<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
HACH COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
HACH COMPANY
5600 Lindbergh Drive
Loveland, Colorado 80539
-------------------
NOTICE OF ANNUAL MEETING
To the Stockholders:
The Annual Meeting of the Stockholders of HACH COMPANY, a Delaware
corporation, will be held on Tuesday, August 29, 1995, at 2:00 p.m. local time,
at the Company's facilities located at 100 Dayton Avenue, Ames, Iowa, for the
following purposes:
1. To elect a Board of seven directors.
2. To consider and act upon a proposal to approve the Company's 1995
Employee Stock Purchase Plan.
3. To transact such other business as may lawfully come before the
Annual Meeting or any adjournments thereof.
The Board of Directors has fixed July 7, 1995, at the close of business, as
the record date for the determination of stockholders entitled to receive notice
of and to vote at this Annual Meeting, or any adjournments thereof. All
stockholders are urged to attend the meeting. In order to assure the presence of
a quorum, whether you expect to be present personally or not, please sign, date
and mail immediately the enclosed proxy, since you have full power to revoke it
at any time before it is exercised.
By Order of the Board of Directors,
ROBERT O. CASE, SECRETARY
July 25, 1995
<PAGE>
HACH COMPANY
5600 Lindbergh Drive
Loveland, Colorado 80539
-------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held August 29, 1995
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Hach Company (the "Company") to be voted at
the Annual Meeting of Stockholders to be held on August 29, 1995, and at any and
all adjournments thereof. All proxies received pursuant to this solicitation
will be voted, but stockholders who execute proxies may revoke them at any time
before they are voted by giving written notice to the Secretary of the Company
or by voting in person at the meeting. This proxy statement and the accompanying
proxy are being first mailed to stockholders on or about July 25, 1995.
Only stockholders of record at the close of business on July 7, 1995, will
be entitled to vote at the meeting. On that date, the Company had outstanding
11,363,818 shares of common stock entitled to vote at the meeting, each share
being entitled to one vote.
VOTING OF SHARES
Shares voted as abstentions on any matter (or a "withhold authority to vote
for" as to directors) will be counted as shares that are present and entitled to
vote for purposes of determining the presence or absence of a quorum at the
meeting and as unvoted, although present and entitled to vote, for purposes of
determining the approval of each matter as to which the shareholder has
abstained. If a broker submits a proxy that indicates the broker does not have
discretionary authority as to certain shares to vote on one or more matters,
those shares will be counted as shares that are present and entitled to vote for
purposes of determining the presence or absence of a quorum at the meeting, but
will not be considered as present and entitled to vote with respect to such
matters.
An affirmative vote of the holders of a plurality of the votes cast at the
meeting is required for the election of directors. An affirmative vote of the
holders of a majority of the shares present or represented at the meeting is
required for the approval of each of the other matters to be voted upon.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth, as of June 30, 1995, certain information
with respect to each person who is known to the Company to own beneficially more
than 5% of the outstanding voting securities of the Company. This information
has been furnished by such persons to the Company.
<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS BENEFICIALLY PERCENT
CLASS OF BENEFICIAL OWNER OWNED OF CLASS
- ----------- -------------------------------------------------------------- --------------- ----------
<S> <C> <C> <C>
Common Kathryn Hach-Darrow .......................................... 4,632,699(1) 40.77 %
Hach Company
5600 Lindbergh Drive
Loveland, Colorado 80537
Common Lawter International, Inc. ................................... 3,157,220 27.78 %
990 Skokie Boulevard
Northbrook, Illinois 60062
Common Hach Company Employee Stock .................................. 646,370(2) 5.69 %
Ownership Plan and Trust
Hach Company
5600 Lindbergh Drive
Loveland, Colorado 80537
</TABLE>
The following table shows the amount of voting securities of the Company
beneficially owned by all officers and directors of the Company as a group (13
persons) on June 30, 1995.
<TABLE>
<CAPTION>
TITLE OF BENEFICIALLY PERCENT
CLASS OWNED OF CLASS
-------------- ----------
<S> <C> <C>
Common................................................... 4,995,978(3) 43.96 %
<FN>
- ---------
(1) The shares listed in the table above opposite Kathryn Hach-Darrow's name
include 942,882 shares held in Mrs. Hach-Darrow's name. The shares listed
above also include 1,888,611 shares held by Mrs. Hach-Darrow as trustee and
beneficiary of the Kathryn C. Hach Marital Trust, 95,176 shares held by
Mrs. Hach-Darrow as the trustee and beneficiary of the Clifford C. Hach
Generation Skipping Trust, and 73,635 shares held by the Clifford C. Hach
Family Trust, all three of which Trusts were created under an agreement
dated August 30, 1988, by Clifford C. Hach. Mrs. Hach-Darrow has the power
to vote and dispose of the shares held in the Marital, Generation Skipping
and Family Trusts. In addition, the shares listed above opposite Mrs.
Hach-Darrow's name include 1,511,415 shares owned by C&K Enterprises, Ltd.,
as to which Mrs. Hach-Darrow and the Kathryn C. Hach Marital Trust have
voting and investment powers, and 120,782 shares owned by the Hach
Scientific Foundation, a charitable foundation. Mrs. Hach-Darrow is
President and a co-trustee of the Foundation and she shares voting and
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
investment powers with respect to the shares held by the Foundation.
Finally, the shares listed above include 198 shares which have been
allocated to the account of Mrs. Hach-Darrow under the Company's Employee
Stock Ownership Plan (the "ESOP") and which Mrs. Hach-Darrow has the right
to direct the Plan trustee to vote.
(2) These shares are allocated to the accounts of the individual employees of
Hach Company who are participants in the ESOP, and who have the power to
vote the shares. The Trustees and the Company have investment power over
the stock held in the Plan.
(3) Includes the shares listed in the table above opposite Kathryn Hach-Dar-
row's name. Excludes (i) 77,446 shares held by the Company's 401(k) Plan
for the individual accounts of employees other than officers and directors
of the Company, (ii) 620,845 shares held by the Company's ESOP, which are
allocated to the individual accounts of employees other than officers or
directors of the Company, (iii) 292,969 shares referred to in footnote 3 to
the table below listing the shares beneficially owned by the directors, and
(iv) 99,047 shares held by a partnership composed of the children of
Kathryn Hach-Darrow and the late Clifford C. Hach and their spouses, as to
which Bruce J. Hach, the President and a Director of the Company, is a
partner. If all the shares referred to in the preceding sentence were
included, the shares beneficially owned by officers and directors as a
group would be 6,086,285 and the percent of the class would be 53.56%.
</TABLE>
ELECTION OF DIRECTORS
At the meeting seven directors are to be elected to hold office until the
next annual meeting and until their successors have been elected and qualified.
