<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
- - --------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
Instron Corporation
(Name of Registrant as Specified In Its Charter)
Instron Corporation
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $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:
4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- - --------------------------------------------------------------------------------
<PAGE> 2
[LOGO]
NOTICE OF ANNUAL MEETING
Canton, Massachusetts
April 6, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Instron
Corporation (the "Corporation") will be held at the Bank of Boston, 150 Royall
Street, Canton, Massachusetts on Wednesday, May 3, 1995 at 10:00 a.m. for the
following purposes:
1. To elect a class of Directors (3 persons) to serve until the 1998
Annual Meeting of Stockholders;
2. To consider and act upon a stockholder proposal which is set forth
and described in the attached Proxy Statement; and
3. To consider and act upon any other matters which may properly come
before the Annual Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed March 10, 1995 as the record date for the
Annual Meeting. Only stockholders of record at the close of business on that
date are entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof.
By Order of the Board of Directors,
JILL E. PEEBLES, Secretary and Clerk
REGARDLESS OF HOW MANY SHARES YOU OWN, IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED AT THE ANNUAL MEETING. WHETHER OR NOT YOU EXPECT TO BE PRESENT AT
THE ANNUAL MEETING, PLEASE SIGN, DATE AND PROMPTLY MAIL THE ENCLOSED PROXY CARD
IN THE ENCLOSED POSTAGE PAID ENVELOPE.
<PAGE> 3
INSTRON CORPORATION
100 ROYALL STREET
CANTON, MASSACHUSETTS 02021
(617) 828-2500
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MAY 3, 1995
ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Instron Corporation, a Massachusetts
corporation (the "Corporation"), for the Annual Meeting of Stockholders of the
Corporation to be held on Wednesday, May 3, 1995 at 10:00 a.m. at the Bank of
Boston, 150 Royall Street, Canton, Massachusetts and any adjournments or
postponements thereof. At the Annual Meeting, stockholders will consider the
matters set forth in the accompanying Notice of Annual Meeting.
RECORD DATE
This Proxy Statement, the accompanying Notice of Annual Meeting and proxy
card are first being sent to stockholders on or about April 6, 1995. The Board
of Directors has fixed the close of business on March 10, 1995 as the record
date for determining the stockholders entitled to notice of, and to vote at,
this meeting and any adjournments or postponements thereof. On that date, there
were outstanding 6,302,680 shares of the Corporation's common stock, $1.00 par
value (the "Common Stock"), and the stockholders are entitled to one vote for
each share held by them.
PROXIES
THE STOCKHOLDERS OF THE CORPORATION ARE REQUESTED TO SIGN, DATE AND
PROMPTLY MAIL THE ACCOMPANYING PROXY CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE.
Common Stock represented by properly executed proxies received by the
Corporation and not revoked will be voted at the Annual Meeting in accordance
with the instructions marked thereon. If the proxy card is properly executed and
no choice is specified with respect to any matter, the proxy will be voted in
accordance with the recommendation of the Board of Directors with respect to
such matter. The Board recommends a vote "FOR" the election of the three
nominees of the Board of Directors and "AGAINST" the stockholder proposal. In
addition, the proxy card authorizes the proxy holders to vote, in their
discretion, upon such other business as may properly come before the meeting and
any adjournments or postponements thereof. The Board is not aware of any other
matters which may come before the Annual Meeting other than those described in
this Proxy Statement. If any other matters shall properly come before the Annual
Meeting or any adjournments or postponements thereof, proxies will be voted in
accordance with the best judgment of the proxy holders.
The presence of a stockholder at the Annual Meeting will not automatically
revoke a stockholder's proxy. A stockholder may, however, revoke a proxy at any
time prior to the voting thereof on any
<PAGE> 4
matter by filing with the Clerk of the Corporation a written notice of
revocation, or by delivering to the Corporation a duly executed proxy bearing a
later date, or by attending the Annual Meeting and voting in person. The cost of
soliciting proxies will be borne by the Corporation. The Corporation has
retained Georgeson & Co. to perform various proxy advisory and solicitation
services for the Corporation. Pursuant to its agreement with the Corporation,
Georgeson & Co. will be paid a fee of $6,000 plus reasonable out-of-pocket
expenses. It is anticipated that employees of Georgeson & Co. and officers,
Directors and other employees of the Corporation (who will not receive
additional compensation for doing so) may solicit proxies by mail, telephone,
telecopy, telegraph or in person. The Corporation may also request persons,
firms and corporations holding shares in their names or in the names of their
nominees, which shares are beneficially owned by others, to send proxy materials
to and obtain proxies from such beneficial owners. The Corporation may reimburse
such holders for their reasonable expenses.
PROPOSAL 1
ELECTION OF A CLASS OF DIRECTORS
<TABLE>
The Board of Directors is presently comprised as follows:
<S> <C>
Class I: Messrs. Burr, Grant and Lacey were elected at the Annual Meeting
of Stockholders held on May 5, 1993 to serve until the 1996
Annual Meeting of Stockholders and until their successors are
duly elected and qualified.
Class II: Messrs. Hindman and Young were elected at the Annual Meeting of
Stockholders held on May 4, 1994, and Mr. Rutstein was appointed
by the Board of Directors on May 4, 1994 to serve until the 1997
Annual Meeting of Stockholders and until their successors are
duly elected and qualified.
Class III: Mr. McConnell was elected at the Annual Meeting of Stockholders
held on May 8, 1992, and Messrs. Smith and Moore were appointed
by the Board of Directors on March 9, 1994 and March 11, 1994,
respectively, to serve until the 1995 Annual Meeting of
Stockholders and until their successors are duly elected and
qualified.
