<PAGE>
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 Section 240.14a-11(c) or Section 240.14a-12
Symbol Technologies, Inc.
- --------------------------------------------------------------------------------
(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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE>
SYMBOL TECHNOLOGIES, INC.
ONE SYMBOL PLAZA
HOLTSVILLE, NEW YORK 11742-1300
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 5, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Symbol
Technologies, Inc. (the "Corporation") will be held at 10:00 A.M., local
time, on May 5, 1997 at Symbol Technologies, Inc., World Headquarters, One
Symbol Plaza, Holtsville, NY, for the following purposes:
1. To elect nine directors of the Corporation to serve until the next
annual meeting of shareholders and until the election and
qualification of their respective successors;
2. To approve the adoption of the 1997 Employee Stock Option Plan;
3. To approve the adoption of the 1997 Employee Stock Purchase Plan;
4. To ratify the appointment of Deloitte & Touche, independent certified
public accountants, as auditors for fiscal year 1997; and
5. 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 March 10, 1997 are entitled to notice of, and to vote at, the
meeting and any adjournment thereof. Such shareholders may vote in person or
by proxy. The stock transfer books of the Corporation will not be closed.
Shareholders who find it convenient are cordially invited to attend the
meeting in person. If you are not going to do so and wish that your shares 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,
LEONARD H. GOLDNER
Secretary
Dated: March 11, 1997
<PAGE>
SYMBOL TECHNOLOGIES, INC.
ONE SYMBOL PLAZA
HOLTSVILLE, NEW YORK 11742-1300
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Symbol Technologies, Inc. (the "Corporation") of
proxies to be used at the Annual Meeting of Shareholders of the Corporation
to be held at 10:00 A.M., local time on May 5, 1997, at Symbol Technologies,
Inc., World Headquarters, One Symbol Plaza, Holtsville, New York, and at any
adjournment thereof. 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 (1) for the election as directors of the nominees of the Board
of Directors named below, (2) in favor of the proposal to approve the 1997
Employee Stock Option Plan, (3) in favor of the proposal to approve the 1997
Employee Stock Purchase Plan, (4) to ratify the appointment of Deloitte &
Touche as the Corporation's auditors for fiscal 1997, and (5) 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 shareholder prior to its exercise upon written notice to the
Secretary of the Corporation, or by the vote of a shareholder cast in person
at the meeting. The approximate date of mailing of this Proxy Statement and
the accompanying proxy is March 20, 1997.
VOTING
Holders of record of the Corporation's Common Stock on March 10, 1997,
will be entitled to vote at the Annual Meeting or any adjournment thereof. As
of that date, there were 28,434,037 shares of Common Stock outstanding and
entitled to vote and a majority, or 14,217,019 of these shares, will
constitute a quorum for the transaction of business. Share amounts in this
Proxy Statement have not been adjusted to reflect the three for two stock
split which will be effective on April 1, 1997. Each share of Common Stock
entitles the holder thereof to one vote on all matters to come before the
meeting, including election of directors. Only votes cast "for" a motion
constitute affirmative votes. Votes "withheld" or abstentions (including
broker non-votes) are considered for quorum purposes but since they are not
votes "for" a motion, they will have the same effect as negative votes or
votes "against" such matters. The closing price of the Corporation's Common
Stock on the New York Stock Exchange on February 28, 1997 was $50.25 per
share.
NOMINEES FOR ELECTION
The following information is supplied with respect to the nominees for
election as directors of the Corporation:
<TABLE>
<CAPTION>
POSITIONS AND OFFICES HAS BEEN A
NAME AGE PRESENTLY HELD WITH THE CORPORATION DIRECTOR SINCE
- ------------------- ----- ----------------------------------------------- --------------
<S> <C> <C> <C>
Jerome Swartz....... 56 Chairman of the Board of Directors, 1973
Chief Executive Officer and Director
Harvey P. Mallement. 56 Director 1977
Frederic P. Heiman . 57 Executive Vice President and Director 1981
Raymond R. Martino . 58 Vice Chairman of the Board of Directors 1983
Saul P. Steinberg .. 57 Director 1985
Lowell C. Freiberg . 57 Director 1985
George Bugliarello . 69 Director 1992
Charles Wang ....... 52 Director 1994
Tomo Razmilovic..... 54 President, Chief Operating Officer and 1995
Director
</TABLE>
1
<PAGE>
Dr. Swartz co-founded and has been employed by the Corporation from its
inception in 1973. He has been the Chairman of the Board of Directors and
Chief Executive Officer of the Corporation for more than the past ten years.
Dr. Swartz was an industry consultant for the prior 12 years in the areas of
optical and electronic systems and instrumentation and has a total of some
140 issued and pending U.S. patents and technical papers to his credit. He is
a member of the Board of Trustees of Polytechnic University and a member of
the Board of Directors of the Stony Brook Foundation. He is also a fellow of
the Institute of Electrical and Electronic Engineers.
Mr. Mallement has been one of the Managing General Partners of Harvest
Partners, Inc., a private equity and leveraged buyout investment management
company, since its inception in April 1981. He is an officer and director of
seven privately held companies.
Dr. Heiman has been Executive Vice President of the Corporation since July
1986. He was previously employed by Intel Corporation, a manufacturer of
semiconductor components, from May 1982 until July 1986, in a number of
positions, the most recent of which was as its Director of Corporate
Planning. Dr. Heiman is the inventor or co-inventor of 20 issued U.S.
patents, including basic elements of the MOS integrated circuit chip, which
became the basis of much of the modern revolution in computer and electronics
communications and the first silicon storage tube used in display and
scanning applications.
Mr. Martino was the Corporation's President and Chief Operating Officer
from December 1983 until June 30, 1994. He is currently the Corporation's
Vice Chairman of the Board of Directors and is employed by the Corporation on
a part-time and consulting basis.
Mr. Steinberg founded and has been the Chief Executive Officer and a
Director of Reliance Group Holdings, Inc. ("Reliance") and predecessors of
Reliance since 1961. Reliance is a holding company whose principal business
is the ownership of property and casualty and title insurance companies. He
is also a member of the Board of Trustees of the University of Pennsylvania
and Chairman of the Wharton School Board of Overseers. Mr. Steinberg is also
a Director of Reliance Insurance Company, Reliance Financial Services
Corporation and Zenith National Insurance Corp.
Mr. Freiberg has been employed by Reliance and its predecessors since
1969. For more than the past five years, he has been the Senior Vice
President and Chief Financial Officer of Reliance.
Dr. Bugliarello has been Chancellor of Polytechnic University since July
1, 1994. For the prior 21 years, he was President of Polytechnic University.
He has been a member of several scientific organizations including past
Chairman of the Board of Science and Technologies for International
Development of the National Academy of Sciences. He is a member of the
National Academy of Engineering and is also the U.S. Member of the Science
for Stability Steering Group of the Scientific Affairs Division of NATO. He
is a member of the Board of Directors of several organizations including the
Long Island Lighting Company, Comtech Laboratories and Spectrum Information
Technologies, Inc. In January 1995, Spectrum Information Technologies, Inc.
filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
Mr. Wang has been the Chief Executive Officer of Computer Associates
International, Inc. since 1976. He has been the Chairman of the Board since
1980. Computer Associates is the world's leading business software company
with fiscal 1996 revenues exceeding $3.9 billion.
Mr. Razmilovic has been President and Chief Operating Officer of the
Corporation since October 1995. He was previously Senior Vice President
- -Worldwide Sales and Services. He first joined the Corporation in 1989. Prior
thereto, he was President of ICL International, a major European computer
manufacturer and he also led its industry marketing and software development
divisions.
Pursuant to agreements between Reliance and the Corporation, Reliance
currently has the right to designate one person to the Corporation's Board of
Directors. Reliance has designated Mr. Steinberg.
2
<PAGE>
MEETINGS OF THE BOARD
During the fiscal year ended December 31, 1996 the Board of Directors held
five meetings. Each director, except for Mr. Wang, attended 75% or more of
the aggregate of (1) the total number of meetings of the Board of Directors
and (2) the total number of meetings held by all the committees of the Board
on which such director served. Mr. Wang attended three of the five meetings.
The Board of Directors has an Audit Committee consisting of Messrs.
Mallement and Bugliarello. The primary functions of the Audit Committee are
to review the Corporation's financial statements, to recommend the
appointment of the Corporation's independent auditors and to review the
overall scope of the audit. The Audit Committee held two meetings in 1996.
The Board of Directors has a Compensation/Stock Option Committee
consisting of Messrs. Freiberg and Steinberg. The primary functions of this
Committee are to review the salaries, benefits and any other compensation of
the Corporation's senior executive officers, to make recommendations to the
Board of Directors with respect to these matters and to administer the
Corporation's stock option plans. During 1996 the Committee held 5 meetings.
The Board of Directors has a Nominating Committee consisting of Messrs.
Swartz, Mallement and Steinberg. The primary function of this Committee is to
review and recommend to the Board potential candidates for election to the
Board of Directors. Shareholders wishing to recommend candidates for
consideration by the Committee can do so by providing written notice to the
Secretary of the Corporation no later than December 31 of the year preceding
the date of the meeting, at its corporate office in Holtsville, New York,
giving the candidate's name, biographical data and qualifications. Any such
recommendation should be accompanied by a written statement from the
individual of his or her consent to be nominated as a candidate and, if
nominated and elected, to serve as a director. The Committee did not meet in
1996.
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to the
Common Stock of the Corporation beneficially owned by any person who is known
to the Corporation to be the beneficial owner of more than 5% of the
Corporation's voting securities:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP(1) COMMON STOCK
- ---------------------------------------------- --------------------- --------------
<S> <C> <C>
Saul P. Steinberg and 3,592,384(2) 13.8
Reliance Financial Services Corporation
Park Avenue Plaza
New York, New York 10055
Prudential Insurance Company of America 2,571,052(3) 9.9
751 Broad Street
Newark, New Jersey 07102-3777
Forstmann-Leff Associates Inc. and 1,985,515(4) 7.6
subsidiaries
55 East 52nd Street
New York, New York 10055
AIM Managment Group, Inc. 1,401,200(5) 5.4
11 Greenway Plaza
Houston, Texas 77046
Putnam Investment Management, Inc. 1,299,900(6) 5.0
One P.O. Box Square
Boston, Massachusetts 02109
</TABLE>
- ------------
(1) The table identifies any persons having sole voting and investment
power with respect to the shares set forth opposite their names as of
February 15, 1997 except as otherwise disclosed in the footnotes to the
table, according to information publicly filed or otherwise furnished
to the Corporation.
3
<PAGE>
(2) Of the Common Stock shown, 3,578,634 shares are beneficially owned by
Reliance Financial Services Corporation ("Reliance Financial").
Reliance Financial is a wholly owned subsidiary of Reliance.
Approximately 47% of the common voting stock of Reliance is owned by
Saul P. Steinberg, members of his family and affiliated trusts. As a
result of his stock holdings in Reliance, Mr. Steinberg may be deemed
to control Reliance Financial and to be a beneficial owner of the
shares beneficially owned by Reliance Financial. Sole voting and
dispositive power with respect to such shares are held as follows:
Reliance Insurance Company, a subsidiary of Reliance Financial,
2,880,534 shares; United Pacific Insurance Company, a subsidiary of
Reliance Insurance Company, 500,000 shares; Reliance National
Indemnity, a subsidiary of Reliance Insurance Company, 198,100 shares.
Mr. Steinberg disclaims beneficial ownership of the 3,578,634 shares
beneficially owned by Reliance Financial. Includes 13,750 shares Mr.
Steinberg beneficially owns which may be acquired within 60 days of
February 15, 1997, pursuant to the exercise of options and a warrant
held by him.
(3) The number of shares beneficially owned as of December 31, 1996
according to a statement on Schedule 13G filed with the Securities and
Exchange Commission. Prudential Insurance Company of America, an
insurance company, has sole power to vote or direct the vote and
dispose of or direct the disposition of 351,600 of such shares, shared
power to vote or direct the vote of 1,979,052 of such shares, and
shared power to dispose of or direct the disposition of 2,219,452 of
such shares. Prudential may have direct or indirect voting and/or
investment discretion over 2,571,052 shares which are held for the
benefit of its clients by its separate accounts, externally managed
accounts, registered investment companies, subsidiaries and/or other
affiliates.
(4) The number of shares beneficially owned as of December 31, 1996
according to a statement on Schedule 13G filed with the Securities and
Exchange Commission. Forstmann-Leff Associates Inc. and subsidiaries,
investment advisors, have sole power to vote or direct the vote of
1,000,115 of such shares, shared power to vote or direct the vote of
249,300 of such shares, sole power to dispose of or to direct the
disposition of 1,134,015 of such shares and shared power to dispose of
or direct the disposition of 851,500 of such shares.
(5) The number of shares beneficially owned as of December 31, 1996
according to a statement on Schedule 13G filed with the Securities and
Exchange Commission. AIM Management Group, Inc. and its subsidiaries,
investment advisors, have shared power to vote or direct the vote of
1,401,200 such shares. No one client owns more than 5% of such shares.
(6) The number of shares beneficially owned as of December 31, 1996
according to a statement on Schedule 13G filed with the Securities and
Exchange Commission. Putnam Investments, Inc., an investment advisor,
has shared power to vote or direct the vote of 196,000 of such shares,
and shared power to dispose of or direct the disposition of 1,299,900
of such shares. No one client owns more than 5% of such shares.
