<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 [Section]240.14a-11(c) or
[Section]240.14a-12
INSTRON CORPORATION
(Name of Registrant as Specified In Its Charter)
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 15, 1996
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 15, 1996 at 10:00 a.m. for the
following purposes:
1. To elect a class of Directors (3 persons) to serve until the 1999
Annual Meeting of Stockholders;
2. To consider and act upon a proposal to approve an amendment to the
Corporation's 1992 Stock Incentive Plan (the "1992 Plan") which increases
the number of shares of the Corporation's Common Stock that may be issued
thereunder from 300,000 to 600,000 shares (the "Plan Amendment").
3. To consider and act upon two stockholder proposals which are set
forth and described in the attached Proxy Statement; and
4. 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 29, 1996 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 15, 1996
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 15, 1996 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 15, 1996. The Board
of Directors has fixed the close of business on March 29, 1996 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 6,395,766 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, a vote "FOR" the plan amendment to the
Corporation's 1992 Stock Incentive Plan and a vote "AGAINST" each of the
stockholder proposals. 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 matter by filing with the Clerk of the
Corporation a written notice of revocation, or by delivering to the Corporation
a duly executed
<PAGE> 4
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.
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
The Corporation's Board of Directors is divided into three classes, each of
which consists of three Directors. One class of Directors is elected each year
to serve for a three year term. Class I Directors will be elected at the 1996
Annual Meeting of Stockholders; Class II Directors were elected at the 1994
Annual Meeting of Stockholders; and Class III Directors were elected at the 1995
Annual Meeting of Stockholders. In each case, members of each class will hold
office until their successors have been duly elected and qualified.
The nominees for Class I Directors, Messrs. Burr, Grant and Lacey, are
presently serving as Directors of the Corporation. The persons named in the
enclosed proxy will vote for the election of each of the nominees for Class I
Directors unless the proxy is marked otherwise or unless one or more nominees
are unable or unwilling to serve. Each of the nominees has indicated his
willingness to serve, if elected; however, if any nominee should be unable or
unwilling to serve, the proxies may be voted for a substitute nominee designated
by the Board of Directors or the Board of Directors may reduce the number of
Directors.
INFORMATION REGARDING THE BOARD OF
DIRECTORS' NOMINEES AND DIRECTORS
The following sets forth information, including principal occupation and
business experience for the past five years, regarding Messrs. Burr, Grant and
Lacey, the Board of Directors' nominees for election as Directors, as well as
each Director whose term in not scheduled to expire until the 1997 or 1998
Annual Meeting of Stockholders. Information with respect to the number of shares
of Common Stock beneficially owned by each Director, directly or indirectly, as
of December 31, 1995, appears under the heading "Security Ownership of Certain
Beneficial Owners and Management."
NOMINEES FOR CLASS I DIRECTORS (TERMS EXPIRING AT THE 1999 MEETING)
GEORGE S. BURR, age 78, has been a Director of the Corporation since 1946.
Mr. Burr is retired and currently serves as Vice Chairman of the Board of the
Corporation.
NICHOLAS J. GRANT, age 80, has been a Director of the Corporation since
1971. Dr. Grant is a Senior Lecturer and Professor Emeritus at the Department of
Materials Science and Engineering, Massachusetts Institute of Technology. Dr.
Grant is also a Director of Capital Growth Management ("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.
JOHN W. LACEY, age 65, has been a Director of the Corporation since 1987.
Mr. Lacey is retired from Control Data Corp. where he served as Executive Vice
President. Mr. Lacey is also a Director of LSC Corporation.
2
<PAGE> 5
CLASS II DIRECTORS (TERMS EXPIRE AT THE 1997 ANNUAL MEETING)
HAROLD HINDMAN, age 78, has been a Director of the Corporation since 1946.
Mr. Hindman is retired and currently serves as Chairman of the Board. Prior to
April 1990, Mr. Hindman was Chairman of the Board and Chief Executive Officer of
the Corporation.
RICHARD W. YOUNG, age 69, has been a Director of the Corporation since
1983. Dr. Young is retired from Mentor O&O, Inc. (ophthalmic devices) where he
served as Chairman and Chief Executive Officer from 1985 to 1990. Dr. Young is
also a Director of Mentor Corporation, Bay State Milling Co. and Oceantrawl,
Inc.
SHELDON RUTSTEIN, age 61, has been a Director of the Corporation since
1994. Mr. Rutstein is retired from Raytheon Company where he served as Senior
Vice President and Chief Financial Officer. Mr. Rutstein is a consultant to
Raytheon Company and is also a Director of Bradlees Inc.
CLASS III DIRECTORS (TERMS EXPIRE AT THE 1998 MEETING)
JAMES M. MCCONNELL, age 55, has been a Director, as well as President and
Chief Executive Officer, of the Corporation since April 1990. He was formerly
employed by Automatic Switch Company, a wholly owned subsidiary of Emerson
Electric Co., where he served as President and Chief Executive Officer from 1987
through 1990.
DENNIS J. MOORE, age 57, has been a Director of the Corporation since 1994.
Mr. Moore is Chairman and Chief Executive Officer of ESCO Electronics
Corporation (diversified producer of defense systems and commercial products).
From 1990 to 1992 he was President and Chief Operating Officer of ESCO, and from
1987 to 1990 he was President of Electronics & Space Corp., a wholly owned
subsidiary of Emerson Electric Co.
JOHN F. SMITH, age 61, has been a Director of the Corporation since 1994.
Mr. Smith was formerly employed by Digital Equipment Corporation where he served
as Senior Vice President and Chief Operating Officer. Mr. Smith is President of
Mycos International (construction). He is also a Director of Sequoia Systems,
PerSeptive Biosystems and Hadco Corporation.
3
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
<TABLE>
The following table sets forth, as of December 31, 1995, information
regarding the ownership of the Corporation's Common Stock by: (i) the
stockholders known by the Corporation to be beneficial owners of more than five
percent (5%) of the outstanding shares of Common Stock; (ii) each Director and
nominee for Director; (iii) each executive officer named in the Summary
Compensation Table below; and (iv) all Directors and executive officers of the
Corporation as a group:
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY % OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OUTSTANDING
------------------------------------ ---------------- -----------
<S> <C> <C>
David L. Babson, & Co.(2)................................... 433,900 6.8%
One Memorial Drive
Cambridge, MA 02142
Dimensional Fund Advisors, Inc.(3).......................... 390,700 6.2%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
Pioneering Management Corporation(4)........................ 406,100 6.4%
60 State Street
Boston, MA 02109
George S. Burr(5)........................................... 379,560 6.0%
Nicholas J. Grant........................................... 1,237 +
Harold Hindman(6)........................................... 543,759 8.6%
John W. Lacey(7)............................................ 2,000 +
James M. McConnell(8)....................................... 268,825 4.2%
Dennis J. Moore............................................. 100 +
Sheldon Rutstein............................................ -- --
John F. Smith............................................... -- --
Richard W. Young............................................ 25,000 +
Joseph E. Amaral(9)......................................... 35,946 +
Kenneth L. Andersen(10)..................................... 26,197 +
Ian M. MacGregor(11)........................................ 30,890 +
Linton A. Moulding(12)...................................... 34,755 +
All Directors and executive officers as a group (17
persons)(13).............................................. 1,599,003 25.2%
<FN>
- ---------------
+ Less than 1%.
(1) Unless otherwise indicated, the Corporation believes that each of the
stockholders listed above has sole voting and investment power with respect
to the shares of Common Stock that are beneficially owned by them.
(2) The number of shares beneficially owned is based on information as set
forth on a Schedule 13G dated February 12, 1996. David L. Babson & Co. is
an investment counseling firm managing stock and bond portfolios for a
variety of clients, ranging from large personal accounts to Fortune 500 and
state government retirement funds.
(3) The number of shares beneficially owned is based on information set forth
on a Schedule 13G dated February 7, 1996. Dimensional Fund Advisors, Inc.
("Dimensional") is a registered investment advisor. All of Dimensional's
shares of Common Stock 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,
</TABLE>
4
<PAGE> 7
investment vehicles for qualified employee benefit plans, all of which
Dimensional serves as investment manager. Dimensional disclaims beneficial
ownership of all such shares.
(4) The number of shares beneficially owned is based on information set forth
on a Schedule 13G dated January 26, 1996. Pioneering Management Corporation
is a registered investment advisor to 24 funds which make up the Pioneer
Group of Funds, and all of its shares of Common Stock are held by funds in
the Pioneer Group.
(5) The number shown excludes 51,550 shares which are owned by Mr. Burr's wife,
as to which Mr. Burr disclaims beneficial ownership.
(6) The number shown excludes 60,863 shares which are owned by Mr. Hindman's
wife, as to which Mr. Hindman disclaims beneficial ownership.
(7) Mr. Lacey has sole voting and investment power with respect to 1,000 of
these shares. The number shown also includes 1,000 shares held by Mr.
Lacey's wife.
(8) Mr. McConnell has sole voting and investment power with respect to 4,325 of
these shares, which includes 3,325 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 and 263,500
shares which Mr. McConnell has the right to acquire within 60 days of
December 31, 1995 upon the exercise of stock options granted under the
Corporation's stock option plans. 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.
(9) Mr. Amaral has sole voting and investment power with respect to 3,142 of
these shares, which represents shares allocated to Mr. Amaral's account
pursuant to the 401(k) Plan. The number shown also includes 32,804 shares
which Mr. Amaral has the right to acquire within 60 days of December 31,
1995 upon the exercise of stock options granted under the Corporation's
stock option plans.
