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.
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(1)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
_______________________________________________________
2) Aggregate number of securities to which transaction applies:
_______________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
_______________________________________________________
4) Proposed maximum aggregate value of transaction:
_______________________________________________________
5) Total fee paid:
_______________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing
by registration statement number, or the Form or Schedule and date
of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
SYMBOL TECHNOLOGIES, INC.
One Symbol Plaza
Holtsville, New York 11742-1300
____________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
May 11, 1998
____________________
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 11, 1998 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 ratify the appointment of Deloitte & Touche, independent
certified public accountants, as auditors for fiscal year 1998;
and
3. To transact such other business as may properly come before the
meeting.
Only holders of record of the Corporation's Common Stock at the
close of business on March 17, 1998 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 18, 1998
<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 11, 1998, 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) to ratify the appointment of Deloitte & Touche
as the Corporation's auditors for fiscal 1998, and (3) 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 31, 1998.
VOTING
Holders of record of the Corporation's Common Stock on March 17, 1998,
will be entitled to vote at the Annual Meeting or any adjournment thereof. As
of that date, there were 39,314,390 shares of Common Stock outstanding and
entitled to vote and a majority, or 19,657,196 of these shares, will
constitute a quorum for the transaction of business. Share amounts in this
Proxy Statement have been adjusted, as appropriate, to reflect the three for
two stock split which was effective on April 1, 1997 but do not reflect the
three for two stock split which will be effective on April 3, 1998. 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.
Broker non-votes and shares as to which proxy authority has been
withheld with respect to any matters are not deemed to be present or
represented for purposes of determining whether stockholder approval of that
matter has been obtained. The closing price of the Corporation's Common Stock
on the New York Stock Exchange on March 2, 1998 was $49.625 per share.
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<PAGE
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 Director
the Corporation Since
<S> <C> <C> <C>
Jerome Swartz 57 Chairman of the Board of Directors, 1975
Chief Executive Officer and Director
Harvey P. Mallement 57 Director 1977
Frederic P. Heiman 58 Executive Vice President
and Director 1981
Raymond R. Martino 59 Vice Chairman of the
Board of Directors 1983
Saul P. Steinberg 58 Director 1985
Lowell C. Freiberg 58 Director 1985
George Bugliarello 70 Director 1992
Charles B. Wang 53 Director 1994
Tomo Razmilovic 55 President, Chief Operating 1995
Officer and Director
</TABLE>
Dr. Swartz co-founded and has been employed by the Corporation since it
commenced operations in 1975. He has been the Chairman of the Board of
Directors and Chief Executive Officer of the Corporation for more than the
past fifteen 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 150 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.
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<PAGE
Dr. Heiman has been Executive Vice President of the Corporation since
July 1986. He is currently employed by the Corporation on a part-time
(approximately 50%) basis. 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 more than 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. Martino is also a member of the Board
of Directors of Checkpoint Systems, Inc.
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. He is a member of the
Board of Directors of LandAmerica Financial Group, Inc.
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 1997 revenues exceeding $4 billion.
-3-
<PAGE
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.
MEETINGS OF THE BOARD
During the fiscal year ended December 31, 1997 the Board of Directors
held five meetings. Each director 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.
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 one meeting in 1997.
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 1997 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 preceeding
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
1997.
-4-
<PAGE
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>
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership(1) Common Stock
<S> <C> <C>
Saul P. Steinberg and 5,379,201(2) 13.7
Reliance Financial Services
Corporation
Park Avenue Plaza
New York, New York 10055
Jennison Associates LLC 3,960,630(3) 10.1
466 Lexington Avenue
New York, New York 10017
Prudential Insurance Company
Of America 3,817,166(4) 9.7
751 Broad Street
Newark, New Jersey 07102-3777
Forstmann-Leff Associates, Inc. 2,924,247(5) 7.5
55 East 52nd Street
New York, New York 10055
Edward C. Johnson III and 2,494,100(6) 6.2
F.M.R. Corp.
