,
Inc. since July 1, 1996. From July 16, 1992 through June 30, 1996, Mr. Van
Zandt served as President of the Cardiac Assist Division. From November 1989
through July 1992, Mr. Van Zandt served as President of Bard Vascular
Systems. From April 1986 through November 1989, Mr. Van Zandt served as
President of Bard Canada, Inc.
5
<PAGE> 8
(7) Mr. Wasserman has been employed by the Corporation as Vice President and
Treasurer since May 18, 1994, and as Chief Financial Officer since May 16,
1995. Mr. Wasserman also served as Chief Financial Officer of the
Corporation from May 18, 1994 through August 17, 1994. Mr. Wasserman served
as President of the Patient Monitoring Division from August 17, 1994 through
June 30, 1996. From August 1989 through December 1993 Mr. Wasserman served
as a General Manager of Melville Biologics and Vice President of N.Y. Blood
Center.
(8) Mr. Zak has been employed by the Corporation as Corporate Counsel since
November 23, 1992, and as Vice President of Regulatory Affairs since
September 20, 1995. From 1986 through 1992 Mr. Zak served as a litigation
associate at Sullivan & Cromwell.
6
<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth for the fiscal years ended June 30, 1996,
1995 and 1994, the compensation for services in all capacities to the
Corporation of those persons who were at June 30, 1996 the chief executive
officer and the other four most highly compensated executive officers of the
Corporation (collectively, the "Named Executives"):
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
--------------------------------- -------------------- -------
OTHER ANNUAL RESTRICTED LTIP ALL OTHER
SALARY BONUS COMPENSATION STOCK OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($) AWARDS($) (#) ($) ($)(1)
- -------------------------------- ---- -------- ------- ------------ --------- -------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lawrence Saper,................. 1996 630,000 400,000 313,897(2) -- -- -- 8,742
Chairman of the Board 1995 630,000 400,000 137,221(2) -- -- -- 8,540
and Chief Executive 1994 630,000 756,000 116,662(2) -- 500,000 -- 9,341
Officer
Murray Pitkowsky................ 1996 215,000 75,000 -- -- 10,000 -- 6,418
Senior Vice President and 1995 215,000 75,000 -- -- -- -- 6,205
Secretary 1994 212,500 67,500(3) -- -- 5,000 -- 6,279
Timothy J. Haines............... 1996 219,586 100,000 56,867(4) -- 20,000 -- 2,681
Vice President; 1995 197,489 100,000 83,228(4)(5) -- 5,000 -- 4,576
President, Patient 1994 162,531 100,000 75,238(4)(5) -- 20,000 -- 91
Monitoring Division
Russell Van Zandt............... 1996 214,050 75,000 -- -- 10,000 -- 3,718
Vice President; 1995 208,400 120,000 -- -- 5,000 -- 4,936
President, 1994 199,583 110,000 67,019(6) -- 2,000 -- 5,780
InterVascular, Inc.
S. Arieh Zak.................... 1996 170,625 122,500 -- -- 10,000 -- 6,368
Vice President, 1995 155,625 75,000 -- -- 13,000 -- 5,379
Regulatory Affairs and 1994 143,333 45,000 -- -- 3,000 -- 2,510
Corporate Counsel
</TABLE>
- ---------------
(1) Amounts in this column represent (a) Corporation matching contributions
under the Corporation's 401(k) Savings and Supplemental Retirement Plan, (b)
premiums for term life insurance and (c) with respect to split dollar life
insurance policies maintained by the Corporation for the benefit of Messrs.
Saper and Pitkowsky, the actuarial value of the benefit to such Named
Executives of the current year's insurance premium paid by the Corporation
in excess of that required to fund the death benefit under the policy. The
amounts comprising items (a), (b) and (c) described above for each Named
Executive in fiscal year 1994 are as follows. Saper: (a) $4,620, (b) $615
and (c) $4,106. Pitkowsky: (a) $4,647, (b) $357 and (c) $1,275. Haines: (a)
$0 and (b) $91. Van Zandt: (a) $5,165 and (b) $615. Zak: (a) $1,875 and (b)
$635. The amounts comprising items (a), (b) and (c) described in the
preceding sentence for each Named Executive in fiscal year 1995 are as
follows. Saper: (a) $4,620, (b) $885 and (c) $3,035. Pitkowsky: (a) $4,620,
(b) $597 and (c) $988. Haines: (a) $4,380 and (b) $196. Van Zandt: (a)
$4,051 and (b) $885. Zak: (a) $4,714 and (b) $665. The amounts comprising
items (a), (b) and (c) described above for each Named Executive in fiscal
year 1996 are as follows. Saper: (a) $4,750, (b) $1,026 and (c) $2,966.