(10) Mr. Andersen has sole voting and investment power with respect to 13,572 of
these shares, which represents shares allocated to Mr. Andersen's account
pursuant to the 401(k) Plan. The number shown also includes 12,625 shares
which Mr. Andersen has the right to acquire within 60 days of December 31,
1995 upon the exercise of stock options granted under the Corporation's
stock option plans.
(11) Mr. MacGregor has sole voting and investment power with respect to 5,375 of
these shares. The number shown also includes 25,515 shares which Mr.
MacGregor has the right to acquire within 60 days of December 31, 1995 upon
the exercise of stock options granted under the Corporation's stock option
plans. The number shown excludes 3,000 shares which are owned by Mr.
MacGregor's wife, as to which Mr. MacGregor disclaims beneficial ownership.
(12) Mr. Moulding has sole voting and investment power with respect to 6,958 of
these shares, which includes 4,958 shares allocated to Mr. Moulding's
account pursuant to the 401(k) Plan. The number shown also includes 27,797
shares which Mr. Moulding has the right to acquire within 60 days of
December 31, 1995 upon the exercise of stock options granted under the
Corporation's stock option plans.
(13) Based on information provided by the Directors and executive officers of
the Corporation, 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 indicated ownership includes 430,480 shares
which all executive officers as a group have a right to acquire within 60
days of December 31, 1995 upon the exercise of stock options granted under
the Corporation's stock option plans.
5
<PAGE> 8
During 1995, the Board of Directors of the Corporation held seven meetings
and acted by unanimous written consent on one occasion. 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 1995, 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.
During 1995, the Compensation Committee of the Board (the "Compensation
Committee") held one meeting. The current members of the Compensation Committee
are Messrs. Young (Chairman), Moore and Lacey. No member has served as an
officer of the Corporation or has any other business relationship or affiliation
with the Corporation, except his service as Director. 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.
6
<PAGE> 9
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
Compensation Philosophy
The Compensation 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 Compensation 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 Compensation Committee endorses the position that the executive
officers should share in the risk of the business and, accordingly, a
significant portion of each executive's compensation is at risk subject to
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 Compensation 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
7
<PAGE> 10
intended to reflect the executive's current and anticipated contributions to the
Corporation. The exercise price of options granted by the Corporation during
1995 were at the fair market value at the time of grant and no options granted
by the Corporation during 1995 were immediately exercisable at the time of grant
but rather were subject to a vesting schedule. Stock option information with
respect to executive officers is reflected in the tables included in this Proxy
Statement.
President and Chief Executive Officer 1995 Compensation
In determining Mr. McConnell's base salary, performance compensation and
stock option grants for 1995, 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. Accordingly, Mr. McConnell's 1995 total annual compensation was
$330,846 as compared to $409,800 and $257,927 for 1994 and 1993, respectively.
In addition, the Compensation Committee recommended and the Board endorsed
the granting to Mr. McConnell options to purchase 50,000 shares of the
Corporation's Common Stock. The Compensation Committee considered the number of
options held by Mr. McConnell at the time of grant and determined that this
granting is consistent with the Corporation's emphasis on long-term performance
in that it ensures that Mr. McConnell's compensation is substantially dependent
on long-term stock performance.
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 $1 million to any of the named executive officers of the
Corporation unless the compensation is paid pursuant to a plan which is
performance-related, non-discretionary and has been approved by the
Corporation's stockholders. The Committee's policy with respect to Section
162(m) is to make every reasonable effort to ensure that compensation is
deductible to the extent permitted and appropriate while simultaneously
providing executives with appropriate rewards for their performance.
This report was prepared by the Compensation Committee:
Dr. Richard W. Young, Chairman
John W. Lacey
Dennis J. Moore
8
<PAGE> 11
SUMMARY COMPENSATION TABLE
<TABLE>
The following table sets forth compensation awarded to, earned by or paid
to the Chief Executive Officer of the Corporation and the four other most highly
compensated executive officers of the Corporation during each of the three years
ended December 31, 1995, 1994 and 1993, for services rendered in all capacities
to the Corporation and its subsidiaries during such period. The Corporation has
not granted stock appreciation rights to any of its executive officers for such
periods. Information is furnished for each fiscal year during which such persons
were executive officers.
<CAPTION>
ANNUAL COMPENSATION LONG TERM
------------------------------- COMPENSATION
OTHER AWARDS
ANNUAL --------------------- ALL OTHER
COMPENSATION SECURITIES UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITIONS YEAR SALARY($) BONUS($) (1) OPTIONS(#) ($)(2)
- ---------------------------- ---- ------- ------- ------------ --------------------- ------------
<S> <C> <C> <C> <C> <C> <C>
James M. McConnell................ 1995 258,846 72,000 -- 50,000 4,500
President and Chief 1994 245,000 164,800 -- -- 4,500
Executive Officer 1993 239,077 18,850 -- 52,000 4,497
Joseph E. Amaral.................. 1995 130,231 18,525 -- 15,000 4,500
Vice President and 1994 122,423 40,560 -- -- 4,035
General Manager -- North 1993 108,308 12,090 -- 21,000 3,790
America Operations
Ian M. MacGregor.................. 1995 128,390 13,200 -- 15,000 --
Vice President and 1994 121,983 32,636 -- -- --
Managing Director of 1993 114,187 7,181 -- 19,500 --
Instron Limited
Linton A. Moulding................ 1995 123,041 17,205 -- 15,000 4,500
Chief Financial Officer 1994 112,706 36,934 -- -- 3,574
1993 97,307 6,337 -- 19,000 3,264
Kenneth L. Andersen............... 1995 120,769 17,050 -- 15,000 4,500
Vice President, Sales -- 1994 118,000 30,300 -- -- 3,814
North America 1993 143,000 9,150 -- 20,500 4,497
<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 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.
</TABLE>
SEVERANCE AND OTHER AGREEMENTS
During the past three years, the Corporation entered into Executive
Severance Agreements (the "Agreements") with nine of its current executive
officers and with six additional key employees. Each Agreement, other than the
one for Mr. McConnell, provides 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
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<PAGE> 12
case of Mr. Andersen) and (ii) reimbursement of legal fees and expenses incurred
by the employee in seeking to enforce his rights under his Agreement.
In connection with the resignation of John A. Dotson, former Vice President
and General Manager of North America Operations, effective March 31, 1995 the
Corporation loaned to Mr. Dotson $200,000 to exercise his vested stock options.
The loan bore interest at the prime rate and was secured by the shares of Common
Stock issued in connection with Mr. Dotson's exercise. The loan was subsequently
paid off on August 17, 1995.
PENSION PLANS
<TABLE>
The following table sets forth a range of estimated annual retirement
benefits under the Corporation's U.S. Employees' Pension Plan (the "Pension
Plan") for persons in the compensation and years of service classification
specified.
PENSION PLAN TABLE
<CAPTION>
ESTIMATED ANNUAL BENEFIT FOR YEARS OF SERVICE
----------------------------------------------------------------
30 OR
AVERAGE ANNUAL 10 15 20 25 MORE
COMPENSATION(1) YEARS YEARS YEARS 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 1995 was
$150,000.
</TABLE>
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, 1995, Messrs. Amaral, Andersen,
Moulding and McConnell were credited with 18, 13, 11 and 6 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 payments from the Corporation's Employees' Profit Sharing Retirement
Plan nor the required Pension Plan offsets for social security payments.
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 23 years of service under such
plan. His projected annual benefit at normal retirement age is L60,492.
10
<PAGE> 13
STOCK OPTION PLANS
<TABLE>
The following table sets forth stock options granted in 1995 to each of the
Corporation's executive officers named in the Summary Compensation Table. The
following table also discloses for each executive officer listed the gain or
"spread" that would be realized if the options were exercised when the
Corporation's stock price had appreciated by the percentage levels indicated
from the market price on the date of grant. No stock appreciation rights were
granted to the Corporation's executive officers or other employees during 1995.
OPTIONS GRANTED IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
----------------------------------------------------- VALUE AT ASSUMED
NUMBER OF ANNUAL RATE OF
SECURITIES PERCENT OF STOCK PRICE
UNDERLYING TOTAL OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OR OPTION TERMS(3)
GRANTED EMPLOYEES BASE PRICE EXPIRATION ------------------
NAME (#)(1) IN FISCAL YEAR ($/SH)(2) DATE 5%($) 10%($)
- ---- ---------- --------------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
James M. McConnell..... 50,000 24.9% $11.875 3/08/03 $283,489 $679,006
Joseph E. Amaral....... 15,000 7.5 11.875 3/08/03 85,047 203,702
Ian M. MacGregor....... 15,000 7.5 11.875 3/08/02 72,515 168,990
Linton A. Moulding..... 15,000 7.5 11.875 3/08/03 85,047 203,702
Kenneth L. Andersen.... 15,000 7.5 11.875 3/08/03 85,047 203,702
<FN>
- ---------------
(1) All such options are subject to a vesting schedule pursuant to which 25% of
such options vest and become exercisable on each of the first four
anniversaries of the respective grant date.
(2) The per share exercise price for all such options was equal to the market
price of the underlying security as of the date of grant.
(3) Represents amount of hypothetical potential gains from the stock options
granted in 1995. These hypothetical gains are based entirely on assumed
annual growth rates of 5% and 10% in value of the Corporation's stock price
over the life of the stock options.