4
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of February 15, 1997
with respect to the Common Stock of the Corporation beneficially owned by (i)
all directors and nominees, (ii) the executive officers listed in the
following Summary Compensation Table, and (iii) all executive officers and
directors as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENT OF
NAME OF INDIVIDUAL OR IDENTITY OF GROUP OWNERSHIP(1) COMMON STOCK
- ------------------------------------------------ --------------------- --------------
<S> <C> <C>
Jerome Swartz ................................... 918,531(2) 3.5
Harvey P. Mallement ............................. 36,750(3) *
Frederic Heiman ................................. 57,600(4) *
Raymond R. Martino .............................. 208,008(5) *
Saul P. Steinberg ............................... 3,592,384(6) 13.8
Lowell C. Freiberg .............................. 38,750(7) *
George Bugliarello .............................. 5,250(8) *
Charles Wang .................................... 20,000(9) *
Tomo Razmilovic ................................. 69,129(10) *
Richard M. Feldt ................................ 1,000 *
Leonard H. Goldner .............................. 174,107(11) *
All executive officers and directors as a group.. 5,377,201(12) 19.7
(consisting of 18 individuals)
</TABLE>
- ------------
* Less than 1%
(1) The persons identified in this table have 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) Includes (i) 590,500 shares which may be acquired pursuant to the
exercise of options within 60 days of February 15, 1997, (ii) 50,000
shares held in trust for the benefit of Dr. Swartz and his family,
(iii) 5,509 shares owned by his wife, and (iv) 14,600 shares held by
a charitable lead trust of which he is a co-trustee and his adult
children are ultimate beneficiaries. Dr. Swartz disclaims beneficial
ownership of the shares held by or for the benefit of members of his
family.
(3) Represents 3,750 shares that may be acquired pursuant to the exercise
of options within 60 days of February 15, 1997 and 33,000 shares
owned by Mr. Mallement.
(4) Represents 40,100 shares that may be acquired pursuant to the
exercise of options within 60 days of February 15, 1997 and 17,500
shares owned by Dr. Heiman and his wife.
(5) Represents 181,500 shares that may be acquired pursuant to the
exercise of options within 60 days of February 15, 1997 and 26,508
shares owned by Mr. Martino.
(6) Represents 3,578,634 shares owned by Reliance Financial and its
subsidiaries and 13,750 shares that may be acquired by Mr. Steinberg
pursuant to the exercise of options and a warrant within 60 days of
February 15, 1997. See "Principal Shareholders."
(7) Represents 3,750 shares that may be acquired pursuant to the exercise
of a warrant and options within 60 days of February 15, 1997 and
32,500 shares owned by Mr. Freiberg. Mr. Freiberg disclaims
beneficial ownership of the shares owned by Reliance Financial. See
"Principal Shareholders."
(8) Represents 6,250 shares that may be acquired pursuant to the exercise
of options within 60 days of February 15, 1997 and 1,500 shares owned
jointly by Dr. Bugliarello and his wife.
(9) Represents 10,000 shares that may be acquired pursuant to the
exercise of options within 60 days of February 15, 1997 and 10,000
shares owned by Mr. Wang.
(10) Represents 57,450 shares that may be acquired pursuant to the
exercise of options within 60 days of February 15, 1997 and 11,679
shares owned by Mr. Razmilovic.
(11) Includes 69,700 shares that may be acquired pursuant to the exercise
of options within 60 days of February 15, 1997 and 64,600 shares held
by trusts of which he is co-trustee. Mr. Goldner disclaims beneficial
ownership of the shares held by these trusts.
(12) Includes an aggregate of 1,193,846 shares which may be acquired
pursuant to the exercise of options and warrants within 60 days of
February 15, 1997.
5
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the
Corporation's directors and executive officers, and persons who own more than
10% of a registered class of the Corporation's equity securities, to file
with the Securities and Exchange Commission and the New York Stock Exchange,
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Corporation and to furnish the Corporation
with copies of all Section 16(a) forms they file.
Based on a review of the copies of such reports furnished to the
Corporation, the Corporation believes that, during the 1996 fiscal year, all
filing requirements applicable to its executive officers, directors and
greater than 10% shareholders were complied with.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Corporation's Compensation/Stock Option Committee (the "Committee") is
composed entirely of outside directors. Messrs. Freiberg and Steinberg are
the current members of the Committee. Neither has ever been an officer or
employee of the Corporation.
COMPENSATION/STOCK OPTION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
A primary role of the Committee is to oversee compensation practices for
the Corporation's senior executive officers. The Committee's responsibilities
include reviewing the salaries, benefits and other compensation of the
Corporation's senior executive officers, making recommendations to the full
Board of Directors with respect to these matters and administering the
Corporation's stock option plans. In its oversight capacity, the Committee is
dedicated to ensuring that the Corporation's financial resources are used
effectively to support the achievement of its short-and long-term business
objectives. The Committee has available to it an outside compensation
consultant and access to independent compensation data.
In the course of its executive compensation decision making, the Committee
adheres to several guiding principles. Specifically, the Committee takes the
position that the executive compensation program should:
o Target pay levels at rates that are competitive in light of market
practices so as to ensure that the Corporation is positioned to attract
and retain high performing management talent, particularly in the areas
of technology in which it competes.
o Reflect a pay-for-performance orientation, linking overall compensation
paid to senior executives with the Corporation's financial performance.
o Encourage share ownership on the part of key employees with the
objective of aligning the interests of management and investors,
thereby promoting the maximization of shareholder value.
The Corporation's total compensation program is described below. The
Committee believes that the Corporation's executive compensation program is
structured to appropriately recognize the performance and contribution of
individual officers and to attract and retain top quality management talent.
The Committee further believes that the executive compensation program is
effective in supporting the Corporation's business goals and human resource
strategies.
DESCRIPTION OF COMPENSATION POLICIES
It is the Corporation's policy to pay its senior executives at levels that
reflect the Corporation's financial performance relative to comparable
organizations. This policy is implemented by means of a coordinated, total
pay program comprised of discrete elements that reward individual value added
to the Corporation, provide motivation to achieve corporate financial targets
that are consistent with shareholder expectations, and encourage long-term
share ownership by senior executives. These elements exist in the context of
a reward system that includes base salary, a bonus plan and awards of stock
options.
6
<PAGE>
The Corporation, with the assistance of outside consulting firms,
periodically conducts comparisons of the compensation practices of
approximately 30 selected companies. This panel consists of "high tech"
companies with which the Corporation believes it competes in attracting and
retaining employees. Eleven of the panel companies are included in the S&P
Technology Sector Index. The Corporation seeks to target the total
compensation (e.g. base salary, annual bonus and stock options) paid to its
senior executives at approximately the 75th percentile of the total
compensation paid for comparable positions at the panel companies, after
adjusting by regression analysis for the different magnitude of revenues.
Based on a review of Internal Revenue Service regulations, the Committee
believes that all compensation paid in 1996 and payable in 1997 to its senior
executive officers (including Dr. Swartz) will be fully deductible by the
Corporation. The Committee will continue to review the Corporation's
compensation programs and may revise these programs as it deems necessary.
RELATIONSHIP OF EXECUTIVE COMPENSATION TO PERFORMANCE
BASE SALARY
Executive officers' base salaries are normally reviewed each year. An
exception to this policy is made with respect to the consideration of base
salary for Dr. Swartz due to his employment agreement which requires that
salary reviews for him be undertaken biennially. Consistent with this
agreement, Dr. Swartz' annual base salary was increased by 10% to $721,875,
effective July 1, 1996. Furthermore, he will receive an additional 10% raise
effective July 1, 1997. Dr. Swartz' salary will again be reviewed in July
1998.
In assessing the extent to which executive salary increases are warranted,
the Committee considers a number of factors, including performance on the
job, external market pay practices, the incremental value the executive adds
to the Corporation and the executive's level of experience and expertise.
Adjustments in base salary are generally not based upon the financial
performance of the Corporation. In the case of Dr. Swartz, the Committee
considered his effectiveness as Chairman of the Board and Chief Executive
Officer of the Corporation as well as his many noteworthy contributions to
the Corporation. These contributions include 85 issued U.S. patents which he
has assigned to the Corporation and which provide competitive advantages to
the Corporation and have also generated significant licensing revenues that
have materially added to the Corporation's profitability.
EXECUTIVE BONUS PLAN
The Corporation promotes a pay-for-performance philosophy wherein a
significant element of annual compensation is directly linked to the
financial performance of the Corporation. This was accomplished in years
before 1995 through the administration of the Profit Sharing Bonus Plan in
which most of the Corporation's North American-based management level
employees, including all executive officers except Mr. Razmilovic
participated. Effective January 1, 1995, the Committee adopted and the Board
of Directors and shareholders ratified the creation of an Executive Bonus
Plan (the "Executive Bonus Plan"), the purpose of which is to more directly
tie the level of annual executive incentive compensation to the financial
performance of the Corporation than was possible under the prior Profit
Sharing Bonus Plan. All executive officers of the Corporation participate in
the Executive Bonus Plan. The Committee has full authority to construe,
interpret and administer the Executive Bonus Plan, as well as to determine
the extent, if any, to which operating performance standards have been met.
The Committee also has authority to modify (prior to the beginning of the
calendar year for which the targets will be applicable) the specific targets
for the performance goals under the Executive Bonus Plan.
Under the Executive Bonus Plan, the Committee each year, establishes
corporate financial performance objectives (exclusive of extraordinary
revenues and charges), expressed in terms of earnings per share. Three levels
of performance are identified: threshold performance, at which the minimum
award (one-half a participant's target bonus) will be earned and below which
no award will be earned; target performance, at which the target award will
be earned; and maximum performance, at which the maximum award (twice a
participant's target bonus) will be earned and above which no additional
award will be earned. For 1997, threshold performance has been established at
results equal to 85% of the
7
<PAGE>
Corporation's 1997 Business Plan; target performance has been established at
results equal to 100% of the 1997 Business Plan; and maximum performance has
been established at results equal to or greater than 115% of the 1997
Business Plan.
Each participant in the Executive Bonus Plan has been assigned a target
bonus representing a percentage of the participant's base salary. The target
bonuses for 1997 for Messrs. Swartz, Razmilovic, Heiman, Feldt and Goldner
are 100%, 75%, 55%, 50% and 45%, respectively, which is consistent with past
practice and in conformity with their individual employment agreements and
their levels of responsibility. The target bonuses for all other participants
in the Executive Bonus Plan are established by Messrs. Swartz and Razmilovic
based on the individual's performance and relative level of responsibility.
They range from 35% to 45% of base salary.
Messrs. Swartz and Razmilovic's bonuses will be determined solely on the
basis of corporate financial performance. In the case of all other
participants, 25% of their bonuses will be based on individual performance
during the year with the remainder being based on corporate financial
performance. In 1996, all executive officers who participated in the
Executive Bonus Plan received as their actual bonus payment an amount 112.5%
of their Target Bonus (less adjustments in certain instances for individual
performance). In 1995 and 1994, all executive officers who participated in
the Executive Bonus Plan received 134% and 129%, respectively, of their
Target Bonus.
STOCK OPTIONS
The Corporation reinforces the importance of producing satisfactory
returns to shareholders over the long term through the operation of its stock
option plans. Stock options provide employees with the opportunity to acquire
an equity interest in the Corporation, and to participate in the creation of
shareholder value as reflected in growth in the price of the Corporation's
Common Stock.
Option exercise prices are equal to 100% of the fair market value of the
Corporation's Common Stock on the date of option grant. This ensures that
participants will derive benefits only as shareholders realize corresponding
gains. To encourage a long-term decision making perspective, options are
generally assigned a 10-year term and options generally become exercisable
over four to five years following a two year waiting period.
The Committee grants additional options to selected employees based on an
assessment of competitive compensation practices, particularly in high
technology industries, individual contribution and performance. The Committee
believes that in granting such stock options, it is effectively reinforcing
the Corporation's objective of insuring a strong link between employee
rewards and shareholder interests. In 1996, the Committee determined that it
was appropriate and desirable to grant Dr. Swartz (i) an option to purchase
75,000 shares of Common Stock at an exercise price of $37.50 per share (the
fair market value of the Corporation's Common Stock on the date the option
was granted by the Committee) in light of the Corporation's strong financial
performance in 1995 and (ii) an option to purchase 180,000 shares of Common
Stock at an exercise price of $44.75 per share (the fair market value of the
Corporation's Common Stock on the date the option was granted by the
Committee) in light of the Corporation's strong financial performance in
1996.
STOCK OWNERSHIP AND OPTION RETENTION PROGRAM
Effective January 1, 1995, the Committee established for executive
officers a stock ownership and option retention program which it administers.
The Committee firmly believes that the long term interests of the
Corporation's shareholders are best served when management maintains a
significant, equity-based interest in the Corporation. The Committee
considers both vested, unexercised options and shares owned as meaningful
expressions of such interest. Accordingly, the Committee developed a program
with target levels of equity interest for each executive officer. Under the
program, without prior permission of the Committee, unless and until an
executive has attained the minimum requirements described below, there will
exist significant limitations on an executive's freedom to reduce his equity
position. Executive officers must agree to participate in the program to be
eligible to receive option awards after January 1, 1995. All current
executive officers have agreed to participate in the program.
8
<PAGE>
The program limits the exercise of vested options (other than in the last
year of the term of an option) unless the executive meets and will continue
to meet the equity interest requirement described below after the exercise
and sale of shares acquired upon exercise. The equity interest requirement
provides that the combined value of the Corporation's Common Stock and vested
options held by the executive, each valued at the then market price of the
Corporation's Common Stock, must be equal to or greater than a designated
multiple of target cash compensation (annual base salary plus target bonus)
("TCC").
If the equity interest requirement is satisfied, the program allows for
the exercise of vested options but within strict limits. At least 50% of the
net after tax proceeds obtainable upon the exercise of any option (other than
options awarded after January 1, 1994 in connection with an executive's
initial hire or initial promotion to an executive officer position, or
options already held by persons who were promoted to an executive officer
position after January 1, 1994) must be retained in the form of shares of the
Corporation's Common Stock unless and until the executive then owns shares of
Common Stock having a market value equal to a specified multiple of his base
salary.
