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SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EG&G, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
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(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)(1) 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.
[ ] 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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(3) Filing Party:
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(4) Date Filed:
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[EG&G LOGO]
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT 1997
EG&G, INC., CORPORATE OFFICES, 45 WILLIAM STREET, WELLESLEY, MASSACHUSETTS 02181
<PAGE> 3
NOTICE OF ANNUAL MEETING
To the Stockholders of EG&G, Inc.:
The Annual Meeting of the Stockholders of EG&G, Inc., will be held at the
Sheraton Needham Hotel, 100 Cabot Street, Needham, Massachusetts, on Tuesday,
April 22, 1997, at 10:30 a.m., to consider and act upon the following:
1. A proposal to fix the number of Directors at ten and to elect eight nominees
for Director for terms of one year each; and
2. A proposal to approve the EG&G, Inc. 1992 Stock Option Plan, as amended; and
3. Such other matters as may properly come before the Meeting or any adjournment
thereof.
The Board of Directors has no knowledge of any other business to be
transacted at the Meeting.
The Board of Directors has fixed the close of business on February 21,
1997, as the record date for the determination of stockholders entitled to
receive this notice and to vote at the Meeting.
All stockholders are cordially invited to attend the Meeting.
By Order of the Board of Directors
/s/ MURRAY GROSS
-----------------------------------
MURRAY GROSS, Clerk
March 6, 1997
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RETURN ENCLOSED PROXY CARD
Whether or not you expect to attend this Meeting, I urge you to complete, date,
and sign the enclosed proxy card and to mail it promptly in the enclosed
envelope. No postage is required if mailed in the United States. Prompt response
is important and your cooperation will be appreciated. If the envelope is lost,
return the card to Boston EquiServe, L.P., Attention: Proxy Department, Post
Office Box 9373, Boston, Massachusetts 02205-9373.
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<PAGE> 4
PROXY STATEMENT
This Proxy Statement has been prepared to provide the stockholders of EG&G,
Inc. with information pertaining to the matters to be voted on at the EG&G,
Inc., Annual Meeting of Stockholders to be held on Tuesday, April 22, 1997 at
10:30 a.m., at the Sheraton Needham Hotel, 100 Cabot Street, Needham,
Massachusetts, and at any adjournment of that Meeting. The date of this Proxy
Statement is March 6, 1997, the approximate date on which the Proxy Statement
and form of Proxy were first sent or given to stockholders. EG&G, Inc. is
sometimes referred to in this Proxy Statement as "EG&G" or the "Company." EG&G,
Inc. Common Stock, $1 par value (the only outstanding EG&G security with voting
power), is referred to as the "Common Stock."
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF EG&G. You
are requested to sign and return your proxy card promptly. You have the right to
revoke your proxy and change your vote at any time prior to its exercise at the
Meeting by filing written notice with the Clerk of EG&G or by signing and
delivering a new proxy card bearing a later date. IT IS IMPORTANT TO SIGN AND
RETURN YOUR PROXY CARD. It helps to establish a quorum so that the Meeting may
be held, and it permits your votes to be cast in accordance with your
directions.
The expenses connected with soliciting proxies will be borne by EG&G. The
Company expects to pay brokers, nominees, fiduciaries, and other custodians
their reasonable expenses for forwarding proxy materials and annual reports to
principals and obtaining their voting instructions. Due to the limited time
available for the solicitation of proxies, the Company has engaged Kissel-Blake
Inc., of New York City, to assist in soliciting proxies from brokers, nominees,
fiduciaries, and custodians and has agreed to pay Kissel-Blake Inc. $6,500 and
out-of-pocket expenses for such efforts. In addition to the use of the mails,
certain Directors, officers, and employees may solicit proxies in person or by
use of communications media.
The stock transfer books of EG&G will not be closed; however, the Board of
Directors has fixed the close of business on February 21, 1997, as the record
date for determining the stockholders entitled to receive notice and to vote
their shares at the Annual Meeting. On the record date, there were 46,383,953
shares of Common Stock outstanding and entitled to vote. Each share of Common
Stock carries with it the right to cast one vote, with no cumulative voting. The
presence at the Annual Meeting, in person or by proxy, of a majority of the
issued and outstanding shares of Common Stock constitutes a quorum.
The two items being presented for stockholder action are set forth on your
proxy card and each of them is discussed in detail on the following pages.
Shares represented by proxy will be voted at the Meeting in accordance with your
instructions, as indicated on the proxy card.
The first item on the proxy card is a proposal to fix the number of
Directors at ten and to elect eight Directors for terms of one year each. You
are provided the opportunity to vote your shares for granting, or withholding,
authority to fix the number of Directors at ten and to elect the eight nominees
by marking the appropriate box on the proxy card. Should you desire to withhold
authority to vote for specific nominees, please identify the exceptions in the
appropriate space provided on the proxy card. Your shares will be voted as you
indicate. IF YOU SIGN AND RETURN YOUR PROXY CARD AND MAKE NO INDICATION
CONCERNING ITEM NO. 1 ON THE PROXY CARD, YOUR SHARES WILL BE VOTED "FOR" FIXING
THE NUMBER OF DIRECTORS AT TEN AND ELECTING THE NOMINEES NAMED IN THIS PROXY
STATEMENT.
The second item is a proposal to approve the EG&G, Inc. 1992 Stock Option
Plan, as amended. With respect to Item No. 2, you are provided the opportunity
to vote for or against adopting the
EG&G, Inc., Corporate Offices
45 William St., Wellesley, Massachusetts 02181
(617)237-5100
1
<PAGE> 5
proposal or to abstain from voting. Your shares will be voted as you indicate,
or not voted if you abstain. IF YOU DO NOT MAKE AN INDICATION CONCERNING THIS
ITEM, YOUR SHARES WILL BE VOTED "FOR" ITEM NO. 2.
Management does not anticipate a vote on any other proposal at the Annual
Meeting. In the event, however, that another proposal is properly brought before
the Meeting, your shares will be voted in accordance with the discretion of the
named proxies.
EG&G's Annual Report to Stockholders for 1996 has already been mailed to
its stockholders or is enclosed herewith. It should not be considered either as
part of this Proxy Statement or as incorporated herein by reference.
VOTES REQUIRED
The affirmative vote of the holders of a plurality of the votes cast at the
Meeting is required for the election of Directors. The affirmative vote of the
holders of a majority of the shares of Common Stock present or represented at
the Meeting is required for the approval of the EG&G, Inc. 1992 Stock Option
Plan, as amended.
Shares of Common Stock represented by executed proxies received by the
Company will be counted for purposes of establishing a quorum at the Meeting,
regardless of how or whether such shares are voted on any specific proposal.
Shares which abstain from voting as to a particular matter will nonetheless be
treated as present or represented at the Meeting with respect to such matter.
Accordingly, abstentions will have no effect on the voting for the election of
Directors, but will have the same effect as a vote against the approval of the
EG&G, Inc. 1992 Stock Option Plan, as amended. Shares held by nominee record
holders who did not receive specific instructions from the beneficial owners of
such shares and thus are not voted with respect to a particular matter will not
be treated as present or represented at the Meeting with respect to such matter.
Accordingly, such nominee "non-votes" will have no effect on the voting for
either the election of Directors or the approval of the EG&G, Inc. 1992 Stock
Option Plan, as amended.
ITEM NO. 1
ELECTION OF DIRECTORS
The Articles of Organization and By-Laws of EG&G provide that the number of
Directors, not less than three nor more than thirteen, shall be fixed by the
stockholders. The Articles of Organization and By-Laws, as amended in 1996,
provide that at each Annual Meeting of Stockholders, commencing with the Annual
Meeting of Stockholders in 1996, the successors of the Directors whose terms
expire in that year shall be elected for a one-year term. There are, at present,
eleven Directors of the Company. The terms of nine of the Directors expire at
this year's Annual Meeting and the terms of the remaining two Directors expire
at the Annual Meeting in 1998. Fred B. Parks resigned from his position as
President and Chief Operating Officer of the Company effective January 10, 1997.
His term as a Director will expire at this year's Annual Meeting. Messrs. Pounds
and Goldhammer have announced that they will retire from the Board at this
year's Annual Meeting.
The Board of Directors has declared it advisable that the number of
Directors be fixed at ten and has nominated the following persons for election
as Directors for one-year terms expiring at the Annual Meeting in 1998:
TAMARA J. ERICKSON GRETA E. MARSHALL
KENT F. HANSEN MICHAEL C. RUETTGERS
JOHN F. KEANE JOHN LARKIN THOMPSON
NICHOLAS A. LOPARDO G. ROBERT TOD
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" FIXING THE NUMBER OF DIRECTORS
AT TEN AND FOR ELECTING THE EIGHT NOMINEES NAMED ABOVE FOR TERMS OF ONE YEAR
EACH.
It is intended that the shares represented by proxies will be voted to fix
the number of Directors at ten and for the election of the eight nominees
(unless one or more of the nominees is unwilling or unable to serve) for terms
of one year each, unless a contrary vote is indicated on the proxy cards. The
Board of Directors knows of no reason why any nominee should be unable or
unwilling to serve, but if such should be the case, the persons named as proxies
in the Proxy may vote for the election of a substitute. In no event will shares
represented by proxies be voted for more than eight nominees. To apprise you of
the qualifications of the Directors, we are including information concerning the
nominees and the two incumbent Directors whose terms of office expire in 1998.
NOMINEES FOR DIRECTOR FOR A ONE-YEAR TERM EXPIRING IN 1998
TAMARA J. ERICKSON: Age 42; Principal Occupation: Head of U.S. Consulting for
P.A. Consulting Group, a management and technology consulting company. Elected a
Member of the Board of Directors of EG&G in 1995. Member of the Audit Committee
and the Nominating Committee of the Board of Directors.
Ms. Erickson joined P.A. Consulting Group which is headquartered in London, U.
K., in 1996 with responsibility for building the firm's business in the United
States. Prior to joining P.A. Consulting Group, she was a Senior Vice President
of Arthur D. Little, Inc., a company with which she had been associated since
1978. From 1991 to 1995, Ms. Erickson served as a Managing Director of Arthur D.
Little, Inc. with direct line management responsibility for all the firm's
management consulting business in North America, including strategy and
organization, information systems, and operations management consulting
services. Ms. Erickson is the co-author of the book, Third Generation R&D:
Managing the Link to Corporate Strategy, published in 1991. She holds a BA
degree in Biological Sciences from the University of Chicago and an MBA from the
Harvard Graduate School of Business Administration. Ms. Erickson is a Director
of Allergan, Inc., Irvine, California, and an Overseer of the Boston Ballet.
KENT F. HANSEN: Age 65; Principal Occupation: Professor of Nuclear Engineering
at the Massachusetts Institute of Technology, Cambridge, Massachusetts. Director
of EG&G continuously since 1979. Chairman of the Nominating Committee and a
Member of the Audit Committee and the Corporate Governance Committee of the
Board of Directors.
Kent F. Hansen, a Professor of Nuclear Engineering at the Massachusetts
Institute of Technology, first joined the M.I.T. faculty as an Assistant
Professor in 1961. He is a former research scholar of M.I.T., from which he
graduated in 1953 with a degree in physics. Dr. Hansen also received his Sc.D.
degree in nuclear engineering from that institution. An authority in the field
of nuclear reactor physics, reactor safety analysis, and nuclear fuel
management, Dr. Hansen is the author of many scientific and technical
publications and the co-author of a book entitled "Numerical Methods of Reactor
Analysis." A former director of the American Nuclear Society, Dr. Hansen has
served as consultant to several electric utilities and nuclear reactor
manufacturers, to the Department of Energy, and to the Nuclear Regulatory
Commission. Dr. Hansen was nominated by former President Carter in 1977 to serve
as a commissioner of the Nuclear Regulatory Commission. In 1978, Dr. Hansen
received the American Nuclear Society's Arthur Holly Compton Award for
outstanding contributions to education in the fields of nuclear science and
engineering. Dr. Hansen is Chairman of the Board of Directors of Stone &
Webster, Inc. He is also a Member of the National Academy of Engineering.
JOHN F. KEANE: Age 65; Principal Occupation: President and Chief Executive
Officer and Director of Keane, Inc., a public corporation based in Boston,
Massachusetts, that designs, develops and maintains computer software for
corporations and hospitals.