</TABLE>
- ---------------
<TABLE>
The following table sets forth certain information regarding options
exercised in 1995 and options held at December 31, 1995 by the Corporation's
executive officers named in the Summary Compensation Table.
AGGREGATE EXERCISES AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT
YEAR END (#) FISCAL YEAR END ($)(1)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- --------------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
James M. McConnell........ -- -- 258,500/78,500 $979,625/$153,375
Joseph E. Amaral.......... -- -- 30,679/26,375 89,974/ 53,312
Ian M. MacGregor.......... -- -- 25,515/35,375 39,356/ 76,187
Linton A. Moulding........ 2,000 $ 5,000 25,672/25,375 76,828/ 50,562
Kenneth L. Andersen....... 14,010 12,855 10,500/26,125 28,656/ 52,625
<FN>
- ---------------
(1) Represents the total gain which would be realized if all options, for which
the December 31, 1995 stock price of $13.50 was greater than the exercise
price, were exercised.
</TABLE>
11
<PAGE> 14
STOCK PERFORMANCE GRAPH
<TABLE>
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, 1990.
[LINE GRAPH]
<CAPTION>
Measurement Period Instron Cor- Standard & Precision In-
(Fiscal Year Covered) poration Poor's 500 struments
--------------------- ------------ ---------- -------------
<S> <C> <C> <C>
1990 100.00 100.00 100.00
1991 121.22 130.55 125.49
1992 124.17 140.72 117.93
1993 139.64 154.91 159.39
1994 158.60 157.39 170.45
1995 173.32 216.42 246.54
</TABLE>
12
<PAGE> 15
PROPOSAL 2
APPROVAL OF AMENDMENT TO THE 1992 STOCK INCENTIVE PLAN
On March 6, 1995, the Board of Directors adopted, and has recommended that
the Stockholders approve, an amendment (the "Plan Amendment") to the
Corporation's 1992 Stock Incentive Plan (the "1992 Plan"). The Plan Amendment
provides that the number of shares of Common Stock available for issuance under
the 1992 Plan is increased from 300,000 to 600,000 shares.
The Board believes that the 1992 Plan has been, and continues to be, an
important incentive in attracting, maintaining and motivating key management
employees of the Corporation and its subsidiaries. The Board believes that the
ability to grant additional options will help retain and attract key management
employees who are in a position to contribute to the successful conduct of the
business and affairs of the Corporation and, in addition, to stimulate in such
individuals an increased desire to render greater service to the Corporation and
its subsidiaries.
THE BOARD RECOMMENDS A VOTE "FOR" APPROVAL OF THIS AMENDMENT TO THE 1992
PLAN.
DESCRIPTION OF THE 1992 PLAN, AS AMENDED
The 1992 Plan is administered by non-employee members of the Compensation
Committee (the "Committee"), and permits the granting of a variety of incentive
awards based on the Common Stock of the Corporation. The Committee has full
power to select, from among the employees eligible for awards, the individuals
to whom awards will be granted, to make any combination of awards to
participants and to determine the specific terms of each award, subject to the
provisions of the 1992 Plan. Persons eligible to participate in the 1992 Plan
are those full or part-time officers and other key employees of the Corporation
and its subsidiaries who are responsible for or contribute to the management,
growth or profitability of the Corporation and its subsidiaries. If adopted, the
Plan Amendment would increase from 300,000 to 600,000 the number of shares of
Common Stock available for issuance under the 1992 Plan (subject to adjustment
for stock splits and similar events).
Awards available under the 1992 Plan include stock options (both "Incentive
Options" and "Non-Qualified Options"), stock appreciation rights ("SARs"),
grants of restricted stock ("Restricted Stock"), grants of stock conditioned on
the attainment of individual or Corporation performance goals ("Performance
Shares") and unrestricted grants of stock ("Unrestricted Stock").
Stock Option Grants The option exercise price of each option granted
under the 1992 Plan is determined by the Committee, but in the case of
Incentive Options may not be less than 100% of the fair market value of the
shares on the date of grant. The term of each option is also fixed by the
Committee and may not exceed ten years from the date of grant in the case
of an Incentive Option or ten years and one day from the date of grant in
the case of a Non-Qualified Option. Options may be exercised by delivering
to the Corporation either cash or shares of Common Stock valued at their
fair market value on the exercise date.
Stock Appreciation Rights SARs may be granted independently or in
tandem with the grant of an option. SARs entitle the holder, upon exercise,
to receive an amount in any combination of cash or shares of Unrestricted
Stock or Restricted Stock not greater in value than the increase since the
date of grant in the value of the shares covered by such SARs. Each SAR
will terminate upon the termination or exercise of an accompanying option.
Restricted Stock Recipients of Restricted Stock must enter into a
Restricted Stock award agreement with the Corporation, setting forth the
purchase price, if any, the restrictions to which the
13
<PAGE> 16
shares are subject and the date or dates on which the restrictions will
lapse and the shares become vested. The Committee may at any time waive
such restrictions or accelerate such dates. Prior to the vesting of
Restricted Stock, the participant will have all rights of a stockholder
with respect to the shares, including voting and dividend rights, subject
only to the conditions and restrictions set forth in the 1992 Plan or in
the Restricted Stock award agreement.
Unrestricted Stock Unrestricted Stock may be issued in recognition of
past services or other valid consideration, and may be issued in lieu of
cash bonuses to be paid to employees pursuant to other bonus plans of the
Corporation.
Performance Share Awards Recipients of Performance Share awards must
enter into agreements setting forth the applicable conditions, as
determined by the Committee. Except as otherwise determined by the
Committee, rights under a Performance Share award will terminate upon a
participant's termination of employment.
The 1992 Plan provides that in the event of a "Change of Control" (as
defined in the 1992 Plan) of the Corporation, all stock options, SARs and
Performance Share awards shall automatically become fully exercisable, subject
to certain limitations, and restrictions and conditions on awards of Restricted
Stock shall automatically be deemed waived.
TAX ASPECTS UNDER THE U.S. INTERNAL REVENUE CODE
The following is a summary of the principal Federal income tax consequences
of option grants under the 1992 Plan. It does not describe all Federal tax
consequences under the 1992 Plan, nor does it describe state or local tax
consequences.
INCENTIVE OPTIONS
Under the Code, an employee will not realize taxable income by reason of
the grant or the exercise of an Incentive Option. If an employee exercises an
Incentive Option and does not dispose of the shares until the later of (a) two
years from the date the option was granted or (b) one year from the date the
shares were transferred to the employee, the entire gain, if any, realized upon
disposition of such shares will be taxable to the employee as long-term capital
gain, and the Corporation will not be entitled to any deduction. If an employee
disposes of the shares within such one-year or two-year period in a manner so as
to violate the holding period requirements (a "disqualifying disposition"), the
employee generally will realize ordinary income in the year of disposition and
the Corporation will receive a corresponding deduction, in an amount equal to
the excess of (1) the lesser of (x) the amount, if any, realized on the
disposition and (y) the fair market value of the shares on the date the option
was exercised over (2) the option price. Any additional gain realized on the
disposition will be long-term or short-term capital gain and any loss will be
long-term or short-term capital loss. The employee will be considered to have
disposed of his shares if he sells, exchanges, makes a gift of or transfers
legal title to the shares (except by pledge or by transfer on death). If the
disposition of shares is by gift and violates the holding period requirements,
the amount of the employee's ordinary income (and the Corporation's deduction)
is equal to the fair market value of the shares on the date of exercise less the
option price. If the disposition is by sale or exchange, the employee's tax
basis will equal the amount paid for the shares plus any ordinary income
realized as a result of the disqualifying distribution. The exercise of an
Incentive Option may subject the employee to the alternative minimum tax.
Special rules apply if an employee surrenders shares of Common Stock in
payment of the exercise price of his Incentive Option.
14
<PAGE> 17
NON-QUALIFIED OPTIONS
There are no Federal income tax consequences to either the optionee or the
Corporation on the grant of a Non-Qualified Option. On the exercise of a
Non-Qualified Option, the optionee (except as described below) has taxable
ordinary income equal to the excess of the fair market value of the Common Stock
received on the exercise date over the option price of the shares. The
optionee's tax basis for the shares acquired upon exercise of a Non-Qualified
Option is increased by the amount of such taxable income. The Corporation will
be entitled to a Federal income tax deduction in an amount equal to such excess,
provided the Corporation complies with applicable withholding rules. Upon the
sale of the shares acquired by exercise of a Non-Qualified Option, the optionee
will realize long-term or short-term capital gain or loss depending upon his or
her holding period for such shares.
Section 83 of the Code and the regulations thereunder provide that the date
for recognition of ordinary income (and the Corporation's equivalent deduction)
upon exercise of a Non-Qualified Option and for the commencement of the holding
period of the shares thereby acquired by a person who is subject to Section 16
of the 1934 Act will be delayed until the date that is the earlier of (i) six
months after the date of the exercise and (ii) such time as the shares received
upon exercise could be sold at a gain without the person being subject to such
potential liability.
Special rules apply if an optionee surrenders shares of Common Stock in
payment of the exercise price of a Non-Qualified Option.
PARACHUTE PAYMENTS
The exercise of any portion of any option that is accelerated due to the
occurrence of a change of control may cause a portion of the payments with
respect to such accelerated options to be treated as "parachute payments" as
defined in the Code. Any such parachute payments may be non-deductible to the
Corporation, in whole or in part, and may subject the recipient to a
non-deductible 20% Federal excise tax on all or part of such payment (in
addition to other taxes ordinarily payable).