Pitkowsky: (a) $4,620, (b) $863 and (c) $935. Haines: (a) $2,101 and (b)
$580. Van Zandt: (a) $2,692 and (b) $1,026. Zak: (a) $5,432 and (b) $936.
Cumulative net life insurance premiums paid under the split dollar life
insurance program are recoverable (i) with respect to Mr. Saper, on death,
if not recovered earlier, and (ii) with respect to Mr. Pitkowsky, at
retirement or death.
(2) Includes payments for automobile and expense allowance, respectively, in the
following amounts: $66,684 and $45,876 in fiscal 1996; $67,476 and $69,745
in fiscal year 1995; and $67,500 and $49,162 in fiscal 1994. Includes
$21,780 for personal tax services in fiscal year 1996. Also includes
$179,557 reimbursement for executive portion of split dollar life insurance
in fiscal year 1996 covering fiscal years 1995 and 1996.
(3) Includes $22,500 additional bonus paid in fiscal year 1994 with respect to
fiscal year 1993.
7
<PAGE> 10
(4) Payments were for automobile expenses and reimbursement for private school
tuition and fees for children, respectively, in the following amounts:
$13,662 and $43,205 in fiscal year 1996; $18,704 and $23,512 in fiscal year
1995 and $19,653 and $34,795 in fiscal year 1994.
(5) Includes payment for housing allowance of $0 in fiscal year 1996; $41,012 in
fiscal year 1995 and $20,790 in fiscal year 1994.
(6) Includes $62,773 reimbursement for relocation expenses and $4,246
representing personal use of automobile leased by the Corporation.
OPTIONS OF NAMED EXECUTIVES TO PURCHASE SECURITIES
On October 1, 1981, the Corporation adopted the 1981 Plan, which was
subsequently approved by the shareholders at the 1981 Annual Meeting. Options
that qualify as, and options that do not qualify as, incentive stock options
under the Internal Revenue Code of 1986, as amended (the "Code"), may be granted
thereunder. The 1981 Plan, as amended, reserved 3,075,000 shares of Common Stock
for issuance to key employees and officers recommended and approved by the Board
of Directors, or a committee thereof, at a price not less than 100% (or, in the
case of an incentive stock option granted to a 10% shareholder, 110%) of the
fair market value of the shares purchased thereunder on the date of grant. No
option may be exercisable more than ten years from the date of grant, and an
incentive stock option granted to a 10% shareholder may not be exercisable more
than five years from the date of grant. The Stock Option Plan is administered by
the Compensation Committee of the Board of Directors. The 1981 Plan terminated
on September 30, 1996; but options issued thereunder remain outstanding.
Consequently, the Corporation can no longer issue options under the 1981 Plan.
On September 19, 1995, the Corporation adopted the 1995 Plan, which was
subsequently approved by the shareholders at the 1995 Annual Meeting. Options
that qualify as, and options that do not qualify as, incentive stock options
under the Code may be granted thereunder. The 1995 Plan, as amended, reserved
750,000 shares of Common Stock for issuance to key employees and officers
recommended and approved by the Board of Directors, or a committee thereof, at a
price not less than 100% (or, in the case of an incentive stock option granted
to a 10% shareholder, 110%) of the fair market value of the shares purchased
thereunder on the date of grant. No option may be exercisable more than ten
years from the date of grant, and an incentive stock option granted to a 10%
shareholder may not be exercisable more than five years from the date of grant.
The Stock Option Plan is administered by the Compensation Committee of the Board
of Directors. The 1995 Plan terminates on September 18, 2005.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZED
--------------------------------------------------------------- VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION
UNDERLYING EMPLOYEES FOR OPTION TERM
OPTIONS IN FISCAL EXERCISE PRICE EXPIRATION --------------------
NAME GRANTED(#) YEAR ($/SH) DATE 5%($) 10%($)
- -------------------- ---------- ---------- -------------- -------------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Lawrence Saper...... 0 -- -- -- -- --
Murray Pitkowsky.... 10,000(1) 2.2% 21.063 Sept. 18, 2005 132,418 335,547
Timothy J. Haines... 10,000(1) 2.2% 21.063 Sept. 18, 2005 132,418 335,547
10,000(2) 2.2% 17.75 May 12, 2006 111,590 282,769
Russell Van Zandt... 10,000(1) 2.2% 21.063 Sept. 18, 2005 132,418 335,547
S. Arieh Zak........ 10,000(1) 2.2% 21.063 Sept. 18, 2005 132,418 335,547
</TABLE>
- ---------------
(1) The option becomes exercisable in four equal annual installments beginning
on September 19, 1996.