82 Devonshire Street
Boston, Massachusetts
Amvescap PLC 2,281,300(7) 5.8
11 Devonshire Square
London, EC2M 4YR
England
</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 March 1,
1998 except as otherwise disclosed in the footnotes to the table,
according to information publicly filed or otherwise furnished to the
Corporation.
-5-
<PAGE
(2) Of the Common Stock shown, 5,367,951 shares are beneficially owned by
Reliance Financial Services Corporation ("Reliance Financial").
Reliance Financial is a wholly owned subsidiary of Reliance.
Approximately 44% 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, 4,320,801 shares;
United Pacific Insurance Company, a subsidiary of Reliance Insurance
Company, 750,000 shares; Reliance National Indemnity, a subsidiary of
Reliance Insurance Company, 297,150 shares. Mr. Steinberg disclaims
beneficial ownership of the 5,367,951 shares beneficially owned by
Reliance Financial. Includes 11,250 shares Mr. Steinberg beneficially
owns which may be acquired within 60 days of March 1, 1998, pursuant
to the exercise of options held by him.
(3) The number of shares beneficially owned as of December 31, 1997
according to a statement on Schedule 13G filed with the Securities and
Exchange Commission. Jennison Associates LLC ("Jennison"), an
investment advisor, has sole power to direct the vote of 1,200,250 of
such shares, shared power to direct the vote of 2,455,680 of such shares
and shared power to dispose of or direct the disposition of 3,960,630 of
such shares. Jennison is 100% owned by Prudential Insurance Company of
America ("Prudential"), however, Jennison does not file jointly with
Prudential, therefore, an undetermined number of shares of the
Corporation's Common Stock reported on Jennison's Schedule 13G may be
included in the Schedule 13G filed by Prudential.
(4) The number of shares beneficially owned as of December 31, 1997
according to a statement on Schedule 13G filed with the Securities and
Exchange Commission. Prudential, an insurance company, has sole power
to vote or direct the vote and dispose of or direct the disposition of
538,400 of such shares, shared power to vote or direct the vote of
2,973,366 of such shares, sole power to dispose of 538,400 of such
shares and shared power to dispose of or direct the disposition of
3,278,766 of such shares. Prudential may have direct or indirect voting
and/or investment discretion over 3,817,166 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. Jennison is 100% owned by Prudential, however Jennison does
not file jointly with Prudential, therefore, an undetermined number of
shares of the Corporation's Common Stock reported on Jennison's 13G may
be included in the 13G filed by Prudential.
(5) The number of shares beneficially owned as of December 31, 1997
according to a statement on Schedule 13G filed with the Securities
-6-
(6) <PAGE
Exchange Commission. Forstmann-Leff Associates, Inc., an investment
advisor, has sole power to vote or direct the vote of 1,361,947 of such
shares and sole power to dispose of or to direct the disposition of
1,571,597 of such shares. Forstmann-Leff Associates, Inc. and
subsidiaries, investment advisors, have shared power to vote or direct
the vote of 716,850 of such shares and shared power to dispose of or to
direct the disposition of 1,352,650 of such shares. No one client owns
more than 5% of such shares.
(6) The number of shares beneficially owned as of December 31, 1997
according to a statement on Schedule 13G filed with the Securities and
Exchange Commission. Of such shares, 2,419,300 are beneficially owned
by Fidelity Management & Research Company, an investment advisor
("Fidelity"), 74,800 are beneficially owned by Fidelity Management Trust
Company, a bank ("FMT"). Fidelity and FMT are wholly owned subsidiaries
of FMR Corp. ("FMR"). Approximately 49% of the voting stock of FMR
Corp. is owned by Edward C. Johnson III, members of his family and
trusts for their benefit. Mr. Johnson, members of his family and
associated trusts form a controlling group with respect to the common
voting stock of FMR. Mr. Johnson serves as Chairman of FMR. Mr.
Johnson and FMR have sole power to vote or direct the vote of 74,800 of
such shares and sole power to dispose of or to direct the disposition of
all of such shares.