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Mr. Keane founded Keane, Inc., in 1965. Prior to starting the company, Mr. Keane
worked for IBM, and was a marketing and management consultant for Arthur D.
Little. He is a graduate of Harvard University and received his MBA from Harvard
Business School. Mr. Keane is an active member of ITAA (Information Technology
Association of America), the national computer software and services trade
association, having previously served as Chairman of that organization, and is a
member of the Mass High Tech Council. He presently serves as a Trustee of the
Massachusetts Software Council, Inc. He is a member of Governor Weld's Council
on Economic Growth and Technology, is a member of the Board of The Center for
Quality of Management, and is on the Board of Overseers of Beth Israel Deaconess
Medical Center. In 1994, Mr. Keane became Chairman of the Board of Governors of
the New England Aquarium.
NICHOLAS A. LOPARDO: Age 50; Principal Occupation: Executive Vice President of
State Street Bank and Trust Company and Chairman and Chief Executive Officer of
State Street Global Advisors, the Bank's investment management group. Elected a
Member of the Board of Directors of EG&G in 1996. Member of the Audit Committee
and the Benefit Plans Investment Committee of the Board of Directors.
Mr. Lopardo joined the Asset Management Division of State Street Bank and Trust
Company in January 1987. In September of 1990, he was promoted to Executive Vice
President of the Bank and Chief Executive Officer of State Street Global
Advisors with responsibility for the Company's investment management businesses.
Mr. Lopardo is also a member of the Senior Executive Group at State Street Bank
and Trust Company which is responsible for setting the policy direction of the
Bank. Prior to joining State Street Bank and Trust Company, Mr. Lopardo served
as Senior Vice President of sales, marketing and pension advisory services with
Equitable Life Assurance Society in New York. Mr. Lopardo has over 28 years of
experience in the pension industry, having served in a variety of roles with
Equitable related to pension marketing, client relationships, and Equitable's
pension investment advisory services. He is a 1968 graduate of Susquehanna
University with a BS in marketing and management and is a member of the Board of
Directors of the University and the Investment, Property and Finance, and
Executive Committees of that Board. He is also Chairman of the Advisory Board of
the Weis Business School at Susquehanna University and Chairman of the Board of
the Landmark School, the premier secondary school for dyslexic students. Mr.
Lopardo is also a Board Member of the Boston Stock Exchange and of the Whitehead
Institute for Biomedical Research.
GRETA E. MARSHALL, CFA: Age 59; Principal Occupation: Principal and founder of
The Marshall Plan, a financial investment company. Director of EG&G continuously
since 1990. Chairman of the Benefit Plans Investment Committee and a Member of
the Compensation and Stock Option Committee of the Board of Directors.
Ms. Marshall manages The Marshall Plan, a financial investment company she
founded in 1988, with offices in Concord, Massachusetts and Incline Village,
Nevada. She has thirty-five years of experience in financial analysis, research,
and investment. From 1974 to 1984, she was Director, Investments, Deere &
Company, Moline, Illinois. She was President of Baybanks Investment Management
in 1984 and 1985 and Investment Manager of the California Public Employees
Retirement System from 1985 to 1988. Ms. Marshall is a member of the Board of
Directors of Hysec, Inc. Ms. Marshall holds Bachelor of Arts and Master of
Business Administration degrees from the University of Louisville. She is a
Member of the Editorial Board of CFA Digest, member of the Candidate Curriculum
Committee and is a Trustee of the AIMR Investment Management Workshop. Ms.
Marshall is also a Trustee of the Financial Accounting Foundation.
MICHAEL C. RUETTGERS: Age 54; Principal Occupation: President and Chief
Executive Officer and Director of EMC Corporation, a company based in Hopkinton,
Massachusetts, specializing in information storage and retrieval.
Mr. Ruettgers became President and Chief Executive Officer of EMC Corporation in
January 1992. From 1989 to 1991 Mr. Ruettgers held the positions of President
and Chief Operating Officer. He
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joined the company in 1988 as Executive Vice President of Operations and
Customer Service. Before joining EMC Corporation, Mr. Ruettgers spent much of
his career with Raytheon Company. During his 13 years at Raytheon, Mr. Ruettgers
played a key role in the Patriot Missile program while at Raytheon's Missile
Systems Division. In 1981 he joined Boston-based Keane, Inc., a software
development company where he was Senior Vice President. Following his work with
Keane, Inc., Mr. Ruettgers became Chief Operating Officer of Technology
Financial Services where he advised companies such as IBM, AT&T and the regional
Bell operating companies. Mr. Ruettgers holds a BS from Idaho State University
and an MBA from Harvard Business School. He is a Director of Commonwealth Energy
Systems and Crosscom Corporation.
JOHN LARKIN THOMPSON: Age 66; Principal Occupation: Of Counsel to Nutter,
McClennen & Fish, a Boston, Massachusetts law firm. Director of EG&G
continuously since 1986. Member of the Benefit Plans Investment Committee and
the Corporate Governance Committee of the Board of Directors.
Mr. Thompson served as President and Chief Executive Officer of Blue Cross &
Blue Shield of Massachusetts, Inc. from 1988 to his retirement in 1992. He
served as President of Blue Shield of Massachusetts, Inc. and Blue Cross of
Massachusetts, Inc. from 1970 and 1987, respectively, until December 30, 1988
when those two companies merged. Prior to his service with Blue Cross and Blue
Shield, Mr. Thompson was an associate and then partner with the Boston law firm
of Palmer & Dodge. He holds a Bachelor of Science degree from Villanova
University, Master of Science degree from Columbia University Graduate School of
Business, and a Juris Doctor (cum laude) from Boston University School of Law
and is a Member of the Massachusetts and Boston Bar Associations. Mr. Thompson
retired from the United States Naval Reserve in 1976 as a Commander. He is a
Trustee and former Chairman of the New England Aquarium, Director and former
Chairman of the Artery Business Committee, and Trustee of Emmanuel College. He
also served as Chairman of the United Way of Massachusetts Bay and Chairman of
the Massachusetts Port Authority. He currently serves as a Director of several
other civic and charitable organizations.
G. ROBERT TOD: Age 57; Principal Occupation: President and Chief Operating
Officer and Director of the CML Group, Inc., a specialty marketing company.
Director of EG&G continuously since 1984. Member of the Executive Committee and
the Nominating Committee and Chairman of the Compensation and Stock Option
Committee of the Board of Directors.
Mr. G. Robert Tod is a 1961 graduate of Rensselaer Polytechnic Institute with a
Bachelor's degree in Mechanical Engineering and a 1967 graduate of the Harvard
Business School MBA Program. Mr. Tod is co-founder of the CML Group, Inc. and
has served as its President and Chief Operating Officer from 1969 to the
present. Mr. Tod is a Director of SCI Systems, Inc., and is a Trustee of
Rensselaer Polytechnic Institute and of Emerson Hospital.
DIRECTORS WHOSE TERMS EXPIRE IN 1998
JOHN M. KUCHARSKI: Age 61; Principal Occupation: Chairman of the Board,
President and Chief Executive Officer of EG&G. Mr. Kucharski has been a Director
of the Company since 1986 and is a Member of the Executive Committee of the
Board of Directors. He joined the Company in 1972 when Challenger Research,
Inc., a firm he co-founded in 1965, was acquired by EG&G. Mr. Kucharski was
elected a Vice President of the Company in 1979, a Senior Vice President in
1982, and Executive Vice President in 1985. He was promoted to the position of
President and Chief Operating Officer in 1986, was named to the position of
Chief Executive Officer in 1987, and elected Chairman of the Board in 1988. He
is a Director of Nashua Corporation, New England Electric System, State Street
Boston Corporation, and Eagle Industry Co., Ltd. He serves on the Board of
Trustees of Marquette University and George Washington University.
JOHN B. GRAY: Age 69; Principal Occupation: Retired President and Director of
Dennison Manufacturing Company, a subsidiary of Avery Dennison Corporation, a
diversified manufacturer
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serving worldwide markets for office products, industrial systems, packaging,
and pressure-sensitive base materials. Mr. Gray has been a Member of the Board
of Directors of EG&G since 1983 and is a Member of the Executive Committee, the
Corporate Governance Committee, and the Nominating Committee of the Board of
Directors. He also serves as a Director of the Liberty Mutual Insurance
Companies, Liberty Financial Co., the Stackpole Corporation, the New England
Shelter for Homeless Veterans and the Executive Service Corps of New England.
Mr. Gray is a Trustee of Wentworth Institute of Technology and the New England
Aquarium.
INFORMATION RELATIVE TO THE BOARD OF DIRECTORS
AND CERTAIN OF ITS COMMITTEES
A formal Audit Committee of the Board of Directors was created in 1971. The
present Committee, which met four times in 1996, is composed of four
Directors -- Messrs. Goldhammer (Chairman), Hansen and Lopardo and Ms. Erickson.
The responsibilities of the Audit Committee are (1) to recommend the
particular persons or firm to be employed by the Company as its independent
auditor; (2) to consult with the persons so chosen to be the independent auditor
with regard to the plan of audit; (3) to review, in consultation with the
independent auditor, its report of audit or proposed report of audit, and the
accompanying management letter, if any; and (4) to consult periodically with the
independent auditor with regard to the adequacy of internal controls and, if the
Committee so chooses, to consult with the internal auditors, the Chief Financial
Officer, the Corporate Controller, the Treasurer and other officers and
employees as the Committee may deem appropriate.
The Compensation and Stock Option Committee of the Board of Directors,
which met three times in 1996, is composed of three Directors -- Messrs. Tod
(Chairman), Pounds and Ms. Marshall. The Committee reviews and approves the
salaries and incentive compensation of the Chairman of the Board, the Chief
Executive Officer, the President, and the Executive and Senior Vice Presidents.
The Committee also reviews and approves the management incentive plans of the
Company and its subsidiaries, administers the stock option plans adopted by the
Company, and reviews and approves such other employment and compensation matters
as it deems necessary and proper.
The Corporate Governance Committee of the Board of Directors, which met
twice in 1996, is composed of four Directors -- Messrs. Pounds (Chairman), Gray,
Hansen and Thompson. The Committee examines and defines the Board of Directors'
role in corporate governance, formulates policy to deal with and be responsive
to shareholder concerns, and formulates guidance, for management action, to deal
with evolving social issues, both internal and external to the organization.
A Nominating Committee of the Board of Directors was created in 1991. The
present Committee, which met three times in 1996, is composed of four
Directors -- Messrs. Hansen (Chairman), Tod and Gray and Ms. Erickson. The
Committee establishes criteria for nomination or renomination as a Director,
develops procedures for the nomination or renomination process, and identifies
and recommends candidates for nomination to the Board of Directors. Any
stockholder desiring to submit a candidate for consideration by the Nominating
Committee should send sufficient biographical data and background information
concerning the candidate to enable a proper judgment as to the candidate's
qualifications, together with any other relevant information, to: Chairman of
the Nominating Committee, c/o EG&G, Inc., 45 William Street, Wellesley, MA
02181.
A Benefit Plans Investment Committee of the Board of Directors was created
in October of 1991. The present Committee, which met twice in 1996, is composed
of four Directors -- Ms. Marshall (Chairman) and Messrs. Goldhammer, Thompson
and Lopardo. The Committee reviews the investment of funds held in the Company's
employee benefit plans.
The Board of Directors also has an Executive Committee composed of three
Directors -- Messrs. Kucharski, Gray and Tod. The Committee, which acts as
needed during intervals between
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Board meetings, has been delegated with all the powers of the Board except those
powers which by law, the Articles of Organization or the By-Laws of the Company,
the Board of Directors is prohibited from delegating. With the exception of the
Executive Committee, all Committees of the Board of Directors are comprised of
non-employee Directors.
MEETINGS
The Board of Directors met seven times in 1996. All Directors attended at
least 75 percent of the aggregate number of meetings of the Board of Directors
and the committees of the Board on which they respectively served.