</TABLE>
At the Annual Meeting, three Class III Directors will be elected to serve
until the 1998 Annual Meeting and until their successors are duly elected and
qualified. The Board of Directors has nominated Messrs. McConnell, Moore and
Smith to stand for election at the 1995 Annual Meeting. The Board of Directors
anticipates that each of its nominees will serve, if elected, as a Director. If
one or more of these nominees is unable to serve as a Director, the persons
named in the enclosed proxy will at their discretion either vote for the
election of such other person or persons as the Board may recommend to serve in
place of the person or persons unable to serve or vote for such lesser number of
nominees who are then able to serve.
2
<PAGE> 5
INFORMATION REGARDING THE BOARD OF DIRECTORS' NOMINEES AND DIRECTORS
<TABLE>
The following table sets forth information regarding Messrs. McConnell, Moore and Smith,
the Board of Directors' nominees for election as Directors, as well as information regarding
each Director whose term is not scheduled to expire until the 1996 or 1997 Annual Meeting of
Stockholders.
<CAPTION>
PERCENTAGE
OF
SHARES OF OUTSTANDING
COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
OWNED AS OF OWNED AS OF
NAME AND BUSINESS EXPERIENCE DIRECTOR DECEMBER 31, DECEMBER 31,
DURING THE PAST FIVE YEARS SINCE AGE 1994(1) 1994(1)
---------------------------- -------- --- ------------ ------------
<S> <C> <C> <C> <C>
Harold Hindman....................... 1946 77 545,234(2) 8.7%
Chairman of the Board of the
Corporation. Prior to April 1990,
Mr. Hindman was Chairman of the
Board and Chief Executive Officer
of the Corporation.
George S. Burr....................... 1946 77 417,660(3) 6.6%
Vice-Chairman of the Board of the
Corporation.
James M. McConnell................... 1990 54 177,941(4) 2.8%
President and Chief Executive
Officer of the Corporation. From
1987 to 1990, Mr. McConnell was
President and Chief Executive
Officer of Automatic Switch
Company, a wholly-owned subsidiary
of Emerson Electric Co. Mr.
McConnell is also a Director of
Duracraft Corporation.
Nicholas J. Grant.................... 1971 79 1,237(5) +
Senior Lecturer and Professor
Emeritus, Department of Materials
Science and Engineering,
Massachusetts Institute of
Technology. Dr. Grant is also a
Director of Capital Growth Manage-
ment ("CGM") Mutual Fund, CGM
Capital Development Fund, CGM Fixed
Income Fund, CGM American Tax Free
Fund, Memry Metals Inc., National
Forge Co. and Kimball Physics.
Richard W. Young..................... 1983 68 20,637(5) +
Retired Chairman and Chief
Executive Officer of Mentor O&O
Inc. (ophthalmic devices) where he
served in that capacity from 1985
to 1990. Prior to 1985, Dr. Young
was President of Houghton Mifflin
Company (publishing) and Executive
Vice President of Polaroid
Corporation (photographic
products). Dr. Young is also a
Director of Mentor Corporation, Bay
State Milling Co., and Oceantrawl,
Inc.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PERCENTAGE
OF
SHARES OF OUTSTANDING
COMMON STOCK COMMON STOCK
BENEFICIALLY BENEFICIALLY
OWNED AS OF OWNED AS OF
NAME AND BUSINESS EXPERIENCE DIRECTOR DECEMBER 31, DECEMBER 31,
DURING THE PAST FIVE YEARS SINCE AGE 1994(1) 1994(1)
- - ------------------------------------- --------- ---- ------------ ------------
<S> <C> <C> <C> <C>
John W. Lacey........................ 1987 64 1,000(5) +
Retired Executive Vice President of
Control Data Corp. Mr. Lacey is
also a Director of Graco
Incorporated and LSC Corporation.
Dennis J. Moore...................... 1994 56 100(5) +
Chairman and Chief Executive
Officer of ESCO Electronics
Corporation (diversified producer
of defense systems and commercial
products). From 1990 to 1992, Mr.
Moore was President and Chief
Operating Officer of ESCO. From
1987 to 1990, he was President of
Electronics & Space Corp., a wholly
owned subsidiary of Emerson
Electric Co.
Sheldon Rutstein..................... 1994 60 -- --
Retired Senior Vice President and
Chief Financial Officer of Raytheon
Company. Mr. Rutstein retired on
December 31, 1994, after 36 years
of service and was a member of
Raytheon's senior management since
1981. Currently, Mr. Rutstein is a
consultant to Raytheon Company.
John F. Smith........................ 1994 60 -- --
Retired Senior Vice President and
Chief Operating Officer of Digital
Equipment Corporation. Currently,
Mr. Smith is President of Mycos
International (construction). Mr.
Smith is also a Director of Sequoia
Systems and PerSeptive Biosystems.
<FN>
- - ---------------
+ Less than 1%.
(1) Based on information provided by the persons listed as of December 31, 1994.
The share numbers include the number of shares of stock held pursuant to the
Corporation's Savings and Security Plan (the "401(k) Plan"). The information
concerning shares allocated under the 401(k) Plan was provided by the
Vanguard Fiduciary Trust Company, the trustee of such plan (the "Trustee").
(2) Mr. Hindman has sole voting and investment power with respect to all of
these shares. The number shown excludes 60,863 shares owned by Mr. Hindman's
wife, as to which Mr. Hindman disclaims beneficial ownership.
(3) Mr. Burr has sole voting and investment power with respect to all of these
shares. The number shown excludes 66,750 shares which are owned by Mr.