<TABLE>
<CAPTION>
EQUITY INTEREST SHARE OWNERSHIP
POSITION REQUIREMENT REQUIREMENT
- ------------------------- ------------------- -----------------------
<S> <C> <C>
Chairman of the Board 7 times TCC 5 times Base Salary
- ------------------------- ------------------- -----------------------
President 5 times TCC 3 times Base Salary
- ------------------------- ------------------- -----------------------
Executive and
Senior Vice President 3 times TCC 2 times Base Salary
- ------------------------- ------------------- -----------------------
Vice President 2 times TCC 1 times Base Salary
- ------------------------- ------------------- -----------------------
</TABLE>
SUMMARY
The Committee is responsible for recommending to the Board, for its
approval, compensation decisions affecting the Corporation's senior executive
officers. The Committee ensures that the overall compensation offered to
senior executive officers is consistent with the Corporation's interest in
providing competitive pay opportunities, reflective of its
pay-for-performance orientation, encourages share ownership on the part of
executives and is generally supportive of the Corporation's short-and
long-term business goals. The Committee will continue to actively monitor the
effectiveness of the Corporation's senior executive compensation plans and
assess the appropriateness of senior executive pay levels to assure prudent
application of the Corporation's resources.
Compensation /Stock Option Committee
Lowell C. Freiberg, Chairman
Saul P. Steinberg
9
<PAGE>
MANAGEMENT REMUNERATION AND TRANSACTIONS
The following Summary Compensation Table sets forth compensation
information with respect to the Corporation's Chief Executive Officer and the
four other executive officers who in 1996 were the most highly paid executive
officers, for services rendered in all capacities during the fiscal years
ended December 31, 1996, 1995 and 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------------------ ----------------------
NAME AND OTHER ANNUAL SECURITIES UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS(E) COMPENSATION(F) OPTIONS (#) COMPENSATION(F)
- ------------------------ ------ ----------- ---------- --------------- ---------------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Jerome Swartz............ 1996 $689,052(C) $775,184 $0 255,000 $ 52,496(G)
Chairman of the Board, 1995 $656,250(D) $881,823 $0 275,000 $ 19,890(G)
Chief Executive Officer 1994 $640,462(D) $824,915 $0 100,000 $ 13,621(G)
and Director
Tomo Razmilovic.......... 1996 $437,500(C) $369,147 $0 85,000 $ 4,750(H)
President, Chief 1995 $308,673 $254,523 $0 132,500 $111,344(I)
Operating Officer 1994 $262,500 $196,875 $0 0 $118,839(I)
and Director(A)
Frederic P. Heiman....... 1996 $397,509(C) $245,959 $0 30,000 $ 4,750(H)
Executive Vice 1995 $375,000(D) $276,930 $0 27,500 $ 4,750(H)
President 1994 $359,000(D) $254,316 $0 0 $ 4,620(H)
and Director
Richard M. Feldt......... 1996 $288,758(C) $156,335 $0 0 $197,588(J)
Senior Vice President 1995 $ 70,002 $ 75,000 $0 75,000 $ 0
and 1994 -- -- -- -- --
General Manager,
Operations(B)
Leonard H. Goldner....... 1996 $248,872(C) $125,991 $0 10,000 $ 4,750(H)
Senior Vice President, 1995 $210,454(D) $127,259 $0 25,000 $ 4,750(H)
General Counsel and 1994 $200,034(D) $115,933 $0 0 $ 4,620(H)
Secretary
A Until October 15, 1995 he served as Senior Vice President World Wide
Sales and Services and in such capacity he received an annual base
salary in 1995 of $278,000, which was increased to $437,500 upon his
appointment as President.
B Mr. Feldt commenced employment with the Corporation in October 1995.
C Includes $9,500 in contributions to the Corporation's 401(k) deferred
compensation plan.
D Includes $9,240 in contributions to the Corporation's 401(k) deferred
compensation plan.
E Represents amounts earned and accrued pursuant to the Corporation's
Executive Bonus Plan in 1995 and 1996 and Bonus Profit Sharing Plan in
1994. Amounts indicated are earned and accrued in the fiscal year
indicated but generally paid in the first quarter of the next
succeeding year. Mr. Razmilovic participated in the Executive Bonus
Plan in 1995 and 1996 but was not a participant in the Bonus Profit
Sharing Plan. His bonus in 1994 was based upon his attainment of
certain sales related goals established by the President.
F Not included are the amounts of certain perquisites and other personal
benefits provided by the Corporation since such amounts do not exceed
the lesser of (i) $50,000 or (ii) 10% of the total annual salary and
bonus reported in the table for any named executive officer.
10
<PAGE>
G Represents (i) $4,620 in 1994, $4,750 in 1995 and $4,750 in 1996 for
contributions to the Corporation's 401(k) deferred compensation plan,
(ii) $9,001 in 1994, $15,140 in 1995 and $15,246 in 1996 for (a)
premiums paid on his behalf on term life insurance policies for which
members of his family are the beneficiaries and (b) the estimated
dollar value of the economic benefit to Dr. Swartz for insurance
premium payments made by the Corporation on split-dollar whole life
policies for which the Corporation will eventually recover all premiums
paid, and (iii) a non-reimbursable expense allowance in 1996 of
$32,500.
H Represents contributions to the Corporation's 401(k) deferred
compensation plan.
I Represents (i) $48,000 in 1994 and $40,385 in 1995 to reimburse him for
a portion of his duplicate housing expenses when his duties for the
Corporation and its subsidiaries required that he maintain a home in
both the United Kingdom and Long Island, and (ii) $70,839 in 1994 and
$70,959 in 1995 for contributions to a defined contribution retirement
plan maintained by the Corporation's UK subsidiary on his behalf.
J Represents $4,750 in contributions to the Corporation's 401(k) deferred
compensation plan and $192,838 reimbursement of expenses associated
with Mr. Feldt's relocation to the Long Island area.
In 1995, Dr. Swartz and the Corporation entered into an employment
agreement which terminates on June 30, 2000, pursuant to which Dr. Swartz
will receive an annual base salary of $721,864 through June 30, 1997. He will
receive a 10% increase effective July 1, 1997. Dr. Swartz also participates
in the Corporation's Executive Bonus Plan. The target amount of his bonus is
100% of his base salary. In addition, if his employment with the Corporation
is terminated for any reason (other than due to his death or disability or
for cause or his voluntary resignation), Dr. Swartz will receive payments
equal to one year's (if such termination occurs after June 30, 1998, two
year's, if such termination occurs before such date) annual base salary and
bonus during the last completed fiscal year immediately preceding any such
termination.
In 1995, Mr. Razmilovic and the Corporation entered into an employment
agreement which terminates on December 31, 2000, pursuant to which Mr.
Razmilovic will receive an annual base salary of $500,000 for the year ending
December 31, 1997, subject to annual renegotiation thereafter. Mr. Razmilovic
also participates in the Corporation's Executive Bonus Plan. The target
amount of his bonus is 75% of his base salary. In addition, if his employment
with the Corporation is terminated for any reason (other than due to his
death or disability or for cause or his voluntary resignation), Mr.
Razmilovic will receive payments equal to one year's (if such termination
occurs after October 30, 1998, two year's, if such termination occurs before
such date) annual base salary and bonus during the last completed fiscal year
immediately preceding any such termination.
In 1995, Dr. Heiman and the Corporation entered into an employment
agreement which terminates on June 30, 1999 pursuant to which Dr. Heiman is,
effective as of January 1, 1997, employed on an approximate 50% basis. He
will receive an annual base salary of $212,500 for the year ending December
31, 1997, subject to annual renegotiation thereafter. Dr. Heiman also
participates in the Corporation's Executive Bonus Plan. The target amount of
his bonus is 55% of his base salary.
In 1995, Mr. Goldner and the Corporation entered into an employment
agreement which terminates on October 31, 2000, pursuant to which Mr. Goldner
will receive an annual base salary of $291,200 for the year ending December
31, 1997, subject to annual renegotiation thereafter. Mr. Goldner also
participates in the Corporation's Executive Bonus Plan. The target amount of
his bonus is 45% of his base salary. In addition, if his employment with the
Corporation is terminated for any reason (other than due to his death or
disability or for cause or his voluntary resignation), Mr. Goldner will
receive payments equal to one year's (if such termination occurs after
October 31, 1998, two year's, if such termination occurs before such date)
annual base salary and bonus during the last completed fiscal year
immediately preceding any such termination.
Mr. Martino and the Corporation have entered into an employment agreement
which terminates on December 31, 2000 pursuant to which he is employed on a
part-time and consulting basis, assisting the Chairman of the Board and
President. His salary during this period is $150,000 per annum.
11
<PAGE>
Directors who are not employees of the Corporation receive an annual
retainer of $12,500, payable in quarterly installments as well as a fee of
$2,500 for each Board of Directors meeting attended or each meeting of a
committee which is not held in conjunction with a Board of Directors meeting.
The Chairman of the Audit Committee and the Compensation/Stock Option
Committee also each receive an annual retainer of $5,000 payable in quarterly
installments. Directors who are employees receive no additional compensation
for serving as directors or for attending Board or committee meetings. The
Corporation reimburses Directors for expenses incurred in connection with
attending meetings of the Board of Directors or committees of the Board.
In addition, Directors who are not employees of the Corporation
participate in the Corporation's 1994 Directors' Stock Option Plan (the "1994
Plan"). Pursuant to the 1994 Plan, when a person is initially elected to the
Board of Directors, he is awarded an option to purchase 10,000 shares.
Moreover, commencing in 1994, every person who has been a Director for more
than 11 months is, upon re-election at the annual meeting of shareholders,
granted an option to purchase 2,500 shares of the Corporation's Common Stock.
Each option has a term of ten years, becomes exercisable in two equal annual
installments beginning on the first anniversary of the date of grant and has
an exercise price equal to 100% of the fair market value of shares of the
Corporation's Common Stock on the date of grant. Pursuant to the 1994 Plan,
in 1996 Messrs. Mallement, Steinberg, Freiberg, Bugliarello and Wang each
received options to purchase 2,500 shares. If re-elected at the 1997 Annual
Meeting, Messrs. Mallement, Steinberg, Freiberg, Bugliarello and Wang will
each be awarded an option to purchase an additional 2,500 shares.
OPTION GRANTS
Currently, the Corporation maintains two stock option plans, the 1990
Non-Executive Stock Option Plan (the "1990 Plan") and the 1991 Employee Stock
Option Plan (the "1991 Plan") pursuant to which options may be granted to
employees of the Corporation. The 1990 Plan and the 1991 Plan authorize the
Compensation/Stock Option Committee of the Board of Directors to grant
options, from time to time, to key employees of the Corporation and of its
subsidiaries (and in the case of the 1991 Plan, key officers, including those
who are executive officers of the Corporation). Under the 1991 Plan, no
individual may be awarded options to purchase more than 275,000 shares in any
calendar year. Certain of the options, by their terms, as determined by the
Committee at the time of grant, may be qualified under the Internal Revenue
Code of 1986 (the "Code") as Incentive Stock Options ("ISO's") and certain of
the options may be non-qualified options. No option granted under the 1990
Plan or the 1991 Plan is exercisable for a period exceeding ten years. No ISO
granted under the 1991 Plan to owners of 10% or more of the Common Stock of
the Corporation is exercisable for a period exceeding five years. The
exercise price of an option under the Plans must be at least 100% of the fair
market value of the underlying Common Stock on the date of grant.
ISO's must comply with certain provisions of the Code relating to, among
other matters, the maximum amount that can be vested by an optionee in any
one calendar year and the minimum exercise price of an ISO. The 1990 Plan
terminates on April 30, 2000 and the 1991 Plan terminates on October 13,
2001. If the shareholders approve the adoption of the 1997 Employee Stock
Option Plan, the Corporation will discontinue the 1991 Plan.
12
<PAGE>
The following table shows, as to each individual named in the Summary
Compensation Table, certain information with respect to stock options granted
to such individuals under all stock option plans administered by the
Corporation:
</TABLE>
<TABLE>
<CAPTION> POTENTIAL REALIZABLE VALUE AT ASSUMED ANNUAL
INDIVIDUAL GRANTS IN 1996 RATES OF STOCK PRICE APPRECIATION FOR OPTION TERM(A)
------------------------------------------------------- ---------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE 5% 10%
OPTIONS EMPLOYEES OR BASE EXPIRATION STOCK DOLLAR STOCK DOLLAR
NAME GRANTED (#)(B) IN FISCAL YEAR(C) PRICE(D) DATE PRICE(E) GAIN PRICE(E) GAIN
---- ----------- --------------- ------ ---- -------- ---- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
All Shareholders ...... -- -- -- $69.42 $699,560,266 $110.55 $ 1,773,176,450
Jerome Swartz.......... 75,000 $37.50 2/11/06 $61.08 $ 1,768,766 $ 97.27 $ 4,482,401
180,000 30.24 $44.75 10/20/06 $72.89 $ 5,065,746 $116.07 $ 12,837,595
CEO's Gain as % of All
Shareholdlers' Gain .. .977% .977%
Tomo Razmilovic........ 25,000 $37.50 2/11/06 $61.08 $ 589,589 $ 97.27 $ 1,494,134
60,000 10.08 $44.75 10/20/06 $72.89 $ 1,688,582 $116.07 $ 4,279,199
Frederic P. Heiman ... 30,000 3.56 $44.75 10/20/06 $72.89 $ 844,291 $116.07 $ 2,139,599
Richard M. Feldt ...... 0 0 0 -- 0 0 0 0
Leonard H. Goldner .... 10,000 1.19 $47.00 4/28/06 $76.56 $ 295,580 $121.91 $ 749,059
</TABLE>
- ------------
A Total dollar gains based on the assumed annual rates of appreciation of
the exercise price of each option. The gain derived by all shareholders
is based on the outstanding number of shares at December 31, 1996. The
actual value, if any, an executive will realize will depend on the
excess of the market price over the exercise price on the date the
option is actually exercised. There can be no assurance that the value
actually realized by an executive or any shareholder will be at or near
the values estimated in this table.