It is the intention of the persons named in the enclosed form of proxy, unless
the stockholder otherwise specifies therein, to vote for the election as
directors of the persons named in the table below. In case any such nominee
should be unavailable for any reason,
3
<PAGE>
the proxy holders reserve the right to substitute another person of their choice
in his place. The information concerning the nominees and their security
holdings has been furnished by them to the Company.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED ON
JUNE 30, 1995
------------------------------
PRINCIPAL OCCUPATION DIRECTOR NUMBER PERCENT
NAME AGE AND OTHER DIRECTORSHIPS SINCE OF SHARES OF CLASS
- -------------------------- --- ------------------------------------------------ --------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
Kathryn Hach-Darrow....... 72 Chairman of the Board and Chief Executive 1951 4,632,699(1)(2) 40.76%
Officer of the Company since August, 1988;
other executive offices of the Company,
including President and Chief Operating Officer
for more than the previous two years.
Bruce J. Hach............. 49 President and Chief Operating Officer of the 1987 156,833(2)(3) 1.38%
Company since August, 1988; a member of senior
management of the Company for more than the
previous two years.
Gary R. Dreher............ 42 Vice President and Chief Financial Officer since 1994 28,334(2)(4) *
November 1994; Vice President and Treasurer of
the Company from August 1991 through November
1994; Vice President and Controller of the
Company from August, 1990 through August, 1991;
Controller of the Company from September, 1985
through August, 1990.
Joseph V. Schwan.......... 58 Senior Vice President and General Manager, Forms 1987 16,837(2) *
Division of the Standard Register Company; Vice
President, Forms Marketing and Sales of The
Standard Register Company (a publicly-held
manufacturer and distributor of business forms)
since August, 1991; Vice President-Forms Divi-
sion of Rittenhouse, Inc., from March, 1990 to
August, 1991; a member of senior management of
Wallace Computer Services (a publicly-held
computer services and supply company) for the
three previous years.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIALLY
OWNED ON
JUNE 30, 1995
------------------------------
PRINCIPAL OCCUPATION DIRECTOR NUMBER PERCENT
NAME AGE AND OTHER DIRECTORSHIPS SINCE OF SHARES OF CLASS
- -------------------------- --- ------------------------------------------------ --------- ------------------ ----------
<S> <C> <C> <C> <C> <C>
Fred W. Wenninger......... 56 Independent Businessman; President, Chief 1990 -0-(2) *
Executive Officer and Director, Iomega
Corporation (a publicly held manufacturer of
removable mass storage products for computers)
from May, 1989 until December 31, 1993;
President of Allied Signal, Inc.'s Bendix/King
Avionics division from 1986 to 1989.
John N. McConnell......... 56 Chairman and President of Labconco Corporation 1990 7,457(2) *
(a laboratory equipment manufacturer) since
1990; President of Labconco since 1981.
Linda O. Doty............. 45 Certified Public Accountant, partner in Doty & 1991 8,343(2) *
Associates, Certified Public Accountants, since
January 1, 1990; tax partner with Coopers &
Lybrand for more than the previous three years.
<FN>
- ------------------------
* Less than 1%.
(1) The shares listed in the table above opposite Kathryn Hach-Darrow's name
include 942,882 shares held in her name. The shares listed above also
include 1,888,611 shares held by Mrs. Hach-Darrow as trustee and
beneficiary of the Kathryn C. Hach Marital Trust, 95,176 shares held by
Mrs. Hach-Darrow as the trustee and beneficiary of the Clifford C. Hach
Generation Skipping Trust, and 73,635 shares held by the Clifford C. Hach
Family Trust, all three of which Trusts were created under an agreement
dated August 30, 1988, by Clifford C. Hach. Mrs. Hach-Darrow has the power
to vote and dispose of the shares held in the Marital, Generation Skipping
and Family Trusts. In addition, the shares listed above opposite Mrs.
Hach-Darrow's name include 1,511,415 shares owned by C&K Enterprises, Ltd.,
as to which Mrs. Hach-Darrow and the Kathryn C. Hach Marital Trust have
voting and investment powers, and 120,782 shares owned by the Hach
Scientific Foundation, a charitable foundation. Mrs. Hach-Darrow is
President and a co-trustee of the Foundation and she shares voting and
investment powers with respect to the shares held by the Foundation.
Finally, the shares listed above include 198 shares which have been
allocated to the account of Mrs. Hach-Darrow under the Company's Employee
Stock Ownership Plan and Trust (the "ESOP") and which Mrs. Hach-Darrow has
the right to direct the ESOP trustee to vote.
(2) Excludes 79,951 shares owned by the Hach Company 401(k) Plan. The Company
through its board of directors has the power to vote such shares. In
addition, the co-trustees of the 401(k) Plan share
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
investment power with respect to those shares. Also excludes shares of the
Company's ESOP, as to which the Company through its Board of Directors, and
the ESOP's co-trustees, have investment power. The co-trustees of each of
the 401(k) Plan and the ESOP during fiscal year 1994 were Randall A.
Petersen, Gary R. Dreher and Loel J. Sirovy. The ESOP as of June 30, 1995
held a total of 646,370 shares all of which were allocated to the accounts
of plan participants. Shares accrued to the individual accounts of Kathryn
Hach-Darrow, Bruce Hach and Gary Dreher are reflected in the table above
and the amounts of the shares being held in said individual accounts are
given in footnotes 1, 3, and 4 to the above table. See footnote 2, page 3,
with reference to the power to vote ESOP shares.
(3) Excludes 64,644 shares held by Robert O. Case and Bruce J. Hach as
co-trustees of eight irrevocable trusts for the benefit of the
grandchildren of Kathryn Hach-Darrow. Robert O. Case and Bruce J. Hach have
shared investment and voting powers with respect to those shares. Three of
the beneficiaries of the trusts are the children of Bruce J. Hach. Also
excludes 228,325 shares held in separate shares in an irrevocable trust for
the benefit of the grandchildren of Kathryn Hach-Darrow by Bank One --
Loveland under an agreement dated June 30, 1975, between Kathryn
Hach-Darrow and the late Clifford C. Hach as settlors, and The Northern
Trust Company, as initial trustee. The Trust is being held for the benefit
of the grandchildren of Kathryn Hach-Darrow and the late Clifford C. Hach,
three of whom are the children of Bruce J. Hach. Also excludes 99,047
shares held by a partnership composed of the children of Kathryn
Hach-Darrow and their spouses. Includes 4,606 shares held by the ESOP which
are accrued to the account of Bruce J. Hach and which he has the right to
direct the Plan trustee to vote, and options to purchase 3,333 shares of
stock.
(4) Includes 3,166 shares held by the ESOP which are accrued to the account of
Mr. Dreher and which he has the right to direct the Plan trustee to vote,
and options to purchase 10,864 shares of stock. Excludes an additional
643,204 shares owned by the ESOP, for which Gary R. Dreher as a co-trustee
of the ESOP shares investment power.
</TABLE>
Kathryn Hach-Darrow may be considered to be a controlling person of the
Company. Kathryn Hach-Darrow is the mother of Bruce J. Hach.
