<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
INSTRON CORPORATION
(Name of Registrant as Specified In Its Charter)
INSTRON CORPORATION
(Name of Person(s) Filing Proxy Statement)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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<PAGE> 2
[INSTRON LOGO]
NOTICE OF ANNUAL MEETING
Canton, Massachusetts
April 13, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Instron
Corporation (the "Corporation") will be held at Boston EquiServe, 150 Royall
Street, Canton, Massachusetts on Wednesday, May 13, 1998 at 10:00 a.m. for the
following purposes:
1. To elect a class of Directors (3 persons) to serve until the 2001
Annual Meeting of Stockholders; and
2. 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 20, 1998 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
(781) 828-2500
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MAY 13, 1998
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 13, 1998 at 10:00 a.m. at Boston
EquiServe, 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 13, 1998. The Board
of Directors has fixed the close of business on March 20, 1998 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 6,771,996 shares of the Corporation's common stock, $1.00 par
value (the "Common Stock"), and 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. 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 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, facsimile, in person or by other means. The Corporation may
also request persons, firms and corporations holding shares in their
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<PAGE> 4
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, two of
which consist of three directors (Classes II and III) and one of which consists
of two directors (Class I). One class of Directors is elected each year to serve
for a three year term. Class III Directors will be elected at the 1998 Annual
Meeting of Stockholders; Class I Directors were elected at the 1996 Annual
Meeting of Stockholders; and Class II Directors were elected at the 1997 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 III Directors, Messrs. McConnell, Moore and Smith,
are presently serving as Directors of the Corporation. Upon execution of the
enclosed proxy, the persons named therein will vote for the election of each of
the nominees for Class III 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. McConnell, Moore
and Smith, the Board of Directors' nominees for election as Directors, as well
as each Director whose term is not scheduled to expire until the 1999 or 2000
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, 1997, appears under the heading "Security Ownership of Certain
Beneficial Owners and Management."
NOMINEES FOR CLASS III DIRECTORS (TERMS EXPIRING AT THE 2001 MEETING)
JAMES M. MCCONNELL, age 57, 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. He is also a Director of ESCO Electronics Corporation.
DENNIS J. MOORE, age 59, 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.
JOHN F. SMITH, age 63, 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
PerSeptive Biosystems, Inc. (analytical instruments) and from 1990 to 1995 he
was President of Mycos International (construction). He is also a Director of
Sequoia Systems, PerSeptive Biosystems, Hadco Corporation and ANSYS Corporation.
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CLASS I DIRECTORS (TERMS EXPIRE AT THE 1999 MEETING)
GEORGE S. BURR, age 80, 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.
JOHN W. LACEY, age 67, 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.
CLASS II DIRECTORS (TERMS EXPIRE AT THE 2000 MEETING)
HAROLD HINDMAN, age 80, 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 71, 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 and Bay State Milling Co.
SHELDON RUTSTEIN, age 63, 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 currently a
consultant to Raytheon Company and is also a Director of Bradlees Inc.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 1997, 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:
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY % OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER OWNED(1) OUTSTANDING
------------------------------------ ---------------- -----------
<S> <C> <C>
David L. Babson & Co.(2).................................... 727,000 10.8%
One Memorial Drive
Cambridge, MA 02142
Dimensional Fund Advisors Inc.(3)........................... 501,700 7.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
George S. Burr(4)........................................... 286,406 4.2%
Harold Hindman(5)........................................... 532,519 7.9%
John W. Lacey(6)............................................ 2,000 +
James M. McConnell(7)....................................... 380,595 5.6%
Dennis J. Moore............................................. 2,500 +
Sheldon Rutstein............................................ -- --
John F. Smith............................................... -- --
Richard W. Young............................................ 25,000 +
Linton A. Moulding(8)....................................... 78,364 1.2%
Jonathan L. Burr(9)......................................... 177,453 2.6%
Joseph E. Amaral(10)........................................ 68,677 1.0%
Arthur D. Hindman(11)....................................... 89,864 1.3%
All Directors and executive officers as a group (17
persons)(12).............................................. 1,856,622 27.5%
</TABLE>
- ---------------
+ 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 January 15, 1998. David L. Babson & Co. has
sole voting and investment power with respect to 727,000 shares. 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 9, 1998. 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, investment vehicles for qualified
employee benefit plans, all of which Dimensional serves as investment
manager. Dimensional disclaims beneficial ownership of all such shares.
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(4) The number shown excludes 91,550 shares which are owned by Mr. Burr's wife,
as to which Mr. Burr disclaims beneficial ownership.