DIRECTOR COMPENSATION
Directors who are employees of the Company receive no additional
compensation for their services as Directors. Directors who are not employees of
the Company are paid an annual retainer fee of $12,000 and $1,000 for each
meeting of the Board that they attend. Additionally, the Chairmen of the Audit,
Compensation and Stock Option, Corporate Governance, Nominating, and Benefit
Plans Investment Committees receive $4,000 per year and the other non-employee
members of these Committees receive $3,000 per year. All non-employee members of
these Committees receive $1,000 for each Committee meeting that they attend
unless the Committee meeting is held on the same day as a Board of Directors'
meeting, in which case, the Committee member receives $500.
The EG&G, Inc. 1990 Director Stock Plan provides that on each January 31,
non-employee Directors who served for the preceding calendar year shall receive
800 shares of Common Stock (with a pro-rated number of shares issued to
Directors who served for only a portion of such year). If a Director fails to
attend at least 75 percent of the aggregate number of meetings of the Board and
the committees on which the Director served during the preceding year, the
number of shares of Common Stock will be reduced to 400 shares and no shares
will be issued if a Director fails to attend at least 50 percent of such
meetings. In accordance with the Director Stock Plan, in February of 1997, each
of the eight non-employee Directors who served as Directors for the entire 1996
calendar year received 800 shares of Common Stock, with a fair market value to
each such Director at that time of $17,050. Mr. Lopardo, elected to the Board at
the 1996 Annual Meeting, received 600 shares of Common Stock, with a fair market
value to him at that time of $12,788. Mr. Rubinovitz, who retired from the Board
in April of 1996, received 200 shares with a fair market value of $4,263.
The Company terminated its Deferred Compensation Plan for non-employee
Directors effective December 31, 1995. The termination does not affect any
rights of non-employee Directors that had vested as of such termination date.
The Plan provided for an annual payment to be made by the Company to the
eligible Director or his or her estate in an amount equal to 100 percent of the
Director's annual retainer fee in effect at the time the Director's service on
the Board ceased due to death, retirement, or resignation. Under the Plan as
terminated, annual payments will be made to any non-employee Director in office
as of December 31, 1995, upon his or her death, retirement, or resignation from
the Board for the greater of five years or the number of years the Director
served on the Board as of December 31, 1995.
The Company also has established the EG&G, Inc. Directors Charitable
Contribution Program for certain non-employee Directors. To be eligible under
the program, the Director must be a non-employee Director with no previous
employment with the Company and have either been a member of the Company's Board
of Directors as of January 1, 1992 or have otherwise completed five years of
service on the Board. Under this program, the Company will contribute, upon the
death of an eligible Director, a total of $1,000,000 to one or more qualifying
charitable organizations named by the Director. The program is funded through a
life insurance policy on each such eligible Director, with the life insurance
proceeds payable to EG&G.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
<TABLE>
The following table identifies the only persons known to the Company to be
beneficial owners of five percent or more of the outstanding shares of Common
Stock. The information in this table and the footnotes is taken from a Schedule
13G dated January 13, 1997, filed by The Regents of the University of California
and a Schedule 13G dated February 7, 1997, filed by FMR Corp. with the
Securities and Exchange Commission.
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE
OF BENEFICIAL OF BENEFICIAL PERCENT OF
OWNER OWNERSHIP(1) CLASS
- ----------------------------------------------------------------------------------
<S> <C> <C>
The Regents of the University of California
300 Lakeside Drive
Office of the Treasurer
Oakland, CA 94612 3,343,000(2) 7.06%
FMR Corp.
82 Devonshire Street
Boston, MA 02109 4,889,587(3) 10.33%
</TABLE>
NOTES
(1) There are no shares included with respect to which such persons have a right
to acquire beneficial ownership.
(2) The Schedule 13G filed by The Regents of the University of California states
that it has sole voting power and sole dispositive power over 3,343,000
shares.
(3) The Schedule 13G filed by FMR Corp. states that FMR Corp. has sole
dispositive power with respect to 4,889,587 shares of which 4,642,562 shares
are held by various investment companies to which a wholly-owned subsidiary
of FMR Corp., Fidelity Management and Research Company, acts as investment
adviser and 247,025 are held by Fidelity Management Trust Company, a
wholly-owned subsidiary of FMR Corp., and has sole voting power and sole
dispositive power with respect to 221,325 shares held by Fidelity Management
Trust Company, which serves as investment manager of the institutional
account(s).
8
<PAGE> 12
SECURITY OWNERSHIP OF MANAGEMENT
<TABLE>
The following table shows the number of shares of Common Stock owned of
record or beneficially (including unexercised stock options exercisable within
60 days) on February 3, 1997, (i) by each of the Directors and nominees for
Director individually, (ii) by each of the executive officers named in the
Summary Compensation Table, and (iii) by all of the executive officers,
Directors, and nominees for Director as a group. No Director, nominee for
Director, or executive officer of the Company owned any equity securities of the
Company other than Common Stock on that date.
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME BENEFICIAL OWNERSHIP OF CLASS
- ----------------------------------------------------------------------
<S> <C> <C>
John M. Kucharski(1)(2) 386,926 *
Fred B. Parks(1)(2) 82,461 *
Angelo D. Castellana(1)(2) 68,081 *
Luciano S. Rossi(1)(2) 78,447 *
C. Michael Williams(1)(2) 108,346 *
Tamara Erickson 800 *
Robert F. Goldhammer 15,600 *
John B. Gray 13,400 *
Kent F. Hansen 5,600 *
John F. Keane 0 *
Nicholas A. Lopardo 600 *
Greta E. Marshall 5,400 *
William F. Pounds 15,900 *
Michael C. Ruettgers 100 *
John Larkin Thompson 8,400 *
G. Robert Tod 10,600 *
All executive officers, Directors,
and nominees for Director of the
Company as a Group, 26 in number,
including those listed above(1)(2) 1,128,904 2.39%
- ---------------
<FN>
* Less than 1%
</TABLE>
NOTES
(1) The amounts shown as beneficially owned by Messrs. Kucharski, Parks,
Castellana, Rossi, and Williams, and by all executive officers, Directors,
and nominees for Director as a group, include 320,500, 76,600, 62,800,
72,300, 77,200, and 868,500 shares, respectively, which are obtainable
within 60 days only upon exercise of, and payment for, outstanding,
unexercised stock options.
(2) Owners of all shares shown have sole voting and investment power except
Messrs. Kucharski, Parks, Castellana, Rossi, and Williams and certain
executive officers of EG&G, not identified by name in the above Table, as a
group, who share investment and/or voting power over 32,226 shares, 6
shares, 1,000 shares, 6,147 shares, 21,546 shares, and 3,600 shares,
respectively. The number of shares stated as being owned beneficially
includes shares held beneficially by spouses, minor children, and certain
trusts; the inclusion of such shares in the Proxy Statement, however, does
not constitute an admission that the executive officers, Directors, or
nominees for Director are direct or indirect beneficial owners of such
shares.
9
<PAGE> 13
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation and Stock Option Committee (Committee) of the Board of
Directors is composed of three independent outside Directors. The Committee's
report on executive compensation follows.
OVERALL PHILOSOPHY
The Company's overall executive compensation philosophy is based on the
premise that compensation should be aligned with and support the Company's
business strategy and long-term initiatives, enhance shareholder value and be
competitive with that offered by comparable companies. Under the guidance of the
Committee, compensation policies have been designed which link executive
compensation to the attainment of the Company's specific goals. These policies
also allow the Company to attract and retain those senior executives critical to
the long-term success of a highly diversified organization by providing a
competitive compensation package and recognizing and rewarding individual
contributions. The key elements of the Company's executive compensation are base
salary, annual incentive awards, and stock options.
BASE SALARY
Each year, the Committee reviews and establishes the base salary of the
Chief Executive Officer based on the Company's performance, as measured by a
combination of factors consisting principally of sales, earnings per share
growth, return on equity, return on capital (EVA) and on a comparison to
executive compensation in other companies as revealed by the surveys referred to
below. The Committee also reviews, approves or modifies, as deemed appropriate
by the Committee, a salary plan recommended by the Chief Executive Officer and
the Vice President of Human Resources for the positions of President, Executive
Vice President and Senior Vice President. This plan, developed by the Human
Resources staff, is based on the performance of each such Officer while taking
into consideration the Company's performance as measured by the factors
described above.
Two national surveys are used to provide general overall guidance with
respect to compensation levels. The surveys show the varied percentile base and
total compensation for selected officer positions for companies comparable in
revenue size to EG&G. Generally, the compensation levels of EG&G officers are
comparable with those for similar positions within the companies included in the
above-mentioned surveys.
After a three-year salary freeze for all officers, in accordance with the
Company's policy to pay competitive salaries, the base salaries of most officers
were increased in January of 1994 and in April of 1995. Mr. Kucharski's base
salary was increased to $650,000 per year in January 1994 and has remained at
this level throughout 1995 and 1996. His recommendation that he not receive a
salary increase in 1997 has been accepted by the Committee.
INCENTIVE COMPENSATION
EG&G maintains an Economic Value Added ("EVA") Incentive Plan (the "Plan",
or "EVA Plan"), the purpose of which is to provide incentive compensation to
certain key employees. Mr. Kucharski and most officers, including the other
executive officers named in the Summary Compensation Table, are participants in
the EVA Plan. Although the EVA Plan is the primary source of bonuses for
officers, the Committee may award additional bonuses to selected officers
outside of the EVA Plan in circumstances in which the Committee determines that
an additional bonus determined on a different basis is appropriate.
Bonuses under the EVA Plan are based on the additional shareholder value
created. For purposes of the Plan, shareholder value is created when the Company
earns a return in excess of the cost of the capital employed. EG&G calculates
its EVA by taking its net operating profit after tax and subtracting a capital
charge. The capital charge is the result of the capital employed by the Company
multiplied by the Company's weighted average cost of capital.
10
<PAGE> 14
Each EVA Plan participant is assigned a target incentive, expressed as a
percentage of base salary ranging between 5% and 60%, which represents the
amount of the incentive award if EVA performance targets are met. The EVA
performance targets are based on the participant's business unit. Thus, the
performance targets may be based on Division, Segment and/or Consolidated
performance depending on the participant's degree of responsibility. Performance
targets in the future will be based on Division and/or Consolidated performance
given the corporate realignment effective January 1, 1997. The actual incentive
award is determined by multiplying the target incentives by a formula
performance factor based upon actual EVA performance compared to the target
performance. The performance factor will be greater than one if the EVA target
is exceeded and will be less than one or even negative if the EVA target is not
met. There is no cap and no floor on the incentive award.
The incentive awards declared in a year for certain employees may not be
completely paid out in the following year. Instead, a percentage of the annual
incentive awards of all Company officers, general managers, and certain highly
compensated employees remains in an "at risk" reserve account. With respect to
such employees, the Company will make distribution first, to the extent
possible, from the declared incentive and then the reserve balance. The
remaining portion, if any, of the declared incentive for the fiscal year will be
added to the incentive reserve and the remaining reserve balance will be carried
forward to the next fiscal year.
The prescribed distribution ratios for the incentive reserve for such
employees are:
<TABLE>
<S> <C>
1996 80%
1997 67%
1998 57%
1999 & Beyond 50%
</TABLE>
All distributions from the incentive reserve shall be made on a last-in,
first-out basis, such that the distribution for any given fiscal year shall come
first from the declared incentive for that fiscal year, with any remainder of
that distribution coming from the reserve balance attributable to years prior to
the fiscal year for which the current distribution is being made.
Amounts in the reserve account can be lost if performance in subsequent
years is so far below target that a negative award results. Thus, it is possible
for the reserve account to have a negative balance, although plan participants
are not required to reimburse the Company for negative balances in the reserve
account or for negative awards. In the case of retirement, disability or death,
the balance in the reserve account will be paid to the participant. The reserve
account will be forfeited (unless determined otherwise by the Company) in the
case of voluntary or involuntary termination and will be forfeited for breach of
any noncompetition agreement. If there is a Change in Control of the Company (as
defined in the EVA Plan), the Plan will terminate and all positive balances in
reserve accounts will be distributed unless the Plan is continued on no less
beneficial terms to the participants.
Individual performance factors allow managers to adjust a participant's
final incentive awards up or down by 25% based upon their discretionary
assessment of performance. These adjustment factors are limited to participants
with target incentive percentages of 5% - 30% of salary.