15
<PAGE> 18
PLAN BENEFITS TABLE
<TABLE>
The following table sets forth certain benefits which may accrue to the
named individuals and groups under the 1992 Plan, to the extent determinable, if
the Plan Amendment is approved by stockholders. If the proposed Plan Amendment
is not approved, the option grants described below will be automatically
cancelled.
STOCK OPTIONS GRANTED UNDER THE 1992 PLAN(1)
<CAPTION>
NUMBER OF
NAME OR GROUP OPTION SHARES
------------- -------------
<S> <C>
James M. McConnell........................................................... 50,000
President and Chief Executive Officer
Joseph E. Amaral............................................................. 15,000
Vice President and General Manager -- North America Operations
Ian M. MacGregor(2).......................................................... --
Vice President and Managing Director of Instron Limited
Linton A. Moulding........................................................... 15,000
Chief Financial Officer
Kenneth L. Andersen.......................................................... 15,000
Vice President, Sales -- North America
All executive officers as a group............................................ 155,000
All employees, excluding executive officers, as a group(3)................... 18,250
<FN>
- ---------------
(1) These options represent incentive or non-qualified stock options granted
under the 1992 Plan on March 6, 1996, subject to stockholder approval of the
proposed Plan Amendment, at an exercise price of $13.50 per share (the
market price of the underlying security on the date of grant). Such options
vest ratably over a four year period.
(2) Mr. MacGregor was granted 15,000 stock options under the Corporation's 1979
Non-Qualified Stock Option and Stock Appreciation Rights Plan on March 6,
1996, at an exercise price of $13.50 per share (the market price of the
underlying security on the date of grant). These options vest ratably over a
four year period.
(3) In addition to the grant of stock options stated above, other employees,
excluding executive officers, as a group were granted 22,500 stock options
under the Corporation's 1979 Non-Qualified Stock Option and Stock
Appreciation Rights Plan on March 6, 1996, at an exercise price of $13.50
per share (the market price of the underlying security on the date of
grant). These options vest ratably over a four year period.
</TABLE>
16
<PAGE> 19
PROPOSAL 3
STOCKHOLDER PROPOSAL CONCERNING EMPLOYEE
COMPENSATION ARRANGEMENTS
The following proposal was submitted for consideration at the Annual
Meeting by Mr. William Steiner, 4 Radcliff Drive, Great Neck, New York 11024,
who states that he holds 800 shares of Common Stock of the Corporation. The text
of the proposal, the statement submitted by Mr. Steiner 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
"RESOLVED, that the shareholders recommend that the board of directors
adopt a policy against entering into future agreements with officers and
directors of this corporation which provide compensation contingent on a change
of control of the corporation, unless such compensation agreements are submitted
to a vote of the shareholders and approved by a majority of shares present and
voting on the issue."
STATEMENT OF PROPOSING STOCKHOLDER
Lucrative severance contracts awarded to senior corporate executives which
provide compensation contingent on a change of control, usually through a merger
or acquisition of the corporation, are known as "golden parachutes". These
contracts are awarded without shareholder approval.
The practice of providing these large cash awards to a small group of
senior corporate managers without shareholder approval has been a subject of
public outcry. In 1988, the U.S. Senate in emphasizing the potential conflict of
interest between management and shareholders created by these agreements voted
ninety eight to one to require shareholder approval of golden parachutes.
Although final action was not taken, it is clear to me that the
overwhelming vote in favor of the measure reflects public sentiment against
golden parachutes. A shareholder vote would allow the corporation's owners to
decide for themselves whether golden parachutes are in their best interests.
I am a founding member of the Investors Rights Association of America and
it is clear to me that requiring a shareholder vote is necessary to address the
conflicts of interest between management and shareholders that arise in the
awarding of golden parachutes.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OPPOSES THE FOREGOING PROPOSAL AND UNANIMOUSLY
RECOMMENDS THAT THE 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
The Corporation's Board of Directors believes that employee compensation
arrangements which provide reasonable contingent benefits upon a change in
control serve the best interests of stockholders, and are an important and
entirely appropriate element of a sound compensation program. Requiring
stockholder approval of such agreements gives stockholders no additional
benefits and can significantly increase the Corporation's costs and decrease its
flexibility.
17
<PAGE> 20
The view of the Board is that such severance agreements are intended to
minimize a conflict of interest executives might be deemed to have in the event
a tender offer or other takeover bid is made for the Corporation. These
agreements, by providing financial security for possible job loss following a
takeover, help management to stay focused during the takeover process, to assess
a takeover bid objectively and to advise the Board whether the bid is in the
best interest of the Corporation and its stockholders without fear of personal
financial loss. Furthermore, since it can be a long period from the time a
change in control is proposed until it is completed, the Corporation could be at
a disadvantage if it were to lose key employees during that time. These
agreements are an incentive for key managers to protect stockholder interests
and to remain with the Corporation during a contest for control and following a
takeover.
The Board also believes that change-in-control agreements are an important
and necessary benefit that enables the Corporation to compete for and retain the
best management personnel. The Board needs the flexibility to efficiently
provide such agreements to executives. This flexibility would be severely
hampered by the need to submit such agreements to stockholders for approval.
Under the proposal, unless the Corporation were to incur the significant expense
of a special meeting of stockholders, such employment agreements could only be
entered into once a year after approval at the annual meeting of stockholders or
subject to a general pre-approval which might not be sufficient for all needs.
Furthermore, termination agreements of this type have no current cost to the
Corporation or the stockholders and are similar to other such agreements which
exist in many public companies. These agreements will NOT prevent a business
combination that would increase stockholder value.
For all of these reasons, your Board of Directors 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.
PROPOSAL 4
STOCKHOLDER PROPOSAL CONCERNING NON-EMPLOYEE
DIRECTOR COMPENSATION
The following proposal was submitted for consideration at the Annual
Meeting by Dr. Charles Miller, 23 Park Circle, Great Neck, New York 11023, who
states that he holds 300 shares of Common Stock of the Corporation. The text of
the proposal, the statement submitted by Dr. Miller 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
"RESOLVED that the shareholders recommend that the board of directors take
the necessary steps to ensure that from here forward all non-employee directors
should receive a minimum of fifty percent of their total compensation in the
form of company stock which cannot be sold for three years."
STATEMENT OF PROPOSING STOCKHOLDER
A significant equity ownership by outside directors is probably the best
motivator for facilitating identification with shareholders.
Traditionally, outside directors, usually selected by management, were
routinely compensated with a fixed fee, regardless of corporate performance. In
today's competitive global economy, outside directors must exercise a critical
oversight of management's performance in furthering corporate profitability. All
too often, outside directors oversight has been marked by complacency, cronyism,
and inertia.
18
<PAGE> 21
Corporate America has too many examples of management squandering company
assets on an extended series of strategic errors. Meanwhile, Boards of Directors
stood by and passively allowed the ineptitude to continue, well after disaster
struck. They fiddled while Rome was burning.
When compensation is in company stock, there is a greater likelihood that
outside directors will be more vigilant in protecting their own, as well as
corporate, and shareholder interests.
What is being recommended in this proposal is neither novel nor untried. A
number of corporations have already established versions of such practices,
namely, Scott Paper, The Travelers, and Hartford Steam Boiler.
Robert B. Stobough, Professor of Business Administration at the Harvard
Business School, did a series of studies comparing highly successful to poorly
performing companies. He found that outside directors in the better performing
companies had significantly larger holdings of company stock than outside
directors in the mediocre performing companies.
It can be argued that awarding stock options to outside directors
accomplishes the same purpose of insuring director's allegiance to a company's
profitability, as paying them exclusively in stock. However, it is our
contention that stock options are rewarding on the upside, but offer no
penalties on the downside, where shareholders bear the full downside risks.
There are few strategies that are more likely to cement outside directors with
shareholder interests and company profitability than one which results in their
sharing the same bottom line.
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
Instron believes it is in the best interest of the Corporation and its
stockholders to attract and retain exceptional individuals to serve as
non-employee Directors on the Board of Directors. To successfully do this,
Instron must provide fair and competitive compensation to its non-employee
Directors. Instron believes that the non-employee Directors' current
compensation package is competitive with industry standards, allowing Instron to
attract highly qualified individuals to serve on the Board. The Corporation's
current Directors include individuals who are leaders in a wide range of
business fields. The experience and varied perspectives they bring to the
Board's deliberations are critical in making informed, reasoned policy decisions
on the diverse and complex issues with which the Board must deal. In order for
the Corporation to continue to attract and retain such outstanding individuals
to serve on the Board, the Corporation must be able to provide fair, competitive
and unrestricted compensation to its Directors.
In summary, your Board believes that the non-employee Directors' current
compensation package is competitive with industry standards and that the
implementation of this proposal could significantly impair its ability to
attract and retain qualified candidates to serve as Directors. Accordingly, the
Board of Directors recommends that stockholders vote "AGAINST" the proposal.
19
<PAGE> 22
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, abstentions 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 withholds authority to vote for a particular nominee or nominees will
have no effect on the outcome of voting for the election of Directors. In
addition, with respect to each of the stockholder proposals, the affirmative
vote of a majority of the shares voting on such matter is required for adoption
of the stockholder proposal and thus abstentions and broker non-votes will have
no effect on the outcome of voting on such proposal.
