<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 16, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Instron
Corporation (the "Corporation") will be held at Lombardo's Conference Center,
Six Billings Street, Randolph, Massachusetts on Wednesday, May 12, 1999 at 10:00
a.m. for the following purposes:
1. To elect a class of Directors (2 persons) to serve until the 2002
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 19, 1999 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 12, 1999
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 12, 1999 at 10:00 a.m. at Lombardo's
Conference Center, Six Billings Street, Randolph, 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 16, 1999. The Board
of Directors has fixed the close of business on March 19, 1999 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 6,956,838 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. The Common Stock constitutes all of the outstanding voting
securities entitled to vote at the Annual Meeting.
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 of Directors recommends a vote "FOR" the election of each
of the two nominees for membership in the Board of Directors identified under
the heading "Proposal I -- Election of a Class 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. As of the close of business on the 15th day following the
Corporation's December 29, 1998 press release announcing the date of the Annual
Meeting, the Board of Directors did not receive notice of any stockholder
proposals concerning any other matters to be properly brought before the Annual
Meeting. (See "Other Matters -- Proposals by Stockholders.") 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
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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 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 I Directors will be elected at the 1999 Annual
Meeting of Stockholders; Class II Directors were elected at the 1997 Annual
Meeting of Stockholders; and Class III Directors were elected at the 1998 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 and Lacey, 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 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 and Lacey,
the Board of Directors' nominees for election as Directors, as well as each
Director whose term is not scheduled to expire until the 2000 or 2001 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, 1998, appears under the heading "Security Ownership of Certain
Beneficial Owners and Management."
NOMINEES FOR CLASS I DIRECTORS (TERMS EXPIRING AT THE 2002 MEETING)
GEORGE S. BURR, age 81, 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 68, has been a Director of the Corporation since 1987.
Mr. Lacey is retired from Control Data Corp. where he served as Executive Vice
President.
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CLASS II DIRECTORS (TERMS EXPIRE AT THE 2000 MEETING)
HAROLD HINDMAN, age 81, 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 72, 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 64, 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.
CLASS III DIRECTORS (TERMS EXPIRE AT THE 2001 MEETING)
JAMES M. MCCONNELL, age 58, 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 60, has been a Director of the Corporation since 1994.
Mr. Moore is Chairman and Chief Executive Officer of ESCO Electronics
Corporation ("ESCO"), a 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 64, 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 was formerly
President of PerSeptive Biosystems, Inc., a producer of analytical instruments
and now a wholly-owned subsidiary of The Perkin Elmer Corporation. He is also a
Director of Hadco Corporation, ANSYS Corporation and Texas Micro Inc.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of December 31, 1998, 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).................................... 757,500 10.9%
One Memorial Drive
Cambridge, MA 02142
Dimensional Fund Advisors Inc.(3)........................... 500,000 7.2%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
George S. Burr(4)........................................... 259,206 3.7%
Harold Hindman(5)........................................... 531,354 7.7%
John W. Lacey(6)............................................ 2,000 +
James M. McConnell(7)....................................... 339,025 4.9%
Dennis J. Moore............................................. 2,500 +
Sheldon Rutstein............................................ -- --
John F. Smith............................................... -- --
Richard W. Young............................................ 25,000 +
Linton A. Moulding(8)....................................... 86,273 1.2%
Joseph E. Amaral (9)........................................ 76,465 1.1%
William J. Milliken(10)..................................... 20,549 +
Yahya Gharagozlou(11)....................................... 46,392 +
All Directors and executive officers as a group (17
persons)(12).............................................. 1,858,175 26.8%
</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 21, 1999. David L. Babson & Co. has
sole voting and investment power with respect to 757,700 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 as set
forth on a Schedule 13G dated February 11, 1999. Dimensional Fund Advisors
Inc. ("Dimensional"), an investment advisor registered under Section 203 of
the Investment Advisors Act of 1940, furnishes investment advice to four
investment companies registered under the Investment Company Act of 1940,
and serves as investment manager to certain other investment vehicles,
including commingled group trusts collectively, the "Portfolios". In its
role as investment advisor and investment manager, Dimensional possesses
both voting and investment power over the securities of the Issuer owned by
the Portfolios. All securities reported are owned by the Portfolios, and
Dimensional disclaims beneficial ownership of such securities.