(7) The number of shares beneficially owned as of December 31, 1997
according to a statement on Schedule 13G filed with the Securities and
Exchange Commission. Amvescap PLC and its subsidiaries, investment
advisors, have shared power to vote or direct the vote and shared power
to dispose of or to direct the disposition of all of such shares. No
one client owns more than 5% of such shares.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth certain information as of March 1, 1998 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:
-7-
<PAGE
<TABLE>
<CAPTION>
Name of Individual of Amount and Nature of Percent of
Identity of Group Beneficial Ownership(1) Common Stock
<S> <C> <C>
Jerome Swartz.......... 1, 235,785(2) 3.1
Harvey P. Mallement.... 44,250(3) *
Frederic Heiman........ 26,250(4) *
Raymond R. Martino..... 132,418 *
Saul P. Steinberg...... 5,379,201(5) 13.6
Lowell C. Freiberg..... 42,375(6) *
George Bugliarello..... 13,500(7) *
Charles B. Wang........... 33,750(8) *
Tomo Razmilovic........ 112,539(9) *
Richard M. Feldt....... 49,000(10) *
Leonard H. Goldner..... 181,510(11) *
Kenneth V. Jaeggi...... 1,000 *
All executive officers 7,710,273(12) 19.6
and directors as a group.
(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) Represents (i) 825,750 shares which may be acquired pursuant to the
exercise of options within 60 days of March 1, 1998, and (ii) 21,900
shares held in trust for the benefit of his family, and (iii) 7,345
shares owned by his wife, and (iv) 380,790 shares owned by Dr. Swartz.
Dr. Swartz disclaims beneficial ownership of the shares held by or for
the benefit of members of his family.
(3) Represents 11,250 shares that may be acquired pursuant to the exercise
of options within 60 days of March 1, 1998 and 33,000 shares owned by
Mr. Mallement.
(4) Represents shares owned jointly by Dr. Heiman and his wife.
(4) Represents 5,367,951 shares owned by Reliance Financial and its
subsidiaries and 11,250 shares that may be acquired by Mr. Steinberg
pursuant to the exercise of options within 60 days of March 1, 1998.
See "Principal Shareholders."
-8-
<PAGE
(6) Represents 15,000 shares that may be acquired pursuant to the exercise
of a warrant and options within 60 days of March 1, 1998 and 27,375
shares owned by Mr. Freiberg. Mr. Freiberg disclaims beneficial
ownership of the shares owned by Reliance Financial. See "Principal
Shareholders."
(7) Represents 11,250 shares that may be acquired pursuant to the exercise
of options within 60 days of March 1, 1998 and 2,250 shares owned
jointly by Dr. Bugliarello and his wife.
(8) Represents 18,750 shares that may be acquired pursuant to the exercise
of options within 60 days of March 1, 1998 and 15,000 shares owned by
Mr. Wang.
(9) Represents 78,777 shares that may be acquired pursuant to the exercise
of options within 60 days of March 1, 1998 and 33,762 shares owned by
Mr. Razmilovic.
(10) Represents 45,000 shares that may be acquired pursuant to the exercise
of options within 60 days of March 1, 1998 and 4,000 shares owned by Mr.
Feldt.
(11) Represents 121,800 shares that may be acquired pursuant to the exercise
of options within 60 days of March 1, 1998 and 59,710 shares owned by
Mr. Goldner.
(12) Includes an aggregate of 1,371,213 shares which may be acquired pursuant
to the exercise of options and warrants within 60 days of March 1,
1998.
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 1997 calendar year,
executive officers, directors and greater than 10% shareholders complied with
all filing requirements applicable to them.
-9-
<PAGE
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:
? 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.
? Reflect a pay-for-performance orientation, linking overall
compensation paid to senior executives with the Corporation's
financial performance.
? 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
-10-
<PAGE
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 stock option
awards.
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 1997 and payable in 1998 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 last reviewed in July 1996 and
at that time was increased by 10%, effective July 1, 1996 and by an additional
10%, effective July 1, 1997. Accordingly, his current base salary is
$794,000. Dr. Swartz' base 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 94 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.