In 1996, Mr. Kucharski's target bonus was 60% of base salary. His target
EVA was based on Consolidated performance. For 1996 the actual Consolidated EVA
showed improvement over 1995 but was less than his target EVA. As a result, he
received an EVA award of $234,400 which represents 60% of the target bonus.
STOCK OPTIONS
Many studies indicate a correlation between stock ownership and
performance. Under the Company's Stock Option Plans, stock options are granted
to the Company's senior executives following guidelines established by the
Committee. These guidelines are based primarily on competitive industrial
practice as revealed by a long-term executive compensation survey covering a
large number of public companies in a variety of industries in which the Company
participates. The
11
<PAGE> 15
survey data show that the normal stock option award is a multiple of base
salary. Beginning in 1991, the Committee began to use the Black-Scholes option
pricing method as the basis for determining the value of the option grants. This
method takes into consideration a number of factors including the stock's
volatility, dividend rate, option term, and interest rates to estimate the
option's present value. Mr. Kucharski was granted an option on 75,000 shares in
January 1996 for performance in 1995 and another 75,000 shares in December 1996
for performance in 1996 based on the survey data and the application of the
Black-Scholes option pricing method.
Stock options are classified as long-term incentives and are intended to
link the long-term interests of the executive with those of the stockholder.
Stock options will provide value to the optionee only when the price of EG&G
stock increases above the option price. All options are granted with an exercise
price equal to the fair market value on the date of the grant.
STOCK OWNERSHIP PROGRAM BY OFFICERS AND GENERAL MANAGERS
The Committee has determined that in order to further align management and
shareholder interests, EG&G stock ownership by EG&G officers and general
managers should be significant relative to each officer's and general manager's
base salary. The market value of EG&G stock expected to be owned by the
Company's officers and general managers is as follows:
CEO 2 times base salary
Executive Vice Presidents 1 1/2 times base salary
Senior Vice Presidents 1 1/2 times base salary
Other Officers 1 times base salary
General Managers 1/2 times base salary
Those officers who do not presently have such ownership are expected to
attain the ownership by the later of January 1, 2000 or four years after their
election to the specified officer position. General managers are expected to
attain the ownership by the later of January 1, 2001 or four years after their
selection to the specified general manager position.
SECTION 162(m)
Section 162(m) of the Internal Revenue Code which became effective January
1, 1994 generally limits the deductibility of annual compensation for certain
officers to $1 million. It is the general intention of the Committee to assure
that officer compensation will meet the Section 162(m) requirements for
deductibility. However, the Committee reserves the right to use its judgment to
authorize compensation payments which may be in excess of the limit when the
Committee believes such payment is appropriate, after taking into consideration
changing business conditions or the officer's performance, and is in the best
interest of the stockholders. This year the Committee has recommended that the
EG&G, Inc. 1992 Stock Option Plan be amended and that the Plan as amended be
submitted for approval by the stockholders at the 1997 Annual Meeting so that
compensation attributable to option grants made under the Plan may be deemed
qualified performance-based compensation and therefore not subject to the
Section 162(m) $1 million deduction limit. The Plan as amended is discussed more
fully under Item No. 2 of this Proxy Statement. The Committee will review its
policy concerning Section 162(m) on a year by year basis.
COMPENSATION AND STOCK OPTION COMMITTEE
G. Robert Tod (Chairman)
William F. Pounds
Greta E. Marshall
12
<PAGE> 16
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total shareholder
return on the Company's Common Stock against the cumulative total return of the
S&P Composite-500 Stock Index and the S&P Technology-500 Index (name changed
from S&P High Technology Composite Index) for the period of five fiscal years
commencing December 30, 1991 and ended December 29, 1996.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
EG&G, INC. COMMON STOCK, S&P COMPOSITE-500 AND
S&P TECHNOLOGY-500 INDICES
<TABLE>
TOTAL RETURN TO SHAREHOLDERS
REINVESTED DIVIDENDS
<CAPTION>
Measurement Period S&P Composite-500 S&P Technology-500
(Fiscal Year Covered) EG&G, Inc. Index Index
<S> <C> <C> <C>
Dec. 1991 100.00 100.00 100.00
Dec. 1992 80.61 107.62 104.13
Dec. 1993 77.43 118.46 128.09
Dec. 1994 61.60 120.03 149.29
Dec. 1995 109.41 165.13 215.04
Dec. 1996 93.40 203.05 305.07
- ---------
<FN>
* Assumes that the value of the investment in EG&G, Inc. Common Stock and each
index was $100 on December 29, 1991 and that all dividends were reinvested.
</TABLE>
13
<PAGE> 17
The following table sets forth information concerning the annual and
long-term compensation for services to the Company for the 1994, 1995, and 1996
fiscal years, of (i) the chief executive officer during 1996, and (ii) the other
four most highly compensated executive officers of the Company for 1996 who were
serving as executive officers as of December 29, 1996.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL ---------------------------------
COMPENSATION AWARDS PAYOUTS
- ------------------------------------------------------------------------------------------------------------------
OTHER ALL
ANNUAL RESTRICTED SECURITIES OTHER
COMPEN- STOCK UNDERLYING LTIP COMPEN-
NAME AND SALARY BONUS SATION(2) AWARD(S) OPTIONS PAYOUTS SATION(4)
PRINCIPAL POSITION YEAR $ ($)(1) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------
John M. Kucharski 1996 650,000 234,000 150,000(3) 26,097
Chairman of the Board, 1995 650,000 491,400 0 30,714
President and 1994 647,885 0 75,000 33,434
Chief Executive Officer
Fred B. Parks 1996 382,522 114,757 125,000(3) 4,950
former President and 1995 334,984 211,040 0 3,371
Chief Operating Officer 1994 333,350 0 35,000 3,300
(resigned eff. 1/10/97)
Angelo D. Castellana 1996 234,623 221,719 39,000(3) 11,305
Vice President 1995 219,626 146,600 0 5,043
1994 209,976 25,000 15,000 4,950
Luciano S. Rossi 1996 241,923 119,752 38,000(3) 4,950
Vice President 1995 220,000 175,725 0 5,026
1994 220,000 17,400 17,500 4,950
C. Michael Williams 1996 250,016 85,318 20,500(3) 12,622
Vice President 1995 250,016 168,761 0 14,079
1994 249,439 37,300 19,000 15,026
NOTES
(1) A percentage of each of the incentive awards for 1995 and 1996 set forth in
the Bonus Column for the named executive officers is held in an "at risk"
reserve account in accordance with the provisions of the EVA Incentive Plan.
See "Board Compensation Committee Report on Executive Compensation".
(2) Perquisites and other personal benefits did not in the aggregate exceed the
lesser of $50,000 for any named executive officer or 10 percent of the total
of annual salary and bonus reported in this table for such executive.
(3) This number includes 75,000, 50,000, 17,000, 17,500, and 19,000 shares of
EG&G stock underlying options that were granted in January of 1996 with
respect to performance in 1995.
(4) This column includes the actuarial benefit to the named executive officer of
the split-dollar life insurance policy established in 1991 and the Company's
contribution to the EG&G, Inc. Savings Plan. The actuarial benefit of the
split-dollar life insurance to Messrs. Kucharski, Parks, Castellana, Rossi,
and Williams is $21,147, $0, $6,355, $0, and $7,672 respectively. The
Company makes no contribution to the term life portion of the split-dollar
life insurance premium. The named executive officer contributes an amount
each year to the split-dollar life insurance policy equal to the cost of the
term life insurance under the policy. The amount reported in the column for
1996 for Messrs. Kucharski, Parks, Castellana, Rossi, and Williams includes
$4,950 as the Company's contribution to the EG&G, Inc. Savings Plan for each
of the aforementioned executives.
</TABLE>
14
<PAGE> 18
PENSION PLANS
EMPLOYEES RETIREMENT PLAN
The Company and its subsidiaries maintain several basic retirement plans
for the benefit of their employees, including officers. All of the executive
officers, including all of the five highest compensated executive officers,
participate in the EG&G, Inc., Employees Retirement Plan (the "Retirement
Plan"), the principal features of which are as follows.
Subject to maximum benefit limitations prescribed by law, a participant
will be entitled to receive an annual payment equal to the sum of 0.85 percent
of the participant's Final Average Earnings (the average of the employee's base
salary for the five consecutive highest-salaried years out of the last ten years
of credited service with the Company) multiplied by the number of years of
credited service with the Company plus 0.75 percent of the excess of such
earnings over the Social Security Tax Base multiplied by the number of years of
credited service (not in excess of 35) with the Company. All of the employees of
EG&G, Inc. who participate in the Retirement Plan are required to either
complete five years of service or reach their normal retirement date before they
have a vested interest in the Retirement Plan.
The following table sets forth information with respect to estimated annual
benefits under the Retirement Plan, payable upon retirement to persons in the
specified ranges of compensation and years of service.
<TABLE>
PENSION PLAN TABLE
ANNUAL ESTIMATED BENEFITS
UNDER THE EG&G, INC. EMPLOYEES RETIREMENT PLAN(1)(2)
<CAPTION>
FINAL YEARS OF SERVICE
AVERAGE ------------------------------------------------------------
EARNINGS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$500,000 $116,898 $120,000 $120,000 $120,000 $120,000
475,000 110,898 120,000 120,000 120,000 120,000
450,000 104,898 120,000 120,000 120,000 120,000
400,000 92,898 120,000 120,000 120,000 120,000
375,000 86,898 115,864 120,000 120,000 120,000
350,000 80,898 107,864 120,000 120,000 120,000
325,000 74,898 99,864 120,000 120,000 120,000
300,000 68,898 91,864 114,830 120,000 120,000
275,000 62,898 83,864 104,830 120,000 120,000
250,000 56,898 75,864 94,830 113,795 120,000
225,000 50,898 67,864 84,830 101,795 118,761
200,000 44,898 59,864 74,830 89,795 104,761
175,000 38,898 51,864 64,830 77,795 90,761
150,000 32,898 43,864 54,830 65,795 76,761
125,000 26,898 35,864 44,830 53,795 62,761
100,000 20,898 27,864 34,830 41,795 48,761
75,000 14,898 19,864 24,830 29,795 34,761
50,000 8,898 11,864 14,830 17,795 20,761
NOTES
(1) For the purpose of calculating the amounts shown in the above table, it is
assumed that the participants in the specified ranges retired on December
31, 1996, and at age 65, and that all payments were made on a straight life
annuity basis. These payments are not subject to any deduction for Social
Security benefits.
</TABLE>
15
<PAGE> 19
(2) Messrs. Kucharski, Parks, Castellana, Rossi, and Williams have respectively
31, 20, 31, 10, and 31 years of credited service under the EG&G, Inc.
Employees Retirement Plan; and $150,000 of the 1996 compensation of each of
Messrs. Kucharski, Parks, Castellana, Rossi, and Williams is covered by the
Retirement Plan. The reasons for the difference between the amounts shown in
the Summary Compensation Table and the amounts disclosed above are that
compensation in excess of $150,000 and all incentive payments and deferred
compensation amounts, other than amounts deferred under savings plans, are
excluded in determining the compensation covered by the Retirement Plan.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
In addition to the basic benefit plan outlined in the table above, the
Company has created the EG&G, Inc. Supplemental Executive Retirement Plan (the
"Supplemental Plan"), which provides additional benefits for executive officers.
Officers at the Vice Presidential level and above, the General Counsel, the
Corporate Controller, the Treasurer, and others designated by the Board of
Directors are eligible to receive benefits under the Supplemental Plan when they
have reached 55 years of age and completed five years of service. In the event
of a change of control as defined in the Supplemental Plan, however,
participants in the Supplemental Plan are eligible to receive benefits
regardless of age or years of service. If a participant dies prior to attaining
age 55, but after the completion of five years of service, the participant's
eligible spouse is entitled to receive a benefit in the form of a 50 percent
surviving spouse option commencing on the date the participant would have
attained age 55.
During 1996, the Company charged $1,473,738 as an expense and $1,430,092 as
income for the Supplemental Plan and made payments to retired officers and
beneficiaries in the amount of $476,109. While the Company is not required to
fund the Supplemental Plan, effective April 6, 1989, the EG&G, Inc.