Richard D. Vanous, 42, resigned as a Director and executive officer of the
Company effective May 5, 1995. Mr. Vanous had been a director of the Company
since 1992. Mr. Vanous served as Vice President, Research and Development, of
the Company at the time of his resignation. Mr. Vanous beneficially owned 19,843
shares of the Company's Common Stock as of June 30, 1995. The current term of
Jerry M. Churchill, 55, as a director of the Company will expire effective as of
the election of directors at the 1995 Annual Meeting of Stockholders, and Mr.
Churchill is not standing for re-election at this meeting. Mr. Churchill has
been a director of the Company since 1990. During the last 5 years Mr. Churchill
has served as an officer of the Company and currently serves as Vice President,
Domestic Sales of the Company. Mr. Churchill beneficially owned 28,324 shares of
the Company's common stock as of June 30, 1995. On June 7, 1995, the Board of
Directors amended the By-laws of the Company, effective as of the election of
directors at the 1995 Annual Meeting of Stockholders, to reduce the number of
directors of the Company from nine to seven.
The Board of Directors has an Audit Committee, an Executive Committee and a
Compensation Committee, but does not have a nominating committee. The members of
the Audit Committee are
6
<PAGE>
Linda O. Doty and Joseph V. Schwan. There were two meetings of the Audit
Committee during the last fiscal year. The Audit Committee oversees
implementation of the Company's financial and accounting systems, recommends the
appointment of the independent auditors for the Company and reviews the adequacy
and scope of the auditor's examination.
The Compensation Committee, which is composed of Kathryn Hach-Darrow, John
N. McConnell (Chairman), Joseph V. Schwan and Linda O. Doty, met on two (2)
occasions during the last fiscal year. The Compensation Committee consults with
management and makes recommendations to the Board of Directors as to annual
compensation of, and the award of stock options to, key personnel and such other
compensation matters as may be delegated to it by the Board of Directors.
The members of the Executive Committee are Kathryn Hach-Darrow (Chairman),
Bruce J. Hach and Fred J. Wenninger. The Executive Committee acts in lieu of the
Board of Directors, when necessary, on matters which require the authorization
of the Board of Directors and are within the Committee's powers as provided by
statute, the Company's by-laws and Board resolutions. The Executive Committee
did not meet during the last fiscal year.
The Board of Directors met six times during the last fiscal year. During
fiscal 1995, all incumbent directors of the Company attended at least 75% of the
total number of meetings of the Board of Directors and meetings of committees of
which they were members.
The Company pays each director who is not also an officer of the Company for
his services as a director at the rate of $3,750 per year, plus $750 per each
board meeting attended in excess of five per year. The Company may at its option
also pay $750 for each meeting of a board committee attended, provided that
committee meetings held in conjunction with board meetings are not separately
compensated. In addition, each director who is not an officer of the Company
participates in the Company's Directors' Bonus Compensation Plan under which
such directors may receive annual awards of Stock Units of up to $10,000 each,
entitling them to receive payments in cash which are equal to the number of
Stock Units times the price of one share of the Company's stock when they
retire, die, resign or are not reelected as directors of the Company. Each year
a committee of "disinterested persons" may award Stock Units under this plan.
The actual number of Stock Units received by each director is determined by
dividing the dollar value of the units awarded by the market value of the common
stock of the Company on the date of grant. In addition, when the Company pays a
dividend on its common stock, pursuant to this plan it issues Stock Units to the
directors equal to the dividends which would have been paid if the Stock Units
previously awarded had been shares of common stock. The Company has the right to
terminate the Directors' Bonus Compensation Plan at any time. In lieu of the
cash compensation payment to directors for committee meeting attendances, the
Company, in its discretion, has provided such compensation in the form of awards
of Stock Units under the Plan. During the fiscal year 1995, Joseph V. Schwan
received $6,750 in Stock Units, Linda O. Doty received $6,500 in Stock Units,
John N. McConnell received $5,500 in Stock Units, and Fred W. Wenninger received
$5,000 in Stock Units. These awards were made in July, 1994 for the prior year's
service and includes compensation for committee meeting attendance.
7
<PAGE>
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
See "Executive Employment Agreements" and "Compensation Committee Interlocks
and Insider Participation" below for a description of certain transactions and
business relationships, involving management of the Company.
APPROVAL OF THE 1995 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors believes that an employees stock purchase plan is in
the Company's best interest and therefore recommends adoption of a new five-year
plan on the terms and conditions as described below.
SUMMARY OF THE PLAN
The following summary describes features of the Hach Company 1995 Employees
Stock Purchase Plan (the "Plan"). This summary is qualified in its entirety by
reference to the specific provisions of the Plan, the full text of which is set
forth as Appendix A.
The Plan, subject to approval by the stockholders, became effective as of
July 1, 1995, and 500,000 shares of authorized common stock were reserved for
issuance under the Plan. The Plan will have a duration of five years, subject to
earlier termination by the Board of Directors.
The Plan permits employees to purchase Hach Company common stock through
payroll deductions during ten consecutive semi-annual offerings made on January
1 and July 1 of each year, beginning July 1, 1995. Eligible employees on each
offering date may purchase full or fractional shares through payroll deductions
of up to 10% of compensation, but no employee may be granted rights under the
Plan to purchase stock with an aggregate fair market value in excess of $25,000
(determined at the effective date of the applicable offering) in any calendar
year, and in no event can more than 2,000 shares of common stock be purchased in
an offering period by an employee. The price an employee pays is the lesser of
85% of the market price on the first day of the applicable offering period or
85% of the market price on the last day of the applicable offering period.
Shares for the Plan may be either treasury shares, shares purchased in the open
market for the particular purpose, or authorized and unissued shares.
Eligibility will be extended to all regular and certain other employees of the
Company and of its domestic subsidiaries, as defined in the Plan, including
officers of the Company subject to reporting requirements under Section 16 of
the Securities Exchange Act of 1934.
8
<PAGE>
NEW PLAN BENEFITS
It is not possible to determine how many eligible employees will participate
in the Plan in the future.
TAX TREATMENT
The Plan is intended to be an Employee Stock Purchase Plan within the
meaning of Section 423 of the Internal Revenue Code of 1986, as amended. In
general, under present Federal tax laws, employees who participate in the Plan
will recognize no income by virtue of their participation in the Plan or upon
the granting of options or the purchase of stock thereunder. Amounts set aside
as payroll deductions toward the purchase of stock under the Plan will, however,
constitute taxable income to the participant. Further, recognition of income for
Federal income tax purposes will occur upon disposition of the stock acquired
under the Plan or upon the death of a participant who has acquired Stock under
the Plan. The tax treatment accorded to participants upon the disposition of
their stock will depend on the length of time the stock is held.