(2) The option becomes exercisable in four equal annual installments beginning
on May 13, 1997.
8
<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL AT FISCAL YEAR
SHARES YEAR END(#) END($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------- ----------- ----------- ---------------------- --------------------
<S> <C> <C> <C> <C>
Lawrence Saper............... 0 0 45,000/500,000 0/1,937,500
Murray Pitkowsky............. 15,000 175,950 26,500/ 13,500 115,315/ 10,000
Timothy J. Haines............ 0 0 11,250/ 33,750 41,563/ 48,438
Russell Van Zandt............ 2,250 18,063 11,250/ 18,500 0/ 12,438
S. Arieh Zak................. 0 0 11,000/ 20,000 13,623/ 16,998
</TABLE>
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ----------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000................................. 28,125 37,500 46,875 56,250 65,625
$150,000................................. 33,750 45,000 56,250 67,500 78,750
$175,000................................. 39,375 52,500 65,625 78,750 91,875
$200,000................................. 45,000 60,000 75,000 90,000 105,000
$225,000................................. 50,625 67,500 84,375 101,250 118,125
$250,000................................. 56,250 75,000 93,750 112,500 131,250
$300,000................................. 67,500 90,000 112,500 135,000 157,500
$400,000................................. 90,000 120,000 150,000 180,000 210,000
$450,000................................. 101,250 135,000 168,750 202,500 236,250
$500,000................................. 112,500 150,000 187,500 225,000 262,500
</TABLE>
The Corporation maintains the Datascope Corp. Pension Plan. Each year the
Corporation contributes an amount necessary to fund the plan on an actuarial
basis. Pension benefits to be received upon retirement are determined by an
employee's highest 5 consecutive years' earnings (based on base salary,
commission and certain bonus compensation paid to sales and service
representatives) in the 10 years preceding retirement, length of service with
the Corporation and age at retirement. Mr. Saper is currently credited with 32
years of service under the plan, Mr. Pitkowsky with 10 years, Mr. Van Zandt with
4 years, and Mr. Zak with 4 years; Mr. Haines will be retroactively credited
with 3 years of service in January, 1997. Pensions are reduced by 1.5% of an
employee's estimated primary Social Security benefit for each year of credited
service (to a maximum of 33 1/3 years). The net pension is limited as required
by the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The foregoing table illustrates annual pension benefits on a single life basis,
assuming retirement at age 65 and prior to reduction for Social Security
benefits or application of the ERISA limits.
The Corporation also maintains certain plans which provide for supplemental
pension benefits for Messrs. Saper and Pitkowsky (the "Supplemental Benefits
Plans"). Under the terms of the plan maintained for Mr. Pitkowsky, upon
attaining the age of 65, Mr. Pitkowsky is entitled to receive specified monthly
payments for 15 years, which payments may be increased if the participant
continues to work for the Corporation after age 65. In general, the payments to
be received were fixed by determining the difference between (i) 60% of a
pre-determined amount deemed to represent average compensation for the five
years prior to age 65 and (ii) the monthly retirement benefit that would be
payable under the Datascope Corp. Pension Plan (which amounts are limited by
ERISA). The plan in effect for Mr. Saper during fiscal year 1996 provides that
upon his retirement, Mr. Saper is entitled to receive annual lifetime payments,
the amounts of which will be based on average total compensation for the three
years in which Mr. Saper's compensation was greatest of the ten years
immediately preceding Mr. Saper's retirement, but will not be less than the
value of the benefit that would have been payable had his retirement occurred at
age 65. The plan in effect for Mr. Pitkowsky also provides for survivor
benefits, including monthly payments upon death. The plan in effect
9
<PAGE> 12
for Mr. Saper provides survivor benefits in the form of a $10,000,000 life
insurance policy, maintained pursuant to a split-dollar agreement among Mr.