(5) The number shown excludes 60,863 shares which are owned by Mr. Hindman's
wife, as to which Mr. Hindman disclaims beneficial ownership.
(6) 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.
(7) Mr. McConnell has sole voting and investment power with respect to 83,578
of these shares, which includes 4,095 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 292,922
shares which Mr. McConnell has the right to acquire within 60 days of
December 31, 1997 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.
(8) Mr. Moulding has sole voting and investment power with respect to 31,067 of
these shares, which includes 6,067 shares allocated to Mr. Moulding's
account pursuant to the 401(k) Plan. The number shown also includes 9,297
shares held jointly with his wife and 38,000 shares which Mr. Moulding has
the right to acquire within 60 days of December 31, 1997 upon the exercise
of stock options granted under the Corporation's stock option plans.
(9) Mr. Burr has sole voting and investment power with respect to 141,703 of
these shares, which includes 3,239 shares allocated to Mr. Burr's account
pursuant to the 401(k) Plan. The number shown also includes 35,750 shares
which Mr. Burr has the right to acquire within 60 days of December 31, 1997
upon the exercise of stock options granted under the Corporation's stock
option plans.
(10) Mr. Amaral has sole voting and investment power with respect to 32,108 of
these shares, which includes 3,927 shares allocated to Mr. Amaral's account
pursuant to the 401(k) Plan. The number shown also includes 36,569 shares
which Mr. Amaral has the right to acquire within 60 days of December 31,
1997 upon the exercise of stock options granted under the Corporation's
stock option plans.
(11) Mr. Hindman has sole voting and investment power with respect to 89,864 of
these shares, which includes 7,453 shares allocated to Mr. Hindman's
account pursuant to the 401(k) Plan. The number shown also includes 34,750
shares which Mr. Hindman has the right to acquire within 60 days of
December 31, 1997 upon the exercise of stock options granted under the
Corporation's stock option plans. The number shown excludes 39,950 shares
held by Mr. Hindman for the benefit of his children and 1,000 shares which
are owned by Mr. Hindman's wife, as to which Mr. Hindman disclaims
beneficial ownership.
(12) 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 514,336 shares
which all executive officers as a group have a right to acquire within 60
days of December 31, 1997 upon the exercise of stock options granted under
the Corporation's stock option plans.
During 1997, the Board of Directors of the Corporation held seven meetings
and acted by unanimous written consent on two occasions. 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.
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During 1997, the Audit Committee of the Board (the "Audit Committee") held
three meetings. The current members of the Audit Committee are Messrs. Rutstein
(Chairman), Lacey and Moore. 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 Audit Committee's activities and
recommendations.
During 1997, the Compensation Committee of the Board (the "Compensation
Committee") held two meetings. The current members of the Compensation Committee
are Messrs. Smith (Chairman) and Young. 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 awards 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 advance notice and other requirements of the Corporation's By-Laws. See
"Other Matters -- Proposals by Stockholders."
Directors who are not employees of the Corporation currently earn a
director's fee of $22,000 per year plus $500 for attendance at each meeting of
the Board or any committee thereof. The Chairman of the Board receives a fee of
$38,000 per year. The Chairman of the Board and the Chairman of each Committee
also receive $1,000 for attendance at each meeting that they chair.
The Corporation entered into a consulting agreement with Mr. Hindman
effective January 1, 1994, pursuant to which Mr. Hindman agreed to provide
consulting services to the Corporation for a period commencing January 1, 1994
and ending June 30, 1999. As compensation for such services, Mr. Hindman is
entitled to receive an annual consulting fee of $80,000. The agreement can be
terminated by Mr. Hindman upon 30 days prior written notice to the Corporation.
COMPENSATION COMMITTEE REPORT TO STOCKHOLDERS
Compensation Philosophy
The Compensation Committee establishes base salaries and performance
compensation for executive officers and selects the recipients and terms of the
stock awards 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.
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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 Compensation
Annual compensation for the Corporation's executives consists of three
principal elements: base salary, performance compensation and stock awards.
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.
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 Awards
The Corporation's stock incentive program is designed to reward long-term
business success and develop a parallel interest between key employees and
stockholders. The number of stock awards granted is generally intended to
reflect the executive's current and anticipated contributions to the
Corporation. During 1997, the Corporation granted stock awards to its executive
officers in the form of restricted stock with vesting in year seven or sooner if
certain financial targets are met. Stock award information with respect to
executive officers is reflected in the tables included in this Proxy Statement.