The affirmative vote of the holders of a majority of the shares of Common
Stock present, or represented, and entitled to vote at the Annual Meeting is
required to approve the Plan Amendment. Abstentions will be included in
determining the number of shares of Common Stock present, or represented, and
entitled to vote for purposes of approval of the Plan Amendment, and will
therefore have the effect of votes "against" the proposal. Broker non-votes will
not be counted in determining the number of shares of Common Stock present, or
represented, and entitled to approve the Plan Amendment, and will therefore have
no effect on the outcome of voting on such proposal.
INDEPENDENT ACCOUNTANTS
A representative of Coopers & Lybrand L.L.P., 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 1996, 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 L.L.P. 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 1997 Annual Meeting, it must be received at the
principal executive offices of the Corporation on or before December 17, 1996.
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 no later
than the close of business on the 15th day following the day on which
20
<PAGE> 23
such notice of the scheduled date of the meeting was mailed or such disclosure
was made, whichever first occurs.
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 1995 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: Ian M. MacGregor, Vice President and
Managing Director of Instron Limited, inadvertently failed to file Statements of
Changes in Beneficial Ownership on Form 4 to show the sale of shares of Common
Stock in May of 1995.
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.
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APPENDIX
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INSTRON CORPORATION
AMENDED AND RESTATED 1992 STOCK INCENTIVE PLAN
SECTION 1. General Purpose of the Plan; Definitions.
The name of the plan is the Instron Corporation 1992 Stock Incentive
Plan (the "Plan"). The purpose of the Plan is to encourage and enable the
personnel of Instron Corporation (the "Company") and its Subsidiaries upon
whose judgment, initiative and efforts the Company largely depends for the
successful conduct of its business to acquire a proprietary interest in the
Company. It is anticipated that providing such persons with a direct stake in
the Company's welfare will assure a closer identification of their interests
with those of the Company, thereby stimulating their efforts on the Company's
behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
"Act" means the Securities Exchange Act of 1934, as amended.
"Award" or "Awards", except where referring to a particular
category of grant under the Plan, shall include Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Unrestricted Stock Awards and Performance
Share Awards.
"Award Agreement" means the agreement executed and delivered
to the Company by the recipient of an Award.
"Board" means the Board of Directors of the Company.
"Cause" means and shall be limited to a determination of the
Board that the optionee should be dismissed as a result of (i) serious
and willful misconduct that is injurious to the Company, including
dishonest or fraudulent activity; (ii) the optionee's conviction of
(whether or not such conviction is subject to appeal), or entry of a
plea of guilty or nolo contendere to, any crime or offense involving
fraud, personal dishonesty or moral turpitude or which constitutes a
felony in the jurisdiction involved; or (iii) the optionee's
continuing repeated willful failure or refusal to perform such
optionee's duties to the Company.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor Code, and related rules, regulations and
interpretations.
"Committee" means the 1992 Stock Incentive Plan Committee
referred to in Section 2.
"Disability" means disability as set forth in Section 22(e)(3)
of the Code.
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"Disinterested Person" shall have the meaning set forth in
Rule 16b-3(c)(2)(i) promulgated under the Act, or any successor
definition under the Act.
"Effective Date" is defined in Section 17.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the related rules, regulations and
interpretations.
"Fair Market Value" on any given date means the last sale
price at which Stock is traded on such date or, if no Stock is traded
on such date, the most recent date on which Stock was traded, as
reflected in the American Stock Exchange; except that the Committee
may prescribe another measure of value for the exercise of Stock
Appreciation Rights as provided in Section 7(e).
"Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of
the Code.
"Non-Employee Director" means a member of the Board who is not
also an employee of the Company or any Subsidiary.
"Non-Qualified Stock Option" means any Stock Option that is not
an Incentive Stock Option.
"Normal Retirement" means retirement from active employment
with the Company and its Subsidiaries in accordance with the
retirement policies of the Company and its Subsidiaries then in
effect.
"Option" or "Stock Option" means any option to purchase shares
of Stock granted pursuant to Section 6.
"Performance Share Award" is defined in Section 10(a).
"Restricted Stock Award" is defined in Section 8(a).
"Stock" means the Common Stock, $1.00 par value, of the
Company, subject to adjustments pursuant to Section 3.
"Stock Appreciation Right" means a right described in Section
7(a).
"Subsidiary" means any corporation or other entity (other than
the Company) in any unbroken chain of corporations or other entities,
beginning with the Company if
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each of the corporations or entities (other than the last corporation
or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the total combined voting power of all
classes of stock or other interests in one of the other corporations
or entities in the chain.
"Unrestricted Stock Award" is defined in Section 9.
SECTION 2. Administration of Plan; Committee Authority to Select
Participants and Determine Awards, Etc.
(a) Committee. The Plan shall be administered by all of the
Non-Employee Director members of the Compensation Committee of the Board, or
any other committee of not less than three Non-Employee Directors performing
similar functions, as appointed from time to time by the Board. Each such
administrator shall be a Disinterested Person.
(b) Powers of Committee. The Committee shall have the power and
authority to grant Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the officers and other key employees of the
Company and its Subsidiaries to whom Awards may from time to time be
granted;
(ii) to determine the time or times of grant, and the
extent, if any, of Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock, Unrestricted
Stock and Performance Shares, or any combination of the foregoing,
granted to any one or more participants;
(iii) to determine the number of shares to be covered by
any Award;
(iv) to determine and modify the terms and conditions,
including restrictions, not inconsistent with the terms of the Plan,
of any Award, which terms and conditions may differ among individual
Awards and participants, and to approve the form of Award Agreements;
(v) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or
credit amounts equal to interest (at rates determined by the
Committee) or dividends or deemed dividends on such deferrals; and
(vi) to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including
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related Award Agreements); to make all determinations it deems
advisable for the administration of the Plan; to decide all disputes
arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
SECTION 3. Shares Issuable under the Plan; Mergers; Substitution.
(a) Shares Issuable. The maximum number of shares of Stock
reserved and available for issuance under the Plan shall be 600,000. For
purposes of this limitation, the shares of stock underlying any Awards which
are forfeited, cancelled, reacquired by the Company, satisfied without the
issuance of Stock or otherwise terminated (other than by exercise) shall be
added back to the shares of Stock available for issuance under the Plan so long
as the Plan participants to whom such Awards had been previously granted
received no benefits of ownership of the underlying shares of Stock to which
the Award related. Subject to such overall limitation, shares may be issued up
to such maximum number pursuant to any type or types of Award, including
Incentive Stock Options. Shares issued under the Plan may be authorized but
unissued shares or shares reacquired by the Company. Upon the exercise of a
Stock Appreciation Right settled in stock, the right to purchase an equal
number of shares of Common Stock covered by a related Stock Option, if any,
shall be deemed to have been surrendered and will no longer be exercisable, and
said number of shares shall no longer be available under the Plan.
(b) Stock Dividends, Mergers, etc. In the event of a stock
dividend, stock split or similar change in capitalization affecting the Stock,
the Committee shall make appropriate adjustments in (i) the number and kind of
shares of stock or securities on which Awards may thereafter be granted, (ii)
the number and kind of shares remaining subject to outstanding Awards, and
(iii) the option or purchase price in respect of such shares. In the event of
any merger, consolidation, dissolution or liquidation of the Company, the
Committee in its sole discretion may, as to any outstanding Awards, make such
substitution or adjustment in the aggregate number of shares reserved for
issuance under the Plan and in the number and purchase price (if any) of shares
subject to such Awards as it may determine and as may be permitted by the terms
of such transaction, or accelerate, amend or terminate such Awards upon such
terms and conditions as it shall provide (which, in the case of the termination
of the vested portion of any Award, shall require payment or other
consideration which the Committee deems equitable in the circumstances),
subject, however, to the provisions of Section 15.
(c) Substitute Awards. The Company may grant Awards under the
Plan in substitution for stock and stock based awards held by employees of
another corporation who concurrently become employees of the Company or a
Subsidiary as the result of a merger or
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consolidation of the employing corporation with the Company or a Subsidiary or
the acquisition by the Company or a Subsidiary of property or stock of the
employing corporation. The Committee may direct that the substitute awards be
granted on such terms and conditions as the Committee considers appropriate in
the circumstances. The shares which may be delivered under such substitute
awards shall be in addition to the maximum number of shares provided for in
Section 3(a) only to the extent that the substitute Awards are both (i) granted
to persons whose relationship to the Company does not make (and is not expected
to make) them subject to Section 16(b) of the Act; and (ii) granted in
substitution for awards issued under a plan approved, to the extent then
required under Rule 16b-3 (or any successor rule under the Act) by the
stockholders of the entity which issued such predecessor awards.
SECTION 4. Eligibility.
Participants in the Plan will be such full or part time officers and
other key employees of the Company and its Subsidiaries who are responsible for
or contribute to the management, growth or profitability of the Company and its
Subsidiaries and who are selected from time to time by the Committee, in its
sole discretion.
SECTION 5. Limitations on Terms and Dates of Awards.
(a) Duration of Awards. Except as otherwise set forth herein, no
restrictions or limitations on Awards shall extend beyond 10 years (or 10 years
and one day in the case of Non-Qualified Stock Options) from the grant date,
provided that deferrals elected by participants of the receipt of Stock or
other benefits under the Plan may extend beyond such date.
(b) Latest Grant Date. No Incentive Stock Option shall be granted
under the Plan after February 25, 2002.
SECTION 6. Stock Options.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options or Non-Qualified Stock Options. To the extent that any option does not
qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock
Option.