Non-Qualified Benefit Trust Agreement (the "Trust") was established by and
between EG&G, Inc. and The Boston Safe Deposit and Trust Company. As of December
29, 1996, the Trust had a balance of $9,056,000. The purpose of the Trust is to
provide greater assurance of the receipt of Supplemental Plan benefits. Amounts
held in the Trust are subject to the claims of the Company's general creditors
in the event of the Company's insolvency or bankruptcy.
The Supplemental Plan is administered by the Compensation and Stock Option
Committee of the Board of Directors. The Board of Directors may amend or
terminate the Supplemental Plan at any time; however, such amendment or
termination shall not reduce or eliminate the benefit payments currently being
made or the accrued plan benefit of any participant.
The Supplemental Plan provides an annual benefit payable at retirement
equal to:
(a) 0.85 percent of average total compensation (as defined below) for
each year of credited service, plus 0.75 percent of average total
compensation in excess of the Social Security Tax Base, less (b),
(b) 100 percent of the participant's benefit accrued at date of
termination and payable at normal retirement age under any Company-funded
retirement plan, plus (c),
(c) The reduction, if any, to the early retirement benefit payable
from any Company-funded retirement plan due to the limitations as set forth
in Section 415(b) of the Internal Revenue Code of 1986.
The benefit payable under the Supplemental Plan, however, shall in no event
be less than (c) above.
Years of service after age 65 are not counted in determining benefits under
the Supplemental Plan, nor is any actuarial adjustment made as a result of
retirement before or after age 65. Average total compensation is the average of
a participant's total cash compensation for the highest-
16
<PAGE> 20
compensated consecutive five years of credited service out of his last ten years
of credited service prior to age 65 (or his age at earlier termination of
employment).
Messrs. Kucharski, Castellana and Williams have reached the minimum age of
eligibility for retirement under the Supplemental Plan. In combination with the
amounts payable under the EG&G, Inc. Employees Retirement Plan, Messrs.
Kucharski, Castellana, and Williams would receive $389,812, $141,431 and
$158,292, respectively, assuming they retired on the last day of 1996 and
received benefits in the form of a lifetime income.
EMPLOYMENT AND OTHER AGREEMENTS
Compensation in the form of salary to Mr. Kucharski is paid pursuant to a
three-year employment agreement with the Company dated November 1, 1993,
automatically renewable for successive 3-year intervals, which provided for a
minimum annual payment in 1996 of $650,000. Compensation in the form of salary
to Messrs. Parks, Castellana, Rossi, and Williams is paid pursuant to one-year
employment agreements with the Company dated November 1, 1993, automatically
renewable for successive 1-year intervals, which provided for minimum annual
payments in 1996 of $383,000, $235,000, $242,000, and $250,000 respectively.
All of the employment agreements with the named executive officers contain
provisions that provide that in the event of a change in control of the Company,
the employment term shall be extended for a period of five (5) years from the
date of the change of control. Following a change in control, if the named
executive is terminated without "cause" or resigns for "good reason" (each as
defined in the agreement), the named executive is entitled to receive a
severance payment equivalent to five (5) years of base salary plus bonuses and
continuation of certain benefits for five (5) years from the date of
termination.
Generally, a change in control will be deemed to have occurred in any of
the following circumstances:
1) the acquisition of 30% or more of the outstanding voting stock of the
Company by any person or entity;
2) during any period of two consecutive years, persons serving as
Directors of the Company and those replacements or additions approved
by a two-thirds vote of the Board, cease for any reason to constitute
a majority of the Board;
3) the stockholders of the Company approve a merger or consolidation in
which the voting securities of the Company outstanding immediately
prior thereto would end up representing 50% or less of the voting
power of the surviving entity; or
4) a plan for the complete liquidation or an agreement for the sale or
disposition of all or substantially all of the assets of the Company
is approved by the stockholders of the Company.
All of the employment agreements with the named executive officers, with
the exception of Mr. Kucharski's employment agreement, contain provisions that
provide that upon termination initiated by the Company without cause, apart from
a change in control situation, each executive would be entitled to continuation
of his or her salary, bonus, and employee benefits for one (1) year from the
date of termination. Mr. Kucharski's employment agreement provides that he would
be entitled to the continuation of his salary, bonus, and employee benefits for
three (3) years from the date of termination.
17
<PAGE> 21
OPTION GRANTS
The following table sets forth information on grants made in the 1996
fiscal year of stock options pursuant to the EG&G, Inc. 1992 Stock Option Plan,
for performance during the last fiscal year, to the officers identified in the
Summary Compensation Table. No stock appreciation rights were granted under that
Plan during the last fiscal year.
<TABLE>
OPTION GRANTS TABLE
OPTION GRANTS IN 1996(1)
FOR PERFORMANCE IN LAST FISCAL YEAR(2)
<CAPTION>
GRANT
DATE
INDIVIDUAL GRANTS VALUE(3)
- --------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE GRANT
UNDERLYING GRANTED TO OR BASE DATE
OPTIONS EMPLOYEES PRICE PER PRESENT
GRANTED IN FISCAL SHARE(4) EXPIRATION VALUE(3)
NAME (#) YEAR(2) ($) DATE ($)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John M. Kucharski 75,000 10.25% 19.75 12/19/06 465,000
Fred B. Parks 75,000 10.25% 19.75 12/19/06 465,000
Angelo D. Castellana 22,000 3.01% 19.75 12/19/06 136,400
Luciano S. Rossi 20,500 2.80% 19.75 12/19/06 127,100
C. Michael Williams 1,500 0.21% 19.75 12/19/06 9,300
NOTES
(1) All options granted by the Company in 1996 for performance in 1996 to the
officers identified above are non-statutory options and vest in 20%
increments over a period of five (5) years. The options become fully vested
and immediately exercisable upon the death of the optionee while in the
employ of the Company; upon termination of the optionee's employment due to
permanent and total disability or upon retirement at a Company-recognized
retirement age; or upon a change in control of the Company.
(2) This table does not include option grants made to Messrs. Kucharski, Parks,
Castellana, Rossi, and Williams in January 1996 for performance in 1995.
The "Percentage of Total Options Granted to Employees in Fiscal Year"
reflects only the options granted in December 1996 for performance in 1996.
Please refer to table below.
(3) The Black-Scholes option pricing model was chosen to estimate the grant
date present value of the options set forth in this table. The assumptions
used at the time of grant in December of 1996 included expected market
volatility of 24%, a 6.3% risk-free rate of return, a 2% dividend yield,
and a 7-year retention period.
(4) The exercise price is equal to the fair market value of the Common Stock as
determined by the closing price on the New York Stock Exchange-Composite
Transactions on December 18, 1996, the date of grant.
</TABLE>
18
<PAGE> 22
The following table sets forth information on grants made in the 1996
fiscal year of stock options pursuant to the EG&G, Inc. 1992 Stock Option Plan,
for performance during the 1995 fiscal year, to the officers identified in the
Summary Compensation Table.
<TABLE>
OPTION GRANTS TABLE
OPTION GRANTS IN 1996(1)
FOR PERFORMANCE IN 1995(2)
<CAPTION>
GRANT
DATE
INDIVIDUAL GRANTS VALUE(3)
- --------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS EXERCISE GRANT
UNDERLYING GRANTED TO OR BASE DATE
OPTIONS EMPLOYEES PRICE PER PRESENT
GRANTED IN FISCAL SHARE(4) EXPIRATION VALUE(3)
NAME (#) YEAR(2) ($) DATE ($)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
John M. Kucharski 75,000 11.53% 21.75 1/19/06 501,000
Fred B. Parks 50,000 7.69% 21.75 1/19/06 334,000
Angelo D. Castellana 17,000 2.61% 21.75 1/19/06 113,560
Luciano S. Rossi 17,500 2.69% 21.75 1/19/06 116,900
C. Michael Williams 19,000 2.92% 21.75 1/19/06 126,920
NOTES
(1) All options granted by the Company in 1996 for performance in 1995 to the
officers identified above are non-statutory options and vest in 20%
increments over a period of five (5) years. The options become fully vested
and immediately exercisable upon the death of the optionee while in the
employ of the Company; upon termination of the optionee's employment due to
permanent and total disability or upon retirement at a Company-recognized
retirement age; or upon a change in control of the Company.
(2) This table does not include option grants made to Messrs. Kucharski, Parks,
Castellana, Rossi and Williams in December 1996 for performance in 1996.
The "Percentage of Total Options Granted to Employees in Fiscal Year"
reflects only the options granted in January 1996 for performance in 1995.
Please refer to previous table.
(3) The Black-Scholes option pricing model was chosen to estimate the grant
date present value of the options set forth in this table. The assumptions
used at the time of grant in January of 1996 included expected market
volatility of 25%, a 5.5% risk-free rate of return, a 2% dividend yield,
and a 7-year retention period.
(4) The exercise price is equal to the fair market value of the Common Stock as
determined by the closing price on the New York Stock Exchange-Composite
Transactions on January 19, 1996, the date of grant.
</TABLE>
19
<PAGE> 23
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to option exercises
during the 1996 fiscal year and the number and value of unexercised options to
purchase the Company's Common Stock held by the officers named in the Summary
Compensation Table at the end of the 1996 fiscal year. No stock appreciation
rights were exercised during 1996 or were outstanding at the end of the 1996
fiscal year.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUE TABLE
<CAPTION>
- --------------------------------------------------------------------------------------------
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FY-END FY-END
ACQUIRED VALUE (#) ($)
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($)(1) UNEXERCISABLE UNEXERCISABLE(2)
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
John M. Kucharski 7,500 63,750 320,500/180,000 633,531/345,000
Fred B. Parks 0 0 76,600/136,000 97,125/193,500
Angelo D. Castellana 2,000 10,375 62,800/44,600 119,575/74,688
Luciano S. Rossi 3,000 12,375 72,300/45,000 152,137/82,938
C. Michael Williams 3,600 17,100 77,200/28,100 158,425/73,181
- ------------
<FN>
(1) Based on the fair market value determined on the date of exercise, less the
option exercise price.
(2) Based on the fair market value (determined by averaging the high and the low
selling price) on the New York Stock Exchange-Composite Transactions of the
Company's Common Stock on December 27, 1996 ($20.5625), less the option
exercise price.
</TABLE>
ITEM NO. 2
APPROVAL OF THE
EG&G, INC. 1992 STOCK OPTION PLAN
AS AMENDED
There will be presented to the stockholders at the Annual Meeting a
proposal to approve the EG&G, Inc. 1992 Stock Option Plan (the "1992 Plan")as
amended. The 1992 Plan was amended by the Board of Directors, upon the
recommendation of the Compensation and Stock Option Committee, at its meeting on
January 22, 1997, subject to approval of the 1992 Plan as amended by the
stockholders at the 1997 Annual Meeting. The 1992 Plan as amended limits to
200,000 the number of shares with respect to which options may be granted during
a calendar year to any employee. The text of the amendment is set forth in
Exhibit A.
In August 1991, the Omnibus Budget Reconciliation Act of 1993 added Section
162 (m) to the Internal Revenue Code of 1986, as amended, limiting the
deductibility of certain compensation in excess of $1 million per year paid by a
publicly traded corporation to each of its chief executive officer and the four
other most highly compensated officers at the end of the corporation's fiscal
year. Section 162 (m) and regulations issued thereunder by the Internal Revenue
Service provide, however, that the deduction limit does not apply to "qualified
performance-based compensation" meeting the following requirements: (a) the
compensation must be payable solely on account of the attainment of one or more
pre-established performance goals, (b) the performance goals must be
20
<PAGE> 24
established by a compensation committee comprised solely of two or more outside
directors, (c) the material terms of the performance goals must be disclosed to
and approved by stockholders before any compensation is paid, and (d) the
compensation committee must certify in writing that the performance goals have
been satisfied before any compensation is paid.
The Board of Directors has determined that it is desirable, to the extent
practicable, to assure full deductibility of stock options granted under the
1992 Plan. The regulations issued by the Internal Revenue Service provide that
compensation attributable to a stock option is deemed to be payable on account
of pre-established performance goals if, among other things, the underlying plan
includes a per-employee limitation on the number of shares for which stock
options may be granted during a specified period. The 1992 Plan as amended
states that no participant may receive awards of stock options with respect to
more than 200,000 shares of Common Stock under the 1992 Plan in any calendar
year.