The following are examples of the tax treatment which may result from the
disposition of stock acquired under the Plan:
(i) If a participant does not dispose of the stock until two years have
elapsed since the commencement date of the particular offering in which the
stock is acquired, or if a participant dies, the lesser of:
(a) the amount by which the market value of the stock on the
commencement date of the particular offering in which the stock
was acquired exceeds the option price (determined as of the
commencement date), or
(b) the amount by which the market value of the stock on the date of
disposition or death exceeds the actual option price,
will be treated as ordinary income to the participant in the year of the
disposition or death. The amount, if any, by which the price received upon
disposition of the stock exceeds the sum of the actual option price of the
stock plus the ordinary income as determined above will be treated as a
capital gain. Long-term capital gain is taxed to individuals at a maximum
rate of 28%, while, beginning in 1993, ordinary income could be taxed at a
maximum effective rate of 39.6%.
(ii) If the participant acquires stock under the Plan and disposes of
the stock within two years after the commencement date of the particular
offering in which the stock was acquired, the participant will recognize
both ordinary income and capital gain or loss. The amount by which the
market value of the stock at the termination date of the particular offering
under which the stock was acquired exceeds the option price will be taxed as
ordinary income even if the stock is sold at a loss. The amount of the
difference, if any, between the market value of the stock as of the
termination date of the particular offering under which the stock was
acquired and the price received upon disposition of the stock will be
treated as long-term or short-term capital gain or loss depending on the
length of time the participant has held the stock. Capital gains and losses
will be realized from the sale of assets held more than one year. Long-term
(but not short-term) capital gains are accorded special tax treatment
through a minimum tax rate of 28%.
9
<PAGE>
The tax consequences of the disposition of stock acquired under the Plan may
vary in individual cases. Federal estate and gift taxes, and state and foreign
taxes may also be important to some persons. The tax consequences referred to
above should be carefully observed to obtain the full benefit from the stock
purchased under the Plan. Participants are encouraged to consult their personal
tax advisors to assure that they obtain as much of the desired benefit as it is
intended that they may receive under the Plan.
The Plan will be administered by a committee appointed by the Board of
Directors from its members or members of senior management. Members of the
administrative committee will not be eligible to participate in the Plan. The
Plan may be amended by the Board of Directors but may not be amended, without
prior stockholder approval, to increase the number of shares, to reduce the
purchase price per share, to remove the Plan's administration from a committee
whose members are not eligible to participate, or to change the designation of
subsidiaries eligible to participate in the Plan. The proceeds of the sale of
stock and of administrative fees received under the Plan will constitute general
funds of the Company and may be used by it for any purpose. The Plan provides
for proportionate adjustments to reflect stock splits, stock dividends, or other
changes in the capital stock.
On July 7, 1995, Hach Company common stock closed at $13.50 on the NASDAQ
National Market System.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL.
10
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table provides summary information concerning compensation
paid by the Company to its Chief Executive Officer and each of the four other
most highly compensated executive officers of the Company (hereafter referred to
as the "named executive officers") for the fiscal years ended April 30, 1995,
1994 and 1993. No amounts were required to be disclosed in the "Other Annual
Compensation" column under applicable United States Securities and Exchange
Commission ("SEC") rules.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION AWARDS (2)
---------------------------------------------
ANNUAL COMPENSATION OTHER ANNUAL SECURITIES ALL OTHER
----------------------------------- COMPEN- UNDERLYING COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS SATION (1) OPTIONS SATION (3)
- ------------------------------------------- --------- ----------- ----------- --------------- --------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Kathryn Hach-Darrow 1995 $ 126,004 $ 0 0 $ 18,049
Chairman of the Board and 1994 125,887 0 -- 0 18,041
Chief Executive Officer 1993 119,628 0 0 16,984
Bruce J. Hach 1995 $ 160,280 $ 0 0 $ 17,513
President and Chief Operating 1994 144,028 0 -- 10,000 17,059
Officer 1993 139,994 0 0 18,419
Richard D. Vanous(4) 1995 $ 132,359 $ 0 0 $ 17,973
Vice President, Research 1994 122,822 0 -- 10,000 17,510
and Development 1993 112,749 0 10,000 17,428
Jerry M. Churchill 1995 $ 119,562 $ 0 0 $ 18,016
Vice President, Domestic Sales 1994 111,159 0 -- 7,500 16,972
1993 107,544 0 5,000 16,925
Loel J. Sirovy 1995 $ 122,285 $ 0 0 $ 18,312
Senior Vice President, Operations 1994 111,159 0 -- 10,000 16,972
1993 105,359 0 10,000 16,379
<FN>
- ------------------------
(1) The aggregate amount of perquisites and other personal benefits did not
exceed the lesser of $50,000 or ten percent (10%) of the total annual
salary and bonus reported for any of the named officers, and is therefore
not included.
(2) No named executive officer had any restricted stock holdings as of April
30, 1995. The Company has not granted any stock appreciation rights to any
named executive officer. Kathryn Hach-Darrow does not participate in the
Company's stock option plans.
</TABLE>
11
<PAGE>
<TABLE>
<S> <C>
(3) The amounts reported as "All Other Compensation" include the following
payments or accruals under the Company's benefit and incentive plans:
(i) Company contributions during fiscal 1995 under the Company's Profit
Sharing Plan (including Company contributions made pursuant to Section
401(k) of the Internal Revenue Code) as follows: K. Hach-Darrow
$9,612, B. Hach $7,997, R. Vanous $9,331, J. Churchill $8,513, and L.
Sirovy $8,714. Under the Plan, all domestic full time employees of the
Company with six or more months of service are eligible to
participate. The Company's annual contribution (after allocation of
the matching contribution described below) is determined by the Board
of Directors and is proportionately allocated to participants'
accounts based on their annual compensation not in excess of $150,000.
Participants' accounts attributable to the Company's contribution vest
at the rate of 10% for each of the first four years of service and 20%
for each of the next three years of service. The Profit Sharing Plan
includes a voluntary salary reduction provision as authorized by
Section 401(k) of the Internal Revenue Code. All employee
contributions and any contributions by the Company that the Board of
Directors determines are pursuant to Section 401(k), vest immediately.
The Plan provides for a matching contribution in the form of Company
stock for all contributions by employees with one or more years of
service in an amount of 50% of the employee's yearly contribution up
to a maximum of 2.0% of the employee's yearly compensation. Matching
contributions by the Company vest at the rate of 10% for each of the
first four years of service and 20% for each of the next three years
of service. All vested amounts allocated to the participants' accounts
are distributable upon retirement at or after age 65, termination of
employment, permanent disability or death.
(ii) Company contributions during fiscal 1995 to the Employee Stock
Ownership Plan ("ESOP") as follows: K. Hach-Darrow $2,996, B. Hach
$3,427, R. Vanous $2,908, J. Churchill $2,653, and L. Sirovy $2,716.
All domestic full time employees of the Company with six or more
months of service are eligible to participate in the ESOP. The
Company's annual contribution to the ESOP is determined by the Board
of Directors and is proportionately allocated to participants' ac-
counts based on their annual compensation not in excess of $150,000.