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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 214,525
of these shares, which includes 4,413 shares allocated to Mr. McConnell's
account pursuant to the Corporation's 401(k) Plan. The number shown also
includes 124,500 shares which Mr. McConnell has the right to acquire within
60 days of December 31, 1998 upon the exercise of stock options granted
under the Corporation's stock option plans.
(8) Mr. Moulding has sole voting and investment power with respect to 31,476 of
these shares, which includes 6,476 shares allocated to Mr. Moulding's
account pursuant to the Corporation's 401(k) Plan. The number shown also
includes 13,547 shares held jointly with his wife and 41,250 shares which
Mr. Moulding has the right to acquire within 60 days of December 31, 1998
upon the exercise of stock options granted under the Corporation's stock
option plans.
(9) Mr. Amaral has sole voting and investment power with respect to 32,396 of
these shares, which includes 4,215 shares allocated to Mr. Amaral's account
pursuant to the Corporation's 401(k) Plan. The number shown also includes
44,069 shares which Mr. Amaral has the right to acquire within 60 days of
December 31, 1998 upon the exercise of stock options granted under the
Corporation's stock option plans.
(10) Mr. Milliken has sole voting and investment power with respect to 20,549 of
these shares, which includes 49 shares allocated to Mr. Milliken's account
pursuant to the Corporation's 401(k) plan.
(11) Mr. Gharagozlou has sole voting and investment power with respect to 26,892
of these shares, which includes 1,892 shares allocated to Mr. Gharagozlou's
account pursuant to the Corporation's 401(k) Plan. The number shown also
includes 19,500 shares which Mr. Gharagozlou has the right to acquire
within 60 days of December 31, 1998 upon the exercise of stock options
granted under the Corporation's stock option plans.
(12) The figures provided are 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 Corporation's
401(k) Plan, which information was provided by the Trustee. The indicated
ownership includes 369,664 shares which all executive officers as a group
have a right to acquire within 60 days of December 31, 1998 upon the
exercise of stock options granted under the Corporation's stock option
plans.
During 1998, the Board of Directors of the Corporation held nine 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 1998, 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
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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 1998, the Compensation Committee of the Board (the "Compensation
Committee") held three 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 $700 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 $1,200 for attendance at each meeting that they chair.
TRANSACTIONS WITH MANAGEMENT
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.
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.
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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. Stock award information with respect to executive officers is
reflected in the tables included in this Proxy Statement.
President and Chief Executive Officer 1998 Compensation
In determining Mr. McConnell's base salary, performance compensation and
stock awards for 1998, 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 1998 total annual compensation was
$539,945 as compared to $488,447 and $414,008 for 1997 and 1996, respectively.
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 $1 million to any of the named executive officers of the
Corporation unless the compensation is paid pursuant to a plan which is
performance-related, non-discretionary and has been approved by the
Corporation's stockholders. The Committee's policy with respect to Section
162(m) is to make every reasonable effort to ensure that compensation is
deductible to the extent permitted and appropriate while simultaneously
providing executives with appropriate rewards for their performance.