B The options awarded vest in three annual installments commencing two
years after date of grant. If a change in control of the Corporation
were to occur, all of the then unvested portion of each option would
become immediately exercisable.
C Based on 843,200 options granted to all employees in 1996.
D 100% of the closing price of the Corporation's Common Stock on the date
of grant.
E The stock price represents the price of the Corporation's Common Stock
if the assumed annual rates of stock price appreciation are achieved
over the term of the options. In the case of all shareholders, the
weighted average share price of the options awarded to Dr. Swartz was
used.
13
<PAGE>
OPTION EXERCISES AND FISCAL YEAR-END VALUES
Shown below is information with respect to the unexercised options to
purchase the Corporation's Common Stock as of December 31, 1996 and the value
realized upon the exercise in 1996 of any option by the individuals named in
the Summary Compensation Table.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE OF UNEXERCISED,
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
SHARES HELD AT DECEMBER 31, 1996 HELD AT DECEMBER 31, 1996(A)
ACQUIRED ON VALUE ----------------------------- -----------------------------
NAME EXERCISE IN 1996 REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Jerome Swartz 91,250 $3,682,345 528,000 612,500 $16,921,000 $5,770,625
Tomo Razmilovic 21,800 $ 345,485 41,000 243,450 $ 1,225,250 $2,527,663
Frederic P. Heiman 50,000 $1,052,184 22,500 64,100 $ 633,375 $ 704,550
Richard M. Feldt 0 $ 0 0 75,000 $ 0 $ 712,500
Leonard H. Goldner 62,500 $2,138,232 55,950 38,750 $ 1,721,213 $ 569,063
</TABLE>
- ------------
A Based on the closing price of the Corporation's Common Stock on the New
York Stock Exchange on that date of $44.25.
Employees of the Corporation and certain of its subsidiaries are eligible
to participate in a 401(k) deferred compensation plan after 90 days of
service. A participant may elect to make pre-tax contributions, subject to
certain limitations, with a maximum contribution of $9,500 in 1996 and 1997.
The first 6% contributed by each participant during each pay period is
eligible for a matching 50% contribution by the Corporation. There is
immediate vesting of the individual's contribution and 100% vesting of the
Corporation's contribution after one year of service. Amounts accumulated
under this plan are normally paid to a participant on retirement or
termination of employment and depend, among other factors, on the amounts
contributed by the participant, the manner in which contributions have been
invested, and the amount of any prior withdrawal.
The Corporation maintains an Executive Retirement Plan (the "Retirement
Plan"), which is a non-qualified deferred compensation arrangement for a
select group of senior management employees of the Corporation. Participants
are selected by the Compensation/Stock Option Committee of the Board of
Directors. Under the Retirement Plan, the maximum benefit payable to a
participant is the participant's average compensation (base salary plus
bonus) for the three year period ending on the date the participant ceases to
be a full time employee of the Corporation multiplied by five (the "Benefit
Ceiling Amount"). After five successive years of participation in the
Retirement Plan, a participant is entitled to 50% of the Benefit Ceiling
Amount. After each additional year of participation in the Retirement Plan up
to five additional years of participation, a participant is entitled to an
additional 10% of the Benefit Ceiling Amount. Benefits are normally payable
in equal monthly installments over a ten year period after retirement,
beginning after the participant attains age 65 (or age 62 with 20 years or
more of credited service). However, upon death or disability, payment is
accelerated and made in a lump sum but the amount is reduced to the then
present value of the benefit payments which would have been made under the
normal mode of payment. Messrs. Swartz, Razmilovic, Heiman, Feldt and Goldner
are participants in the Retirement Plan.
The following table illustrates the estimated annual retirement benefits
payable under the Retirement Plan to a participant at specified average
compensation levels and years of service. There is no offset in benefits
under the Retirement Plan for Social Security benefits. However, benefits
payable under the Retirement Plan will be reduced by the value of any
retirement income of the participant attributable to contributions by the
Corporation to any qualified pension plan adopted by the Corporation
(excluding the Corporation's current 401(k) deferred compensation plan).
14
<PAGE>
PENSION PLAN TABLE
YEARS OF SERVICE
3 YEARS AVERAGE ---------------------
ANNUAL COMPENSATION 5 10
------------------- -------- ---------
$ 400,000 $100,000 $ 200,000
800,000 200,000 400,000
1,200,000 300,000 600,000
1,600,000 400,000 800,000
2,000,000 500,000 1,000,000
As of January 1, 1997, Messrs. Swartz, Razmilovic, Heiman, Feldt and
Goldner had 20, 2, 10, 1 and 6 years, respectively, of credited service.
Since Dr. Heiman is no longer a full-time employee, he will no longer be an
active participant in the Plan. Upon reaching age 65, he will be entitled to
receive monthly payments of $26,510 for a ten year period. Mr. Razmilovic
became a participant in the Corporation's Executive Retirement Plan in
October 1995. He will not receive credit under the Plan for his prior service
to the Corporation but in lieu thereof, he will receive, for the first five
years of participation in the Plan, two years of credited service for each
year of employment after October 1995.
SHAREOWNER RETURN PERFORMANCE PRESENTATION
Set forth below is a graph comparing the yearly percentage change in the
cumulative total shareowner return on the Corporation's Common Stock against
the cumulative total return of the S&P Composite-500 Stock Index and the S&P
Technology Sector Index for the period of five years commencing January 1,
1992 and ending December 31, 1996, assuming in each case a fixed investment
of $100 at the respective closing prices on December 31, 1991 and
reinvestment on a quarterly basis of all dividends.
[GRAPHIC OMITTED - THE FOLLOWING TABLE REPRESENTS THE GRAPHIC DATA]
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL
RETURN*
AMONG SYMBOL TECHNOLOGIES, INC., THE S&P 500 INDEX
AND THE S&P TECHNOLOGY SECTOR INDEX
12/31/91 12/31/92 12/31/93 12/31/94 12/31/95 12/31/96
Symbol Technologies $100 $50 $71 $120 $154 $173
S&P 500 $100 $108 $118 $120 $165 $203
S&P 500 Technology Sector $100 $104 $128 $149 $215 $305
* $100 INVESTED ON 12/31/91 IN STOCK
OR INDEX - INCLUDING REINVESTMENT
OF DIVIDENDS. FISCAL YEAR ENDING
DECEMBER 31.
15
<PAGE>
PROPOSAL TO ADOPT THE 1997 EMPLOYEE STOCK OPTION PLAN
GENERAL
The Corporation currently awards options under two stock option plans.
Options covering 4,750,000 shares of Common Stock may be issued pursuant to
the 1990 Plan and options to purchase 2,500,000 shares may be issued under
the 1991 Plan. As of February 15, 1997, 2,816,842 shares had been exercised
and there were outstanding options to purchase 1,933,680 shares under the
1990 Plan. Accordingly, only 578 shares remained available for the grant of
options under the 1990 Plan. As of February 15, 1997, 337,129 shares had been
exercised under the 1991 Plan and there were outstanding options to purchase
2,162,399 shares under the 1991 Plan. Accordingly, only 25 shares remained
available for the grant of options under the 1991 Plan. Moreover, officers
(which includes persons who are officers as said term is defined in Rule
16a-1(f) of the Securities Exchange Act of 1934) are not eligible to have
options granted to them under the 1990 Plan. Reference is made to the
information contained under the headings "Security Ownership of Management"
and "Management Remuneration and Transactions." The Board of Directors
believes that, because of the Corporation's continued anticipated growth, it
will be necessary to hire additional management personnel. In view of these
personnel needs, and in light of the present level of remuneration paid to
management (see "Management Remuneration and Transactions") and the present
level of management's equity in the Corporation (see "Security Ownership of
Management"), the Board of Directors is of the opinion that it is appropriate
that stock options continue to be a major component of the Corporation's
management remuneration package. Accordingly, on February 10, 1997, the Board
of Directors, subject to shareholder approval, adopted the 1997 Employee
Stock Option Plan (the "1997 Plan"). The complete text of the 1997 Plan is
attached hereto as Appendix A.
TERMS OF THE PLAN
Under the 1997 Plan, options to purchase 1,250,000 shares may be issued.
The 1997 Plan is administered by a committee consisting of at least two
"disinterested" directors within the meaning of Rule 16b-3 under the
Securities Exchange Act of 1934 (the "Committee") selected by the Board of
Directors. The Board has designated the Compensation/Stock Option Committee,
consisting of Messrs. Freiberg and Steinberg, to administer the 1997 Plan.
Within the applicable limits of the 1997 Plan, the Committee shall have full
authority to select from among eligible individuals those to whom options
shall be granted under the 1997 Plan, the number of shares subject to each
option and the price, terms and conditions of any options to be granted
thereunder. The Board of Directors shall have full authority to amend the
1997 Plan, provided, however, that any amendment which (i) increases the
number of shares which may be the subject of stock options granted under the
1997 Plan, (ii) expands the class of individuals eligible to receive options
under the 1997 Plan, (iii) increases the period during which options may be
granted or the permissible term of options under the 1997 Plan, or (iv)
decreases the minimum exercise price of such options, shall only be adopted
by the Board of Directors subject to shareholder approval. No amendment to
the 1997 Plan shall, without the consent of the holder of an existing option,
materially and adversely affect his rights under such option.
Officers and key employees of the Corporation and directors, officers and
key employees of its subsidiaries (including any partnership of which the
Corporation or any subsidiary of the Corporation is a general partner) are
eligible to receive options under the 1997 Plan. The exercise price of any
option must be 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 purchasable thereunder on the date of grant.
Payment for shares purchased upon the exercise of options may be made (i)
in cash or certified check, (ii) by transfer to the Corporation of a number
of shares of the Corporation's Common Stock whose aggregate market value is
equal to the aggregate option exercise price, (iii) by delivering to the
Corporation (a) irrevocable instructions to deliver the stock certificates
representing the shares for which the option is being exercised directly to a
broker, and (b) instructions to the broker to sell such shares and promptly
deliver to the Corporation the portion of sale proceeds equal to the
aggregate option exercise price, or (iv) a combination of these methods of
payment.
16
<PAGE>
No option may be exercisable for more than ten years from the date of
grant; an incentive stock option granted to a 10% shareholder may not be
exercisable for more than five years from the date of grant. Moreover, to
qualify as incentive stock options, the aggregate fair market value,
determined as of the date of grant, of the shares which may first become
exercisable by an individual in any calendar year, under the 1997 Plan and
under any other plans of the Corporation and its subsidiaries pursuant to
which incentive stock options may be granted, may not exceed $100,000. The
maximum number of shares purchasable under any option or options granted
pursuant to the 1997 Plan in any calendar year to any one individual shall in
no event exceed one percent of the then issued and outstanding shares of
Common Stock of the Corporation.
Under the 1997 Plan, both incentive and non-incentive stock options may be
granted. For federal income tax purposes, a holder of an option designated as
not qualifying as an incentive stock option will generally realize taxable
income upon the exercise of an option, and at that time the Corporation will
then be allowed a tax deduction equal to the excess of (a) the aggregate
market value, at the time of such exercise, of shares acquired pursuant to
such exercise over (b) the aggregate option exercise price for such shares.
Generally, no realization of taxable income to the optionee will result from
the exercise of an incentive stock option and the Corporation will not
receive any deduction in connection with such exercise. At the time of the
sale of the shares acquired upon the exercise of an incentive option the
optionee will then realize taxable income equal to the sale price less the
exercise price.
Options may generally not be transferred except to the extent that options
may be exercised by an executor or administrator provided, however, with the
prior approval of the Committee, options under the 1997 Plan may be
transferred to an optionee's spouse, children, grandchildren or trusts or
partnerships for the benefit of such persons. Under the 1997 Plan, options
generally lapse if the optionee ceases to be an employee of the Corporation
or its subsidiaries. However, if the cessation of employment is due to
retirement, disability or death of the optionee, options may be exercised
within one year of the optionee's retirement, death or disability, provided,
however, that no option may be exercisable after its normal expiration date.
At this date, the individuals who will receive options under the 1997 Plan
have not been determined except that Messrs. Swartz, Razmilovic, Heiman,
Feldt and Goldner have been granted (subject to shareholder approval of the
adoption of the 1997 Plan) options to purchase 180,000, 60,000, 13,750,
25,000 and 25,000 shares, respectively. The exercise price of such options
will be the closing price of the Corporation's Common Stock on the date
shareholder approval of the 1997 Plan has been obtained. In addition, all
other executive officers have been granted (subject to shareholder approval)
options to purchase an aggregate of 94,500 shares. Accordingly, except for
the options described above, it is not possible at this time to state the
number of shares to be optioned to directors, executive officers or their
associates under the 1997 Plan. With respect to options awarded under other
stock option plans, reference is made to the table contained in the section
entitled "Management Remuneration and Transactions." The closing price of the
Corporation's Common Stock on February 28, 1997 was $50.25 per share.
The 1997 Plan terminates on February 9, 2007. The 1997 Plan may be
altered, suspended or discontinued at any time by the Board of Directors,
provided that no such action may, without the consent of an optionee,
materially and adversely affect his rights under any outstanding options. If
approval of the shareholders is not obtained at the 1997 Annual Meeting, the
Plan will be terminated and all options awarded thereunder shall be canceled.