Burr's wife, as to which Mr. Burr disclaims beneficial ownership.
</TABLE>
4
<PAGE> 7
(4) Mr. McConnell has sole voting and investment power with respect to 3,941 of
these shares, which includes 2,941 shares allocated to Mr. McConnell's
account pursuant to the 401(k) Plan. The number shown also includes 1,000
shares held jointly for the benefit of Mr. McConnell's daughter. The number
shown excludes 1,000 shares held by Mr. McConnell's wife for the benefit of
their daughter under the Uniform Gift to Minors Act. The number shown also
includes 173,000 shares which Mr. McConnell has the right to acquire within
60 days of December 31, 1994 upon the exercise of stock options granted
under the Corporation's stock option plans.
(5) The Director identified has sole voting and investment power with respect to
these shares.
As of December 31, 1994, all Directors and executive officers of the
Corporation as a group (16 persons) beneficially owned 1,569,288 shares of
Common Stock, which constituted 24.9% of the outstanding shares of Common Stock.
This number is based on information provided by such persons, except for
information concerning shares allocated to the accounts of such persons under
the 401(k) Plan, which information was provided by the Trustee. The 1,569,288
shares includes 344,849 shares which all Directors and executive officers as a
group have the right to acquire within 60 days of December 31, 1994 upon the
exercise of stock options granted under the Corporation's stock option plans.
As of February 14, 1995, the only persons known by the Corporation to own
5% or more of its outstanding Common Stock, other than Messrs. Hindman and Burr
(see Notes (2) and (3) to the foregoing table), are Dimensional Fund Advisors,
Inc. ("Dimensional") and Pioneering Management Corporation ("PMC"). According to
written representations of Dimensional, a registered investment advisor, it is
deemed to have beneficial ownership of 395,500 shares of Common Stock (6.3%) as
of December 31, 1994, all of which shares are held in portfolios of DFA
Investment Dimensions Group Inc., a registered open-end investment company, or
in series of the DFA Investment Trust Company, a Delaware business trust, or the
DFA Group Trust and DFA Participation Group Trust, investment vehicles for
qualified employee benefit plans, all of which Dimensional Fund Advisors Inc.
serves as investment manager. Dimensional disclaims beneficial ownership of all
such shares. The address of Dimensional is 1299 Ocean Avenue, 11th Floor, Santa
Monica, CA 90401. According to written representations of PMC, a registered
investment adviser to 24 funds which make up the Pioneer Group of Funds, it is
deemed to have beneficial ownership of 361,000 shares of Common Stock (5.7%) as
of December 31, 1994, all of which shares are held by funds in the Pioneer
Group. The address of PMC is 60 State Street, Boston, MA 02109.
During 1994, the Board of Directors of the Corporation held eight meetings.
Each of the Directors attended at least 75% of the aggregate number of meetings
of the Board and of the committees of which he is a member. The Board has
standing Audit and Compensation Committees and acts as a nominating committee.
During 1994, the Audit Committee of the Board (the "Audit Committee") held
three meetings. The current members of the Audit Committee are Messrs. Rutstein
(Chairman), Grant and Smith. The functions of the Audit Committee include making
recommendations to the Board regarding the selection of the Corporation's
independent accountants, reviewing the scope of the annual audit, reviewing fee
arrangements for audit and non-audit services and receiving and reviewing the
independent accountants' "management letters" and management's responses
thereto. In addition, the Audit Committee approves all significant assignments
of audit and other work, including tax engagements, performed by the independent
accountants, and reports to the Board on the Committee's activities and
recommendations.
5
<PAGE> 8
During 1994, the Compensation Committee of the Board (the "Compensation
Committee") held two meetings. The current members of the Compensation Committee
are Messrs. Young (Chairman), Moore and Lacey. The Compensation Committee
recommends to the Board the remuneration arrangements for senior management and
Directors and the adoption of compensation plans in which officers and other
employees are eligible to participate. The Compensation Committee also selects
the recipients and terms of the stock options granted under the Corporation's
stock option and stock incentive plans.
The Corporation does not maintain a standing nominating committee. The
Board selects nominees for election or re-election as Directors and officers.
The Board will consider a nominee for election to the Board recommended by a
stockholder of record if the stockholder submits the nomination in compliance
with the requirements of the Corporation's By-Laws. The Corporation's By-Laws
provide that, in order to be considered at an Annual Meeting, any nomination for
a candidate for election as Director must be delivered to, or mailed and
received by, the Corporation not less than 75 days nor more than 120 days prior
to the date of the scheduled annual meeting; provided, however, that in the
event that less than 90 days notice or prior public disclosure of the scheduled
date of the annual meeting is given or made to stockholders, notice by the
stockholder must be received not later than the close of business on the 15th
day following the day on which such notice of the scheduled date of the meeting
was mailed or such disclosure was made, whichever first occurs. To make such a
recommendation or nomination, a stockholder should send the nominee's name and
appropriate supporting information (as set forth in the Corporation's By-Laws)
to the Corporation at its principal executive offices, 100 Royall Street,
Canton, Massachusetts 02021.
Directors who are not employees of the Corporation earn a director's fee of
$20,000 per year plus $500 for attendance at each meeting of the Board or any
committee thereof. The Chairman of the Board receives a fee of $38,000 per year.
The Chairman of the Board and the Chairman of each Committee also receive $1,000
for attendance at each meeting that they chair.