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<PAGE
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. 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 directly tie the level of annual executive incentive compensation to the
financial performance of the Corporation. 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 1998, threshold performance has been
established at results equal to 85% of the Corporation's 1998 Business Plan;
target performance has been established at results equal to 100% of the 1998
Business Plan; and maximum performance has been established at results equal
to or greater than 115% of the 1998 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 1998 for Messrs. Swartz, Razmilovic, Feldt, Goldner and
Jaeggi are 100%, 100%, 50%, 50% and 50%, respectively, which is in conformity
with their individual employment agreements and their levels of
responsibility. The target bonuses for 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 55% 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 1997, 1996 and 1995, all participants in the Executive Bonus
Plan received as their actual bonus payment an amount equal to 112.5%, 112.5%
and 134% of their target bonus, respectively (less adjustments in certain
instances for individual performance).
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<PAGE
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
assigned a 10-year term and 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 February 1997, the Committee determined that it
was appropriate and desirable to grant (subject to shareholder approval of the
adoption of the 1997 Employee Stock Option Plan) Dr. Swartz an option to
purchase 270,000 shares of Common Stock at an exercise price of $33 per share
(the fair market value of the Corporation's Common Stock on the date the 1997
Employee Stock Option Plan, pursuant to which the options were issued, was
approved by the Corporation's shareholders) in light of Dr. Swartz'
contributions and the Corporation's strong financial performance in 1996 and
anticipated strong performance in 1997 and subsequent years. 48,000 of these
options will vest on January 1, 1999; 36,000 will vest on July 1, 2000; 36,000
will vest on January 1, 2001 and 150,000 will vest on January 1, 2006.
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.
-13-
<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
-14-
<PAGE
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
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 1997 were the most highly paid executive
officers, for services rendered in all capacities during the fiscal years
ended December 31, 1997, 1996 and 1995.
- -15-
<PAGE
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
Name and
Principal Other Annual Securities Underlying All Other
Position Year Salary Bonus(F) Compensation(G) Options (No.) Compensation
<S> <C> <C> <C> <C> <C> <C>
Jerome Swartz 1997 $757,962(D) $852,707 $0 270,000 $ 56,652(H)
Chairman of the 1996 $689,052(D) $775,184 $0 255,000 $ 52,496(H)
the Board and 1995 $656,250(D) $881,823 $0 275,000 $ 19,890(H)
Chief Executive
Officer and
Director
Tomo Razmilovic 1997 $500,032(D) $421,902 $100,000 162,000 $ 4,750(I)
President and 1996 $437,500(D) $369,147 $0 85,000 $ 4,750(I)
Chief Operating 1995 $308,673 $254,523 $0 132,500 $111,344(J)
Officer and
Director(A)
Richard M. Feldt 1997 $309,795(D) $174,260 $0 52,500 $ 27,290(K)
Senior Vice 1996 $288,758(D) $156,335 $0 0 $197,588(K)
President and 1995 $ 70,002 $ 75,000 $0 75,000 $ 0
General Manager,
Operations(B)
Leonard H. Goldner 1997 $291,200(D) $147,420 $0 67,500 $ 4,750(I)
Senior Vice 1996 $248,872(D) $125,991 $0 10,000 $ 4,750(I)
President and 1995 $210,454(D) $127,259 $0 25,000 $ 4,750(I)
General Counsel
and Secretary
Kenneth V.Jaeggi 1997 $206,250(E) $116,016 $ 66,797 100,000 $135,110(L)
Senior Vice 1996 --- --- --- --- ---
President and 1995 --- --- --- --- ---
Chief Financial
Officer(C)
-16-
<PAGE
(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) Mr. Jaeggi commenced employment with the Corporation in May 1997.
(D) Includes $9,500 in contributions to the Corporation's 401(k) deferred
compensation plan.
(E) Includes $6,000 in contributions to the Corporation's 401(k) deferred
compensation plan.