President and Chief Executive Officer 1997 Compensation
In determining Mr. McConnell's base salary, performance compensation and
stock awards for 1997, 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 1997 total annual compensation was
$488,447 as compared to $414,008 and $330,846 for 1996 and 1995, respectively.
In addition, the Compensation Committee recommended and the Board endorsed
the granting to Mr. McConnell of a restricted stock award representing 50,000
shares of the Corporation's Common Stock subject to the vesting restrictions
described above. The Compensation Committee considered the number of options
held by Mr. McConnell at the time of grant and determined that this grant is
consistent with the
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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 $1 million to any of the named executive officers of the
Corporation unless the compensation is paid pursuant to a plan which is
performance-related, nondiscretionary and has been approved by the Corporation's
stockholders. The Committee's policy with respect to Section 162(m) is to make
every reasonable effort to ensure that compensation is deductible to the extent
permitted and appropriate while simultaneously providing executives with
appropriate rewards for their performance.
This report was prepared by the Compensation Committee:
John F. Smith, Chairman
Dr. Richard W. Young
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SUMMARY COMPENSATION TABLE
The following table sets forth compensation awarded to, earned by, or paid
to the Chief Executive Officer of the Corporation and the four other most highly
compensated executive officers of the Corporation during each of the three years
ended December 31, 1997, 1996 and 1995, for services rendered in all capacities
to the Corporation and its subsidiaries during such periods. The Corporation has
not granted stock appreciation rights to any of its executive officers for such
periods. Information is furnished for each fiscal year during which such persons
were executive officers.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL ----------------------------
COMPENSATION RESTRICTED SECURITIES ALL OTHER
-------------------- STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITIONS YEAR SALARY($) BONUS($) AWARDS($)(1)(2) OPTIONS(#) ($)(3)
- ---------------------------- ---- --------- -------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
James M. McConnell............... 1997 280,000 208,447 612,500 -- 4,750
President and Chief 1996 279,808 134,200 -- 50,000 4,500
Executive Officer 1995 258,846 72,000 -- 50,000 4,500
Linton A. Moulding............... 1997 149,346 67,165 306,250 -- 4,750
Chief Financial Officer 1996 132,808 32,560 -- 15,000 4,500
1995 123,041 17,205 -- 15,000 4,500
Jonathan L. Burr................. 1997 129,423 79,388 306,250 -- --
Vice President -- Corporate 1996 114,808 29,526 -- 15,000 3,833
Director of Human Resources 1995 107,712 12,960 -- 15,000 4,082
Joseph E. Amaral................. 1997 142,808 58,200 306,250 -- 4,750
Vice President and 1996 137,846 41,145 -- 15,000 4,500
General Manager -- 1995 130,231 18,525 -- 15,000 4,500
North America Operations
Arthur D. Hindman................ 1997 131,269 58,166 306,250 -- 4,750
Vice President and 1996 112,731 27,000 -- 15,000 3,791
General Manager -- 1995 101,068 13,630 -- 15,000 3,936
Asia Pacific/Latin America
</TABLE>
- ---------------
(1) Amount shown represents dollar value on the date of grant of restricted
stock granted in each year.
(2) Mr. McConnell was awarded 50,000 shares and Messrs. Moulding, Burr, Amaral
and Hindman were awarded 25,000 shares of common stock in the form of
restricted stock on May 14, 1997, valued at $12.25 per share based on the
closing stock price on such date of grant. Based on the December 31, 1997
closing stock price of $18.875, Mr. McConnell's shares of restricted stock
had an aggregate value of $943,750 and Messrs. Moulding, Burr, Amaral and
Hindman's shares of restricted stock had an aggregate value of $471,875. The
restricted stock vests after seven years or sooner if certain financial
targets are met or upon a change in control. Dividends on the restricted
stock awards are paid at the same rate as paid to all stockholders.
(3) Amount shown represents matching contributions made under the Corporation's
401(k) Plan.
SEVERANCE AND OTHER AGREEMENTS
During the past five years, the Corporation entered into Executive
Severance Agreements (the "Agreements") with ten of its current executive
officers and 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
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agreement provides that he will receive severance benefits if his employment is
terminated for any reason within 24 months after a Change in Control. The
Agreements generally provide for the following severance benefits: (i) a
lump-sum payment equal to 200% (150% in the case of one executive officer) of
the employee's "base amount," as such term is defined in Section 280G(b)(3) of
the Internal Revenue Code of 1986, as amended (the "Code") and (ii)
reimbursement of legal fees and expenses incurred by the employee in seeking to
enforce his rights under his Agreement. The Agreements also provide that,
subject to certain limitations, the Corporation will provide a "gross-up"
payment to an executive officer if he becomes subject to an excise tax pursuant
to Section 280G of the Code as a result of receiving change-in-control severance
benefits (including the value of accelerated vesting of options and restricted
stock).