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This report was prepared by the Compensation Committee:
John F. Smith, Chairman
Dr. Richard W. Young
SUMMARY COMPENSATION TABLE
The following table sets forth compensation awarded to, earned by or paid
to the Chief Executive Officer of the Corporation and the four other most highly
compensated executive officers of the Corporation during each of the three years
ended December 31, 1998, 1997 and 1996, for services rendered in all capacities
to the Corporation and its subsidiaries during such periods. The Corporation has
not granted stock appreciation rights to any of its executive officers for such
periods. Information is furnished for each fiscal year during which such persons
were executive officers.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
ANNUAL ----------------------------
COMPENSATION RESTRICTED SECURITIES ALL OTHER
-------------------- STOCK UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITIONS YEAR SALARY($) BONUS($) AWARDS($)(1) OPTIONS(#) ($)(2)
- ---------------------------- ------ --------- -------- --------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
James M. McConnell............ 1998 325,769 214,176 -- -- 4,800
President and Chief 1997 280,000 208,447 612,500(3) -- 4,750
Executive Officer 1996 279,808 134,200 -- 50,000 4,500
Linton A. Moulding............ 1998 165,769 66,585 -- -- 4,777
Chief Financial Officer 1997 149,346 67,165 306,250(3) -- 4,750
1996 132,808 32,560 -- 15,000 4,500
Joseph E. Amaral.............. 1998 155,500 56,221 -- -- 4,800
Vice President and 1997 142,808 58,200 306,250(3) -- 4,750
General Manager -- 1996 137,846 41,145 -- 15,000 4,500
North America Operations
William J. Milliken........... 1998 155,769 53,544 -- -- 865
Vice President, Corporate 1997(4) 28,846 24,283 351,063(5) -- --
Director of Manufacturing
Yahya Gharagozlou............. 1998 149,808 54,096 -- -- 4,800
Vice President, Corporate 1997 124,115 53,166 306,250(3) -- 4,545
Technical Director 1996 101,384 22,375 -- -- 3,334
</TABLE>
- ---------------
(1) Amounts shown represent dollar value on the date of grant of restricted
stock granted in each year.
(2) Amount shown represents matching contributions made under the Corporation's
401(k) Plan.
(3) Mr. McConnell was awarded 50,000 shares and Messrs. Moulding, Amaral and
Gharagozlou 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, 1998
closing stock price of $17.25, Mr. McConnell's shares of restricted stock
had an aggregate value of $862,500 and Messrs. Moulding, Amaral and
Gharagozlou's shares of restricted stock had an aggregate value of $431,250.
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.
(4) Mr. Milliken joined the Corporation in October, 1997, as Vice President,
Corporate Director of Manufacturing. Salary for 1997 in the table reflects a
partial year.
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(5) Mr. Milliken was awarded 20,500 shares of common stock in the form of
restricted stock on October 29, 1997, valued at $17.125 per share based on
the closing stock price on such date of grant. Based on the December 31,
1998 closing stock price of $17.25, Mr. Milliken's shares of restricted
stock had an aggregate value of $353,625. 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.
SEVERANCE AND OTHER AGREEMENTS
During the past six years, the Corporation entered into Executive Severance
Agreements (the "Agreements") with ten of its current executive officers and
five 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 in Control. The
Agreements generally provide for the following severance benefits: (i) a
lump-sum payment equal to 200% 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 1998 was $160,000.
The calculation for retirement benefits under the Pension Plan is based on
average annual compensation (which includes salary and performance compensation)
for the highest five full consecutive twelve month periods out of the last ten
full consecutive twelve month periods preceeding retirement or termination of
employment. As of December 31, 1998, Messrs. Amaral, Gharagozlou, Milliken,
Moulding and McConnell were credited with 21, 14, 1, 14 and 9 years of service,
respectively, under the Pension Plan. The estimated
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<PAGE> 12
annual benefit for years of service in the table above is computed on the basis
of payment of a straight life annuity at the normal retirement age of 65. The
amounts in the table do not reflect plan offsets for certain benefits provided
under the Corporation's former Employees' Profit Sharing Retirement Plan nor the
required Pension Plan offsets for social security payments.
STOCK OPTION PLANS
The following table sets forth certain information regarding options
exercised in 1998 and options held at December 31, 1998 by the Corporation's
executive officers named in the Summary Compensation Table. During the fiscal
year ended December 31, 1998, no officer named in the Summary Compensation Table
received any stock options.