Saper, the Corporation, and a trust for the benefit of Mr. Saper's family. The
Corporation's net investment in the program is recoverable on Mr. Saper's death,
but may be repaid sooner by the trust. Benefits under each Supplemental Benefits
Plan are paid from the general funds of the Corporation; however, the
Corporation purchases key-man insurance intended to recover a substantial
portion of the net after-tax cost of the benefits. The estimated annual benefit
payable upon retirement to Mr. Saper under his Supplemental Benefits Plan is
$1,257,000. The total annual benefit payable upon retirement to Mr. Pitkowsky
under his Supplemental Benefits Plan is $88,466.
COMPENSATION OF DIRECTORS
Each director of the Corporation (except Mr. Saper and Dr. Grayzel)
receives an annual director's fee of $12,000 and an attendance fee of $1,000 for
each meeting of the Board attended by that director and $500 per committee
meeting attended.
From time to time, the Corporation has granted options to directors to
purchase shares of Common Stock. All such options remain exercisable in full
until the earlier of ten years after the date of grant or the termination of
status as a director of the Corporation, and are not transferable except that
each of the options may be exercised by an executor or administrator within one
year after an optionee's death or disability but not beyond the option's normal
expiration date. Each option provides that the optionee may pay for any shares
acquired pursuant to the exercise of such option by cash or check or by transfer
to the Corporation of a number of shares of the Corporation's Common Stock with
an aggregate market value equal to the aggregate option exercise price. Such
options do not qualify as incentive stock options under the Code. For federal
income tax purposes, an optionee will realize taxable income on the date of
exercise of an option, and the Corporation will then be allowed a deduction from
income, equal to the excess of (a) the aggregate market value, on the date of
exercise, of the shares so acquired over (b) the aggregate option exercise price
for such shares. In September 1996, options to purchase 5,000 shares of Common
Stock were granted to each of Messrs. Abramson and Nash, two newly appointed
non-employee directors of the Corporation.
Transactions with respect to stock options granted to directors who are
officers of the Corporation pursuant to the 1981 Plan and the 1995 Plan and with
respect to the certain director options which have been approved by the
Corporation's shareholders are exempt from the short-swing trading liability
provisions of Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), pursuant to Rule 16b-3 of the Exchange Act. The 1981 Plan
and the 1995 Plan do not cover grants to directors who are not employees or
officers of the Corporation.
EMPLOYMENT CONTRACTS AND TERMINATION OF
EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
The Corporation entered into a five-year employment agreement with Mr.
Saper, dated as of June 30, 1991, which was amended as of July 25, 1994. The
employment agreement provides for automatic one year extensions after June 30,
1996 unless either party gives notice of intent not to extend one hundred and
eighty days prior to the end of the initial five-year term or any extension. The
employment agreement provides for an annual base salary of $630,000 until June
30, 1994 after which increases will be as determined by the Compensation
Committee. Mr. Saper is also entitled to participate in the Corporation's Annual
Bonus Plan (the "Bonus Plan") described below. Mr. Saper may terminate the
agreement for good reason, including a significant breach by the Corporation of
its obligations thereunder or certain changes in control of the Corporation, in
which event Mr. Saper is entitled to receive a lump sum payment equal to his
compensation as then in effect (including base salary and prior year's bonus
compensation) multiplied by the number of years remaining in his term of
employment or, if greater, an amount equal to his compensation as then in effect
multiplied by 2.99. Under the agreement, if Mr. Saper voluntarily decides to
reduce his duties while the employment agreement is in effect, he and the
Corporation will negotiate a mutually agreeable five-year consulting
arrangement. Under the terms of any such consulting arrangement, Mr. Saper would
be entitled to the retirement benefits provided by his employment agreement
during the term of the consulting arrangement.
10
<PAGE> 13
The Corporation has agreed that in the event of a change in control of the
Corporation Mr. Pitkowsky would be entitled to a lump-sum payment of 2.5 times
his annual base salary then in effect.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the Board of Directors (the "Compensation
Committee") establishes and reviews the Corporation's arrangements and programs
for compensating executive officers, including the Named Executives. The
Compensation Committee is composed entirely of directors who are neither
officers nor employees of the Corporation. The Compensation Committee has been
advised by outside legal counsel and by compensation consultants in formulating
the Compensation Committee's overall philosophy and objectives regarding
executive compensation and in structuring the Chief Executive Officer's
compensation package.