The Corporation entered into a consulting agreement with Mr. Hindman
effective January 1, 1994, pursuant to which Mr. Hindman agreed to provide
consulting services to the Corporation for a period commencing January 1, 1994
and ending June 30, 1999. As compensation for such services, Mr. Hindman is
entitled to receive an annual consulting fee of $80,000. The agreement can be
terminated by Mr. Hindman upon 30 days prior written notice to the Corporation.
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
Compensation Philosophy
The Compensation Committee (the "Committee") establishes base salaries for
executive officers and selects the recipients and terms of the stock options
granted under the Corporation's stock option and stock incentive plans. In
determining the appropriate levels of compensation, the committee takes into
consideration the recommendations of appropriate officials of the Corporation
and independent professional compensation consultants.
The Committee's executive compensation philosophy is to provide competitive
levels of compensation, integrate management's pay with the achievement of the
Corporation's annual and long-term performance goals, reward above average
corporate performance, recognize individual initiative and achievement, and
assist the Corporation in attracting and retaining qualified management.
The Committee endorses the position that the executive officers should
share in the risk of the business and, accordingly, a significant portion of the
executive's compensation is at risk subject to
6
<PAGE> 9
individual and corporate performance and stock price appreciation. Executive
officers' annual cash compensation is targeted at industry competitive levels of
which approximately 65-80% is provided for in base salary with the remaining
20-35% provided for under the Corporation's Incentive Compensation Program,
dependent upon the Corporation's performance and the accomplishment of personal
objectives approved by the Committee.
Executive Compensation
Annual compensation for the Corporation's executives consists of three
principal elements, base salary, performance compensation and stock options.
Base Salaries
Base salaries for executive officers are targeted to equal 65-80% of total
annual cash compensation and are determined by evaluating the responsibilities
of the position held and the experience of the individual referenced to
compensation surveys for executives at similar companies based on a variety of
factors, including financial criteria and industrial classification.
Annual salary adjustments are determined by evaluating the competitive
marketplace, the performance of the Corporation, the performance of the
executive, and any change in responsibilities assumed by the executive. Salary
adjustments are normally determined and made on an annual basis.
Performance Compensation
The Corporation's Incentive Compensation Program is intended to focus
attention on annual performance goals which are tied directly to financial
performance targets approved by the Board of Directors. The plan targets
approximately 20-35% of the executive officer's annual cash compensation to be
paid under this program. In the event the individual and the Corporation's goals
are not reached, compensation is reduced accordingly; likewise, to the extent
that individual and Corporation performance exceeds the plan, additional
compensation is paid up to a predetermined maximum. Payments under this plan are
determined and paid annually after the close of each fiscal year.
Stock Options
The Corporation's stock option program is designed to reward long-term
business success and develop a parallel interest between key employees and
stockholders. The number of stock options awarded is generally intended to
reflect the executive's current and anticipated contributions to the
Corporation. The exercise price of options granted by the Corporation during
1994 were at the fair market value at the time of grant and no options granted
by the Corporation during 1994 were immediately exercisable at the time of grant
but rather were subject to a vesting schedule. No executive officers received
stock options during 1994. Stock option information with respect to executive
officers is reflected in the tables included in this Proxy Statement.
President and Chief Executive Officer 1994 Compensation
In determining Mr. McConnell's base salary, performance compensation, and
stock option grants for 1994, the Compensation Committee considered both the
Corporation's overall performance and Mr. McConnell's individual performance by
the same measures described above for determining executive officer
compensation. In light of the Corporation's improved financial performance for
1994 and Mr. McConnell's contribution with respect thereto, Mr. McConnell's 1994
total annual compensa-
7
<PAGE> 10
tion was increased to $409,800 as compared to $257,927 and $267,907 for 1993 and
1992, respectively. No stock options were granted to Mr. McConnell during 1994.
Section 162(m) of the Internal Revenue Code
The SEC requires that this report comment upon the Corporation's policy
with respect to Section 162(m) of the Internal Revenue Code of 1986, as amended.
This section generally limits the deductibility on the Corporation's tax return
of compensation over $1 million to any of the named executive officers of the
Corporation unless the compensation is paid pursuant to a plan which is
performance-related, non-discretionary and has been approved by the
Corporation's stockholders. The Committee's policy with respect to Section
162(m) is to make every reasonable effort to ensure that compensation is
deductible to the extent permitted and appropriate while simultaneously
providing executives with appropriate rewards for their performance.
This report was prepared by the Compensation Committee:
Dr. Richard W. Young, Chairman
John W. Lacey
Dennis J. Moore
SUMMARY COMPENSATION TABLE
The following table sets forth compensation awarded to, earned by or paid
to the Chief Executive Officer of the Corporation and the four other most highly
compensated executive officers of the Corporation during each of the three years
ended December 31, 1994, 1993 and 1992, for services rendered in all capacities
to the Corporation and its subsidiaries during such period. The Corporation has
not granted stock appreciation rights to any of its executive officers for such
periods. Information is furnished for each fiscal year during which such persons
were executive officers.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------- LONG TERM
OTHER COMPENSATION AWARDS
ANNUAL --------------------- ALL OTHER
COMPENSATION SECURITIES UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITIONS YEAR SALARY($) BONUS($) (1) OPTIONS(#) ($)(2)
- - ------------------------------ ---- -------- -------- ------------ --------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
James M. McConnell............ 1994 $245,000 $164,800 -- -- 4,500
President and Chief 1993 239,077 18,850 -- 52,000 4,497
Executive Officer 1992 234,000 33,907 -- 10,000 2,077
John A. Dotson(3)............. 1994 126,431 40,994 -- -- 3,996
Vice President of Operations 1993 113,308 7,050 -- 20,500 3,817
1992 111,000 15,356 -- 3,500 3,023
Joseph E. Amaral.............. 1994 122,423 40,560 -- -- 4,035
Vice President and 1993 108,308 12,090 -- 21,000 3,790
General Manager -- North 1992 106,000 18,018 -- 3,500 2,344
America Operations
Ian M. MacGregor.............. 1994 121,983 32,636 -- -- --
Vice President and 1993 114,187 7,181 -- 19,500 --
Managing Director of 1992 132,635 2,828 -- 3,500 --
Instron Limited
Linton A. Moulding............ 1994 112,706 36,934 -- -- 3,574
Chief Financial Officer 1993 97,307 6,337 -- 19,000 3,264
1992 95,000 11,486 -- 3,500 2,434
</TABLE>
8
<PAGE> 11
- - ---------------
[FN]
(1) Perquisites and other personal benefits paid to each named executive officer
in each instance aggregated less than 10% of the total annual salary and
performance compensation set forth in the columns entitled "Salary" and
"Bonus" for each named executive officer, and accordingly, are therefore
omitted from the table as permitted by the rules of the Securities and
Exchange Commission.