(a) Stock Options Granted to Employees. The Committee in its
discretion may grant Stock Options to employees of the Company or any
Subsidiary. Stock Options granted to employees pursuant to this Section 6(a)
shall be subject to the following terms and
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conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(i) Option Price. The option price per share of Stock
purchasable under a Stock Option shall be determined by the Committee
at the time of grant but shall be, in the case of Incentive Stock
Options, not less than 100% of Fair Market Value on the date of grant.
If an employee owns or is deemed to own (by reason of the attribution
rules applicable under Section 424(d) of the Code) more than 10% of
the combined voting power of all classes of stock of the Company or
any Subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the option price shall be not less than 110%
of Fair Market Value on the grant date.
(ii) Option Term. The term of each Stock Option shall be
fixed by the Committee, but no Incentive Stock Option shall be
exercisable more than ten years after the date the option is granted
and no Non-Qualified Stock Option shall be exercisable more than ten
years and one day after the date the option is granted. If an
employee owns or is deemed to own (by reason of the attribution rules
of Section 424(d) of the Code) more than 10% of the combined voting
power of all classes of stock of the Company or any Subsidiary or
parent corporation and an Incentive Stock Option is granted to such
employee, the term of such option shall be no more than five years
from the date of grant.
(iii) Exercisability; Rights of a Shareholder. Stock
Options shall become vested and exercisable at such time or times,
whether or not in installments, as shall be determined by the
Committee at or after the grant date; provided, however, that no Stock
Option shall first be exercisable until at least six months after the
date of grant. The Committee may at any time accelerate the
exercisability of all or any portion of any Stock Option. An optionee
shall have the rights of a shareholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock
Options.
(iv) Method of Exercise. Stock Options may be exercised
in whole or in part, by giving written notice of exercise to the
Company, specifying the number of shares to be purchased. Payment of
the purchase price may be made by one or more of the following
methods:
(1) In cash, by certified or bank check or other
instrument acceptable to the Committee;
(2) In the form of shares of Stock that the
optionee has beneficially owned for more than six months and
that are not then subject to restrictions under any Company
plan, if permitted by the Committee, in its discretion, at
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(or, in the case of Non-Qualified Stock Options, after) the
time of the grant. Such surrendered shares shall be valued at
Fair Market Value on the exercise date; or
(3) By the optionee delivering to the Company a
properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company to pay
the option purchase price; provided that in the event the
optionee chooses to pay the option purchase price as so
provided, the optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and
other agreements as the Committee shall prescribe as a
condition of such payment procedure. Payment instruments will
be received subject to collection.
The delivery of certificates representing shares of Stock to be purchased
pursuant to the exercise of a Stock Option will be contingent upon receipt from
the Optionee (or a purchaser acting in his stead in accordance with the
provisions of the Stock Option) by the Company of the full purchase price for
such shares and the fulfillment of any other requirements contained in the
Stock Option or applicable provisions of laws.
(v) Non-transferability of Options. No Stock Option
shall be transferable by the optionee otherwise than by will or by the
laws of descent and distribution and all Stock Options shall be
exercisable, during the optionee's lifetime, only by the optionee.
(vi) Termination by Death. If any optionee's employment
by the Company and its Subsidiaries terminates by reason of death, the
Stock Option may thereafter be exercised, to the extent exercisable at
the date of death, by the legal representative or legatee of the
optionee, for a period of one year (or such shorter period as the
Committee shall specify at the time of grant or such longer period as
the Committee shall specify at any time) from the date of death, or
until the expiration of the stated term of the Option, if earlier.
(vii) Termination by Reason of Disability or Normal
Retirement.
(1) Any Stock Option held by an optionee whose
employment by the Company and its Subsidiaries has terminated
by reason of Disability may thereafter be exercised, to the
extent it was exercisable at the time of such termination, for
a period of one year (or such shorter period as the Committee
shall specify at the time of grant or such longer period as
the Committee shall specify at any time) from the date of such
termination of employment, or until the expiration of the
stated term of the Option, if earlier.
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(2)(A) Any Non-Qualified Stock Option held by an
optionee whose employment by the Company and its Subsidiaries
has terminated by reason of Normal Retirement may thereafter be
exercised, to the extent it was exercisable at the time of such
termination, for a period of one year (or such shorter period
as the Committee shall specify at the time of grant or such
longer period as the Committee shall specify at any time) from
the date of such termination of employment, or until the
expiration of the stated term of the Option, if earlier.
(B) Any Incentive Stock Option held by an
optionee whose employment by the Company and its Subsidiaries
has terminated by reason of Normal Retirement may thereafter
be exercised, to the extent it was exercisable at the time of
such termination, for a period of three months (or such
shorter period as the Committee shall specify at the time of
grant or such longer period as the Committee shall specify at
any time) from the date of such termination of employment, or
until the expiration of the stated term of the Option, if
earlier.
(3) In the event of termination of employment by
reason of Disability or Normal Retirement, the Committee shall
have sole authority and discretion to determine whether a
participant's employment has been terminated for such reason.
(4) Except as otherwise provided by the Committee
at the time of grant, the death of an optionee during a period
provided in this Section 6(a)(vii) for the exercise of a
Non-Qualified Stock Option (or during the final year of such
period if longer than one year), shall extend such period for
one year following death, subject to termination on the
expiration of the stated term of the Option, if earlier.
(viii) Termination for Cause. If any optionee's employment
by the Company and its Subsidiaries has been terminated for Cause, any
Stock Option held by such optionee shall immediately terminate and be
of no further force and effect; provided, however, that the Committee
may, in its sole discretion, provide that such stock option can be
exercised for a period of up to three months from the date of
termination of employment or until the expiration of the stated term
of the Option, if earlier.
(ix) Other Termination. Unless otherwise determined by
the Committee, if an optionee's employment by the Company and its
Subsidiaries terminates for any reason other than death, Disability,
Normal Retirement or for Cause, any Stock Option held by such optionee
may thereafter be exercised, to the extent it was exercisable on the
date of termination of employment, for a period of three months (or
such shorter period as the Committee shall specify at the time of
grant or such longer period as the
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Committee shall specify at any time) from the date of termination of
employment or until the expiration of the stated term of the Option,
if earlier.
(x) Annual Limit on Incentive Stock Options. To the
extent required for "incentive stock option" treatment under Section
422 of the Code, the aggregate Fair Market Value (determined as of the
time of grant) of the Stock with respect to which Incentive Stock
Options granted under this Plan and any other plan of the Company or
its Subsidiaries become exercisable for the first time by an optionee
during any calendar year shall not exceed $100,000.
(xi) Form of Settlement. Shares of Stock issued upon
exercise of a Stock Option shall be free of all restrictions under the
Plan, except as otherwise provided in this Plan. The Committee may
provide at time of grant that the shares to be issued upon the
exercise of a Stock Option shall be in the form of Restricted Stock,
or may reserve the right to so provide after the time of grant.
(b) Reload Options. At the discretion of the Committee, Options
granted under this Section 6(a) may include a so- called "reload" feature
pursuant to which an optionee exercising an option by the delivery of a number
of shares of Stock in accordance with Section 6(a)(iv)(2) hereof would
automatically be granted an additional Option (with an exercise price equal to
the Fair Market Value of the Stock on the date the additional Option is granted
and with the same expiration date as the original Option being exercised, and
with such other terms as the Committee may provide) to purchase that number of
shares of Stock equal to the number delivered to exercise the original Option.
SECTION 7. Stock Appreciation Rights; Discretionary Payments.
(a) Nature of Stock Appreciation Right. A Stock Appreciation
Right is an Award entitling the recipient to receive an amount in cash or
shares of Stock (or in a form of payment permitted under Section 7(e) below) or
a combination thereof having a value equal to (or if the Committee shall so
determine at time of grant, less than) the excess of the Fair Market Value of a
share of Stock on the date of exercise over the exercise price per share set by
the Committee at the time of grant (or over the option exercise price per
share, if the Stock Appreciation Right was granted in tandem with a Stock
Option) multiplied by the number of shares with respect to which the Stock
Appreciation Right shall have been exercised, with the Committee having the
right to determine the form of payment.
(b) Grant and Exercise of Stock Appreciation Rights. Stock
Appreciation Rights may be granted to any employees of the Company or any
Subsidiary by the Committee in tandem with, or independently of, any Stock
Option granted pursuant to Section 6(a) of the Plan. In the case of a Stock
Appreciation Right granted in tandem with a Non-Qualified Stock Option, such
Right may be granted either at or after the time of the grant of such Option.
In
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the case of a Stock Appreciation Right granted in tandem with an Incentive Stock
Option, such Right may be granted only at the time of the grant of the Option.
A Stock Appreciation Right or applicable portion thereof granted in
tandem with a Stock Option shall terminate and no longer be exercisable upon
the termination or exercise of the related Stock Option, except that, at the
Committee's discretion, a Stock Appreciation Right granted with respect to less
than the full number of shares covered by a related Stock Option shall only so
terminate if and to the extent that the number of shares covered by the
exercise or termination of the related Stock Option exceeds the number of
shares not covered by such Stock Appreciation Right.
(c) Terms and Conditions of Stock Appreciation Rights. Stock
Appreciation Rights shall be subject to such terms and conditions as shall be
determined from time to time by the Committee, subject to the following:
(i) Stock Appreciation Rights granted in tandem with
Stock Options shall be exercisable at such time or times and to the
extent that the related Stock Options shall be exercisable.
(ii) Upon exercise of a Stock Appreciation Right, the
applicable portion of any related Stock Option shall be surrendered.