Options are subject to adjustment to protect against dilution in certain
events, including the recapitalization or reorganization of the Corporation,
its merger into or consolidation with another corporation, stock splits and
stock dividends.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO ADOPT
THE 1997 PLAN. The affirmative vote of the holders of a majority of the
outstanding shares of the Corporation's Common Stock represented in person or
by proxy at the Annual Meeting and entitled to vote will be required for the
approval of this proposal.
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PROPOSAL TO ADOPT THE 1997 EMPLOYEE STOCK PURCHASE PLAN
The 1997 Employee Stock Purchase Plan (the "1997 Purchase Plan") was
adopted by the Board of Directors on February 10, 1997, subject to
shareholder approval. The complete text of the 1997 Purchase Plan is attached
hereto as Appendix B.
The 1997 Purchase Plan is intended to provide an incentive to, and to
encourage stock ownership by, all eligible employees of the Corporation and
participating subsidiaries so that they may share in the growth of the
Corporation by acquiring or increasing their proprietary interest in the
Corporation. The 1997 Purchase Plan is designed to encourage eligible
employees to remain in the employ of the Corporation. Under the 1997 Purchase
Plan, payroll deductions are used to purchase the Corporation's Common Stock
for eligible, participating employees through the exercise of stock options.
It is intended that the 1997 Purchase Plan will be administered by the
Compensation/Stock Option Committee of the Board of Directors of the
Corporation. The Compensation/Stock Option Committee, subject to the
provisions of the 1997 Purchase Plan, has the power to construe the 1997
Purchase Plan, to determine all questions thereunder, and to adopt and amend
such rules and regulations for administration of the 1997 Purchase Plan as it
may deem appropriate. The Compensation/Stock Option Committee or the Board of
Directors may, from time to time, adopt amendments to the 1997 Purchase Plan
provided that, without the approval of the Corporation's shareholders, no
amendment may increase the number of shares that may be issued under the 1997
Purchase Plan or change the class of the employees eligible to receive
options under the 1997 Purchase Plan, or cause Rule 16b-3 under the
Securities Exchange Act of 1934 to be inapplicable to the 1997 Purchase Plan.
The 1997 Purchase Plan may be terminated at any time by the Corporation's
Board of Directors but such termination will not affect options then
outstanding under the 1997 Purchase Plan. If at any time shares of Common
Stock reserved for the purposes of the 1997 Purchase Plan remain available
for purchase but not in sufficient number to satisfy all then unfilled
purchase requirements, the available shares will be apportioned among
participants in proportion to the amount of payroll deductions accumulated on
behalf of each participant that would otherwise be used to purchase stock,
and the 1997 Purchase Plan will terminate. Upon termination of the 1997
Purchase Plan, all payroll deductions not used to purchase Common Stock will
be refunded to 1997 Purchase Plan participants without interest.
The 1997 Purchase Plan authorized the issuance of up to 250,000 shares of
Common Stock pursuant to the exercise of non-transferable options granted to
participating employees. The Common Stock subject to the options under the
1997 Purchase Plan includes shares of the Corporation's authorized but
unissued Common Stock, shares of Common Stock reacquired by the Corporation,
and shares of Common Stock purchased in the open market. Option holders are
generally protected against dilution in the event of certain capital changes
such as a recapitalization, stock split, merger, consolidation,
reorganization, combination, liquidation, stock dividend or similar
transactions.
An employee electing to participate in the 1997 Purchase Plan must
authorize an amount (a whole percentage not less than 2% nor more than 10% of
the employee's base compensation) to be deducted by the Corporation from the
employee's pay and applied toward the purchase of Common Stock under the 1997
Purchase Plan. Deductions under the 1997 Purchase Plan generally may not be
increased and may not be decreased more than once during the six month
periods commencing on the first day of January or the first day of July in
each year (the "Payment Period") with the first Payment Period commencing on
July 1, 1997. On the first business day of each Payment Period, the
Corporation will grant to each 1997 Purchase Plan participant an option to
purchase shares of Common Stock of the Corporation. On the last day of the
Payment Period, the employee will be deemed to have exercised this option, at
the option price to the extent of such employee's accumulated payroll
deduction, on the condition that the employee remains eligible to participate
in the 1997 Purchase Plan throughout the Payment Period. In no event,
however, may the employee exercise an option granted under the 1997 Purchase
Plan for more than 2,500 shares during a Payment Period. If the amount of the
accumulated payroll deductions exceeds the aggregate purchase price of 2,500
shares, the excess deductions will be promptly refunded to the employee
without interest. Furthermore, no employee may be granted an option which
permits the employee's right to purchase shares of Common Stock under the
1997 Purchase Plan and all other Section 423 plans of the
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Corporation and any subsidiary corporations, to accrue at a rate which
exceeds $25,000 of fair market value of such stock (determined on the
respective date(s) of grant) for each calendar year in which the option is
outstanding. Any excess accumulation of payroll deductions will be promptly
refunded to the employee without interest. Under the terms of the 1997
Purchase Plan, the option price is an amount equal to the lesser of (i) 85%
of the fair market value of the Common Stock on the first business day of the
Payment Period, or (ii) 85% of the fair market value of the Common Stock on
the last business day of the Payment Period. The Corporation will accumulate
and hold for the employee's account the amounts deducted from his pay. No
interest will be paid on these amounts.
An employee may enter the 1997 Purchase Plan by delivering to the
Corporation, at least 30 days before the beginning date of the next
succeeding Payment Period, an authorization stating the initial percentage to
be deducted from the employee's pay and authorizing the purchase of shares of
Common Stock for the Employee in each Payment Period in accordance with the
terms of the 1997 Purchase Plan. Unless an employee files a new authorization
or withdraws from the 1997 Purchase Plan, the deductions and purchases under
the authorization the employee has on file under the 1997 Purchase Plan will
continue from the initial Payment Period to succeeding Payment Periods as
long as the 1997 Purchase Plan remains in effect. Deductions may be increased
or decreased during a Payment Period, as set forth above. An employee may
withdraw from the 1997 Purchase Plan, in whole but not in part, at any time
prior to the last business day of each Payment Period by delivering a
withdrawal notice to the Corporation in which event the Corporation will
refund the entire balance of the employee's deductions not previously used to
purchase stock under the 1997 Purchase Plan.
Employees of the Corporation and participating subsidiaries (A) who have
completed more than 90 days of employment with the Corporation or any of its
subsidiaries on or before the first day of any Payment Period, and (B) whose
customary employment is not less than 20 hours per week and more than 5
months per calendar year are able to participate in the 1997 Purchase Plan.
An employee may not be granted an option under the 1997 Purchase Plan, if
after the granting of the option such employee would be treated as owning 5%
or more of the total combined voting power or value of all classes of stock
of the Corporation or its subsidiaries. Directors who are not employees of
the Corporation may not participate in the 1997 Purchase Plan.
If an employee is not a participant in the 1997 Purchase Plan on the last
day of the Payment Period, the employee generally is not entitled to exercise
his option. An employee's rights under the 1997 Purchase Plan generally
terminate upon his voluntary withdrawal from the 1997 Purchase Plan at any
time, or when he ceases employment because of retirement, resignation,
discharge, death, change of status or any other reason.
An employee's rights under the 1997 Purchase Plan are the employee's alone
and may not be transferred to, assigned to, or availed of by, any other
person. Any option granted to an employee may be exercised, during the
employee's lifetime, only by the employee. Employees are required to retain
any shares acquired upon the exercise of any options under the 1997 Purchase
Plan for a six month period after the exercise thereof.
The proceeds received by the Corporation, if any, from the sale of Common
Stock pursuant to the 1997 Purchase Plan will be used for general corporate
purposes. The Corporation's obligation to deliver shares of Common Stock is
subject to the approval of any governmental authority required in connection
with the sale or issuance of such shares.
The following general rules are currently applicable for United States
federal income tax purposes to employees who receive grants of options for
Common Stock and purchase shares of Common Stock pursuant to the 1997
Purchase Plan:
1. The amounts deducted from an employee's pay under the 1997 Purchase
Plan will be included in the employee's compensation subject to federal
income tax. Subject to certain requirements no additional income will be
recognized by the employee either at the time the options are granted
pursuant to the 1997 Purchase Plan or at the time the employee purchases
shares of Common Stock pursuant to the 1997 Purchase Plan.
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2. If the employee disposes of shares of Common Stock more than two years
after the first business day of the Payment Period in which the employee
acquired the shares, then upon such disposition the employee will recognize
ordinary compensation in an amount equal to the lesser of:
(a) the excess, if any, of the fair market value of the shares on the
date of disposition over the amount the employee paid for the shares, or
(b) the excess of the fair market value of the shares on the first
business day of the Payment Period over the option price determined as if
the option was exercised on the first business day of the Payment Period.
In addition, the employee generally will recognize a capital gain or loss
in an amount equal to the difference between the amount realized upon the
sale of shares and the employee's basis in the shares (i.e., the amount the
employee paid for the shares plus the amount, if any, taxed as ordinary
compensation income). If the employee's holding period for the shares exceeds
one year, such gain or loss will be a long-term capital gain or loss.
3. If the employee disposes of shares of Common Stock within two years
after the first business day of the Payment Period in which the employee
acquired the shares, then upon disposition the employee will recognize
ordinary compensation in an amount equal to the excess of the fair market
value of the shares on the last business day of the applicable Payment Period
over the amount the employee paid for the shares.
In addition, the employee generally will recognize a capital gain or loss
in an amount equal to the difference between the amount realized upon the
sale of the shares and the employee's basis in the shares (i.e., the amount
the employee paid for the shares plus the amount, if any, taxed to the
employee as ordinary compensation income). If the employee's holding period
for the shares is more than one year, such gain or loss will be a long-term
capital gain or loss.
4. If the two-year holding period is satisfied, the Corporation will not
receive any deduction for federal income tax purposes with respect to the
options or the shares of Common Stock issued upon their exercise. If the
two-year holding period is not satisfied, the Corporation generally will be
entitled to a deduction in an amount equal to the amount which is considered
ordinary compensation income to the employee, subject to general limitations
on the deductibility of compensation.
Approval of the 1997 Purchase Plan will require an affirmative vote of a
majority of the outstanding shares of Common Stock of the Corporation
represented in person or by proxy at the Annual Meeting and entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO ADOPT THE 1997
PURCHASE PLAN.
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Deloitte & Touche, independent certified public accountants, were selected
by the Board of Directors to audit the financial statements of the
Corporation for the fiscal year ended December 31, 1996 and the Board of
Directors and Audit Committee have recommended that they be retained to audit
the financial statements of the Corporation for the current fiscal year.
Representatives of Deloitte & Touche are expected to be present at the Annual
Meeting of Shareholders. They will have an opportunity to make a statement at
the meeting if they so desire and are expected to be available to respond to
appropriate questions raised orally by shareholders. In the event
shareholders do not ratify the appointment of Deloitte & Touche as the
Corporation's independent accountants for the current year, such appointment
will be reconsidered by the Audit Committee and the Board of Directors. THE
BOARD RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO RETAIN DELOITTE & TOUCHE
TO AUDIT THE FINANCIAL STATEMENTS OF THE CORPORATION FOR FISCAL 1997.
OTHER BUSINESS
The Board of Directors of the Corporation knows of no other matters that
may 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.
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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 Proxy Statement on or prior to November
17, 1997.
ANNUAL REPORT AND FINANCIAL STATEMENTS
The Annual Report to Shareholders of the Corporation for the year ended
December 31, 1996 is being furnished simultaneously herewith. Such report and
the financial statements included therein are not to be considered a part of
this Proxy Statement
THE CORPORATION WILL MAKE AVAILABLE AT NO COST, UPON THE WRITTEN REQUEST
OF A SHAREHOLDER, A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED DECEMBER 31, 1996 (WITHOUT EXHIBITS) AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. COPIES OF EXHIBITS TO THE CORPORATION'S
FORM 10-K WILL BE MADE AVAILABLE, UPON WRITTEN REQUEST OF A SHAREHOLDER AND
THE PAYMENT TO THE CORPORATION OF THE REASONABLE COSTS OF REPRODUCTION AND
MAILING. REQUESTS SHOULD BE DIRECTED TO SYMBOL TECHNOLOGIES, INC., ONE SYMBOL
PLAZA, HOLTSVILLE, NEW YORK, 11742-1300, ATTENTION: VICE PRESIDENT --
INVESTOR RELATIONS.
SOLICITATION OF PROXIES
The cost of solicitation of proxies in the accompanying form has been or
will be borne by the Corporation. In addition to solicitation by mail,
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,
Leonard H. Goldner
Secretary
Dated: March 11, 1997
Holtsville, New York
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APPENDIX A
SYMBOL TECHNOLOGIES, INC.
1997 EMPLOYEE STOCK OPTION PLAN
(AS OF FEBRUARY 10, 1997)
1. Purpose. The 1997 Employee Stock Option Plan (the "Plan") of Symbol
Technologies, Inc. (the "Company"), a Delaware corporation, is designed to
aid the Company and its subsidiaries in retaining and attracting personnel of
exceptional ability by enabling key employees to purchase a proprietary
interest in the Company, thereby stimulating in such individuals an increased
desire to render greater services which will contribute to the continued
growth and success of the Company and its subsidiaries. Certain of the
options to be granted under the Plan are intended to satisfy the requirement
for classification as "Incentive Stock Options" as defined in Section 422A of
the Internal Revenue Code 1986, as amended (the "Code"). (An option granted
under the Plan which is intended to satisfy the requirements for
classification as an Incentive Stock Option shall be referred to herein as a
"Plan Incentive Stock Option").