(F) Represents amounts earned and accrued pursuant to the Corporation's
Executive Bonus Plan. Amounts indicated are earned and accrued in the
fiscal year indicated but are generally paid in the first quarter of the
next succeeding year.
(G) Includes special one-time bonus awards. 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.
(H) Represents (i) $4,750 in 1995, 1996, 1997 for contributions to the
Corporation's 401(k) deferred compensation plan, and (ii) $15,140 in
1995, $15,246 in 1996 and $19,402 in 1997 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 and 1997 of $32,500.
(I) Represents contributions to the Corporation's 401(k) deferred
compensation plan.
(J) Represents (i) $40,385 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) $70,959 for contributions to a defined
contribution retirement plan maintained by the Corporation's UK
subsidiary on his behalf.
(K) Represents (i) $4,750 in 1996 and 1997 in contributions to the
Corporation's 401(k) deferred compensation plan, and (ii) $192,838 in
1996 for reimbursement of expenses associated with Mr. Feldt's
-17-
<PAGE
relocation to the Long Island area, and (iii) $22,540 in 1997 in
retroactive tax adjustments in connection with Mr. Feldt's relocation to
the Long Island area.
(L) Represents $3,000 in contributions to the Corporation's 401(k) deferred
compensation plan and $132,110 for reimbursement of expenses
associated with Mr. Jaeggi'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 $794,000 through June 30, 1998. His base
salary will be reviewed in July 1998. 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 $550,000 for the year ending
December 31, 1998, subject to annual renegotiation thereafter. Mr. Razmilovic
also participates in the Corporation's Executive Bonus Plan. In 1998, 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), Mr.
Razmilovic will receive payments equal to one year's (if such termination
occurs after October 15, 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. 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 $350,000 for the year ending December
31, 1998, subject to annual renegotiation thereafter. Mr. Goldner also
participates in the Corporation's Executive Bonus Plan. In 1998, the target
amount of his bonus is 50% 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.
-18-
<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 1997 Messrs. Mallement, Steinberg, Freiberg, Bugliarello and Wang each
received options to purchase 2,500 shares. If re-elected at the 1998 Annual
Meeting, Messrs. Mallement, Steinberg, Freiberg, Bugliarello and Wang will
each be awarded an option to purchase an additional 2,500.
Option Grants
Currently, the Corporation maintains two stock option plans, the 1990
Non-Executive Stock Option Plan (the "1990 Plan") and the 1997 Employee Stock
Option Plan (the "1997 Plan") pursuant to which options may be granted to
employees of the Corporation. The 1990 Plan and the 1997 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 1997 Plan, key officers, including those
who are executive officers of the Corporation). Under the 1997 Plan, no
individual may be awarded options to purchase more than 1% of the outstanding
shares of Common Stock 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 1997 Plan is exercisable for a
period exceeding ten years. No ISO granted under the 1997 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.
-19-
<PAGE
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 1997 Plan terminates on February 9, 2007
-20-
<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 as Assumed Annual
Individual Grants in 1997 Rates of Stock Price Appreciation for Option Term(A)
Number of %of Total
Securities Options
Underlying Granted to Exercise 5% 10%
Options Employees in or Base Expiration Stock Dollar Stock Dollar
Name Granted (No.)(B) Fiscal Year(G) Price Date Price(J) Gain Price(J) Gain
<S> <C> <C> <C> <C> <C> <C> <C> <C>
All
Shareholders ---- ---- ---- ---- $53,75 812,575,167 $85.59 $2,059,437,442
Jerome Swartz 270,000(C) 12.02 $33.00(H) 2/9/07 $53.75 5,603,451 $85.59 $ 14,200,245
CEO's Gain as
% of All
Shareholders
Gain .690% .690%
Tomo Razmilovic 90,000(D) 4.01 $33.00(H) 2/9/07 $53.75 1,867,817 $85.59 $ 4,733,415
72,000(E) 3.21 $35.00(I) 2/9/07 $57.01 1,584,814 $90.78 $ 4,016,231
Richard M. Feldt37,500(D) 1.67 $33.00(H) 2/9/07 $53.75 778,257 $85.59 $ 1,972,256
15,000(E) .67 $35.00(I) 2/9/07 $57.01 330,170 $90.78 $ 836,715
Leonard H. Goldner37,500(D) 1.67 $33.00(H) 2/9/07 $53.75 778,257 $85.59 $ 1,972,256
30,000(E) 1.34 $35.00(I) 2/9/07 $57.01 660,339 $90.78 $ 1,673,430
Kenneth V. Jaeggi 100,000(F) 4.45 $33.00(H) 5/4/07 $53.75 2,075,352 $85.59 $ 5,259,350
</TABLE>
-21-
<PAGE
(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, 1997. 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) 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) 48,000 vest on January 1, 1999; 36,000 vest on January 1, 2000; 36,000
vest on January 1, 2001 and 150,000 vest on January 1, 2006.