PHILOSOPHY AND POLICY
The Compensation Committee's policy is to design executive compensation
packages that reward the achievement of both short-term and long-term objectives
of the Corporation. Under this approach, the attainment of yearly earnings and
other short-term targets is compensated through yearly bonuses under the Bonus
Plan described below, and long-term performance of the Corporation is rewarded
through the grant of stock options under the 1995 Plan described above. The
bonuses and stock options are in addition to executives' yearly base salaries,
which are determined in a manner to be competitive with companies which the
Compensation Committee believes are comparable to the Corporation in the
Corporation's industry.
The Bonus Plan allows for annual bonus payments to eligible executives
based on attainment of overall corporate and division earnings targets. The
divisional earnings targets are established annually by the divisional
presidents and approved by Mr. Saper and the overall corporate earnings targets
are established annually by the Corporation's Board of Directors. Bonuses are
granted to participants if the target level of earnings growth is achieved, and
the size of the executive's bonus increases with the level of earnings growth up
to a certain maximum level of bonus. Mr. Saper has the discretion, subject to
approval of the Board of Directors, to grant special awards or adjust annual
awards in the event that corporate or divisional results do not adequately
reflect a participant's effort. The percentage of an eligible executive's salary
which may be earned as a bonus varies depending on the employee's position with
the Corporation.
The Compensation Committee believes that, in addition to compensating
executives for the long-term performance of the Corporation, the grant of stock
options aligns the interest of the executives with those of the Corporation's
shareholders. The Compensation Committee determines the recipients of stock
option grants and the size of the grants consistent with these principles, and
based on the employee's performance and position with the Corporation.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Saper's compensation for fiscal year 1996 was determined by an
employment agreement entered into in June 1991. The overall compensation
included in the agreement was determined in a manner to be competitive with
companies which the Compensation Committee believes are comparable to the
Corporation in the Corporation's industry. Pursuant to that agreement, Mr. Saper
is entitled to participate in the Bonus Plan. The Compensation Committee has
determined that, in addition to continued earnings growth of the Corporation, an
important goal for Mr. Saper is to build greater management depth, provide for
eventual succession, and to lead the Corporation through the regulatory
challenges it faced. Mr. Saper's bonus of $400,000 for the fiscal year ended
June 30, 1996 was based on the achievement of the Corporation's overall
corporate earnings target established by the Board of Directors for that year,
as well as Mr. Saper's leadership of the Corporation during that year, with a
special emphasis on the Corporation's success in meeting the regulatory
challenges it faced and the strengthening of the Corporation's management team.
11
<PAGE> 14
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Section 162(m) of the Code generally disallows a tax deduction for
compensation over $1,000,000 paid to the Corporation's Chief Executive Officer
and certain other highly compensated executive officers. Qualifying
performance-based compensation will not be subject to the deduction limit if
certain requirements are met. In addition, pursuant to transitional rules under
Section 162(m), compensation which is paid pursuant to a written, binding
agreement in existence on February 17, 1993 is exempt from the deduction limit.
As a result of these transitional rules, the Compensation Committee believes
that Mr. Saper's compensation prior to June 30, 1996 will not be subject to the
Section 162(m) deduction limitation. The Compensation Committee does not believe
that the compensation to be paid to the Corporation's other executives will
exceed the deduction limit set by Section 162(m).
COMPENSATION COMMITTEE
Alan B. Abramson
David Altschiller
William L. Asmundson
The forgoing report of the Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
the Proxy Statement into any filing under the Securities Act of 1933, as amended
(the "Securities Act"), or the Exchange Act, except to the extent that the
Corporation specifically incorporated this information by reference and shall
not otherwise be deemed filed under such Acts.
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on
Common Stock with the cumulative total return of the Standard & Poor's 500 Stock
Index and the Standard & Poor's Medical Products and Supplies Index for the five
year period commencing July 1, 1991 and each subsequent June 30 through June 30,
1996. The graph assumes that the value of the investment in Common Stock was
$100 on July 1, 1991 and that all dividends were reinvested.
<TABLE>
<CAPTION>
Measurement Period S&P 500 In- S&P Medical
(Fiscal Year Covered) Datascope dex Products
<S> <C> <C> <C>
1991 100.00 100.00 100.00
1992 117.50 113.41 114.19
1993 75.00 128.87 93.66
1994 80.00 130.68 90.29
1995 86.25 164.75 138.52
1996 88.75 207.59 181.98
</TABLE>
12
<PAGE> 15
SHAREHOLDER PROPOSALS
The following shareholder proposals were submitted pursuant to Rule 14a-8
of the Securities Exchange Act of 1934. The Corporation will furnish the names
and addresses of the proponents of the statements and information concerning the
number of shares of Common Stock that each proponent beneficiary owns, to any
person, orally or in writing, promptly upon receipt of any oral or written
request thereof.