Except for participants' accounts transferred in 1989 from an earlier
employee stock ownership plan, which are fully vested, participants'
accounts in the ESOP vest at the rate of 10% for each of the
participant's first four years of service with the Company and 20% for
each of the participant's next three years of service. The ESOP
invests primarily in Company stock. All amounts in the participants'
accounts in the ESOP are distributable upon retirement at or after age
65, termination of employment, permanent disability or death.
(iii) Imputed compensation under Group Term Life Insurance Program as
follows: K. Hach-Darrow $5,099, B. Hach $696, R. Vanous $400, J.
Churchill $1,548 and L. Sirovy $1,572. The program, which is generally
available to all employees, provides coverage during employment equal
to twice salary. The above amounts of premiums paid by the Company on
behalf of named executive officers under the program represent amounts
imputed as compensation to such executive officers under the Internal
Revenue Code of 1986, as amended.
(iv) Company contributions during fiscal 1995 to the Company's Deferred
Compensation Plan as follows: K. Hach-Darrow $0, B. Hach $5,000, R.
Vanous $5,000, J. Churchill $5,000 and L. Sirovy
</TABLE>
12
<PAGE>
<TABLE>
<S> <C>
$5,000. Company contributions on behalf of eligible key employees
under the Deferred Compensation Plan are determined on an annual basis
in the sole discretion of the Plan's administration committee, which
is appointed by the Board of Directors. The Deferred Compensation Plan
also allows all eligible key employees to defer up to 25% of their
base compensation and up to 100% of bonuses and certain other payments
on a tax favored basis into a tax exempt trust pursuant to Internal
Revenue Service guidelines. The employee accounts are invested by the
Plan trustee in an investment fund as directed by the administration
committee. The Deferred Compensation Plan is the result of March 1,
1995 amendment and reconstitution of the Company's Supplemental
Executive Benefits Plan ("SEBP"), which was first established in 1988.
At the time of the March 1, 1995 amendment, the actuarial equivalent
of the benefits that had accrued under the SEBP were transferred to
employee accounts under the Deferred Compensation Plan. Internal
Revenue Service limits on the Deferred Compensation Plan preclude in
1995 elective employee contributions of more than $9,240 or an
eligible compensation base of more than $150,000 for any one employee.
Compensation deferred under the Deferred Compensation Plan at the
election of the named executives are included above in the category
(e.g., salary, bonus) and year it would otherwise have been reported
had it not been deferred.
(4) Richard D. Vanous served as Senior Vice President, Research and
Development, Marketing and Sales until November 22, 1994. He served as Vice
President, Research and Development thereafter until he resigned all
positions with the Company effective May 5, 1995.
</TABLE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The Company maintains the 1983 Stock Option Plan and the 1993 Stock Option
Plan (collectively, the "Option Plans"). The Option Plans are administered by
the Compensation Committee of the Company's Board of Directors which, in its
sole discretion, determines the persons from among salaried, full-time
non-director employees owning less than five percent of the Company's
outstanding stock to whom options, either incentive or non-incentive as defined
in Section 422 of the Internal Revenue Code, will be granted and the terms and
conditions of each grant within the limits imposed by the Option Plans. No stock
options were granted to the named executive officers during fiscal 1995.
13
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR, AND FISCAL YEAR END OPTION
VALUES
The following table shows information concerning the exercise of stock
options by each of the named executive officers during fiscal 1995, and the
value of all remaining exercisable and unexercisable options at April 30, 1995,
on a pre-tax basis.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT 4/30/95 (#) 4/30/95($) (2)
SHARES ACQUIRED VALUE REALIZED ----------------------------- --------------------------------
NAME ON EXERCISE (#) ($) (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------------------- ----------------- -------------- ------------- -------------- ----------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Kathryn Hach-Darrow 0 $ 0 0 0 $ 0 $ 0
Bruce J. Hach 0 0 3,333 6,667 0 0
Richard D. Vanous 2,500 14,123 9,999 10,001 0 0
Jerry M. Churchill 0 0 7,020 6,667 8,356 0
Loel J. Sirovy 2,822 13,517 9,999 10,001 0 0
<FN>
- ------------------------
(1) The value realized on exercise of stock options is calculated by
subtracting the exercise price from the market value of the Company's
Common Stock as of the exercise date.
(2) The value of unexercised in-the-money options is equal to the market value
of the Common Stock at April 30, 1995 ($16.00 per share) less the per share
option exercise price multiplied by the number of exercisable or
unexercisable options, as the case may be.
</TABLE>
EXECUTIVE EMPLOYMENT AGREEMENTS
Each of the executive officers identified below has an employment agreement
with the Company which comes into effect only upon a "Change of Control" of the
Company (as defined in the agreements), and thereafter provides for continued
employment of such individual for a three year term (which is automatically
renewed annually for one year unless either party gives six months prior written
notice of termination) (the "Employment Period") at an annual compensation rate,
and with such employment benefits, as in effect at the time of the commencement
of the Employment Period. The agreement, once triggered, further provides that
if the individual's employment is terminated by the Company (except for "cause"
as defined in the agreements) or if the individual should resign under certain
circumstances set forth in the agreements, the individual shall be entitled to
certain payments described below. The executive officers who have employment
contracts are Messrs. Hach, Sirovy, Churchill, Dreher, Peterson, Thompson and
Privette, and their current annual compensation rates range from $86,000 -
$155,000.
The Board of Directors believes that the Agreements assure fair treatment of
the executive officers in relation to their careers with the Company by assuring
them of some financial security. The Agreements
14
<PAGE>
also protect the stockholders by encouraging the executive officers to continue
their attention to their duties without distraction in a potentially disturbing
circumstance and neutralizing any bias they might have in evaluating proposals
for the acquisition of the Company.
Upon the death of an individual, the Company is obligated to make payments
to the beneficiary or representative of the deceased at a rate equal to one-half
of the annual compensation rate in effect on the date of death, until the end of
the term of the agreement (without reduction of any life insurance benefits
payable directly to the deceased's beneficiaries or estate).
If the individual's employment is terminated by the Company by reason of
such individual's disability, the Company is obligated to pay a salary to such
individual at the annual rate in effect upon termination for the remaining term
of the Agreement.
The agreements entitle an individual to resign during the Employment Period
if, without his consent in any circumstance other than his disability, his
office in the Company or the geographical area of his employment should be
changed. Upon such resignation, the individual is entitled to a lump sum payment
equal to the aggregate cash compensation (based on his annual compensation rate
at the time of termination) which would have been payable to the individual over
the remaining term of the agreement had it not been terminated, plus any other
benefits which would have been payable to him during such period (including the
fair market value of any stock options or other stock rights granted him under
any stock plans of the Company).
Each agreement includes a covenant by the individual providing that if the
individual's employment terminates for any reason he will not for a period of
twelve months following the termination of his employment engage directly or
indirectly in any competitive business, nor will he at any time following
termination use the confidential information of the Company.