(2) Amount shown represents matching contributions made under the Corporation's
401(k) Plan.
(3) On March 31, 1995, Mr. Dotson terminated his employment with the
Corporation.
SEVERANCE AND OTHER AGREEMENTS
In 1993, the Corporation entered into Executive Severance Agreements (the
"Agreements") with nine of its current executive officers and with seven
additional key employees. The Agreements other than the one for Mr. McConnell
provide that the employee will receive severance benefits if the employment of
the employee is terminated by the Corporation (other than for cause or by reason
of his death, disability, or retirement) or by the employee for Good Reason (as
defined in the Agreements) within 24 months after a "Change in Control" (as such
term is defined in the Agreements). Mr. McConnell's agreement provides that he
will receive severance benefits if his employment is terminated for any reason
within 24 months after a Change of Control. The Agreements generally provide for
the following severance benefits: (i) a lump-sum payment equal to 200% of the
sum of the employee's annual base salary (150% in the case of Mr. Andersen and
100% in the case of one other executive officer) and (ii) reimbursement of legal
fees and expenses incurred by the employee in seeking to enforce his rights
under his Agreement.
In connection with Mr. Dotson's resignation effective March 31, 1995, the
Company loaned to Mr. Dotson $200,000 to exercise his vested stock options. The
loan matures no later than March 31, 1997, bears interest at the prime rate and
is secured by the shares of common stock issued in connection with Mr. Dotson's
exercise.
PENSION PLANS
The following table sets forth a range of estimated annual retirement
benefits under the Employees' Pension Plan (the "Pension Plan") for persons in
the compensation and years of service classification specified.
<TABLE>
PENSION PLAN TABLE
<CAPTION>
ESTIMATED ANNUAL BENEFIT FOR YEARS OF SERVICE
--------------------------------------------------------------------
30 OR
AVERAGE ANNUAL MORE
COMPENSATION(1) 10 YEARS 15 YEARS 20 YEARS 25 YEARS YEARS
- - ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000 ............... $20,833 $31,250 $41,667 $52,083 $ 62,500
150,000 ............... 25,000 37,500 50,000 62,500 75,000
175,000 ............... 29,167 43,750 58,333 72,917 87,500
200,000 ............... 33,333 50,000 66,667 83,333 100,000
- - ---------------
<FN>
(1) Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the
"Code") limits the compensation taken into account in calculating an
employee's retirement benefit. The limit for compensation paid in 1994 was
$150,000.
</TABLE>
9
<PAGE> 12
Covered compensation includes salary and performance compensation. The
calculation for retirement benefits under the Pension Plan is based on average
annual compensation for the highest five full consecutive twelve month periods
out of the last ten full consecutive twelve month periods preceding retirement
or termination of employment. As of December 31, 1994, Messrs. Amaral, Moulding,
McConnell and Dotson were credited with 17, 10, 5 and 4 years of service,
respectively, under the Pension Plan. The estimated annual benefit for years of
service in the table above is computed on the basis of payment of a straight
life annuity at the normal retirement age of 65. The amounts in the table do not
reflect the required Pension Plan offsets for social security payments and
payments from the Corporation's Employees' Profit Sharing Retirement Plan.
Mr. MacGregor's retirement benefits are provided under a foreign
subsidiary's pension plan that bases benefits on years of service and
compensation. Mr. MacGregor is credited with 22 years of service under such
plan. His projected annual benefit at normal retirement age is L58,530.
STOCK OPTION PLANS
The following table sets forth the number of exercisable and unexercisable
stock options at December 31, 1994 and the value of such stock options at
December 31, 1994 held by the Corporation's executive officers named in the
Summary Compensation Table. During the fiscal year ended December 31, 1994, no
officer named in the Summary Compensation Table received or exercised any stock
options nor had or exercised any stock appreciation rights.
<TABLE>
AGGREGATE FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT
YEAR END (#) FISCAL YEAR END ($)(1)
---------------------------- ----------------------------
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ------------------------------------------- ---------------------------- ----------------------------
<S> <C> <C>
James M. McConnell......................... 168,000/119,000 $473,687/$291,062
John A. Dotson............................. 31,875/ 17,125 121,718/ 25,906
Joseph E. Amaral........................... 23,554/ 18,500 48,170/ 26,687
Ian M. MacGregor........................... 22,890/ 23,000 15,653/ 32,750
Linton A. Moulding......................... 22,047/ 16,000 48,531/ 23,937
- - ---------------
<FN>
(1) Represents the total gain which would be realized if all options, for which
the year end stock price was greater than the exercise price, were
exercised.