PROPOSAL 1
Eliminate Classified Board of Directors Resolution
RESOLVED, that the stockholders of the Corporation request that the Board
of Directors take the necessary steps, in accordance with state law, to
declassify the Board of Directors so that all directors are elected annually,
such declassification to be effected in a manner that does not affect the
unexpired terms of directors previously elected.
Supporting Statement
The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable for
its implementation of those policies. I believe that the classification of the
Board of Directors, which results in only a portion of the Board being elected
annually, is not in the best interests of the Corporation and its stockholders.
The Board of Directors of the Corporation is divided into three classes
serving staggered three-year terms. I believe that the Corporation's classified
Board of Directors maintains the incumbency of the current Board and therefore
of current management, which in turn limits management's accountability to
stockholders.
The elimination of the Corporation's classified Board would require each
new director to stand for election annually and allow stockholders an
opportunity to register their views on the performance of the Board collectively
and each director individually. I believe this is one of the best methods
available to stockholders to ensure that the Corporation will be managed in a
manner that is in the best interests of the stockholders.
I am a founding member of the Investors Rights Association of America and I
believe that concerns expressed by companies with classified boards that the
annual election of all directors could leave companies without experienced
directors in the event that all incumbents are voted out by stockholders, are
unfounded. In my view, in the unlikely event that stockholders vote to replace
all directors, this decision would express stockholder dissatisfaction with the
incumbent directors and reflect the need for change.
I urge your support. Vote for this resolution.
CORPORATION'S STATEMENT IN OPPOSITION TO PROPOSAL 1
The Board of Directors recommends a vote AGAINST the shareholder proposal
to declassify the Board of Directors.
In 1994, the Corporation's shareholders rejected a similar proposal, which
was proposed by another member of the Investors Rights Association of America.
In 1991 the shareholders of the Corporation voted in favor of creating a
classified Board of Directors. The Board of Directors believes that the success
of the Corporation in producing long-term shareholder value, as reflected in
capital appreciation, requires long-term and strategic planning, and careful and
consistent application of the Corporation's financial and other resources. The
Board believes that an abrupt change of control could be disruptive to the
Corporation in achieving its long-term strategic goals and might deprive
shareholders of the opportunity to realize the full value of their investment.
The Board believes that a classified Board helps provide continuity in
management by ensuring that a majority of the Board at any given time would have
prior experience as directors of the Corporation.
13
<PAGE> 16
In addition, as stated in the proxy statement relating to the 1991 annual
meeting, a classified board enhances the ability of the Corporation's Board
(which may be in possession of non-public information critical to an accurate
assessment of the attractiveness of an acquisition proposal) to evaluate and
respond to takeover attempts in a manner which maximizes shareholder value. In
the particular case of a technology oriented corporation like the Corporation,
market price at a given time may not be an accurate measure of the Corporation's
intrinsic value, because the price may not reflect certain information such as
the impact of a new product under development which has not been publicly
disclosed or the potential performance of a recently introduced product.
Accordingly, a hostile acquisition that is not negotiated with the Board could
result in a price which is not indicative of the Corporation's true value.
Further, the Board does not believe that a classified board limits
management's accountability and responsiveness to the Corporation's
shareholders. The shareholders retain their ability to replace incumbent
directors or to propose alternate nominees for the class of directors to be
elected at an annual meeting. By altering the composition of the Board, the
shareholders can properly and effectively express their views with respect to,
and thus influence, the Corporation's policies. The Board believes that
incumbent directors who continue in office will be aware of and influenced by
such shareholder action.
In the opinion of the Board of Directors, the above reasons continue to be
valid and the classified board remains in the best interest of the shareholders.
Under Delaware law, the Corporation's Certificate of Incorporation must be
amended in order to declassify the Board of Directors. The amendment to the
Corporation's Certificate of Incorporation contemplated by the proposal must
first be approved by the Board of Directors and then submitted to the
shareholders for a vote. The Board of Directors, however, has not approved the
requested action and is opposed to such an amendment. A vote in favor of the
proposal is only an advisory recommendation to the Board of Directors that it
recommend to the shareholders the amendment of the Certificate of Incorporation.
PROPOSAL 2
Golden Parachute Resolution
RESOLVED, that the shareholders recommend that the board of directors adopt
a policy against entering into future agreements with officers and directors of
the Corporation which provide compensation contingent on a change of control of
the Corporation, unless such compensation agreements are submitted to a vote of
the shareholders and approved by a majority of shares present and voting on the
issue.