REPORT OF THE COMPENSATION
COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
reviewing and recommending the compensation and other remuneration afforded the
named executive officers of the Company, including the grants of stock options
under the Company's Stock Option Plans. All decisions by the Compensation
Committee relating to the compensation of the Company's named executive officers
are reviewed and approved by the full Board.
COMPENSATION PRINCIPLES
In carrying out its responsibilities in fiscal 1995, the Compensation
Committee, as it has in prior years, considered the following:
- Financial performance of the Company as a whole on both a long-term
and short-term basis (including the increases in operating income,
sales, shareholder values, and returns on assets and equity achieved
by the Company in the prior fiscal year).
15
<PAGE>
- The Company's evaluation of the executive officers with respect to
overall job performance, including, with respect to each individual
executive officer, the financial performance of that area of the
Company, if any, for which such executive officer is responsible.
- The Company's policy and practices for compensation of employees
generally.
- Review of general compensation surveys prepared by executive
compensation consultants and available to the public.
- Such other material information which the Compensation Committee deems
appropriate in the case of any particular individual.
The compensation paid to the named executive officers of the Company, in
addition to the compensation paid pursuant to employee benefit plans, consists
of an annual salary and periodic grants of stock options. Historically, and in
fiscal 1995, the annual compensation paid to executive officers of the Company
has not included an "at-risk" or bonus component other than quarterly
performance bonus payments payable to all employees.
In fiscal 1995, with respect to certain named executive officers, in
addition to historical job performance, in determining annual salaries the
Compensation Committee took into account the increased responsibilities given
such executive officers in connection with promotions which became effective in
fiscal 1995.
The Committee has historically granted, or recommended the grant of,
individual stock options to executive officers in order to provide an incentive
to motivate and retain those individuals who are important to the Company's
future success. Stock options are designated to align the interests of
executives with those of shareholders, since the executives can only benefit
from the options if there is price appreciation in the Common Stock after the
date of grant. In April, 1993, the Company's 1983 Stock Option Plan terminated.
In order to continue to have the ability to provide the long-term incentives
which stock option grants provide, the Committee recommended, the Board of
Directors of the Company authorized and the Company's shareholders approved at
the 1994 Annual Meeting, the 1993 Stock Option Plan. The named executive
officers of the Company (other than Mrs. Hach-Darrow) are eligible to receive
grants under the Company's 1993 Option Plan, as recommended by the Compensation
Committee and approved by the Board of Directors.
Based on its review of the number of stock options awarded executive
officers in the prior fiscal year in connection with the establishment of the
1993 Stock Option Plan, and all options currently outstanding to executive
officers, the Committee determined not to grant additional stock option awards
to executive officers in the current fiscal year.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Compensation Committee meets without Kathryn Hach-Darrow present to
evaluate her performance and to determine its recommendations to the Board of
Directors with respect to her compensation as the Chief Executive Officer. Mrs.
Hach-Darrow, other than by her participation in general employee benefit
programs, has been compensated by the Company almost solely through her annual
salary. She is not eligible to participate in the Company's Stock Option Plans.
16
<PAGE>
The Compensation Committee continues to believe that the compensation paid
to Kathryn Hach-Darrow does not adequately reflect the value of Mrs.
Hach-Darrow's contributions to the Company's performance and the returns
recognized by the Company's shareholders and has not been competitive with the
compensation paid to the chief executive officers of companies of comparable
sales size in the manufacturing industry. Notwithstanding the position of the
Compensation Committee, Mrs. Hach-Darrow, as she has in most prior years, again
this year declined the competitive increases in her compensation recommended by
the Compensation Committee. Consequently, Mrs. Hach-Darrow's fiscal 1995 salary
remained at $125,000, the same amount she received in fiscal years 1993 and
1994.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Code, enacted in 1993, generally precludes a public
corporation from taking a deduction for compensation over $1 million paid to its
chief executive officer and any of its four other highest-paid executive
officers. Qualifying performance-based compensation will not be subject to the
deduction limit if certain requirements are met. Based on proposed regulations,
any taxable compensation derived from the exercise of stock options under the
Company's Stock Option Plans should be exempt from the limit on the corporate
tax deduction. The Company intends to structure future performance-based
compensation of its executive officers in a manner that will preserve the
deductibility of compensation payments to executive officers. However, the
Committee may authorize compensation which is not deductible in limited
circumstances where it seems appropriate to do so in the overall best interests
of the Company, and consistent with the Committee's other compensation policies
described above. Based on their understanding of Section 162(m) in the context
of the Company's compensation programs, the Committee considers it unlikely that
the compensation level of any executive officer would exceed the deductibility
limits under Section 162(m).
SUMMARY
The Compensation Committee believes that the policies and objectives of the
compensation programs at the Company serve to keep shareholder and management
interests in building value closely aligned and are consistent with programs
maintained by comparable industrial companies. The Corporation's senior
leadership team continues to move aggressively to position the organization for
global competition. Their efforts during fiscal 1995 have made the company
stronger and well-positioned for world-wide opportunities.
COMPENSATION COMMITTEE:
John N. McConnell, Chairman
Kathryn Hach-Darrow
Joseph V. Schwan
Linda O. Doty
17
<PAGE>
PERFORMANCE GRAPH
The following graph prepared by the Center for Research in Security Prices
compares the cumulative total shareholder return on the Common Stock of the
Company from April 30, 1990, through April 28, 1995, with the cumulative total
shareholder return for the Standard and Poor's 500 Index and the Peer Group (as
defined below) over the same period, assuming the investment of $100 on April
30, 1990 and the full reinvestment of all dividends. The companies that comprise
the Company's Peer Group are as follows: Betz Laboratories, Inc.; Dionics
Corporation; Ionics, Inc.; Isco, Inc.; Millipore Corporation; OI Corporation;
Osmonics, Inc.; Perkin Elmer Corporation; Thermo Instrument Systems, Inc. and
VWR Corporation. Peer Group investment is weighted based on the market
capitalization of each individual company within the Peer Group at the beginning
of each year period.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
04/30/90 04/30/91 04/30/92 04/30/93 04/30/94 04/30/95
<S> <C> <C> <C> <C> <C> <C>
Hach Company 100 117.4 188.4 185.7 138.4 154.5
S&P 500 Stocks 100 117.6 134 146.3 153.8 180.9
Self-Determined Peer Group 100 152.2 162.5 162.9 179.6 200.6
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following directors served as members of the Compensation Committee of
the Company's Board of Directors during fiscal 1995: Kathryn Hach-Darrow, John
N. McConnell, Joseph V. Schwan and Linda O. Doty.
Kathryn Hach-Darrow is the Chief Executive Officer of the Company. Although
Mrs. Hach-Darrow served on the Compensation Committee she did not participate in
any decisions regarding her own compensation as an executive officer other than
as described in the last sentence of the Compensation Committee's Report above.