AGGREGATE EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF SECURITIES UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT
YEAR END(#) FISCAL YEAR END($)(1)
SHARES ACQUIRED VALUE ------------------------- -------------------------
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- --------------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
James M. McConnell.......... 193,422 1,740,798 124,500/37,500 $679,563/$160,938
Linton A. Moulding.......... 4,250 21,250 41,250/11,250 227,344/ 48,281
Joseph E. Amaral............ -- -- 44,069/11,250 245,974/ 48,281
William J. Milliken......... -- -- --/-- --/--
Yahya Gharagozlou........... -- -- 19,500/11,000 94,125/ 47,344
</TABLE>
- ---------------
(1) Represents the total gain which would be realized if all options, for which
the December 31, 1998 stock price of $17.25 was greater than the exercise
price, were exercised.
11
<PAGE> 13
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, 1993.
<TABLE>
<CAPTION>
INSTRON CORPORATION STANDARD & POORS 500 PRECISION INSTRUMENT
------------------- -------------------- --------------------
<S> <C> <C> <C>
'1993' 100.00 100.00 100.00
'1994' 113.58 101.60 111.74
'1995' 124.12 139.71 175.20
'1996' 118.67 172.18 212.68
'1997' 177.63 229.65 241.91
'1998' 164.00 294.87 251.87
</TABLE>
12
<PAGE> 14
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 PricewaterhouseCoopers 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 1999, 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 2000 Annual Meeting, it must be received at the
principal executive offices of the Corporation on or before December 11, 1999.
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
13
<PAGE> 15
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 1998 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).
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.
14
<PAGE> 16
411-PS-99
<PAGE> 17
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 19, 1999, at the Annual Meeting of
Stockholders of Instron Corporation to be held at Lombardo's Conference Center,
Six Billings Street, Randolph, Massachusetts, on Wednesday, May 12, 1999, 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 TWO 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 1999 Annual Meeting of Stockholders and hereby revokes any
proxy or proxies heretofore given.
- ------------ -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
<PAGE> 18
INSTRON CORPORATION
c/o EQUISERVE
P.O. BOX 8040
BOSTON, MA 02266-8040
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.
DETACH HERE
[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 TWO DIRECTORS
NOMINEES: George S. Burr and John W. Lacey
FOR [ ] [ ] WITHHELD
BOTH FROM BOTH
NOMINEES NOMINEES
[ ]
------------------------------------------------
For both nominees except vote withheld from the
Nominee set forth above.
2. In their discretion, the proxies are authorized
to vote upon such other business as may properly
come before the meeting or any adjournments thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [ ]
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:
--------------------------------------- -------------------------
<PAGE> 19
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 19, 1999, (the "Shares") at the Annual Meeting of
Stockholders of Instron Corporation to be held at Lombardo's Conference Center,
Six Billings Street, Randolph, Massachusetts, on Wednesday, May 12, 1999, 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 TWO 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 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 1999 Annual Meeting of Stockholders and hereby revokes any
proxy or proxies heretofore given.
- ------------ -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- ----------- -----------
<PAGE> 20
INSTRON CORPORATION
c/o EQUISERVE
P.O. BOX 8040
BOSTON, MA 02266-8040
THIS IS YOUR VOTING INSTRUCTION CARD.
YOUR VOTE IS IMPORTANT.
DETACH HERE
[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 TWO DIRECTORS
NOMINEES: George S. Burr and John W. Lacey
FOR [ ] [ ] WITHHELD
BOTH FROM BOTH
NOMINEES NOMINEES
[ ]
------------------------------------------------
For both nominees except vote withheld from the
Nominee set forth above.
2. In their 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 thereof.
MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW [ ]
PLEASE SIGN, DATE AND PROMPTLY MAIL YOUR VOTING
INSTRUCTION CARD IN THE ENCLOSED ENVELOPE.
PLEASE SIGN NAME EXACTLY AS SHOWN.
Signature: Date:
--------------------------------------- -------------------------
Signature: Date:
--------------------------------------- -------------------------