2. Amount and Source of Stock. The total number of shares of Common Stock,
par value $.01 per share (the "Shares"), of the Company which may be the
subject of options granted pursuant to the Plan shall not exceed 1,250,000 of
the Company's Shares subject to adjustment as provided in paragraph 10. Such
Shares may be reserved or made available from the Company's authorized and
unissued Shares or from Shares reacquired and held in the Company's treasury.
In the event that any option granted hereunder shall terminate prior to its
exercise in full for any reason, then the Shares subject to such option shall
be added to the Shares otherwise available for issuance pursuant to the
exercise of options under the Plan.
3. Administration of Plan. If all of the members of the Board of Directors
of the Company (the "Board") are "disinterested persons" as that term is
defined in Rule 16b-3(c)(2) (or any successor provision) promulgated under
the Securities and Exchange Act of 1934, as amended (the "Exchange Act")
("Disinterested Persons"), then the Plan shall be administered by the Board
or, if so designated by resolution of the Board by a committee of the Board
comprised of two or more members of the Board, selected by the Board, all of
which members shall be "Disinterested Persons" (the "Committee"). If all of
the members of the Board are not "Disinterested Persons", then the Board
shall designate such a Committee to administer the Plan. (The body which is
administering the Plan pursuant to this paragraph shall at times be referred
to herein as the "Administrative Body.")
The Administrative Body shall have full authority to interpret the Plan,
to establish and amend rules and regulations relating to it, to determine the
key employees to whom options may be granted under the Plan, to select from
among the eligible individuals those to whom options are to be granted, to
determine the terms and provisions of the respective option agreements (which
need not be identical) and to make all other determinations necessary or
advisable for the administration of the Plan. The date on which the
Administrative Body adopts resolutions granting an option to a specified
individual shall constitute the date of grant of such option (the "Date of
Grant"); provided, however, that if the grant of an option is made subject to
the occurrence of a subsequent event (such as, for example, the commencement
of employment), the date on which such subsequent event occurs shall be the
Date of Grant. Such resolutions shall also specify whether the option is or
is not intended to qualify as a Plan Incentive Stock Option; provided,
however, that in the event no such specification is made in such resolutions,
the Administrative Body will be deemed to have specified that such option is
not intended to qualify as a Plan Incentive Stock Option; provided further,
however, that in the event such specification, whether explicit or implicit,
is inconsistent with terms set forth in such resolutions for such option,
then such specification shall be deemed of no force and effect, and the
Administrative Body will be deemed to have made a specification which is
consistent with such terms. The adoption of any such resolution by the
majority of the members of the Administrative Body shall complete the
necessary corporate action constituting the grant of said option and an offer
of Shares for sale to said individual under the Plan.
4. Eligibility. All officers and key employees of the Company or
subsidiaries of the Company, as determined by the Administrative Body, shall
be eligible to receive options hereunder; provided, however, that no Plan
Incentive Stock Option shall be granted hereunder to any person who, together
with his spouse, children and trusts and custodial accounts for their
benefit, at the time of the grant of such option, owns, within the meaning of
Section 425(d) of the Code, Shares constituting more than ten percent (10%)
of the total combined voting power of all of the outstanding stock of the
Company (a "Ten Percent
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Shareholder"), unless the Plan Incentive Stock Option granted to the Ten
Percent Shareholder satisfies the additional conditions for the options
granted to Ten Percent Shareholders set forth in subparagraphs 5(a) and 6(a).
For purposes of the Plan, a subsidiary shall mean any corporation of which
the Company owns or controls, directly or indirectly, fifty percent (50%) or
more of the outstanding shares of stock normally entitled to vote for the
election of directors including voting securities issuable upon conversion of
another security which is, or may be issuable upon the exercise of any
warrant, option or other similar right, and any partnership of which the
Company or a corporate subsidiary is a general partner. From time to time the
Administrative Body shall, in its sole discretion, within the applicable
limits of the Plan, select from among the eligible individuals those persons
to whom options shall be granted under the Plan, the number of Shares subject
to each option, and the exercise price, terms and conditions of any options
to be granted hereunder.
5. Option Price; Maximum Grant.
(a) The exercise price for the Shares purchasable under any option granted
pursuant to the Plan shall not be less than 100% or, in the case of a Plan
Incentive Stock Option granted to a Ten Percent Shareholder, 110% of the fair
market value per share of the Shares subject to option under the Plan at the
Date of Grant, solely as determined by the Administrative Body in good faith.
The exercise price for options granted pursuant to the Plan shall be subject
to adjustment as provided in paragraph 10. For purposes of the Plan, the
"fair market value per share" of the Shares on a given date shall be: (i) if
the Shares are listed on a registered securities exchange or traded on the
NASDAQ National Market System, the closing price per share of the Shares on
such date (or, if there was no trading in the Shares on such date, on the
next preceding day on which there was trading); (ii) if the Shares are not
listed on a registered securities exchange or traded on the NASDAQ National
Market System but the bid and asked prices per share for the Shares are
provided by NASDAQ, the National Quotation Bureau Incorporated or any similar
organization, the average of the closing bid and asked price per share of the
Shares on such date (or, if there was no trading in the Shares on such date,
on the next preceding day on which there was trading) as provided by such
organization; and (iii) if the Shares are not listed on a registered
securities exchange or traded on the NASDAQ National Market System and the
bid and asked prices per share of the Shares are not provided by NASDAQ, the
National Quotation Bureau Incorporated or any similar organization, as
determined by the Administrative Body in good faith.
(b) To the extent necessary for Plan Incentive Stock Options to qualify as
Incentive Stock Options, the aggregate fair market value, determined as the
Date of Grant, of the Shares subject to options which may first become
exercisable by an individual in any calendar year, under this Plan and all
other stock option plans of the Company and of any parent or subsidiary of
the Company pursuant to which Incentive Stock Options may be granted, shall
not exceed $100,000.
(c) The maximum number of Shares purchasable under any option or options
granted pursuant to the Plan to any one individual in any calendar year shall
in no event exceed one percent of the then issued and outstanding shares of
Common Stock of the Company.
6. Term of Option.
(a) Subject to the provisions of the Plan, the Administrative Body shall
have absolute discretion in determining the period during which, the rate at
which and the terms and conditions upon which any option granted hereunder
may be exercised, and whether any option exercisable in installments is to be
exercisable on a cumulative or non-cumulative basis; provided, however, that
no option granted hereunder shall be exercisable for a period exceeding ten
(10) years or, in the case of a Plan Incentive Stock Option granted to a Ten
Percent Shareholder, five (5) years from the Date of Grant. The
Administrative Body may, at any time before complete termination of any
option granted hereunder, accelerate the time or times at which such option
may be exercised in whole or in part.
(b) The grant of options by the Administrative Body shall be effective as
of the date on which the Administrative Body shall authorize the option;
provided, however, that no option granted hereunder shall be exercisable
unless and until the holder shall enter into an individual option agreement
with the Company that shall set forth the terms and conditions of such
option. Each such agreement shall expressly incorporate by reference the
provisions of this Plan (a copy of which shall be made available for
inspection by the optionee during normal business hours at the principal
office of the Company), and shall state that in the event of any
inconsistency between the provisions hereof and the provisions of such
agreement, the provisions of this Plan shall govern.
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7. Exercise of Options. An option shall be exercised when written notice
of such exercise, signed by the person entitled to exercise the option, has
been delivered or transmitted by registered or certified mail to the
Secretary of the Company at its then principal office. Said notice shall
specify the number of Shares for which the option is being exercised and
shall be accompanied by (i) such documentation, if any, as may be required by
the Company as provided in subparagraph 11(b), and (ii) payment of the
aggregate option price. Such payment shall be in the form of (i) cash or a
certified check (unless such certification is waived by the Company) payable
to the order of the Company in the amount of the aggregate option price, (ii)
certificates duly endorsed for transfer (with all transfer taxes paid or
provided for) evidencing a number of Shares (provided, however, that with
such Shares have been owned by the Optionee for at least six months) of which
the aggregate fair market value on the date of exercise is equal to the
aggregate option exercise price of the Shares being purchased, (iii) by
delivering to the Company (a) irrevocable instructions to deliver the stock
certificates representing the Shares for which the option is being exercised,
directly to a broker, and (b) instructions to the broker to sell such Shares
and promptly delivered to the Company the portion of the sale proceeds equal
to the aggregate option exercise price, or (iv) a combination of these
methods of payment. Delivery of said notice shall constitute an irrevocable
election to purchase the Shares specified in said notice, and the date on
which the Company receives the last of said notice, documentation and the
aggregate option exercise price for all of the Shares covered by the notice
shall, subject to the provisions of paragraph 11 hereof, be the date as of
which the Shares so purchased shall be deemed to have been acquired. The
optionee shall not have the right or status as a holder of the Shares to
which such exercise relates prior to receipt by the Company of the payment,
notice and documentation expressly referred to in this paragraph 7.
8. Exercise and Cancellation of Options Upon Termination of Employment or
Death. Except as set forth below, if an optionee shall voluntarily or
involuntarily terminate his service as an employee of the Company or any
subsidiary of the Company, any option awarded hereunder shall terminate upon
the date of such termination of employment regardless of the expiration date
specified in such option. Notwithstanding the foregoing, an option agreement
may, at the Administrative Body's discretion, provide that the optionee shall
have the right to exercise an option after his employment has terminated for
any reason whatsoever, including death, disability or retirement provided,
however that the exercise must be accomplished within the term of such
option. Furthermore, all option agreements shall provide that if the
termination of employment is due to retirement or disability (as defined by
the Administrative Body in its sole discretion), the optionee (or his duly
appointed guardian or conservator) shall have the privilege of exercising any
option that the optionee could have exercised on the day upon which he ceased
to be an employee of the Company or any subsidiary of the Company, provided,
however, that such exercise must be accomplished within the term of such
option and within one (1) year of the date of the termination of the
optionee's employment with the Company or any subsidiary of the Company. If
the termination of employment is due to the death of the optionee, the duly
appointed executor or administrator of his estate shall have the privilege at
any time of exercising any option that the optionee could have exercised on
the date of his death; provided, however that such exercise must be
accomplished within the term of such option and within one (1) year of the
optionee's death. For all purposes of the Plan, an approved leave of absence
shall not constitute interruption or termination of employment.
Nothing contained herein or in any option agreement shall be construed to
confer on any optionee any right to be continued in the employ of the Company
or any subsidiary of the Company or derogate from any right of the Company or
any subsidiary of the Company to retire, request the resignation or discharge
of such optionee, or to lay off or require a leave of absence of such
optionee (with or without pay), at any time, with or without cause.
9. Transferability of Options.
(a) Subject to the provisions of subparagraph 9(b) hereof, options granted
under this Plan shall not be transferable except by will or the laws of
descent and distribution. Such options shall be exercisable during the
optionee's lifetime only by the optionee (or his duly appointed guardian or
conservator).
(b) The Administrative Body may, in its discretion, authorize the transfer
of all or a portion of any options granted hereunder on terms which permit
the transfer by the optionee to (i) the spouse, children
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or grandchildren of the optionee ("Immediate Family Members"), (ii) a trust
or trusts for the exclusive benefit of such Immediate Family Members, or
(iii) a partnership in which such Immediate Family Members and/or the
optionee are the only partners, provided that (a) the optionee shall receive
the approval of the Administrative Body prior to such transfer, and such
transfer must be limited to the persons or entities listed in this
subparagraph 9(b), and (b) subsequent transfers of such transferred options
shall be prohibited except in accordance with this paragraph 9. Following any
such transfer, such options shall continue to be subject to the same terms
and conditions as were applicable immediately prior to transfer, provided
that for purposes of this plan, the term "optionee" shall be deemed to refer
to the transferor. In the event of the termination of the employment of the
transferor, the provisions provided herein shall continue to be applicable to
the option and shall limit the ability of the transferee to exercise any such
transferred options to the same extent they would have limited the optionee.
10. Adjustments Upon Changes in Capitalization.
(a) If the outstanding Shares are subdivided, consolidated, increased,
decreased, changed into, or exchanged for a different number or kind of
shares or other securities of the Company through reorganization, merger,
recapitalization, reclassification, capital adjustment or otherwise, or if
the Company shall issue additional Shares as a dividend or pursuant to a
stock split, then the number and kind of shares available for issuance
pursuant to the exercise of options to be granted under this Plan and all
Shares subject to the unexercised portion of any option theretofore granted
and the option price of such options shall be adjusted to prevent the
inequitable enlargement or dilution of any rights hereunder; provided,
however, that any such adjustment in outstanding options under the Plan shall
be made without change in the aggregate exercise price applicable to the
unexercised portion of any such outstanding option. Distributions to the
Company's shareholders consisting of property other than shares of Common
Stock of the Company or its successor and distributions to shareholders of
rights to subscribe for Common Stock shall not result in the adjustment of
the Shares purchasable under outstanding options or the exercise price of
outstanding options. Adjustments under this paragraph shall be made by the
Administrative Body, whose determination thereof shall be conclusive and
binding. Any fractional Share resulting from adjustments pursuant to this
paragraph shall be eliminated from any then outstanding option. Nothing
contained herein or in any option agreement shall be construed to effect in
any way the right or power of the Company to make or become a party to any
adjustments, reclassification, reorganizations or changes in its capital or
business structure or to merge, consolidate, dissolve, liquidate or otherwise
transfer all or any part of its business or assets.