(D) Vest on January 1, 2006.
(E) 40% vest on January 1, 1999, 30% vest on each of January 1, 2000 and
January 1, 2001.
(F) 40% vest on May 5, 1999, 30% vest on each of May 5, 2000 and May 5,
2001.
(G) Based on 2,245,385 options granted to all employees in 1997.
(H) 100% of the closing price of the Corporation's Common Stock on the date
the Corporation's shareholders approved the plan pursuant to which the
options were awarded.
(I) 100% of the closing price of the Corporation's Common Stock on the date
of grant.
(J) 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.
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, 1997 and the value
realized upon the exercise in 1997 of any option by the individuals named in
the Summary Compensation Table.
-22-
<PAGE
<TABLE>
<CAPTION>
Number of Securities
Number of Underlying Value of Unexercised
Shares Unexercised Options In-The-Money Options
Acquired on Value Held at December 31, 1997 Held at December 31, 1997
Name Exercise in 1997 Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Jerome Swartz 300,000 $8,825,011 735,750 945,000 $18,384,211 $9,888,833
Tomo Razmilovic 0 $ 0 179,925 408,750 $ 4,147,557 $3,720,938
Richard M. Feldt 0 $ 0 45,000 120,000 $ 656,235 $1,203,728
Leonard H. Goldner 0 $ 0 104,550 105,000 $ 2,882,842 $ 812,505
Kenneth V. Jaeggi 0 $ 0 0 100,000 $ 0 $ 475,000
</TABLE>
(A) Based on the closing price of the Corporation's Common Stock
on the New York Stock Exchange on that date of $37.75.
-23-
<PAGE
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 $10,000 in 1998 and $
9,500 in 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, Feldt, Goldner and Jaeggi 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).
-24-
<PAGE
PENSION PLAN TABLE
3 Years Average Years of Service
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, 1998, Messrs. Swartz, Razmilovic, Feldt, Goldner and
Jaeggi had 20, 4, 2, 7 and 0 years, respectively, of credited service. 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,
1993 and ending December 31, 1997, assuming in each case a fixed investment of
$100 at the respective closing prices on December 31, 1992 and reinvestment on
a quarterly basis of all dividends.
-25-
<PAGE
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG SYMBOL TECHNOLOGIES, INC., THE S&P 500 INDEX AND THE S&P TECHNOLOGY
SECTOR INDEX
12/92 12/93 12/94 12/95 12/96 12/97
Symbol Technologies, Inc. 100 141 240 307 344 440
S&P 500 100 123 143 207 293 368
S&P Technology Sector 100 110 112 153 189 252
*$100 invested on 12/31/92 in stock or index -
including reinvestment of dividends.
Fiscal year ended December 31.
-26-
<PAGE
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, 1997 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 1998.
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.
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 23,
1998.
ANNUAL REPORT AND FINANCIAL STATEMENTS
The Annual Report to Shareholders of the Corporation for the year ended
December 31, 1997 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, 1997 (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
-27-
<PAGE
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: TREASURER
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 18, 1998
Holtsville, New York
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