(iii) Stock Appreciation Rights granted in tandem with a
Stock Option shall be transferable only when and to the extent that
the underlying Stock Option would be transferable. Stock Appreciation
Rights not granted in tandem with a Stock Option shall not be
transferable otherwise than by will or the laws of descent or
distribution. All Stock Appreciation Rights shall be exercisable
during the participant's lifetime only by the participant or the
participant's legal representative.
(iv) No Stock Appreciation Right may be exercised for a
period of six months after the date of grant.
(d) Settlement in the Form of Restricted Shares. Shares of Stock
issued upon exercise of a Stock Appreciation Right shall be free of all
restrictions under the Plan, except as otherwise provided in this Plan. The
Committee may provide at the time of grant in the case of a Stock Appreciation
Right that such shares shall be in the form of shares of Restricted Stock. Any
such shares shall be valued at Fair Market Value on the date of exercise of the
Stock Appreciation Right.
(e) Rules Relating to Exercise. In the case of a participant
subject to the restrictions of Section 16(b) of the Act, no Stock Appreciation
Right (as referred to in Rule 16b-3(e) or any successor rule under the Act)
shall be exercised except in compliance with any
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applicable requirements of Rule 16b-3 or any successor rule. If a full or
partial settlement in cash would result, (i) such a participant may not exercise
a Stock Appreciation Right or any related Stock Option during the first six
months of the term of the Stock Appreciation Right or Stock Option to be
exercised; and (ii) such a participant may exercise a Stock Appreciation Right
only either: (A) during the period beginning on the third business day following
the date of release of quarterly or annual summary statements of sales and
earnings of the Company and ending on the twelfth business day following such
date, unless a different period is specified by Rule 16b-3(e) or any successor
rule under the Act; (B) pursuant to an irrevocable election to exercise made at
least six months in advance of the effective date of the election; or (C)
pursuant to an election to exercise incident to death, Normal Retirement,
Disability or termination of employment. In the event of an exercise of a Stock
Appreciation Right during the exercise period prescribed by Rule 16b-3(e) or any
successor rule, the Committee may prescribe by rule of general application, such
measure of Fair Market Value as it may determine but not in excess of the
highest per share closing sale price of the Common Stock reported on the
American Stock Exchange during such period and, where a Stock Appreciation Right
relates to an Incentive Stock Option, not in excess of an amount consistent with
the qualification of such Stock Option as an "incentive stock option" under
Section 422 of the Code.
SECTION 8. Restricted Stock Awards.
(a) Nature of Restricted Stock Award. The Committee may grant
Restricted Stock Awards to any employees of the Company or any Subsidiary. A
Restricted Stock Award is an Award entitling the recipient to acquire, at no
cost or for a purchase price determined by the Committee, shares of Stock
subject to such restrictions and conditions as the Committee may determine at
the time of grant ("Restricted Stock"). A Restricted Stock Award may be
granted to an employee by the Committee in lieu of a cash bonus due to such
employee pursuant to any other plan of the Company.
(b) Award Agreement. A participant who is granted a Restricted
Stock Award shall have no rights with respect to such Award unless the
participant shall have accepted the Award within 60 days (or such shorter date
as the Committee may specify) following the award date by making payment to the
Company by certified or bank check or other instrument or form of payment
acceptable to the Committee in an amount equal to the specified purchase price,
if any, of the shares covered by the Award and by executing and delivering to
the Company a Restricted Stock Award Agreement in such form as the Committee
shall determine.
(c) Rights as a Shareholder. Upon complying with Section 8(b)
above, a participant shall have all the rights of a shareholder with respect to
the Restricted Stock including voting and dividend rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section 8 and subject to such other conditions contained in
the Award Agreement. Unless the Committee shall otherwise determine,
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certificates evidencing shares of Restricted Stock shall remain in the
possession of the Company until such shares are vested as provided in Section
8(e) below.
(d) Restrictions. Shares of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment by the
Company and its Subsidiaries for any reason (including death, Disability,
Normal Retirement and for Cause), the Company shall have the right, at the
discretion of the Committee, to repurchase shares of Restricted Stock at their
purchase price, or to require forfeiture of such shares to the Company if
acquired at no cost, from the participant or the participant's legal
representative. The Company must exercise such right of repurchase or
forfeiture not later than the 60th day following such termination of employment
(unless otherwise specified in the Award Agreement).
(e) Vesting of Restricted Stock. The Committee at the time of
grant shall specify the date or dates (which may depend upon or be related to
the attainment of performance goals and other conditions) on which the
non-transferability of the Restricted Stock and the Company's right of
repurchase or forfeiture shall lapse. Subsequent to such date or dates, the
shares on which all restrictions have lapsed shall no longer be Restricted
Stock and shall be deemed "vested." The Committee at any time may accelerate
such date or dates and otherwise waive or, subject to Section 13, amend any
conditions of the Award.
(f) Waiver, Deferral and Reinvestment of Dividends. The
Restricted Stock Award Agreement may require or permit the immediate payment,
waiver, deferral or investment of dividends paid on the Restricted Stock.
SECTION 9. Unrestricted Stock Awards.
The Committee may, in its sole discretion, grant (or sell at a
purchase price determined by the Committee) to any employees of the Company or
any Subsidiary shares of Stock free of any restrictions under the Plan
("Unrestricted Stock"). Shares of Unrestricted Stock may be granted or sold as
described in the preceding sentence in respect of past services or other valid
consideration. Upon the request of an employee and at the discretion of the
Committee, the Committee may grant an Unrestricted Stock Award to such employee
in lieu of a cash bonus due to such employee pursuant to any other plan of the
Company.
SECTION 10. Performance Share Awards.
(a) Nature of Performance Shares. A Performance Share Award is an
award entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Committee may make Performance Share Awards
independently of or in connection with the granting of any other Award under
the Plan. Performance Share Awards may be granted under the Plan to any
employees of the Company or any Subsidiary, including
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those who qualify for awards under other performance plans of the Company. The
Committee in its sole discretion shall determine whether and to whom
Performance Share Awards shall be made, the performance goals applicable under
each such Award, the periods during which performance is to be measured, and
all other limitations and conditions applicable to the awarded Performance
Shares; provided, however, that the Committee may rely on the performance goals
and other standards applicable to other performance unit plans of the Company
in setting the standards for Performance Share Awards under the Plan.
(b) Award Agreement. A participant shall have no rights with
respect to a Performance Share Award unless within 60 days of the grant of such
Award, or such shorter period as the Committee may specify, the participant
shall have accepted the Award by executing and delivering to the Company a
Performance Share Award Agreement in such form as the Committee shall
determine.
(c) Restrictions on Transfer. Performance Share Awards and all
rights with respect to such Awards may not be sold, assigned, transferred,
pledged or otherwise encumbered.
(d) Rights as a Shareholder. A participant receiving a
Performance Share Award shall have the rights of a shareholder only as to
shares actually received by the participant under the Plan and not with respect
to shares subject to the Award but not actually received by the participant. A
participant shall be entitled to receive a stock certificate evidencing the
acquisition of shares of Stock under a Performance Share Award only upon
satisfaction of all conditions specified in the Performance Share Award
Agreement.
(e) Termination. Except as may otherwise be provided by the
Committee at any time prior to termination of employment, a participant's
rights in all Performance Share Awards shall automatically terminate upon the
participant's termination of employment by the Company and its Subsidiaries for
any reason (including death, Disability, Normal Retirement and for Cause).
(f) Acceleration, Waiver, Etc. At any time prior to the
participant's termination of employment by the Company and its Subsidiaries,
the Committee may in its sole discretion accelerate, waive or, subject to
Section 13, amend any or all of the goals, restrictions or conditions imposed
under any Performance Share Award.
SECTION 11. Tax Withholding.
(a) Payment by Participant. Each participant shall, no later than
the date as of which the value of an Award or of any Stock or other amounts
received thereunder first becomes includable in the gross income of the
participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of any Federal,
state, or local taxes of any kind required by law to be withheld with respect
to
13
<PAGE> 37
such income. The Company and its Subsidiaries shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the participant.
(b) Payment in Shares. A participant may elect to have such tax
withholding obligation satisfied, in whole or in part, by (i) authorizing the
Company to withhold from shares of Stock to be issued pursuant to any Award a
number of shares with an aggregate Fair Market Value (as of the date the
withholding is effected) that would satisfy the withholding amount due, or (ii)
transferring to the Company shares of Stock owned by the participant with an
aggregate Fair Market Value (as of the date the withholding is effected) that
would satisfy the withholding amount due. With respect to any participant who
is a director or officer of the Company within the meaning of Section 16(b) of
the Act, the following additional restrictions shall apply:
(A) the election to satisfy tax withholding obligations
relating to an Award in the manner permitted by this Section 11(b)
shall be made either (1) during the period beginning on the third
business day following the date of release of quarterly or annual
summary statements of sales and earnings of the Company and ending on
the twelfth business day following such date, (2) at least six months
prior to the date as of which the receipt of such an Award first
becomes a taxable event for Federal income tax purposes, or (3)
incident to death, Normal Retirement, Disability or termination of
employment;
(B) such election shall be irrevocable;
(C) such election shall be subject to the consent or
disapproval of the Committee; and
(D) such election shall not be made within six months of
the date of grant of the Award.
SECTION 12. Transfer, Leave of Absence, Etc.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary
or from the Company to a Subsidiary, or from one Subsidiary to another;
14
<PAGE> 38
(b) an approved leave of absence for military service or
sickness, or for any other purpose approved by the Company, if the employee's
right to re-employment is guaranteed either by a statute or by contract or under
the policy pursuant to which the leave of absence was granted or if the
Committee otherwise so provides in writing.