Supporting Statement
Lucrative severance contracts awarded to senior corporate executives which
provide compensation contingent on a change of control, usually through a merger
or acquisition of the corporation, are known as "golden parachutes." These
contracts are awarded without shareholder approval.
The practice of providing these large cash awards to a small group of
senior corporate managers without shareholder approval has been a subject of
public outcry. In 1988, the U.S. Senate in emphasizing the potential conflict of
interest between management and shareholders created by these agreements voted
ninety-eight to one to require shareholder approval of golden parachutes which
exceed three times annual compensation.
Although final action was not taken, it is clear to me that the
overwhelming vote in favor of the measure reflects public sentiment against
golden parachutes. A shareholder vote would allow the corporation's owners to
decide for themselves whether golden parachutes are in their best interests.
I am a founding member of the Investors Rights Association of America and
it is clear to me that requiring a shareholder vote is necessary to address the
conflicts of interest between management and shareholders that arise in the
awarding of golden parachutes.
I urge your support. Vote for this resolution.
14
<PAGE> 17
CORPORATION'S STATEMENT IN OPPOSITION TO PROPOSAL 2
The Board of Directors recommends a vote AGAINST the shareholder proposal
requiring the Corporation to seek shareholder approval before entering into
change-in-control compensation agreements. The Board believes that employee
compensation arrangements which provide reasonable benefits contingent upon a
change-in-control serve the best interests of the Corporation and its
shareholders. Requiring shareholder approval of these agreements would decrease
the Corporation's flexibility to implement these arrangements while providing no
corresponding benefit to shareholders.
Change-in-control compensation agreements are common in public companies
and serve as part of an integral program to enable companies, such as the
Corporation, to attract and retain highly qualified officers. In the Board's
view, requiring shareholder approval of such arrangements would disadvantage the
Corporation in the highly competitive market for talented executives. The
Corporation believes that change of control compensation arrangements are common
and are regularly offered to potential executives by its competitors. If
shareholder approval were required, some talented executives might decline
opportunities to join the Corporation due to the uncertainty and significant
delay in the Corporation's entering into an agreement acceptable to the
prospective executive.
The Corporation's existing employment (change-in-control) arrangements are
designed to minimize, rather than create, any conflict of interest that
executives might be deemed to have in the event of a takeover bid for the
Corporation. By providing financial security against possible job loss following
a takeover, these arrangements help management to assess a takeover bid
objectively, without fear of personal financial loss, and to advise the Board
whether the bid is in the best interests of the Corporation and its
shareholders. Indeed, the Corporation's current change of control compensation
arrangements have a value of less than 2% of the Corporation's market
capitalization, and therefore would not materially increase the cost of an
acquisition of the Corporation. Accordingly, the Corporation does not believe
that these provisions transfer significant value from the shareholders to the
executives.
As a lengthy period may elapse from the time a change in control is
proposed until it is completed, the Corporation and its shareholders would be
disadvantaged if it were to lose key employees during that time. The existing
employment arrangements are an incentive for key managers to protect shareholder
interests and to remain with the Corporation while the Corporation is facing the
threat of a contest for control. These arrangements will NOT prevent a business
combination that would increase shareholder value.
Moreover, the Corporation believes that requiring shareholder approval of
change-in-control arrangements might ultimately raise the total current cost of
executive compensation to the shareholders. Executives who join the Corporation
without contractual protection based upon change-in-control arrangements might
seek more value in direct benefits in order to compensate for the uncertainty
and delay created by the shareholder approval requirement. The Corporation,
therefore, believes that the shareholder approval requirement would
unnecessarily increase the cost of compensating new executives.
COMPLIANCE WITH THE SECURITIES EXCHANGE ACT
The Corporation's executive officers and directors are required under the
Exchange Act to file reports of ownership and changes in ownership with the
Securities and Exchange Commission. Copies of those reports must also be
furnished to the Corporation. Based solely on the Corporation's review of the
copies of such reports it has received, the Corporation believes that all its
executive officers and directors, and greater than ten percent beneficial owners
complied with all filing requirements applicable to them.
OTHER BUSINESS
The Board of Directors of the Corporation knows of no other matters to be
presented at the Annual Meeting. However, if any other matters properly come
before the meeting, or any adjournment thereof, it is intended that proxies in
the accompanying form will be voted in accordance with the judgment of the
persons named therein.