</TABLE>
10
<PAGE> 13
<TABLE>
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Corporation's Common Stock, based
on the market price of the Corporation's Common Stock and assuming reinvestment
of dividends, with the total return of companies within the Standard & Poor's
500 Stock Index and the Precision Instruments Industry Index prepared by Value
Line, Inc. The calculation of total cumulative return assumes a $100 investment
in the Corporation's Common Stock, the S&P 500 Index and the Precision
Instruments Industry Index on December 31, 1989.
<CAPTION>
Measurement Period Instron Standard & Precision
(Fiscal Year Covered) Corporation Poors 500 Instruments
<S> <C> <C> <C>
1989 100.00 100.00 100.00
1990 84.69 96.83 95.77
1991 102.66 126.41 121.43
1992 105.16 136.25 114.48
1993 118.26 150.00 155.71
1994 134.32 151.98 166.79
</TABLE>
PROPOSAL 2
STOCKHOLDER PROPOSAL CONCERNING APPOINTMENT OF
COMMITTEE TO SELL THE CORPORATION
The following proposal was submitted for consideration at the Annual
Meeting by Cenith Partners L.P. ("Cenith"). The address and stock ownership of
Cenith will be furnished to any person, orally or in writing as requested,
promptly upon the receipt of any oral or written request therefor by the
Corporation. The text of the proposal, the statement submitted by Cenith in
support thereof, the Recommendation of the Board of Directors and the Statement
of the Board of Directors in opposition to the Stockholder Proposal are set
forth below.
PROPOSAL
"The Stockholders request the Board of Directors immediately establish a
Committee consisting of three directors, who have never been employees of
Instron Corporation or its subsidiaries, for the
11
<PAGE> 14
purpose of evaluating and aggressively pursuing the sale of Instron Corporation
to a strategic or other buyer."
STATEMENT OF PROPOSING STOCKHOLDER
In Cenith's view, Instron stockholders have fared poorly under Mr.
McConnell's stewardship. The stock price has been locked into a limited trading
range. Dividends have been flat.
<TABLE>
Set forth below is a tabulation of selected financial data taken from
Instron's Annual and Quarterly Reports to Stockholders which speaks volumes
regarding Instron's performance during the relevant periods.
SELECTED FINANCIAL DATA
(IN MILLIONS EXCEPT PER SHARE AMOUNTS)
<CAPTION>
NINE MONTHS
YEAR ENDED DEC. 31, ENDED
------------------------------------ SEPT. 30,
1990 1991 1992 1993 1994
------ ------ ------ ------ -----------
<S> <C> <C> <C> <C> <C>
Sales(1)(2).................................. $121.3 $126.4 $116.3 $122.8 $ 96.1
Operating Income before Special
Items(1)(2)................................ 9.2 10.7 5.6 5.0 4.2
Annual Dividend per Share.................... 0.12 0.12 0.12 0.12 0.12
Book Value per Share......................... 7.04 7.60 7.29 7.46 7.94
Average of Annual High and Low Price per
Share (AMEX)............................... 9.31 11.06 11.06 12.13 11.13
- - ---------------
<FN>
(1) Software development costs of $162,000, $687,000 and $1,882,000 were capitalized, increasing
Operating Income during 1991, 1992 and 1993, respectively.
(2) The effect of LIFO inventory liquidation was to reduce cost of sales (increasing Operating Income)
by $818,000 and $663,000 in 1991 and 1992, respectively.
</TABLE>
Per Instron's 1994 Proxy Statement, $100 invested on December 31, 1988 in
Instron Common Stock yielded $103.79 in cumulative total return at December 31,
1993. The same $100 investment in the S&P 500 Stock Index and the Value Line
Precision Instrument Industry Index yielded cumulative total returns of $197.30
and $155.52, respectively, at December 31, 1993. At September 30, 1994,
cumulative total return on that original investment in Instron Common Stock was
$117.61, compared to $198.89 and $181.32, respectively, for the two indices.
Cenith believes Instron's value to a strategic buyer is substantially
greater than the value that can be obtained by waiting and hoping for improved
revenues and profits.
A strategic buyer can reduce duplicative administrative and research and
development costs. By adjusting 1993 Operating Income before Special Items
($5,034,000) for an assumed reductions of 50% in 1993 Research and Development
Expense ($3,624,000) and 20% in 1993 Selling and Administrative Expense
($8,265,000), Cenith believes a strategic buyer could anticipate Operating
Income, as so adjusted, of almost $17,000,000. Utilizing for valuation purposes
multiples of between 5 and 8 times such Adjusted Operating Income (which
multiples Cenith believes are appropriate) and assuming that the realizable
value of Instron's undeveloped real estate offsets approximately its long-term
debt, Cenith believes that a strategic buyer could offer between $13.00 and
$21.00 per share to acquire
12
<PAGE> 15
Instron, representing a premium of between 12% and 81% over the November 30,
1994 closing price of $11 5/8 per share.
Vote YES to enhance stockholder value. Send a message to Instron's Board of
Directors. The stockholders of Instron have endured mediocre stock and operating
performances for too long! VOTE YES.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OPPOSES THE FOREGOING PROPOSAL AND UNANIMOUSLY
RECOMMENDS THAT STOCKHOLDERS VOTE "AGAINST" THIS PROPOSAL. YOUR EXECUTED PROXY
WILL BE SO VOTED UNLESS YOU SPECIFY OTHERWISE.