18
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors of the Company, acting upon the recommendation of the
Audit Committee, has selected the firm of Coopers & Lybrand as independent
certified public accountants of the Company and its subsidiaries for the fiscal
year 1996. Coopers & Lybrand also served as independent certified public
accountants during the fiscal year 1995. A representative of Coopers & Lybrand
is expected to be present at the meeting and will be afforded the opportunity to
make a statement if he or she desires to do so. He or she will also respond to
appropriate questions raised by the stockholders.
1996 STOCKHOLDER PROPOSALS
In order for stockholder proposals for the 1996 Annual Meeting of the
Stockholders to be eligible for inclusion in the Company's proxy statement for
such meeting, they must be received by the Company at its principal office in
Loveland, Colorado prior to March 25, 1996.
GENERAL
The management knows of no other matters which may come before the meeting.
However, if any other matters are properly brought before the meeting, the
persons named in the endorsed proxy or their substitutes will vote in accordance
with their best judgment on such matters.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, directors, officers and employees of the Company may
solicit proxies by telephone or otherwise. The Company will reimburse brokers or
other persons holding stock in their names or in the names of their nominees for
their reasonable charges and expenses in forwarding proxies and proxy materials
to the beneficial owners of such stock.
A copy of the Company's 1995 Annual Report to the United States Securities
and Exchange Commission on Form 10-K may be obtained without charge by writing
to the Company at P.O. Box 389, Loveland, Colorado 80539, attention Mr. Gary R.
Dreher, Vice President and Chief Financial Officer.
By Order of the Board of Directors
ROBERT O. CASE, SECRETARY
July 25, 1995
19
<PAGE>
APPENDIX A
HACH COMPANY
1995 EMPLOYEE STOCK PURCHASE PLAN
The purpose of this Plan is to provide employees a continued opportunity to
purchase Hach stock through semi-annual offerings to be made during the
five-year period commencing July 1, 1995. Five hundred thousand (500,000) shares
of Hach stock in the aggregate have been approved for this purpose. The shares
of common stock to be sold to participants under this Plan may be treasury
shares, authorized unissued shares of the Corporation's $1.00 par value common
stock or Plan Purchase shares as provided in Section 20 below.
1. ADMINISTRATION. The Plan shall be administered by a Committee appointed
by the Board of Directors from its members or members of senior management,
consisting of at least three members. Members of the Committee shall not be
eligible to participate in the Plan.
2. ELIGIBILITY. Except as provided below, all employees of the Corporation
or its domestic subsidiaries who shall have been employed for a period of 180
days preceding an offering period and whose customary employment exceeds twenty
(20) hours per week shall be eligible to participate in the Plan in accordance
with such rule as may be prescribed by the Committee from time to time, which
rules, however, shall neither permit nor deny participation in the Plan contrary
to the requirements of the Internal Revenue Code (including, but not limited to,
Section 423(b)(3), (4), (5) and (8) thereof) and the regulations promulgated
thereunder. No employee may be granted an option if such employee, immediately
after the option is granted, owns 5% or more of the total combined voting power
or value of the stock of the Corporation or any subsidiary. For purposes of the
preceding sentence, the rules of Section 424(d) of the Internal Revenue Code
shall apply in determining the stock ownership of an employee, and stock that
the employee may purchase under outstanding options shall be treated as stock
owned by the employee.
3. OFFERINGS. The Corporation shall make one or more six-month offerings
to employees to purchase Hach stock under this Plan. Each offering period shall
be six (6) months in duration, commencing on January 1 and July 1 of each year.
During such offering periods (or during such portion thereof as an employee may
elect to participate) the amounts received as compensation by an employee shall
constitute the measure of such of the employee's participation in the offering
as is based on compensation.
4. PARTICIPATION. An employee eligible on the effective date of any
offering may participate in such offering at any time by completing and
forwarding a payroll deduction authorization to the employee's appropriate
payroll location. The form will authorize a regular payroll deduction from the
employee's compensation, and must specify the date on which such deduction is to
commence, which may not be retroactive. Such authorization shall be applicable
to subsequent offering periods unless the employer increases or decreases the
employee's payroll deduction as provided in Section 6 or withdraws from
participation as provided in Section 7 below.
5. DEDUCTIONS. The Corporation shall maintain payroll deduction accounts
for all participating employees. With respect to any offering made under this
Plan, an employee may authorize a payroll
<PAGE>
deduction of a whole percentage (up to a maximum of 10 %) of the compensation
the employee receives during the offering period (or during such portion thereof
in which the employee may elect to participate).
No employee may be granted an option that permits his or her rights to
purchase stock under this Plan, and any other stock purchase plan of the
Corporation and its subsidiaries, to accrue at a rate that exceeds $25,000 of
the fair market value of such stock (determined at the effective date of the
applicable offering) for each calendar year in which the option is outstanding
at any time.
6. DEDUCTION CHANGES. An employee may increase or decrease the employee's
payroll deduction by filing a new payroll deduction authorization at any time.
The change may not become effective sooner than the next offering period after
receipt of the authorization.
7. WITHDRAWAL.
(a) A participating employee may withdraw payroll deductions credited to
such employee's account under the Plan at any time by giving written
notice to a designated representative of the Corporation no later
than 7 days prior to the last day of any offering period. All of the
payroll deductions credited to the employee's account will be paid to
the employee promptly after receipt of such notice of withdrawal, and
no further deductions will be made from such employee's pay during
that Offering Period.
(b) An employee's withdrawal will not have any effect upon such
employee's eligibility to participate in any similar plan which may
hereafter be adopted by the Corporation or in any subsequent Offering
Period under this Plan.
8. PURCHASE OF SHARES. Each employee participating in any offering under
this Plan shall be granted an option, upon the effective date of such offering,
for as many full and fractional shares of Hach stock as the participating
employee may elect to purchase with up to 10% of the compensation received
during the specified offering period (or during such portion thereof as the
employee may elect to participate), to be paid by payroll deductions during such
period.
Notwithstanding the foregoing, in no event shall the number of shares
purchased by an employee during an offering period exceed 2,000 shares.
The purchase price for each share purchased shall be the lower of 85% of the
fair market price of a share of Hach stock on the commencement date of the
offering period or 85% of the fair market price of a share of Hach stock on the
last day of the offering period. As of the last day of any offering period, the
account of each participating employee shall be totaled, and the employee shall
be deemed to have exercised an option to purchase one or more full or fractional
shares at the then-applicable price; the employee's account shall be charged for
the amount of the purchase; and the ownership of such share or shares shall be
appropriately evidenced on the books of the Corporation. Additional shares
covered by the employee's option shall be purchased in the same manner, as of
the last day of each subsequent offering period. A participating employee may
not purchase a share under any offering period beyond 6 months from the
effective date thereof. Any balance remaining in an employee's payroll deduction
account at the end of an offering period will be carried forward to the next
offering period.