(b) If, in the event of a merger or consolidation, the Company is not the
surviving corporation, and in the event that the agreements governing such
merger or consolidation do not provide for substitution of new options or
other rights in lieu of the options granted hereunder or for the express
assumption of such outstanding options by the surviving corporation, or in
the event of the dissolution or liquidation of the Company, the holder of any
option theretofore granted under this Plan shall have the right no less than
five (5) days prior to the record date for the determination of shareholders
entitled to participate in such merger, consolidation, dissolution or
liquidation, to exercise his option, in whole or in part, without regard to
any installment provision that may have been made part of the terms and
conditions of such option; provided that any conditions precedent to such
exercise set forth in any option agreement granted under this Plan, other
than the passage of time, shall have been satisfied. In any such event, the
Company will mail or cause to be mailed to each holder of an option hereunder
a notice specifying the date that is to be fixed as of which all holders of
record of Shares shall be entitled to exchange their Shares for securities,
cash or other property issuable or deliverable pursuant to such merger,
consolidation, dissolution or liquidation. Such notice shall be mailed at
least ten (10) days prior to the date therein specified. In the event any
then outstanding option is not exercised in its entirety on or prior to the
date specified therein, all remaining outstanding options granted hereunder
and any and all rights thereunder shall terminate as of said date.
11. General Restrictions.
(a) No option granted hereunder shall be exercisable if the Company shall,
at any time and in its sole discretion, determine that (i) the listing upon
any securities exchange, registration or qualification under
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any state or federal law of any Shares otherwise deliverable upon such
exercise, or (ii) the consent or approval of any regulatory body or the
satisfaction of withholding tax or other withholding liabilities, is
necessary or appropriate in connection with such exercise. In any of such
events, the exercisability of such options shall be suspended and shall not
be effective unless and until such withholding, listing, registration,
qualification or approval shall have been effected or obtained free of any
conditions not acceptable to the Company in its sole discretion,
notwithstanding any termination of any option or any portion of any option
during the period when exercisability has been suspended.
(b) The Administrative Body may require, as a condition to the right to
exercise an option, that the Company receive from the optionee, at the time
of any such exercise, representations, warranties and agreements to the
effect that the Shares are being purchased by the optionee without any
present intention to sell or otherwise distribute such Shares in violation of
the Securities Act of 1933 (the "1933 Act") and that the optionee will not
dispose of such Shares in transactions which, in the opinion of counsel to
the Company, would violate the registration provisions of the 1933 Act and
the rules and regulations thereunder and any applicable "blue sky" laws or
regulations. The certificates issued to evidence such Shares shall bear
appropriate legends summarizing such restrictions on the disposition thereof.
12. Withholding Tax Liability.
(a) An optionee may elect to tender shares to the Company in order to
satisfy federal and state withholding tax liability (a "share withholding
election"), provided, (i) the Administrative Body shall not have revoked its
advance approval of the optionee's share withholding election and (ii) the
share withholding election is made on or prior to the date on which the
amount of withholding tax liability is determined. Notwithstanding the
foregoing, an optionee whose transactions in Common Stock are subject to
Section 16(b) of the 1934 Act may make a share withholding election only if
said election is also in compliance with the provisions of said Section and
the rules and regulations promulgated thereunder.
(b) A share withholding election shall be deemed made when written notice
of such election, signed by the optionee, has been received by the Secretary
of the Company. Delivery of said notice shall constitute an irrevocable
election to have Shares so withheld.
(c) Upon exercise of an option, the Company shall transfer the total
number of Shares so exercised less the number of Shares deliverable, if any,
in connection with the share withholding election (which shall be the number
of Shares having an aggregate fair market value as provided herein equal to
the amount of tax required to be withheld plus cash for any fractional
amount.)
13. Amendment. The Board shall have full authority to amend the Plan;
provided, however, that any amendment that (i) increases the number of Shares
that may be the subject to stock options granted under the Plan, (ii) expands
the class of individuals eligible to receive options under the Plan, (iii)
increases the period during which options may be granted or the permissible
term of options under the Plan, or (iv) decreases the minimum exercise price
of such options, shall only be adopted by the Board subject to shareholder
approval. No amendment to the Plan shall, without the consent of the holder
of an existing option, materially and adversely affect his rights under any
option.
14. Termination. Unless the Plan shall theretofore have been terminated as
hereinafter provided, the Plan shall terminate on February 9, 2007 and no
options under the Plan shall thereafter be granted, provided, however, the
Board at any time may, in its sole discretion, terminate the Plan prior to
the foregoing date. No termination of the Plan shall without the consent of
the holder of an existing option, materially and adversely affect his rights
under such option.
The Plan shall be submitted to the shareholders of the Company for
approval in accordance with the applicable provisions of the General
Corporate Law of the State of Delaware as promptly as practicable and in any
event by February 9, 1998. Any options granted hereunder prior to such
shareholder approval shall not be exercisable unless and until such approval
is obtained. If such approval is not obtained by February 9, 1998, the Plan
and any options granted hereunder shall be terminated.
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APPENDIX B
SYMBOL TECHNOLOGIES, INC.
1997 EMPLOYEE STOCK PURCHASE PLAN
(AS OF FEBRUARY 10, 1997)
ARTICLE 1 -- PURPOSE.
This 1997 Employee Stock Purchase Plan (the "Plan") is intended to
encourage stock ownership by all eligible employees of Symbol Technologies,
Inc. (the "Company"), a Delaware corporation, and its participating
subsidiaries (as defined in Article 18) so that they may share in the growth
of the Company by acquiring or increasing their proprietary interest in the
Company. The Plan is designed to encourage eligible employees to remain in
the employ of the Company and its participating subsidiaries. The Plan is
intended to constitute an "employee stock purchase plan" within the meaning
of Section 423(b) of the Internal Revenue Code of 1986, as amended (the
"Code").
ARTICLE 2 -- ADMINISTRATION OF THE PLAN.
The Plan may be administered by a committee appointed by the Board of
Directors of the Company (the "Committee"). The Committee shall consist of
not less than two members of the Company's Board of Directors. The Board of
Directors may from time to time remove members from, or add members to, the
Committee. Vacancies on the Committee, howsoever caused, shall be filled by
the Board of Directors. The Committee may select one of its members as
Chairman, and shall hold meetings at such times and places as it may
determine. Acts by a majority of the Committee, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be
the valid acts of the Committee.
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final, unless otherwise
determined by the Board of Directors. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it may deem
best, provided that any such rules and regulations shall be applied on a
uniform basis to all employees under the Plan. No member of the Board of
Directors or the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any option granted under it.
In the event the Board of Directors fails to appoint or refrains from
appointing a Committee, the Board of Directors shall have all power and
authority to administer the Plan. In such event, the word "Committee"
wherever used herein shall be deemed to mean the Board of Directors.
ARTICLE 3 -- ELIGIBLE EMPLOYEES.
No option may be granted to any person serving as a member of the
Committee at the time of grant. Subject to the foregoing limitation, all
employees of the Company or any of its participating subsidiaries who have
completed more than 90 days of employment with the Company or any of its
participating subsidiaries on or before the first day of any Payment Period
(as defined in Article 5) and whose customary employment is not less than
twenty hours per week and more than five months in any calendar year shall be
eligible to receive options under the Plan to purchase common stock of the
Company, par value $.01 per share ("Common Stock"). All eligible employees
shall have the same rights and privileges hereunder. Persons who elect to
enter the Plan in accordance with Article 7 and who are eligible employees on
the first business day of any Payment Period shall receive their options as
of such day. Persons who elect to enter the Plan in accordance with Article 7
and who become eligible employees after any date on which options are granted
under the Plan shall be granted options on the first business day of the next
succeeding Payment Period. In no event, however, may an employee be granted
an option if such employee, immediately after the option was granted, would
be treated as owning stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of
any parent corporation or subsidiary corporation, as the terms "parent
corporation" and "subsidiary corporations" are defined in Section 424(e) and
(f) of the Code. For purposes of determining stock ownership under this
paragraph, the rules of Section 424(d) of the Code shall apply, and stock
which the employee may purchase under outstanding options shall be treated as
stock owned by the employee.
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ARTICLE 4 -- STOCK SUBJECT TO THE PLAN.
The stock subject to the options under the Plan shall be authorized but
unissued Common Stock or treasury shares or shares purchased in the open
market. The aggregate number of shares which may be issued pursuant to the
Plan is 250,000, subject to adjustment as provided in Article 13. If any
option granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, the unpurchased shares subject thereto shall
again be available under the Plan.
ARTICLE 5 -- PAYMENT PERIOD AND STOCK OPTIONS.
For the duration of the Plan, the Payment Period shall be defined as
either (i) the six-month period commencing on the first day of January and
ending on the last day of June of each calendar year, or (ii) the six-month
period commencing on the first day of July and ending on the last day of
December of each calendar year. Notwithstanding the foregoing, the first
Payment Period during which payroll deductions will be accumulated under the
Plan shall commence on July 1, 1997 and shall end on December 31, 1997.
On the first business day of each Payment Period, the Company will grant
to each eligible employee who is then a participant in the Plan an option to
purchase on the last day of such Payment Period, at the Option Price
hereinafter provided for, a maximum of 2,500 shares, on condition that such
employee remains eligible to participate in the Plan throughout the remainder
of such Payment Period. The participant shall be entitled to exercise the
option so granted only to the extent of the participant's accumulated payroll
deductions on the last day of such Payment Period. If the participant's
accumulated payroll deductions on the last day of the Payment Period would
enable the participant to purchase more than 2,500 shares except for the
2,500 share limitation, the excess of the amount of the accumulated payroll
deductions over the aggregate purchase price of the 2,500 shares shall be
promptly refunded to the participant by the Company, without interest (unless
required by law). The Option Price per share for each Payment Period shall be
the lesser of (i) 85% of the fair market value of the Common Stock on the
first business day of the Payment Period or (ii) 85% of the fair market value
of the Common Stock on the last business day of the Payment Period, in either
event rounded up to the nearest cent. The foregoing limitation on the number
of shares subject to option and the Option Price shall be subject to
adjustment as provided in Article 13.
For purposes of the Plan, the term "fair market value" on any date means
(i) the closing price (on that date) of the Common Stock on the principal
national securities exchange on which the Common Stock is traded, if the
Common Stock is then traded on a national securities exchange; or (ii) the
last reported sale price (on that date) of the Common Stock by NASDAQ, if the
Common Stock is not then traded on a national securities exchange; or (iii)
the average of the closing bid and asked prices last quoted (on that date) by
an established quotation service for over-the-counter securities, if the
Common Stock is not reported by NASDAQ; or (iv) if the Common Stock is not
publicly traded, the fair market value of the Common Stock as determined by
the Committee after taking into consideration all factors which it deems
appropriate, including, without limitation, recent sale and offer prices of
the Common Stock in private transactions negotiated at arm's length.
For purposes of the Plan, the term "business day" means a day on which
there is trading on the aforementioned national securities exchange or
NASDAQ, whichever is applicable pursuant to the preceding paragraph; and if
neither is applicable, a day that is not a Saturday, Sunday or legal holiday
in New York.
Notwithstanding any other provision herein, no employee shall be granted
an option which permits the employee's right to purchase stock under the
Plan, and under all other Section 423(b) employee stock purchase plans of the
Company and any parent or subsidiary corporations, to accrue at a rate which
exceeds $25,000 of fair market value of such stock (determined on the date or
dates that options on such stock were granted) for each calendar year in
which such option is outstanding at any time. The purpose of the limitation
in the preceding sentence is to comply with Section 423(b)(8) of the Code. If
the participant's accumulated payroll deductions on the last day of the
Payment Period would otherwise enable the participant to purchase Common
Stock in excess of the Section 423(b)(8) $25,000 limitation
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described in this paragraph, the excess of the amount of the accumulated
payroll deductions over the aggregate purchase price of the shares actually
purchased shall be promptly refunded to the participant by the Company,
without interest (unless required by law).
ARTICLE 6 -- EXERCISE OF OPTION.
Each eligible employee who continues to be a participant in the Plan on
the last day of a Payment Period shall be deemed to have exercised his or her
option on such date and shall be deemed to have purchased from the Company
such number of shares of Common Stock reserved for the purpose of the Plan as
the participant's accumulated payroll deductions on such date will pay for at
the Option Price, subject to the 2,500 share limit of the option and the
Section 423(b)(8) $25,000 limitation described in Article 5. If the
individual is not a participant on the last day of a Payment Period, then he
or she shall not be entitled to exercise his or her option and the sum of
accumulated payroll deductions for the Payment Period shall be promptly
refunded to the participant, without interest (unless required by law).
ARTICLE 7 -- AUTHORIZATION FOR ENTERING THE PLAN.
An employee may elect to enter the Plan by filling out, signing and
delivering to the Company's Payroll Department an authorization in the form
and manner satisfactory to the Company:
A) Stating the whole percentage to be deducted from the employee's
pay;
B) Authorizing the purchase of Common Stock for the employee in each
Payment Period in accordance with the terms of the Plan; and
C) Specifying the exact name or names in which Common Stock
purchased for the employee is to be issued as provided under
Article 12 hereof.
Such authorization must be received by the Company at least thirty days
before the first day of the next Payment Period.
Unless a participant files a new authorization or withdraws from the Plan,
the deductions and purchases under the authorization the participant has on
file under the Plan will continue from one Payment Period to succeeding
Payment Periods as long as the Plan remains in effect.
The Company will accumulate and hold for each participant's account the
amounts deducted from his or her pay. No interest will be paid on these
amounts (unless required by law). For purposes of the Plan, "pay" shall be
defined as the employee's base salary. Bonuses, commissions, overtime, shift
differential or other sources of income shall not be considered as "pay" for
the purposes of the Plan.
ARTICLE 8 -- MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS.
An employee may authorize payroll deductions in an amount (expressed as a
whole percentage) not less than two percent (2%) but not more than ten
percent (10%) of the employee's base salary.
ARTICLE 9 -- CHANGE IN PAYROLL DEDUCTIONS.