PENSION PLANS
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
<TABLE>
<CAPTION>
ESTIMATED ANNUAL BENEFIT FOR YEARS OF SERVICE
----------------------------------------------------------
AVERAGE ANNUAL 30 OR
COMPENSATION(1) 10 YEARS 15 YEARS 20 YEARS 25 YEARS MORE 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
</TABLE>
- ---------------
(1) Section 401(a)(17) of the Code limits the compensation taken into account in
calculating an employee's retirement benefit. The limit for compensation
paid in 1997 was $160,000.
The calculation for retirement benefits under the Pension Plan is based on
average annual compensation (which includes salary and performance compensation)
for the highest five full consecutive twelve month periods out of the last ten
full consecutive twelve month periods preceding retirement or termination of
employment. As of December 31, 1997, Messrs. Amaral, Burr, Hindman, Moulding and
McConnell were credited with 20, 18, 18, 13 and 8 years of service,
respectively, under the Pension Plan. The estimated annual benefit for years of
service in the table above is computed on the basis of payment of a straight
life annuity at the normal retirement age of 65. The amounts in the table do not
reflect plan offsets for certain benefits provided under the Corporation's
former Employees' Profit Sharing Retirement Plan nor the required Pension Plan
offsets for social security payments.
11
<PAGE> 13
STOCK OPTION PLANS
The following table sets forth certain information regarding options
exercised in 1997 and options held at December 31, 1997 by the Corporation's
executive officers named in the Summary Compensation Table. During the fiscal
year ended December 31, 1997, no officer named in the Summary Compensation Table
received any stock options.
AGGREGATE EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT
YEAR END(#) FISCAL YEAR END($)(1)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- --------------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
James M. McConnell.......... -- -- 292,922/62,500 $2,540,519/$376,563
Linton A. Moulding.......... -- -- 38,000/18,750 285,688/ 112,969
Jonathan L. Burr............ -- -- 35,750/18,750 265,344/ 112,969
Joseph E. Amaral............ 3,181 19,484 36,569/18,750 271,180/ 112,969
Arthur D. Hindman........... -- -- 34,750/18,750 257,219/ 112,969
</TABLE>
- ---------------
(1) Represents the total gain which would be realized if all options, for which
the December 31, 1997 stock price of $18.875 was greater than the exercise
price, were exercised.
12
<PAGE> 14
STOCK PERFORMANCE GRAPH
Set forth below is a line graph comparing the yearly percentage change in
the cumulative total stockholder return on the Corporation's Common Stock, based
on the market price of the Corporation's Common Stock and assuming reinvestment
of dividends, with the total return of companies within the Standard & Poor's
500 Stock Index and the Precision Instruments Industry Index prepared by Value
Line, Inc. The calculation of total cumulative return assumes a $100 investment
in the Corporation's Common Stock, the S&P 500 Index and the Precision
Instruments Industry Index on December 31, 1992.
[LINE CHART]
<TABLE>
<CAPTION>
Measurement Period Standard & Poors Precision
(Fiscal Year Covered) Instron Corporation 500 Instruments
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 112.46 110.09 133.59
1994 127.73 111.85 149.28
1995 139.58 153.80 234.05
1996 133.45 189.56 284.12
1997 199.76 252.82 323.17
</TABLE>
CERTAIN TRANSACTIONS
In March 1996, the Company made a loan to Mr. Moulding in the principal
amount of $76,619 to enable him to exercise vested stock options. This loan bore
interest at the rate of 7% per annum. In October 1997 this loan, which had an
outstanding balance including principal and accrued interest charges of $85,053,
was repaid in full by Mr. Moulding.
13
<PAGE> 15
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 the rules of the Securities and Exchange Commission (the "SEC"),
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.
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 1998, is expected to be present at
the Annual Meeting and will be given an opportunity to make a statement and 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 1999 Annual Meeting, it must be received at the
principal executive offices of the Corporation on or before December 14, 1998.