STATEMENT OF THE BOARD OF DIRECTORS IN OPPOSITION TO THE STOCKHOLDER PROPOSAL
A proposal has been submitted by Cenith Partners L.P., a stockholder of
Instron, that calls for the establishment of a committee to evaluate and
aggressively pursue the sale of the Company. Instron does not concur with Cenith
Partners' proposal as well as many of the assumptions upon which the proposal
was based. Instron believes that this proposal is not in the best interest of
Instron and its stockholders and ignores the Company's successful strategic
initiatives to enhance stockholder value and the numerous achievements attained
by management.
Instron has enhanced its product and technology portfolios through
extensive internal product development and acquisitions. Over 75% of 1994
product sales consisted of products that were developed or were added through
acquisitions during the last five years. During this time Instron acquired
Wilson Instruments, Inc., Amsler Otto Wolpert-Werke GmbH and in January of 1995,
The Shore Instrument & Manufacturing Company. The acquisition of these companies
has enabled Instron to become the world leader in the manufacturing, selling and
servicing of hardness testing equipment, a market in which Instron did not
compete before 1993. Moreover, the Company's emphasis on its service business
has resulted in increased customer satisfaction, better customer coverage and
improved service revenue and margins.
Although the financial successes of these initiatives were initially
depressed by the global recession, the results for 1994 indicate the significant
improvements that have taken place. Both shipments and bookings for 1994 were at
record levels and net income increased 83% over 1993, from $2,485,000, or $.39
per share, to $4,537,000, or $.72 per share.
Your Board of Directors will continue to diligently evaluate and pursue
alternatives to enhance stockholder value and believes that this proposal is not
in the best interest of Instron and its stockholders. Accordingly, the Board of
Directors recommends that stockholders vote "AGAINST" the proposal.
13
<PAGE> 16
OTHER MATTERS
QUORUM; STOCKHOLDER VOTE REQUIRED
The presence, in person or by proxy, of at least a majority of the total
number of outstanding shares of Common Stock entitled to vote is necessary to
constitute a quorum for the transaction of business at the Annual Meeting. In
accordance with SEC rules, a box and a designated space are provided on the
enclosed proxy card for stockholders to mark if they wish to "withhold
authority" to vote for any of the Corporation's nominees for Directors. In
accordance with the Corporation's By-Laws and applicable state law, votes
withheld for Directors' nominees and "broker non-votes" (that is, shares
represented at the meeting which are held by a broker or nominee and as to which
(i) instructions have not been received from the beneficial owner or the person
entitled to vote and (ii) the broker or nominee does not have discretionary
voting power) shall be treated as shares that are present and entitled to vote
for purposes of determining whether a quorum is present. The Corporation's
By-Laws provide that the election of Directors shall be determined by a
plurality of votes cast by stockholders, and thus shares represented by a proxy
that withhold authority to vote for a particular nominee or nominees and broker
non-votes will have no effect on the outcome of voting for the election of
Directors. In addition, with respect to the stockholder proposal, the
affirmative vote of a majority of the shares voting on such matter is required
for adoption of the stockholder proposal and thus absentions and broker
non-votes will have no effect on the outcome of voting on such proposal.
INDEPENDENT ACCOUNTANTS
A representative of Coopers & Lybrand, who have been the independent
accountants for the Corporation since August 1992, and who have been appointed
by the Board to serve in that capacity for 1995, is expected to be present at
the Annual Meeting and will be given an opportunity to make a statement if he or
she so desires. The representative of Coopers & Lybrand will also be available
to respond to appropriate questions.
PROPOSALS BY STOCKHOLDERS
For a stockholder proposal to be included in the Corporation's Proxy
Statement for the Corporation's 1996 Annual Meeting, it must be received at the
principal executive offices of the Corporation on or before December 8, 1995.
Such a proposal must comply with the requirements as to form and substance
established by the SEC in order to be included in the Corporation's Proxy
Statement.
In addition, the Corporation's By-Laws provide that any stockholder of
record wishing to have a stockholder proposal considered at an Annual Meeting,
other than a stockholder proposal included in the Corporation's Proxy Statement
pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, must provide
written notice of such proposal and appropriate supporting documentation, as set
forth in the By-Laws, to the Corporation at its principal executive offices not
less than 75 days nor more than 120 days prior to the date of the scheduled
annual meeting; provided, however, that in the event that less than 90 days
notice or prior public disclosure of the scheduled date of the meeting is given
or made to stockholders, notice by the stockholder must be received not later
than the close of business on the 15th day following the day on which such
notice of the scheduled date of the meeting was mailed or such disclosure was
made, whichever first occurs.
14
<PAGE> 17
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
The Corporation's executive officers and Directors and beneficial owners of
more than 10% of its Common Stock are required under Section 16(a) of the
Securities Exchange Act of 1934 to file reports of ownership and changes in
ownership with the SEC. Copies of those reports must also be furnished to the
Corporation. Based solely on a review of the copies of reports furnished to the
Corporation and written representations that no other reports were required, the
Corporation believes that during its 1994 fiscal year no person who was a
Director, executive officer or greater than 10% beneficial owner of the
Corporation's Common Stock failed to file on a timely basis all reports required
by Section 16(a) except as follows: Arthur D. Hindman, Vice President and
General Manager -- Asia Pacific/Latin America, inadvertently failed to file
Statements of Changes in Beneficial Ownership on Form 4 to show the sale of
shares of Common Stock in May and August of 1994.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE ANNUAL
MEETING. YOU ARE URGED TO SIGN, DATE AND PROMPTLY MAIL THE PROXY CARD IN THE
ENCLOSED POSTAGE PAID ENVELOPE.