SECTION 13. Amendments and Termination.
The Board may at any time amend or discontinue the Plan and the
Committee may at any time amend or cancel any outstanding Award (or provide
substitute Awards at the same or reduced exercise or purchase price or with no
exercise or purchase price, but such price, if any, must satisfy the
requirements which would apply to the substitute or amended Award if it were
then initially granted under this Plan) for the purpose of satisfying changes
in law or for any other lawful purpose, but no such action shall adversely
affect rights under any outstanding Award without the holder's consent.
However, no such amendment, unless approved by the stockholders of the Company,
shall be effective if it would cause the Plan to fail to satisfy the incentive
stock option requirements of the Code, or cause transactions under the Plan to
fail to satisfy the requirements of Rule 16b-3 or any successor rule under the
Act as in effect on the date of such amendment, or to cause any member of the
Committee to cease to be a Disinterested Person with respect to this Plan or
any other plan of the Company.
SECTION 14. Status of Plan.
With respect to the portion of any Award which has not been exercised
and any payments in cash, stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet
the Company's obligations to deliver Stock or make payments with respect to
Awards hereunder, provided that the existence of such trusts or other
arrangements is consistent with the provision of the foregoing sentence.
SECTION 15. Change of Control Provisions.
Upon the occurrence of a Change of Control as defined in this Section
15:
(a) Subject to the requirements of Section 6(a)(x) in the case of
Incentive Stock Options, each Stock Option, Stock Appreciation Right and
Performance Share Award shall automatically become fully exercisable unless the
Committee shall otherwise expressly provide at the time of grant.
15
<PAGE> 39
(b) Restrictions and conditions on Awards of Restricted Stock
shall automatically be deemed waived, and the recipients of such Awards shall
become entitled to receipt of the Stock subject to such Awards.
(c) To the extent Section 15(a) hereof is not applicable to any
Stock Options, Stock Appreciation Rights or Performance Share Awards, the
Committee may at any time prior to or after a Change of Control accelerate the
exercisability of any Stock Options, Stock Appreciation Rights and Performance
Share Awards to the extent it shall in its sole discretion determine.
(d) "Change of Control" shall mean the occurrence of any one of
the following events:
(i) any "person" (as such term is used in Sections 13(d)
and 14(d)(2) of the Act) becomes a "beneficial owner" (as such term is
defined in Rule 13d-3 promulgated under the Act) (other than the
Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined voting power
of the Company's then outstanding securities; or
(ii) persons who, as of February 26, 1992, constituted the
Company's Board (the "Incumbent Board") cease for any reason,
including without limitation as a result of a tender offer, proxy
contest, merger or similar transaction, to constitute at least a
majority of the Board, provided that any person becoming a director of
the Company subsequent to February 26, 1992 whose election was
approved by at least a majority of the directors then comprising the
Incumbent Board shall, for purposes of this Plan, be considered a
member of the Incumbent Board; or
(iii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or other
entity, other than (a) a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more
than 80% of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation or (b) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction)
in which no "person" (as hereinabove defined) acquires more than 50%
of the combined voting power of the Company's then outstanding
securities; or
16
<PAGE> 40
(iv) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
SECTION 16. General Provisions.
(a) No Distribution, Compliance with Legal Requirements. The
Committee may require each person acquiring shares pursuant to an Award to
represent to and agree with the Company in writing that such person is
acquiring the shares without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities law and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.
(b) Other Compensation Arrangements; No Employment Rights.
Nothing contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, subject to stockholder approval if such
approval is required; and such arrangements may be either generally applicable
or applicable only in specific cases. The adoption of the Plan does not confer
upon any employee any right to continued employment with the Company or any
Subsidiary.
SECTION 17. Effective Date of Plan.
The Plan shall become effective upon approval by the holders of a
majority of the shares of capital stock of the Company present or represented
and entitled to vote at a meeting of stockholders. Subject to such approval by
the stockholders, and to the requirement that no Stock may be issued hereunder
prior to such approval, Stock Options and other Awards may be granted hereunder
on and after adoption of the Plan by the Board.
17
<PAGE> 41
THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
Whether or not you plan to attend the Annual Meeting of Stockholders, you can be
sure your shares are represented at the meeting by promptly returning your proxy
in the enclosed envelope.
NOTICE TO STOCKHOLDERS
Effective with the first quarter of fiscal 1996, Instron will no longer be
producing and mailing quarterly reports. Instron is not alone in this decision.
The Securities and Exchange Commission does not require companies to issue such
reports and there is a growing number of public companies that are either
considering discontinuing quarterly reports or have already done so. This is
being done primarily because the value of a quarterly report does not justify
its cost. The Corporation's quarterly results can be easily accessed via print
and electronic media almost immediately after earnings are announced, whereas
quarterly reports may take six to eight weeks to reach the stockholder.
Anyone without alternative methods of receiving this information can request
that an earnings press release be mailed to them by calling Instron toll free at
(800) 877-6674, extension 5268.
DETACH HERE INS 3
INSTRON CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R The undersigned hereby constitutes and appoints James M. McConnell,
O Linton A. Moulding and John R. Barrett, and each of them, as proxies with
X full power to appoint his substitute and authorizes each of them to
Y 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 29,
1996, 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 15, 1996, 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, A VOTE "FOR" THE
AMENDMENT TO INSTRON CORPORATION'S 1992 STOCK INCENTIVE PLAN DESCRIBED
IN PROPOSAL 2 AND A VOTE "AGAINST" EACH OF THE STOCKHOLDER PROPOSALS
DESCRIBED IN PROPOSALS 3 AND 4. 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 1996 Annual Meeting of Stockholders and hereby revokes
any proxy or proxies heretofore given.
CONTINUED AN TO BE SIGNED AND DATED ON REVERSE SIDE
-------------
SEE REVERSE
SIDE
-------------
<PAGE> 42
DETACH HERE INS 2
/ 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: George S. Burr, Nicholas J. Grant,
and John W. Lacey
FOR / / / / WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
MARK HERE
FOR ADDRESS
CHANGE AND
/ / NOTE BELOW / /
--------------------------------------------
For all nominees except vote withheld from
the nominee(s) set forth above
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
PROPOSAL 2.
2. AMENDMENT TO 1992 STOCK FOR AGAINST ABSTAIN
INCENTIVE PLAN / / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST
PROPOSALS 3 AND 4.
3. STOCKHOLDER PROPOSAL FOR AGAINST ABSTAIN
CONCERNING EMPLOYEE / / / / / /
COMPENSATION ARRANGEMENTS
4. STOCKHOLDER PROPOSAL / / / / / /
CONCERNING NON-EMPLOYEE
DIRECTOR COMPENSATION
5. 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.
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.
PLEASE SIGN NAME EXACTLY AS SHOWN.
Signature: Date: Signature: Date:
-------------- ----------- -------------- -----------
<PAGE> 43
THIS IS YOUR VOTING INSTRUCTION CARD.
YOUR VOTE IS IMPORTANT.
NOTICE TO STOCKHOLDERS
Effective with the first quarter of fiscal 1996, Instron will no longer be
producing and mailing quarterly reports. Instron is not alone in this decision.
The Securities and Exchange Commission does not require companies to issue such
reports and there is a growing number of public companies that are either
considering discontinuing quarterly reports or have already done so. This is
being done primarily because the value of a quarterly report does not justify
its cost. The Corporation's quarterly results can be easily accessed via print
and electronic media almost immediately after earnings are announced, whereas
quarterly reports may take six to eight weeks to reach the stockholder.
Anyone without alternative methods of receiving this information can request
that an earnings press release be mailed to them by calling Instron toll free at
(800) 877-6674, extension 5268.
DETACH HERE INS 3
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 29, 1996 (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 15, 1996, 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, A VOTE "FOR" THE
AMENDMENT TO INSTRON CORPORATION'S 1992 STOCK INCENTIVE PLAN DESCRIBED IN
PROPOSAL 2 AND A VOTE "AGAINST" EACH OF THE STOCKHOLDER PROPOSALS DESCRIBED IN
PROPOSALS 3 AND 4. 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 1996 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
-------------
<PAGE> 44
DETACH HERE IN2 1
/ 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: George S. Burr, Nicholas J. Grant,
and John W. Lacey
FOR / / / / WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
MARK HERE
FOR ADDRESS
CHANGE AND
/ / NOTE BELOW / /
-----------------------------------------------
For all nominees except vote withheld from
the nominee(s) set forth above
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
PROPOSAL 2.
2. AMENDMENT TO 1992 STOCK FOR AGAINST ABSTAIN
INCENTIVE PLAN / / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST
PROPOSALS 3 AND 4.
3. STOCKHOLDER PROPOSAL FOR AGAINST ABSTAIN
CONCERNING EMPLOYEE / / / / / /
COMPENSATION ARRANGEMENTS
4. STOCKHOLDER PROPOSAL / / / / / /
CONCERNING NON-EMPLOYEE
DIRECTOR COMPENSATION
5. 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.
PLEASE SIGN, DATE AND PROMPTLY MAIL YOUR VOTING INSTRUCTION CARD IN THE
ENCLOSED ENVELOPE.
PLEASE SIGN NAME EXACTLY AS SHOWN.
Signature: Date: Signature: Date:
------------- ----------- -------------- ----------