The 1992 Plan was originally approved and adopted by the Board of Directors
at its meeting on January 22, 1992, subject to stockholder approval. The 1992
Plan was approved by the stockholders at the 1992 Annual Meeting.
The purpose of the 1992 Plan is to enhance the profitability and value of
EG&G for the benefit of its stockholders by offering an opportunity to the key
employees, officers, and employee directors of the Company and its subsidiaries
to participate in the Company's growth, thus stimulating their efforts on behalf
of the Company and strengthening their desire to remain with the Company or one
of its subsidiaries.
The following is a summary of the essential features of the 1992 Plan and
is qualified by reference to the full text of the 1992 Plan which is attached as
Exhibit B to this Proxy Statement.
TYPES OF OPTIONS
The 1992 Plan authorizes the Company to grant incentive stock options
meeting the requirements of Section 422 of the Internal Revenue Code of 1986, as
amended or replaced from time to time (the "Code"), and non-statutory stock
options which are not intended to meet the requirements of Section 422 of the
Code. Stock appreciation rights may also be granted under the 1992 Plan.
ADMINISTRATION
The 1992 Plan is administered by the Compensation and Stock Option
Committee appointed by the Board of Directors. The 1992 Plan provides that the
Committee must consist of at least three directors of the Company, each of whom
shall be a "disinterested person" as contemplated by Rule 16b-3 of the
Securities Exchange Act of 1934. The Committee has the authority to construe and
interpret the 1992 Plan; to grant options; to construe the respective stock
option agreements and the 1992 Plan; to prescribe, amend, and rescind rules and
regulations pertaining to the 1992 Plan; to determine the terms and provisions
of the respective stock option agreements; and to make all determinations in the
judgment of the Committee necessary or desirable for the administration of the
1992 Plan.
ELIGIBILITY
Options may be granted to persons who are, at the time of grant, key
employees, officers, or directors (so long as such directors are also employees)
of the Company or its subsidiaries. In selecting the individuals to whom options
shall be granted, as well as in determining the number of shares subject to each
option, the Committee shall consider the positions and responsibilities of the
individuals being considered, the nature of the services and accomplishments of
each, the value to the Company or one of its subsidiaries of their services,
their present and potential contribution to
21
<PAGE> 25
the success of the Company or one of its subsidiaries, and such other factors as
the Committee may deem relevant.
SHARES SUBJECT TO 1992 PLAN
The maximum number of shares of Common Stock which will be reserved for
issuance, and in respect of which options may be granted pursuant to the 1992
Plan in any calendar year during any part of which the Plan is in effect shall
be the greater of (i) 1 1/2 percent of the total outstanding shares of Common
Stock, exclusive of treasury shares, as of December 31, 1991, or (ii) 1 1/2
percent of the total outstanding shares of Common Stock, exclusive of treasury
shares, as of December 31 of the year preceding the calendar year in question.
On December 31, 1991, there were 28,251,519 shares of Common Stock outstanding,
exclusive of treasury shares. Any shares of Common Stock available in any year
during the term of the 1992 Plan which are not made the subject of option grants
during that year will be available for the granting of options in subsequent
years. In no event may more then 1,000,000 shares of Common Stock be issued
pursuant to the grant of incentive stock options.
STOCK OPTIONS
The price per share of Common Stock deliverable upon the exercise of any
option shall be determined by the Committee, provided, however, that the
exercise price shall not be less than the greater of the par value or 100
percent of the fair market value of such Common Stock at the time of grant of
such option. On February 21, 1997, the fair market value of a share of Common
Stock (i.e., the closing price of the Common Stock on the New York Stock
Exchange Composite Transactions Tape) was $22.125 a share. No stock option may
be exercised after the expiration of ten (10) years from the date of grant. Each
stock option granted under the 1992 Plan shall be offered to the optionee in the
form of a notice of grant of stock option and a stock option agreement. The
stock option agreement shall contain the provisions enumerated in the 1992 Plan
as well as such other provisions as the Committee may determine, which
determinations need not be uniform as between the various stock option
agreements. The Committee may, in its sole discretion, include additional
provisions in any option granted under the 1992 Plan provided such provisions
are not inconsistent with the 1992 Plan.
Stock options may be exercised, in whole or in part, by payment of the
exercise price in full. The exercise price may be paid in cash or, to the extent
provided in the applicable stock option agreement, by delivery to the Company of
shares of Common Stock already owned by the optionee.
INCENTIVE STOCK OPTIONS
For as long as the Code shall so provide, the number of shares of Common
Stock in respect of which incentive stock options are first exercisable by an
optionee during any calendar year shall not have a fair market value (determined
at the date of grant) in excess of $100,000.
TRANSFERABILITY
All options and related stock appreciation rights shall not be assignable
or transferable by the person to whom it is granted except by will or the laws
of descent and distribution and, during the life of the optionee, shall be
exercisable only by the optionee.
EFFECT OF TERMINATION OF EMPLOYMENT
In no event may a stock option or related stock appreciation right be
exercised after its expiration date. Subject to the foregoing limitation, an
optionee's right to exercise an incentive stock option expires three months
after termination of employment with the Company for any reason except permanent
and total disability or death. In the case of permanent and total disability,
the optionee has one year from the date the optionee ceased to be such employee
because of such
22
<PAGE> 26
disability to exercise the option and in the case of the optionee's death, the
optionee's executor has one year from the date of the optionee's death to
exercise the option.
Subject to the limitation that in no event may a stock option or related
stock appreciation right be exercised after its expiration date, an optionee's
rights to exercise a non-statutory stock option expires three months after the
optionee ceases to be an employee of the Company or a member of its Board of
Directors for any reason except permanent and total disability, retirement, or
death. In the case of permanent and total disability, the optionee has one year
from the date the optionee ceased to be such employee or member of the Company's
Board of Directors because of such disability to exercise the option. In the
case of retirement, the optionee has three years from the date of retirement
from the Company as an employee or Director in which to exercise the option. In
the case of the optionee's death, the optionee's executor has one year from the
date of the optionee's death to exercise the option.
STOCK APPRECIATION RIGHTS
The Committee, in its sole discretion, may also include stock appreciation
rights ("SARs") in any option granted under the 1992 Plan. Such rights may be
included either concurrently with and as part of the option grant or, with the
consent of the optionee, at any time during the term of the option. The SAR
entitles the optionee, to the extent and at the times that the option may be
exercised, to surrender the related option, in whole or in part, and to receive,
without making any payment to EG&G, an amount (in cash, Common Stock, or a
combination thereof as provided in the option) equal to the difference between
the fair market value of the Common Stock (as of the date the SAR is exercised)
as to which an SAR applies and the option price of such Common Stock. Upon
exercise of an SAR, the optionee must surrender the related option or such
portion thereof as is covered by such exercise of SARs and such option or
portion thereof shall not thereafter be exercisable. All the shares as to which
the surrendered portion of the option relates less the number of shares issued
under such SARs, if any, shall be available for future grants under the 1992
Plan. In an option which contains a provision for such payment in cash, the
Committee may reserve to itself the right to approve or disapprove such payment.
FEDERAL TAX CONSEQUENCES
The Company believes that, under present law, the following are the federal
tax consequences generally arising with respect to options granted under the
1992 Plan.
The grant of an incentive stock option will create no tax consequences for
an optionee or the Company. The optionee will have no taxable income upon
exercising an incentive stock option (except that the alternative minimum tax
may apply), and the Company will receive no deduction when an incentive stock
option is exercised. The optionee will, however, recognize taxable income upon
the disposition or sale of Common Stock so acquired. EG&G is allowed a deduction
for federal income tax purposes for the amount of any taxable income recognized
by the optionee from an incentive stock option only if there is a disqualifying
disposition. A disqualifying disposition occurs if the optionee either sells the
stock within two years after the option is granted or holds the stock for less
then one year after exercise. The optionee will recognize as income at that time
the difference between the fair market value of the Common Stock at the time of
exercise and the exercise price of the option. The Company may deduct that
amount as compensation expense.
With respect to the grant of non-statutory options, no tax consequences
will be created for the optionee or the Company. The optionee, however, will
recognize taxable income upon exercise of such an option. Such taxable income
will be an amount equal to the difference between the fair market value of the
Common Stock on the date of exercise and the option price. EG&G will be allowed
a deduction for federal income tax purposes for the amount of the taxable income
recognized by the optionee upon the exercise of a non-statutory stock option.
23
<PAGE> 27
With respect to SARs included in either an incentive stock option or a
non-statutory stock option, an optionee will not recognize taxable income on the
grant of the SAR but will recognize taxable income upon the exercise of such
rights. Taxable income will be in an amount equal to the cash and the fair
market value of any Common Stock received as payment. EG&G will be allowed a
deduction for federal income tax purposes for the amount of taxable income
recognized by an optionee upon the exercise of an SAR.
STOCK ADJUSTMENTS
In the event of a merger, consolidation, sale of all or substantially all
of the assets of the Company, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
similar transaction affecting the Company's Common Stock, appropriate
adjustments will be made by the Committee in the number of shares of Common
Stock covered by the 1992 Plan, the number of shares of Common Stock subject to
outstanding options under the 1992 Plan, and the exercise price of outstanding
options under the 1992 Plan.
MERGERS
In the event of a consolidation or merger or sale of all or substantially
all of the assets of the Company, the Board of Directors may, in its discretion,
take one or more of the following actions: (i) provide that outstanding options
shall be assumed, or equivalent options shall be substituted, by the acquiring
corporation, (ii) upon written notice to optionees, provide that all unexercised
options will terminate unless exercised within a specified time, and (iii) in
the event of a merger in which cash payments are paid to stockholders, make or
provide for a cash payment to optionees equal to the difference between the cash
payment payable in the merger per share of Common Stock and the exercise price
per share, multiplied by the number of shares subject to each outstanding
option.
AMENDMENT OR TERMINATION
The Board of Directors may terminate at any time and may at any time modify
or amend the 1992 Plan, subject to any stockholder approval required by the
Code. The termination or any modification or amendment to the 1992 Plan shall
not, without the consent of the optionee, affect the optionee's rights under any
outstanding option.
EFFECTIVE DATE AND TERM OF THE PLAN
The 1992 Plan became effective on January 22, 1992. Unless sooner
terminated by the Board of Directors, the 1992 Plan terminates on January 21,
2002, except with respect to any options then outstanding.
Among those eligible to receive stock options are officers, key employees,
and employee Directors who currently receive options under the 1992 Plan. For
1996, stock options under the 1992 Plan were granted to a total of 371 persons.
This includes options that were granted in January of 1996 for performance in
1995 and options that were granted in December of 1996 for performance in 1996.
In January of 1996, for performance in 1995, Messrs. Kucharski, Parks,
Castellana, Rossi, and Williams received options for 75,000, 50,000 17,000,
17,500, and 19,000 shares, respectively; all current executive officers as a
group received options for 291,000 shares; and all employees as a group,
including executive officers, received options for 650,200 shares. In December
of 1996, for performance in 1996, Messrs. Kucharski, Parks, Castellana, Rossi,
and Williams received options for 75,000, 75,000, 22,000, 20,500, and 1,500
shares, respectively; all current executive officers as a group received options
for 352,500 shares; and all employees as a group, including executive officers,
received options for 731,500 shares. The reason why there were two option grants
in 1996 was that the options grants that normally would have been made in 1995
for performance in 1995 were delayed until January of 1996. Under normal
circumstances, option
24
<PAGE> 28
grants will be made only once during a calendar year and will relate to employee
performance in that particular year.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE EG&G, INC.
1992 STOCK OPTION PLAN AS AMENDED.
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
for consideration at the Meeting other than that described above. However, if
any other business should come before the Meeting, it is the intention of the
persons named in the Proxy to vote, or otherwise act, in accordance with their
best judgement on such matters.
SELECTION OF AUDITORS
On January 22, 1997, the Board of Directors selected the firm of Arthur
Andersen LLP, independent public accountants, to act as the Company's auditors
and to audit the books of the Company and its subsidiaries for 1997. Arthur
Andersen LLP is currently performing these duties and has done so continuously
since 1968.