Deductions may not be increased during a Payment Period. Deductions may be
decreased during a Payment Period, provided that an employee may not decrease
his deductions more often than once during any Payment Period.
ARTICLE 10 -- WITHDRAWAL FROM THE PLAN.
A participant may withdraw from the Plan (in whole but not in part) at any
time prior to the last day of a Payment Period by delivering a withdrawal
notice to the Company. Upon receipt of such withdrawal notice, the amount of
the accumulated payroll deductions for the Payment Period shall be promptly
refunded to the participant by the Company, without interest (unless required
by law).
To re-enter the Plan, an employee who has previously withdrawn must file a
new authorization at least thirty days before the first day of the next
Payment Period in which he or she wishes to participate. The employee's
re-entry into the Plan becomes effective at the beginning of such Payment
Period, provided that he or she is an eligible employee on the first business
day of the Payment Period.
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ARTICLE 11 -- ESTABLISHMENT OF BROKERAGE ACCOUNT.
By enrolling in the Plan, each participating employee will be deemed to
have authorized the establishment of a brokerage account in his or her name
at a securities brokerage firm to be approved by the Committee.
ARTICLE 12 -- ISSUANCE OF COMMON STOCK; FRACTIONAL SHARES.
Common Stock purchased under the Plan will be held in an account in the
name of the employee, or if such employee's authorization so specifies, in
the name of the employee and another person of legal age as joint tenants
with rights of survivorship, unless prohibited by law. Certificates will be
issued, at the employee's request, only for whole numbers of shares.
Fractional interests in shares will be carried forward in an employee's
account until such time as they equal one full share, or until the
termination of an employee's brokerage account, whereupon an amount equal to
the value of such fractional interest shall be paid in cash to the employee.
ARTICLE 13 -- ADJUSTMENTS.
Upon the happening of any of the following described events, a
participant's rights under options granted under the Plan shall be adjusted
as hereinafter provided:
A. In the event that the shares of Common Stock shall be subdivided
or combined into a greater or smaller number of shares or if,
upon a reorganization, split-up, liquidation, recapitalization or
the like of the Company, the shares of Common Stock shall be
exchanged for other securities of the Company, each participant
shall be entitled, subject to the conditions herein stated, to
purchase such number of shares of Common Stock or amount of other
securities of the Company as were exchangeable for the number of
shares of Common Stock that such participant would have been
entitled to purchase except for such action, and appropriate
adjustments shall be made in the purchase price per share to
reflect such subdivision, combination or exchange; and
B. In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class
which shall at the time be subject to options hereunder, each
participant upon exercising such an option shall be entitled to
receive (for the purchase price paid upon such exercise) the
shares as to which the participant is exercising his or her
option and, in addition thereto (at no additional cost), such
number of shares of the class or classes in which such stock
dividend or dividends were declared or paid, and such amount of
cash in lieu of fractional shares, as is equal to the number of
shares thereof and the amount of cash in lieu of fractional
shares, respectively, which the participant would have received
if the participant had been the holder of the shares as to which
the participant is exercising his or her option at all times
between the date of the granting of such option and the date of
its exercise.
Upon the happening of any of the foregoing events, the class and aggregate
number of shares set forth in Article 4 hereof which are subject to options
which have been or may be granted under the Plan and the limitations set
forth in the second paragraph of Article 5 shall also be appropriately
adjusted to reflect the events specified in paragraphs A and B above.
Notwithstanding the foregoing, any adjustments made pursuant to paragraphs A
or B shall be made only after the Committee, based on advice of counsel for
the Company, determines whether such adjustments would constitute a
"modification" (as that term is defined in Section 424 of the Code). If the
Committee determines that such adjustments would constitute a modification,
it may refrain from making such adjustments.
If the Company is to be consolidated with or acquired by another entity in
a merger, a sale of all or substantially all of the Company's assets or
otherwise (an "Acquisition"), the Committee or the board of directors of any
entity assuming the obligations of the Company hereunder (the "Successor
Board") shall, with respect to options then outstanding under the Plan,
either (i) make appropriate provision for the continuation of such options by
arranging for the substitution on an equitable basis for the shares then
subject to such options either (a) the consideration payable with respect to
the outstanding shares of the
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Common Stock in connection with the Acquisition, (b) shares of stock of the
successor corporation, or a parent or subsidiary of such corporation, or (c)
such other securities as the Successor Board deems appropriate, the fair
market value of which shall not exceed the fair market value of the shares of
Common Stock subject to such options immediately preceding the Acquisition;
or (ii) terminate each participant's options in exchange for a cash payment
equal to the excess of the fair market value on the date of the Acquisition
of the number of shares of Common Stock that the participant's accumulated
payroll deductions as of the date of the Acquisition could purchase, at an
option price determined with reference only to the first business day of the
applicable Payment Period and subject to the 2,500 share limit and Code
Section 423(b)(8) limitations on the amount of stock a participant would be
entitled to purchase over the aggregate option price to such participant
thereof.
The Committee or Successor Board shall determine the adjustments to be
made under this Article 13, and its determination shall be conclusive.
ARTICLE 14 -- NO TRANSFER OR ASSIGNMENT OF EMPLOYEE'S RIGHTS.
An option granted under the Plan may not be transferred or assigned,
otherwise than by will or by the laws of descent and distribution. Any option
granted under the Plan may be exercised, during the participant's lifetime,
only by the participant.
ARTICLE 15 -- TERMINATION OF EMPLOYEE'S RIGHTS.
Whenever a participant ceases to be an eligible employee because of
retirement, voluntary or involuntary termination, resignation, layoff,
discharge, death or for any other reason, his or her rights under the Plan
shall immediately terminate, and the Company shall promptly refund, without
interest (unless required by law), the entire balance of his or her payroll
deduction account under the Plan. Notwithstanding the foregoing, eligible
employment shall be treated as continuing intact while a participant is on
military leave, sick leave or other bona fide leave of absence, for up to 90
days, or, if such leave is longer than 90 days, for so long as the
participant's right to re-employment is guaranteed either by statute or by
written contract.
ARTICLE 16 -- TERMINATION AND AMENDMENTS TO PLAN.
The Plan may be terminated at any time by the Company's Board of Directors
but such termination shall not affect options then outstanding under the
Plan. If at any time shares of stock reserved for the purpose of the Plan
remain available for purchase but not in sufficient number to satisfy all
then unfilled purchase requirements, the available shares shall be
apportioned among participants in proportion to the amount of payroll
deductions accumulated on behalf of each participant that would otherwise be
used to purchase stock, and the Plan shall terminate. Upon such termination
or any other termination of the Plan, all payroll deductions not used to
purchase stock will be refunded, without interest (unless required by law).
The Committee or the Board of Directors may from time to time adopt
amendments to the Plan provided that, without the approval of the
shareholders of the Company, no amendment may (i) increase the number of
shares that may be issued under the Plan; (ii) change the class of employees
eligible to receive options under the Plan, if such action would be treated
as the adoption of a new plan for purposes of Code Section 423(b) and the
regulations thereunder, or (iii) cause Rule 16b-3 under the Securities
Exchange Act of 1934 to become inapplicable to the Plan.
ARTICLE 17 -- LIMITS ON SALE OF STOCK PURCHASED UNDER THE PLAN.
The Plan is intended to provide shares of Common Stock for investment and
not for resale. The Company does not, however, intend to restrict or
influence any employee in the conduct of his or her own affairs beyond this
requirement, provided however that all shares acquired herein must be
retained by the employee for at least one Payment Period following the
exercise of options granted hereunder. Thereafter, an employee may sell
Common Stock purchased under the Plan at any time the employee
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chooses, subject to compliance with any applicable federal or state
securities laws and subject to any restrictions imposed under Article 22 to
ensure that tax withholding obligations are satisfied. THE EMPLOYEE ASSUMES
THE RISK OF ANY AND ALL MARKET FLUCTUATIONS IN THE PRICE OF THE COMMON STOCK.
ARTICLE 18 -- PARTICIPATING SUBSIDIARIES.
The term "participating subsidiary" shall mean any present or future
subsidiary of the Company, as that term is defined in Section 424(f) of the
Code, that is designated from time to time by the Board of Directors to
participate in the Plan. The Board of Directors shall have the power to make
such designation before or after the Plan is approved by the shareholders.
ARTICLE 19 -- OPTIONEES NOT SHAREHOLDERS.
Neither the granting of an option to an employee nor the deductions from
his or her pay shall constitute such employee a shareholder of the shares
covered by an option until such shares have been actually purchased by the
employee.
ARTICLE 20 -- APPLICATION OF FUNDS.
Any proceeds which may be received by the Company from the sale of Common
Stock pursuant to options granted under the Plan will be used for general
corporate purposes.
ARTICLE 21 -- NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
By electing to participate in the Plan, each participant agrees to notify
the Company in writing immediately after the participant transfers Common
Stock acquired under the Plan, if such transfer occurs within two years after
the first business day of the Payment Period in which such Common Stock was
acquired. Each participant further agrees to provide any information about
such a transfer as may be requested by the Company or any subsidiary
corporation in order to assist it in complying with the tax laws. Such
dispositions generally are treated as "disqualifying dispositions" under
Sections 421 and 424 of the Code, which have certain tax consequences to
participants and to the Company and its participating subsidiaries.
ARTICLE 22 -- WITHHOLDING OF ADDITIONAL INCOME TAXES.
By electing to participate in the Plan, each participant acknowledges that
the Company and its participating subsidiaries are required to withhold taxes
with respect to the amounts deducted from the participant's compensation and
accumulated for the benefit of the participant under the Plan, and each
participant agrees that the Company and its participating subsidiaries may
deduct additional amounts from the participant's compensation, when amounts
are added to the participant's account, used to purchase Common Stock or
refunded, in order to satisfy such withholding obligations. Each participant
further acknowledges that when Common Stock is purchased under the Plan the
Company and its participating subsidiaries may be required to withhold taxes
with respect to all or a portion of the difference between the fair market
value of the Common Stock purchased and its purchase price, and each
participant agrees that such taxes may be withheld from compensation
otherwise payable to such participant. It is intended that tax withholding
will be accomplished in such a manner that the full amount of payroll
deductions elected by the participant under Article 7 will be used to
purchase Common Stock. However, if amounts sufficient to satisfy applicable
tax withholding obligations have not been withheld from compensation
otherwise payable to any participant, then, notwithstanding any other
provision of the Plan, the Company may withhold such taxes from the
participant's accumulated payroll deductions and apply the net amount to the
purchase of Common Stock, unless the participant pays to the Company, prior
to the exercise date, an amount sufficient to satisfy such withholding
obligations. Each participant further acknowledges that the Company and its
participating subsidiaries may be required to withhold taxes in connection
with the disposition of stock acquired under the Plan and agrees that the
Company or any participating subsidiary may take whatever action it considers
appropriate to satisfy such withholding
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requirements, including deducting from compensation otherwise payable to such
participant an amount sufficient to satisfy such withholding requirements or
conditioning any disposition of Common Stock by the participant upon the
payment to the Company or such subsidiary of an amount sufficient to satisfy
such withholding requirements.
ARTICLE 23 -- GOVERNMENTAL REGULATIONS.
The Company's obligation to sell and deliver shares of Common Stock under
the Plan is subject to the approval of any governmental authority required in
connection with the authorization, issuance or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
identify shares of Common Stock issued under the Plan on its stock ownership
records and send tax information statements to employees and former employees
who transfer title to such shares.
ARTICLE 24 -- GOVERNING LAW.
The validity and construction of the Plan shall be governed by the laws of
the state of New York, without giving effect to the principles of conflicts
of law thereof.
ARTICLE 25 -- APPROVAL OF BOARD OF DIRECTORS AND SHAREHOLDERS OF THE COMPANY.
The Plan was adopted by the Board of Directors on February 10, 1997 and on
such date the Board of Directors resolved that the Plan was to be submitted
to the shareholders of the Company for approval at the next annual meeting of
shareholders.
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SYMBOL TECHNOLOGIES, INC.
PROXY PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS COMMON STOCK
OF THE CORPORATION FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 5, 1997
The undersigned hereby constitutes and appoints JEROME SWARTZ and TOMO
RAZMILOVIC and each of them, with full power of substitution, attorneys and
proxies to represent and to vote all of the shares of Common Stock which the
undersigned would be entitled to vote, with all the powers the undersigned
would possess if personally present, at the Annual Meeting of Shareholders of
SYMBOL TECHNOLOGIES, INC. to be held at Symbol Technologies, Inc., World
Headquarters, One Symbol Plaza, Holtsville, NY 11742 on May 5, 1997 at 10:00
A.M., local time, and at any adjournment thereof, on all matters coming
before said meeting.
1. ELECTION OF DIRECTORS:
Nominees: Jerome Swartz, Harvey P. Mallement, Frederic P. Heiman,
Raymond R. Martino, Saul P. Steinberg, Lowell C. Freiberg,
George Bugliarello, Charles Wang and Tomo Razmilovic
(Mark only one of the following boxes.)
[ ] VOTE FOR all nominees above, except vote withheld as to
the following nominees (if any):
[ ] VOTE WITHHELD from all nominees
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2. To vote to approve the 1997 Employee Stock Option Plan. (Mark only
one.)
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To vote to approve the 1997 Employee Stock Purchase Plan. (Mark only
one.)
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify the appointment of Deloitte & Touche, independent certified
public accountants, as auditors for fiscal 1997. (Mark only one.)
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, upon any other business which may properly come
before the meeting or any adjournment thereof.
(To be signed on other side)
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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 PROPOSALS 1, 2, 3 AND 4. The
undersigned acknowledges receipt of the
accompanying Proxy Statement dated
March 11, 1997.
Dated:_________________, 1997
_____________________________
_____________________________
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.