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 either 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) or a
nominee considered for election to the Board must submit written notice of such
proposal or nomination and appropriate supporting documentation in accordance
with the provisions of the By-Laws. Pursuant to the By-Laws, such written notice
and supporting documentation must be delivered to the Corporation at its
principal executive offices, 100 Royall Street, Canton, Massachusetts 02021 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 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
14
<PAGE> 16
representations that no other reports were required, the Corporation believes
that during its 1997 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:
the Statements of Changes in Beneficial Ownership on Form 4 for Harold Hindman,
Chairman of the Board, reflecting the sale of shares of Common Stock in October
of 1997 was inadvertently filed 3 days late.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AND VOTED AT THE ANNUAL
MEETING. YOU ARE URGED TO SIGN, DATE AND PROMPTLY MAIL THE PROXY CARD IN THE
ENCLOSED POSTAGE PAID ENVELOPE.
15
<PAGE> 17
ISN29 F DETACH HERE
- --------------------------------------------------------------------------------
PROXY
INSTRON CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints James M. McConnell, Linton
A. Moulding and John R. Barrett, and each of them, as proxies with full power
to appoint his substitute and authorizes each of them to represent and to vote
all shares of Common Stock of Instron Corporation held of record by the
undersigned at the close of business on March 20, 1998, at the Annual Meeting
of Stockholders of Instron Corporation to be held at Boston EquiServe, 150
Royall Street, Canton, Massachusetts, on Wednesday, May 13, 1998, 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 STOCKHOLDER WISHING TO VOTE IN ACCORDANCE WITH THE BOARD OF
DIRECTORS' RECOMMENDATION 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 1998 Annual Meeting of Stockholders and hereby revokes any
proxy or proxies heretofore given.
- ------------- -------------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ------------- -------------
<PAGE> 18
<TABLE>
<S> <C>
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.
ISN29 F DETACH HERE
- ---------------------------------------------------------------------------------------
___ PLEASE MARK
| X | VOTES AS IN
|___| THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS 2. In their discretion, the proxies are
A VOTE FOR ALL NOMINEES LISTED IN authorized to vote upon such other
PROPOSAL 1 BELOW. business as may properly come before
the meeting or any adjournments
thereof.
1. ELECTION OF A CLASS OF THREE
DIRECTORS
NOMINEES: James M. McConnell,
Dennis J. Moore
and John F. Smith
FOR ___ ___ WITHHELD ___
ALL | | | | FROM ALL MARK HERE FOR ADDRESS | |
NOMINEES |___| |___| NOMINEES CHANGE AND NOTE BELOW |___|
___
| |
|___| _______________________________
For all nominees except vote withheld
from the Nominee(s) set forth above
Where there is more than one holder,
each should sign.
Where 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:____________
</TABLE>
<PAGE> 19
IS230 F DETACH HERE
- --------------------------------------------------------------------------------
PROXY
INSTRON CORPORATION
THIS VOTING INSTRUCTION CARD IS SOLICITED ON
BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby 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 20, 1998, (the "Shares") at the Annual Meeting of
Stockholders of Instron Corporation to be held at Boston EquiServe, 150 Royall
Street, Canton, Massachusetts, on Wednesday, May 13, 1998, 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 STOCKHOLDER(S). 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 PARTICIPANT WISHING TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION 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 1998 Annual Meeting of Stockholders and hereby revokes any
proxy or proxies heretofore given.
- ------------- -------------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ------------- -------------
<PAGE> 20
<TABLE>
<S> <C>
THIS IS YOUR VOTING INSTRUCTION CARD.
YOUR VOTE IS IMPORTANT.
IS230 F DETACH HERE
- ---------------------------------------------------------------------------------------
___ PLEASE MARK
| X | VOTES AS IN
|___| THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS 2. In their discretion, the Trustee is
A VOTE FOR ALL NOMINEES LISTED IN authorized to vote (in person or by
PROPOSAL 1 BELOW. proxy) upon such other business as
may properly come before the meeting
or any adjournments or postponements
1. ELECTION OF A CLASS OF THREE thereof.
DIRECTORS
NOMINEES: James M. McConnell,
Dennis J. Moore
and John F. Smith
FOR ___ ___ WITHHELD ___
ALL | | | | FROM ALL MARK HERE FOR ADDRESS | |
NOMINEES |___| |___| NOMINEES CHANGE AND NOTE BELOW |___|
___
| |
|___| _______________________________
For all nominees except vote withheld
from the Nominee(s) set forth above.
PLEASE SIGN, DATE AND PROMPTLY MAIL YOUR
VOTING INSTRUCTION CARD IN THE ENCLOSED
ENVELOPE.
PLEASE SIGN NAME EXACTLY AS SHOWN.
Signature:______________ Date:____________ Signature:______________ Date:____________
</TABLE>