A-2
<PAGE>
9. EMPLOYEE ACCOUNTS AND CERTIFICATES. Upon purchase of one or more full
or fractional shares by a Plan participant pursuant to Section 8 hereof, the
Corporation shall establish a book entry account in the name of the employee to
reflect the share(s) purchased at that time. Certificates shall be issued only
on request for full shares. In the event a participant terminates his or her
account, any fractional share held in the account will be paid to the
participant in cash.
10. REGISTRATION OF SHARES. Shares may be registered only in the name of
the employee, or, if the employee so indicates on the employee's payroll
deduction authorization form, in the employee's name jointly with a member of
the employee's family, with right of survivorship. An employee who is a resident
of a jurisdiction that does not recognize such a joint tenancy may have shares
registered in the employee's name as tenant in common or as community property
with a member of the employee's family, without right of survivorship.
11. DEFINITIONS.
(a) The term "Corporation" or "Hach" means Hach Company, a Delaware
corporation.
(b) The term "Hach stock" means the common stock of Hach.
(c) The phrase "fair market price" per share on any given date shall
mean the closing price of the Hach stock as reported on the NASDAQ
National Market System, or if on any such date the Hach stock is not
quoted by any such organization, the average of the closing bid and
asked prices with respect to the Hach stock as furnished by a
professional market maker making a market in the Hach stock selected
by the Board of Directors and if not available, the fair market value
of the Hach stock as of such day as determined in good faith by the
Board of Directors.
(d) The term "subsidiary" means a subsidiary of the Corporation within
the meaning of Section 424(f) of the Internal Revenue Code and the
regulations promulgated thereunder.
12. RIGHTS AS A STOCKHOLDER. None of the rights or privileges of a
stockholder of the Corporation shall exist with respect to shares purchased
under this Plan unless and until such shares shall have been appropriately
evidenced on the books of the Corporation.
13. RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF EMPLOYMENT. In the event
of a participating employee's retirement, death, or termination of employment,
the employee shall be ineligible to continue to participate in the Plan, and no
payroll deduction shall be taken from any pay due and owing to the employee
after the pay period during which the employee became ineligible.
14. RIGHTS NOT TRANSFERABLE. Rights under this Plan are not transferable
by a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
15. APPLICATION OF FUNDS AND ADMINISTRATIVE FEES. All funds received or
held by the Corporation under this Plan may be used for any corporate purpose.
The Committee may impose reasonable administrative fees on participating
employees to defray the administrative costs of the Plan, which shall
A-3
<PAGE>
in no event exceed the actual administrative costs of the Plan. Initially, the
fee shall be $10 per participating employee. An employee who withdraws from
participation shall pay an additional administration fee should such employee
elect to again participate in a subsequent offering under this Plan.
16. ADJUSTMENTS IN CASE OF CHANGES AFFECTING HACH STOCK. In the event of a
subdivision of outstanding shares, or the payment of a stock dividend, the
number of shares approved for this Plan, and the share limitation set forth in
Section 8 hereof, shall be increased proportionately, and such other adjustments
shall be made as may be deemed equitable by the Board of Directors. In the event
of any other change affecting Hach stock, such adjustments shall be made as may
be deemed equitable by the Board of Directors to give proper effect to such
event.
17. AMENDMENT OF THE PLAN. The Board of Directors may at any time, or from
time to time, amend this Plan in any respect, except that, without the approval
of a majority of the shares of stock of the Corporation then issued and
outstanding and entitled to vote, no amendment shall be made (i) increasing the
number of shares approved for this Plan (other than as provided in Section 16
hereof), (ii) decreasing the purchase price per share, (iii) withdrawing the
administration of this Plan from a Committee consisting of persons not eligible
to participate in the Plan, or (iv) changing the designation of subsidiaries
eligible to participate in the Plan.
18. TERMINATION OF THE PLAN. This Plan and all rights of employees under
any offering hereunder shall terminate:
(a) On the day that participating employees become entitled to purchase
a number of shares equal to or greater than the number of shares
remaining available for purchase. If the number of shares so
purchasable is greater than the shares remaining available, the
available shares shall be allocated by the Committee among such
participating employees in such manner as it deems fair; or
(b) At any time, at the discretion of the Board of Directors. No
offering hereunder shall be made which shall extend beyond June 30,
2000.
19. GOVERNMENTAL REGULATIONS. The Corporation's obligation to sell and
deliver Hach stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance,
or sale of such stock.
20. PLAN SHARES PURCHASES. Purchases of outstanding shares may be made
pursuant to and on behalf of this Plan, upon such terms as the Corporation may
approve, for delivery under this Plan.
A-4
<PAGE>
- --------------------------------------------------------------------------------
PROXY
HACH COMPANY
ANNUAL MEETING OF SHAREHOLDERS -- AUGUST 29, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) KATHRYN HACH-DARROW, BRUCE J. HACH and
ROBERT O. CASE, and each of them, each with the power of substitution, as
proxies and agents ("Proxy Agents"), in the name of the undersigned to
represent and to vote as designated below all of the shares of Common Stock of
HACH COMPANY (the "Company"), held of record by the undersigned on Friday,
July 7, 1995, at the Annual Meeting of Shareholders to be held on Tuesday,
August 29, 1995, and any adjournment(s) thereof, the undersigned herewith
ratifying all that the said Proxy Agents may so do. The undersigned further
acknowledges receipt of the Notice of Annual Meeting and the Proxy Statement in
support of the Board's solicitation of proxies dated July 25, 1995.
THIS PROXY, WHEN PROPERLY EXECUTED AND RETURNED TO THE COMPANY, WILL BE VOTED
IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). IF NO DIRECTION
IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
---
(continued on reverse side)
- --------------------------------------------------------------------------------
<PAGE>
PLEASE MARK IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /x/
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
1. ELECTION OF SEVEN DIRECTORS:
(INSTRUCTION: To withhold authority for any individual nominee, strike a
line through the nominee's name in the list below)
Kathryn Hach-Darrow, Bruce J. Hach, Joseph V. Schwan, Fred W. Wenninger,
John N. McConnell, Linda O. Doty, Gary R. Dreher
For all the WITHHOLD
nominees listed AUTHORITY
(except as marked to vote for all
to the contrary). nominees.
---------------------
/ /
---------------------
2. PROPOSAL TO APPROVE THE COMPANY'S 1995 EMPLOYEE STOCK PURCHASE PLAN.
For Against Abstain
---------------------
/ / /
---------------------
3. In their discretion, the Proxy Agents are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE DATE AND SIGN exactly as name(s) appears hereon and return promptly
in the accompanying postpaid envelope. If shares are held by joint tenants or as
community property, both shareholders should sign.
Dated:____________________________________________________________________,1995
- -------------------------------------------------------------------------------
(Signature)
- -------------------------------------------------------------------------------
(Signature)
- -------------------------------------------------------------------------------