Representatives of Arthur Andersen LLP have been invited to the Annual
Meeting and are expected to be present and will have an opportunity to make a
statement if they so desire. They are also expected to be available to respond
to appropriate questions from stockholders.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and Directors to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission and
the New York Stock Exchange. The Company has a program in place to assist its
officers and Directors in complying with the filing requirements of Section
16(a). Executive officers and Directors are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file. Based on a
review of the copies of such forms furnished to the Company and written
representations from the Company's executive officers and Directors, the Company
believes that during the preceding year its executive officers and Directors
have complied with all Section 16 filing requirements.
25
<PAGE> 29
STOCKHOLDER PROPOSALS
In order to be considered for addition to the agenda for the 1998 Annual
Meeting of Stockholders and to be included in the Proxy Statement and form of
proxy, stockholder proposals should be addressed to the Clerk of the Company and
must be received at the Corporate Offices of EG&G no later than November 6,
1997.
By Order of the Board of Directors
/s/ MURRAY GROSS
----------------------------------
MURRAY GROSS, Clerk
Wellesley, Massachusetts
March 6, 1997
26
<PAGE> 30
EXHIBIT A
RESOLVED:
That, subject to the approval of the EG&G, Inc. 1992 Stock Option Plan as
amended by the stockholders at the Corporation's 1997 Annual Meeting of
Stockholders, the EG&G, Inc., 1992 Stock Option Plan be and it hereby is amended
by the addition of a new subsection (c) to Article 4 "Stock Subject to Plan" as
follows:
"(c) Maximum Number of Shares
The maximum number of shares with respect to which options may be
granted during a calendar year to any employee shall not exceed
200,000."
A-1
<PAGE> 31
EXHIBIT B
EG&G, INC.
1992 STOCK OPTION PLAN
1. PURPOSE.
The purpose of the EG&G, Inc., 1992 Stock Option Plan (the "Plan") is to
enhance the profitability and value of EG&G, Inc. (the "Company") for the
benefit of its stockholders by offering an opportunity to the key employees,
officers, and employee directors of the Company and its subsidiaries to
participate in the Company's growth, thus stimulating their efforts on behalf of
the Company and strengthening their desire to remain with the Company or one of
its subsidiaries.
Except where the context otherwise requires, the term "Company" shall
include all present and future subsidiaries of the Company as defined in
Sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended or
replaced from time to time (the "Code").
2. TYPE OF OPTIONS; ADMINISTRATION.
(a) Type of options. Options granted pursuant to the Plan may be either
incentive stock options ("Incentive Stock Options") meeting the requirements of
Section 422 of the Code or non-statutory options which are not intended to meet
the requirements of Section 422 of the Code. Stock appreciation rights may be
granted under the Plan in accordance with Article 10.
(b) Administration. The Plan will be administered by a committee
("Committee") appointed by the Board of Directors of the Company, whose
construction and interpretation of the terms and provisions of the Plan shall be
final and conclusive. The Committee shall consist of not less than three (3)
members of the Board of Directors, each of whom shall be a "disinterested
person" as contemplated by Rule 16b-3 promulgated under the Securities Exchange
Act of 1934 (the "Exchange Act"), or any successor rule ("Rule 16b-3"). The
Committee may in its sole discretion grant options to purchase shares of the
Company's Common Stock, $1 par value ("Common Stock"), and provide for the
issuance of shares upon exercise of such options as provided in the Plan. The
Committee shall have authority, subject to the express provisions of the Plan,
to construe the respective stock option agreements and the Plan, to prescribe,
amend and rescind rules and regulations relating to the Plan, to determine the
terms and provisions of the respective stock option agreements, and to make all
other determinations in the judgment of the Committee necessary or desirable for
the administration of the Plan. The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any stock option
agreement in the manner and to the extent it shall deem expedient to carry the
Plan into effect and it shall be the sole and final judge of such expediency. No
director or person acting pursuant to authority delegated by the Board of
Directors shall be liable for any action or determination made in good faith.
(c) Applicability of Rule 16b-3. Those provisions of the Plan which make
express reference to Rule 16b-3 shall apply only to such persons as are required
to file reports under Section 16(a) of the Exchange Act (a "Reporting Person").
3. ELIGIBILITY.
(a) General. Options may be granted to persons who are, at the time of
grant, key employees, officers or directors (so long as such directors are also
employees) of the Company or its subsidiaries.
(b) Relevant Factors. In selecting the individuals to whom options shall be
granted, as well as in determining the number of shares subject to each option,
the Committee shall consider the positions and responsibilities of the
individuals being considered, the nature of the services and accomplishments of
each, the value to the Company or one of its subsidiaries of their services,
their
B-1
<PAGE> 32
present and potential contribution to the success of the Company or one of its
subsidiaries, and such other factors as the Committee may deem relevant.
4. STOCK SUBJECT TO PLAN.
(a) Formula. Subject to adjustment as provided in Article 13, below, the
maximum number of shares of Common Stock which may be the subject of options
granted under the Plan in any calendar year during any part of which the Plan is
in effect shall be the greater of (i) 1 1/2% of the total outstanding shares of
Common Stock, exclusive of treasury shares, as of December 31, 1991 or (ii)
1 1/2% of the total outstanding shares of Common Stock, exclusive of treasury
shares, as of December 31 of the year preceding the calendar year in question;
provided, however that any unused portion of the shares available to cover
option grants in any calendar year pursuant to the foregoing formula shall be
carried forward and available to cover option grants in succeeding calendar
years. In addition, if an option granted under the Plan shall expire or
terminate for any reason without having been exercised in full, the unpurchased
shares subject to such option shall again be available for subsequent option
grants under the Plan. Notwithstanding the foregoing, but subject to adjustment
as provided in Article 13 below, no more than 1,000,000 shares shall be issued
pursuant to the exercise of Incentive Stock Options granted under the Plan.
(b) Source of Shares. Any shares of Common Stock issued upon the exercise
of an option may consist, in whole or in part, of authorized and unissued shares
or of treasury shares. No fractional shares of Common Stock shall be issued
under the Plan.
(c) Maximum Number of Shares. The maximum number of shares with respect to
which options may be granted during a calendar year to any employee shall not
exceed 200,000.
5. PRICE UPON EXERCISE OF OPTIONS.
(a) General. The price per share of Common Stock deliverable upon the
exercise of an option shall be determined by the Committee, provided, however,
that the exercise price shall not be less than the greater of the par value per
share or 100% of the fair market value of such Common Stock at the time of grant
of such option. The fair market value shall be deemed to be the closing price of
the Common Stock on the New York Stock Exchange Composite Transactions Tape on
the date the option is granted, or if there was no sale, on the last previous
date on which there was a sale.
(b) Payment of Exercise Price. Options granted under the Plan may provide
for the payment of the exercise price by delivery of cash or a check to the
order of the Company in an amount equal to the exercise price of such options,
or, to the extent provided in the applicable stock option agreement, by delivery
to the Company of shares of Common Stock of the Company already owned by the
optionee having a fair market value equal in amount to the exercise price of the
options being exercised, or by any combination of such methods of payment. No
shares shall be issued until all required payment therefor (including payment or
provision for payment of all required taxes) has been made.
6. OPTION PERIOD.
Each option and all rights thereunder shall expire on such date as shall be
set forth in the applicable stock option agreement, except that such date shall
in no case be later than ten (10) years from the date on which the option is
granted.
7. EXERCISE OF OPTIONS.
Each option granted under the Plan shall be exercisable either in full or
in installments at such time or times and during such period as shall be set
forth in the stock option agreement, subject to the provisions of the Plan.
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<PAGE> 33
8. INCENTIVE STOCK OPTIONS.
Options granted under the Plan which are intended to be Incentive Stock
Options shall be subject to the following additional terms and conditions:
(a) Express Designation. All Incentive Stock options granted under the Plan
shall, at the time of grant, be specifically designated as such in the stock
option agreement covering such Incentive Stock Options. Options not specifically
designated as Incentive Stock Options shall be deemed to be non-statutory
options.
(b) Dollar Limitation. For so long as the Code shall so provide, options
granted to any employee under the Plan which are intended to constitute
Incentive Stock Options shall not constitute Incentive Stock Options to the
extent that such options, in the aggregate, become exercisable for the first
time in any one calendar year for shares of Common Stock with an aggregate fair
market value (determined as of the respective date or dates of grant) of more
than $100,000.
9. STOCK OPTION AGREEMENT.
Each stock option granted under this Plan shall be offered to the optionee
in the form of a notice of grant of stock option and a stock option agreement
which the optionee may accept by complying with the terms of the offer. The
stock option agreements shall specify the type of option, the number of shares
to which the option relates, the option price, and the period within which the
option may be exercised. Such stock option agreements shall contain such other
provisions as the Committee may determine, which determinations need not be
uniform as between the various stock option agreements. Notwithstanding the
foregoing, the following provisions shall be incorporated in each stock option
agreement:
(a) Nontransferability of Options, All options and related stock
appreciation rights shall not be assignable or transferable by the person to
whom it is granted, either voluntarily or by operation of law, except by will or
by the laws of descent and distribution, and, during the life of the optionee,
shall be exercisable only by the optionee.
(b) Expiration Date. Under no circumstances may a stock option or related
stock appreciation right be exercised after its expiration date.
(c) Effect of Termination of Employment or other Relationship. Except as
follows, no stock option or related stock appreciation right may be exercised
unless, at the time of such exercise, the optionee is, and has been continuously
since the date of grant of his or her option, employed by the Company, and, in
no event, may a stock option or related stock appreciation right be exercised
after its expiration date:
(1) Incentive Stock Options
(i) Except as provided in subsections (ii) and (iii) below, an
Incentive Stock Option or related stock appreciation right may be
exercised within the period of three months after the date the optionee
ceases to be an employee of the Company;
(ii) if the optionee dies while in the employ of the Company, or
within three months after the optionee ceases to be such an employee,
the Incentive Stock Option or related stock appreciation may be
exercised by the person to whom it is transferred by will or the laws of
descent and distribution or by the optionee's executor or administrator
within the period of one year after the date of death; and
(iii) if the optionee becomes permanently and totally disabled
(within the meaning of Section 22(e) (3) of the Code or any successor
provisions thereto) while in the employ of the Company, the Incentive
Stock Option or related stock appreciation right may be
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exercised within the period of one year after the date the optionee
ceases to be such an employee because of such disability.
(2) Non-Statutory Options
(i) Except as provided in subsections (ii) (iii) and (iv) below, a
non-statutory option or related stock appreciation right may be
exercised within the period of three months after the date the optionee
ceases to be an employee of the Company or a member of the Board of
Directors;
(ii) if the optionee dies (x) while in the employ of the Company or
while a member of the Board of Directors, (y) within three months after
the optionee ceases to be such an employee or member of the Board of
Directors, or (z) within three years after the optionee retires, at a
Company-recognized retirement age, from the Company as an employee or
member of the Board of Directors, the non-statutory option or related
stock appreciation right may be exercised by the person to whom it is
transferred by will or the laws of descent and distribution or by the
optionee's executor or administrator within the period of one year after
the date of death;
(iii) if the optionee becomes permanently and totally disabled
(within the meaning of Section 22(e)(3) of the Code or any successor
provision thereto) while in the employ of the Company or while a member
of the Board of Directors, the non-statutory option or related stock
appreciation right may be exercised within the period of one year after
the optionee ceases to be such an employee or member of the Board of
Directors because of such disability; and
(iv) if the optionee retires, at a Company-recognized retirement
age, from the Company as an employee or member of the Board of
Directors, the non-statutory option or related stock appreciation right
may be exercised within the period of three years after such retirement.
For all purposes of the Plan and any option or award granted hereunder,
"employment" shall be defined in accordance with the provisions of Section
1.421-7(h) of the Income Tax Regulations (or any successor regulations).
10. STOCK APPRECIATION RIGHTS.
At the sole discretion of the Committee, stock appreciation rights may be
included in any option granted under this Plan, either concurrently with the
grant of the option or, with the consent of the optionee, at any time thereafter
during the term of the option. Stock appreciation rights shall entitle the
holder thereof, upon exercise of such rights, to surrender the related option,
or any portion thereof, and to receive, without payment to the Company, an
amount, in Common Stock or cash, as determined by the Committee, equal to no
more than 100% of the excess of the fair market value, on the date of such
exercise, of the stock covered by such option or portion thereof over the option
price of such stock as provided in such option. Said fair market value shall be
deemed to be the closing price of the stock on the New York Stock Exchange
Composite Transactions Tape on the date of exercise, or if there was no sale, on
the last previous day on which there was a sale. Upon exercise of a stock
appreciation right and surrender of the related option or portion thereof, such
option, to the extent surrendered, shall not thereafter be exercisable, but all
stock as to which the surrendered portion of the option relates less the number
of shares of stock issued under such stock appreciation rights, if any, shall be
available for future grants under the Plan.