15
<PAGE> 18
SHAREHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the next annual
meeting of the Corporation's shareholders must be received by the Corporation
for inclusion in the Corporation's 1997 Proxy Statement and form of proxy on or
prior to July 11, 1997.
ANNUAL REPORTS AND FINANCIAL STATEMENTS
The Annual Report to Shareholders of the Corporation for the year ended
June 30, 1996 (the "Annual Report") is being furnished simultaneously herewith.
Such Annual Report is not to be considered a part of this Proxy Statement.
Upon the written request of any shareholder, management will provide, free
of charge, a copy of the Corporation's annual report on Form 10-K for the fiscal
year ended June 30, 1996, including the financial statements and schedules
thereto. Requests should be directed to Secretary, Datascope Corp., 14 Philips
Parkway, Montvale, New Jersey 07645.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Corporation's financial statements for the years ended June 30, 1996
and 1995 have been examined by the firm of Deloitte & Touche LLP, independent
certified public accountants. Representatives of Deloitte & Touche LLP are
expected to be present at the Annual Meeting of Shareholders to make a statement
if they so desire and they are expected to be available to respond to
appropriate questions.
The Corporation's Board of Directors intends to review the appointment of
independent certified public accountants at a meeting subsequent to the Annual
Meeting of Shareholders.
COST OF SOLICITATION
The cost of soliciting proxies in the accompanying form has been or will be
borne by the Corporation. In addition, directors, officers and employees of the
Corporation may solicit proxies personally or by telephone or other means of
communications. Although there is no formal agreement to do so, arrangements may
be made with brokerage houses and other custodians, nominees and fiduciaries to
send proxies and proxy material to their principals, and the Corporation may
reimburse them for any attendant expenses.
It is important that your shares be represented at the meeting. If you are
unable to be present in person, you are respectfully requested to sign the
enclosed proxy and return it in the enclosed stamped and addressed envelope as
promptly as possible.
By Order of the Board of Directors,
MURRAY PITKOWSKY,
Secretary
Dated: November 8, 1996
Montvale, New Jersey
16
<PAGE> 19
PROXY DATASCOPE CORP. COMMON STOCK
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF THE CORPORATION FOR ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 10, 1996
The undersigned hereby constitutes and appoints LAWRENCE SAPER and MURRAY
PITKOWSKY, and each of them, with full power of substitution, attorneys and
proxies to represent and to vote all of the shares of Common Stock, par value
$.01 per share, of DATASCOPE CORP. which the undersigned would be entitled to
vote, with all powers the undersigned would possess if personally present, at
the Annual Meeting of the Shareholders of DATASCOPE CORP., to be held at The
Harmonie Club, 4 East 60th Street, New York, New York, on December 10, 1996 at
11 o'clock A.M., local time, and at any adjournment thereof, on all matters
coming before said meeting:
1. ELECTION OF DIRECTORS. Nominees: David Altschiller and Joseph Grayzel (Mark
only one of the following boxes.)
/ / VOTE FOR ALL NOMINEES LISTED ABOVE, EXCEPT VOTE WITHHELD AS TO THE
FOLLOWING NOMINEES (IF ANY):__________________
/ / VOTE WITHHELD FROM ALL NOMINEES.
2. STOCKHOLDER PROPOSAL NUMBER 1.
/ / FOR / / AGAINST / / ABSTAIN
3. STOCKHOLDER PROPOSAL NUMBER 2.
/ / FOR / / AGAINST / / ABSTAIN
4. IN THEIR DISCRETION, UPON ANY OTHER BUSINESS WHICH MAY PROPERLY COME BEFORE
THE MEETING OR ANY ADJOURNMENT THEREOF.
(Continue and sign on other side)
<PAGE> 20
(Continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION AS DIRECTORS OF THE NOMINEES OF THE BOARD OF DIRECTORS,
AND AGAINST THE STOCKHOLDER PROPOSALS OPPOSED BY THE BOARD OF DIRECTORS.
The undersigned acknowledges receipt of the accompanying Proxy Statement dated
November 8, 1996.
Date: _____________, 1996
__________________________
__________________________
Signature of Shareholder(s)
(When signing as attorney, trustee, executor, administrator, guardian, corporate
officer, etc., please give full title. If more than one trustee, all should
sign. Joint owners must each sign.)
Please date and sign exactly as name appears above.
I plan / / I do not plan / /
to attend the Annual Meeting.