15
<PAGE> 18
INSTRON CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints James M. McConnell,
Linton A. Moulding and John R. Barrett, and each of them, as proxies with full
power to appoint his substitute and authorizes each of them to represent and to
vote all shares of Common Stock of Instron Corporation held of record by the
undersigned at the close of business on March 10, 1995, at the Annual Meeting
of Stockholders of Instron Corporation to be held at the Bank of Boston, 150
Royall Street, Canton, Massachusetts, on Wednesday, May 3, 1995, at 10:00 a.m.
(local time), and at any adjournments or postponements thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER(S). IF THIS PROXY IS PROPERLY EXECUTED
AND NO CHOICE IS SPECIFIED BY THE UNDERSIGNED STOCKHOLDER(S) WITH RESPECT TO
ANY MATTER, THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE RECOMMENDATION OF
THE BOARD OF DIRECTORS WITH RESPECT TO SUCH MATTER. THE BOARD RECOMMENDS A
VOTE "FOR" THE ELECTION OF THE THREE NOMINEES OF THE BOARD OF DIRECTORS LISTED
IN PROPOSAL 1 AND "AGAINST" PROPOSAL 2. A STOCKHOLDER WISHING TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS NEED ONLY SIGN AND DATE
THIS PROXY ON THE REVERSE SIDE AND RETURN IT IN THE ENCLOSED ENVELOPE.
The undersigned hereby acknowledges receipt of the Notice and Proxy
Statement for the 1995 Annual Meeting of Stockholders and hereby revokes any
proxy or proxies heretofore given.
CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE
SEE REVERSE SIDE
/x/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED IN PROPOSAL 1
BELOW.
1. ELECTION OF A CLASS OF THREE DIRECTORS.
NOMINEES: James M. McConnell, Dennis J. Moore and John F. Smith
FOR WITHHELD
ALL FROM ALL
NOMINEES / / / / NOMINEES
/ /_________________________________________
For all nominees except vote withheld from
the nominee(s) set forth above
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 2.
2. STOCKHOLDER-PROPOSED ESTABLISHMENT OF COMMITTEE TO SELL THE COMPANY.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournments or
postponements thereof.
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE AT LEFT / /
PLEASE SIGN NAME EXACTLY AS SHOWN
Where there is more than one holder, each should sign. When signing as an
attorney, administrator, executor, guardian or trustee, please add your title
as such.
If executed by a corporation, the proxy should be signed by a duly authorized
person, stating title or authority.
Signature: ______________________________________ Date: _______________________
Signature: ______________________________________ Date: _______________________
<PAGE> 19
INSTRON CORPORATION
THIS VOTING INSTRUCTION CARD IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS
The undersigned instructs the VANGUARD FIDUCIARY TRUST COMPANY, as
Trustee under the Instron Corporation Savings and Security Plan Trust ("the
Plan"), to vote (in person or by proxy) all shares of Common Stock of Instron
Corporation for which the undersigned has voting rights under the Plan at the
close of business on March 10, 1995 (the "Shares") at the Annual Meeting
of Stockholders of Instron Corporation to be held at the Bank of Boston, 150
Royall Street, Canton, Massachusetts, on Wednesday, May 3, 1995, at 10:00 a.m.
(local time), and at any adjournments or postponements thereof.
WHEN THIS CARD IS PROPERLY EXECUTED, THE SHARES WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED PARTICIPANT. IF THIS VOTING
INSTRUCTION CARD IS PROPERLY EXECUTED AND NO CHOICE IS SPECIFIED BY THE
UNDERSIGNED PARTICIPANT WITH RESPECT TO ANY MATTER, THE SHARES WILL BE VOTED IN
ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD OF DIRECTORS WITH RESPECT TO
SUCH MATTER. THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF THE THREE
NOMINEES OF THE BOARD OF DIRECTORS LISTED IN PROPOSAL 1 AND "AGAINST" PROPOSAL
2. A PARTICIPANT WISHING TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS'
RECOMMENDATIONS NEED ONLY SIGN AND DATE THIS VOTING INSTRUCTION CARD ON THE
REVERSE SIDE AND RETURN IT IN THE ENCLOSED ENVELOPE.
The undersigned hereby acknowledges receipt of the Notice and Proxy
Statement for the 1995 Annual Meeting of Stockholders and hereby revokes any
voting instructions heretofore given.
CONTINUED AND TO BE SIGNED AND DATED ON REVERSE SIDE
SEE REVERSE SIDE
/x/ PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED IN PROPOSAL 1
BELOW.
1. ELECTION OF A CLASS OF THREE DIRECTORS.
NOMINEES: James M. McConnell, Dennis J. Moore and John F. Smith
FOR WITHHELD
ALL FROM ALL
NOMINEES / / / / NOMINEES
/ /_________________________________________
For all nominees except vote withheld from
the nominee(s) set forth above
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST PROPOSAL 2.
2. STOCKHOLDER-PROPOSED ESTABLISHMENT OF COMMITTEE TO SELL THE COMPANY.
FOR AGAINST ABSTAIN
/ / / / / /
3. In its discretion, the Trustee is authorized to vote (in person or by
proxy) upon such other business as may properly come before the meeting
or any adjournments or postponements thereof.
MARK HERE
FOR ADDRESS
CHANGE AND
NOTE AT LEFT / /
PLEASE SIGN NAME EXACTLY AS SHOWN
PLEASE SIGN, DATE AND PROMPTLY MAIL YOUR VOTING INSTRUCTION CARD IN THE
ENCLOSED ENVELOPE.
Signature: ______________________________________ Date: _______________________
Signature: ______________________________________ Date: _______________________