Stock appreciation rights shall be exercisable (a) at such time or times
and to the extent, but only to the extent, that the options to which they are
related shall be exercisable as stipulated in this Plan, and (b) only when the
fair market value of the stock covered by the option exceeds the option price of
such stock as provided in such option. The Committee may impose such other
conditions upon the grant or exercise of stock appreciation rights as it deems
advisable, including but not
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limited to, such conditions relative to Reporting Persons that may be desirable
in order to meet the requirements of Rule 16b-3.
The Committee shall have sole discretion, at the time of the grant of the
stock appreciation right, to determine the form in which payment will be made
upon the exercise of any stock appreciation right (i.e., Common Stock, cash, or
any combination thereof), and may reserve to itself, at the time of the grant,
the right to consent to or disapprove the election of any participant to receive
cash in full or partial settlement of the right at the time of exercise of the
right.
11. COMPLIANCE WITH SECURITIES LAWS.
Each option shall be subject to the requirement that if, at any time, the
Company shall determine that the listing, registration or qualification of the
shares subject to such option upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental or regulatory body,
or the satisfaction of any other condition is necessary as a condition of, or in
connection with, the issuance or purchase of shares thereunder, such option may
not be exercised, in whole or in part, unless such listing, registration,
qualification, consent or approval, or satisfaction of such condition shall have
been effected or obtained on conditions acceptable to the Company. Nothing
herein shall be deemed to require the Company to apply for or to obtain such
listing, registration or qualification, or to satisfy such condition.
12. RIGHTS AS A STOCKHOLDER.
The holder of an option shall have no rights as a stockholder with respect
to any shares covered by the option (including, without limitation, any rights
to receive dividends or non-cash distributions with respect to such shares)
until the date of issue of a stock certificate to said holder for such shares.
No adjustment shall be made for dividends or other rights for which the record
date is prior to the date such stock certificate is issued.
13. ADJUSTMENT PROVISIONS FOR RECAPITALIZATIONS AND RELATED TRANSACTIONS.
(a) General. If, through or as a result of any merger, consolidation, sale
of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased or decreased or are exchanged for a different number or kind of
shares or other securities of the Company, or (ii) additional shares or new or
different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or other securities, an
appropriate and proportionate adjustment may be made in (x) the maximum number
and kind of shares reserved for issuance under the Plan, (y) the number and kind
of shares or other securities subject to then outstanding options under the
Plan, and (z) the price for each share subject to any then outstanding options
under the Plan, without changing the aggregate purchase price as to which such
options remain exercisable.
(b) Committee Authority to Make Adjustments. Any adjustments under this
Article 13 will be made by the Committee, whose determination as to what
adjustments, if any, will be made and the extent thereof will be final, binding
and conclusive. No fractional shares will be issued under the Plan on account of
any such adjustments.
14. MERGER, CONSOLIDATION, ASSET SALE, LIQUIDATION, ETC.
In the event of a consolidation or merger or sale of all or substantially
all of the assets of the Company in which outstanding shares of Common Stock are
exchanged for securities, cash or other property of any other corporation or
business entity or in the event of a liquidation of the Company, the Board of
Directors of the Company, or the board of directors of any corporation assuming
the obligations of the Company, may, in its discretion, take any one or more of
the following actions, as to outstanding options: (i) provide that such options
shall be assumed, or equivalent options shall
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<PAGE> 36
be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such options substituted for Incentive Stock Options
shall meet the requirements of Section 424(a) of the Code, (ii) upon written
notice to the optionees, provide that all unexercised options will terminate
immediately prior to the consummation of such transaction unless exercised by
the optionee within a specified period following the date of such notice, and
(iii) in the event of a merger under the terms of which holders of the Common
Stock of the Company will receive upon consummation thereof a cash payment for
each share surrendered in the merger (the "Merger Price"), make or provide for a
cash payment to the optionees equal to the difference between (A) the Merger
Price times the number of shares of Common Stock subject to such outstanding
options (to the extent then exercisable at prices not in excess of the Merger
Price) and (B) the aggregate exercise price of all such outstanding options in
exchange for the termination of such options.
15. NO SPECIAL RIGHTS.
(a) Nothing contained in the Plan or in any option shall confer upon any
optionee any right with respect to the continuation of his or her employment by
the Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
(b) Except as provided by the Plan, the optionee shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class or
the payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class or by reason of any dissolution,
liquidation, merger, consolidation, or reorganization. The existence of the Plan
and the options granted hereunder shall not affect or restrict in any way the
right or power of the Board of Directors or the stockholders of the Company to
make or authorize any adjustment, recapitalization, reorganization or other
change in the Company's capital structure or its business, any merger or
consolidation of the Company, the dissolution or liquidation of the Company or
any sale or transfer of all or any part of its assets or business, or any other
corporate act or proceeding.
16. WITHHOLDING.
The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state, or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan.
17. PROVISION FOR FOREIGN EMPLOYEES.
The Committee may, without amending the Plan, modify options granted to
employees who are foreign nationals or who are employed outside the United
States to recognize differences in laws, rules, regulations or customs of such
foreign jurisdictions with respect to tax, securities, currency, employee
benefits or other matters.
18. ADDITIONAL PROVISIONS.
The Committee may, in its sole discretion, include additional provisions in
any option granted under the Plan, including without limitation, restrictions on
transfer, repurchase rights, commitments to pay cash bonuses, to make, arrange
for or guaranty loans or to transfer other property to optionees upon exercise
of options, or such other provisions as shall be determined by the Committee;
provided that such additional provisions shall not be inconsistent with any
other term or condition of the Plan.
19. OTHER EMPLOYEE BENEFITS.
Except as to plans which by their terms include such amounts as
compensation, neither the amount of any compensation deemed to be received by an
employee as a result of the exercise of any option or the sale of shares
received upon such exercise will constitute compensation with
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<PAGE> 37
respect to which any other employee benefits of such employee are determined,
including without limitation, benefits under any bonus, pension, profit-sharing,
life insurance or salary continuation plan, except as otherwise specifically
determined by the Board of Directors.
20. TERMINATION AND AMENDMENT OF THE PLAN.
(a) The Board of Directors may terminate the Plan at any time and may at
any time, and from time to time, modify or amend the Plan in any respect, except
that if at any time the approval of the shareholders of the Company is required
as to such modification or amendment under Section 422 of the Code or any
successor provision with respect to Incentive Stock Options or under Rule 16b-3
with respect to options held by Reporting Persons, the Board of Directors may
not effect such modification or amendment without such approval.
(b) The termination or any modification or amendment of the Plan shall not,
without the consent of an optionee, affect his or her rights under an option
previously granted to him or her. With the consent of the optionee affected, the
Committee may amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors and the Committee shall have the right to
amend or modify (i) the terms and provisions of the Plan and of any outstanding
Incentive Stock Options granted under the Plan to the extent necessary to
qualify any or all such options for such favorable federal income tax treatment
(including deferral of taxation upon exercise) as may be afforded Incentive
Stock Options under Section 422 of the Code and (ii) the terms and provisions of
the Plan and of any outstanding option to the extent necessary to ensure the
qualification of the Plan under Rule 16b-3 or any successor rule.
21. CANCELLATION AND NEW GRANT OF OPTIONS.
The Committee shall have the authority to effect, at any time and from time
to time, with the consent of the affected optionees, (i) the cancellation of any
or all outstanding options under the Plan and the grant in substitution therefor
of new options under the Plan covering the same or different number of shares of
Common Stock and having an option exercise price per share which may be lower or
higher than the exercise price per share of the canceled options or (ii) the
amendment of the terms of any and all outstanding options under the Plan to
provide an option exercise price per share which is higher or lower than the
then current exercise price per share of such outstanding options.
22. EFFECTIVE DATE AND TERM OF THE PLAN.
(a) Effective Date. The Plan shall become effective when adopted by the
Board of Directors, subject to approval by the stockholders of the Company.
(b) Term, Unless sooner terminated by the Board of Directors, the Plan
shall terminate on January 21, 2002, except with respect to any options then
outstanding under the Plan.
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[EG&G LOGO]
EG&G, INC., CORPORATE OFFICES, 45 WILLIAM STREET, WELLESLEY, MASSACHUSETTS 02181
<PAGE> 39
DETACH HERE EGG F
[EG&G LOGO] EG&G, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS APRIL 22, 1997
P
R The undersigned hereby appoints John M. Kucharski and Murray Gross,
and each of them, proxies with power of substitution to vote, as indicated
O below, for and on behalf of the undersigned at the Annual Meeting of
Stockholders of EG&G, Inc., to be held at the Sheraton Needham Hotel, 100
X Cabot Street, Needham, Massachusetts on Tuesday, April 22, 1997, at 10:30
a.m., and at any adjournment thereof, hereby granting full power and
Y authority to act on behalf of the undersigned at said Meeting.
1. ELECTION OF DIRECTORS Authority to fix the number of Directors at ten
and to elect Tamara J. Erickson, Kent F.
Hansen, John F. Keane, Nicholas A. Lopardo,
Greta E. Marshall, Michael C. Ruettgers, John
Larkin Thompson and G. Robert Tod for terms of
one year each.
SEE REVERSE SIDE. IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATIONS, JUST SIGN ON THE REVERSE SIDE. YOU NEED NOT MARK
ANY BOXES.
-----------
SEE REVERSE
SIDE
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<PAGE> 40
[EG&G LOGO]
DIVIDEND DIRECT DEPOSIT
Your quarterly dividends can be electronically deposited directly to your
checking or savings account through Dividend Direct Deposit at any financial
institution that participates in the Automated Clearing House system.
Through Dividend Direct Deposit, your EG&G dividend payments will be deposited
into your specified account on the dividend payment date and you will receive
an advice of payment a few days after the payable date. Dividend Direct Deposit
provides the convenience of automatic deposit and immediate access to your
money while eliminating the possibility of mail delays or checks being lost,
stolen, or destroyed. This service is provided to you by EG&G and Boston
EquiServe, our transfer agent, at no charge.
To take advantage of this service, please call Boston EquiServe Limited
Partnership, at 1-800-730-4001.
EG&G STOCKHOLDER INFORMATION LINE
The Company's quarterly earnings results are available to you through the EG&G
Stockholder Information Line. The toll-free number is 1-800-EGG-9147. (EG&G no
longer prints and mails a quarterly report.)
Stockholders can receive current corporate information, such as earnings and
dividend data by dialing the toll-free telephone number. Information is
available either by listening to EG&G's press releases and updates or by
ordering it sent via mail, fax or the Internet.
EG&G's INTERNET HOME PAGE ADDRESS: www.egginc.com
BOSTON EQUISERVE'S INTERNET HOME PAGE ADDRESS: www.equiserve.com
PLEASE COMPLETE AND RETURN THE PROXY CARD BELOW
DETACH HERE EGG F
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THIS PROXY WHEN EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR FIXING THE NUMBER OF
DIRECTORS AT TEN AND THE ELECTION OF DIRECTORS, AND FOR PROPOSAL 2.
<TABLE>
<S> <C>
--------------------------------- <C> <C> <C>
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE FOR PROPOSALS 1 AND 2. FOR AGAINST ABSTAIN
--------------------------------- 2. Approval of EG&G, Inc. 1992 Stock [ ] [ ] [ ]
1. Election of Directors (see reverse). Option Plan, as amended.
FOR WITHHELD
[ ] [ ]
For, except vote withheld from the
following nominee(s):
----------------------------------- MARK HERE
FOR ADDRESS
CHANGE AND [ ]
NOTE CHANGE
AT LEFT
Please sign exactly as your name appears hereon. Joint owners
should each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.
Signature: Date: Signature: Date:
------------------------- --------------- ------------------------------- ---------------------
</TABLE>
