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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
MALLINCKRODT GROUP INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
MALLINCKRODT GROUP INC.
Notice of 1996
Annual Meeting of Stockholders
and Proxy Statement
[LOGO]
IMPROVING HEALTHCARE AND CHEMISTRY
<PAGE>
[LOGO]
MALLINCKRODT GROUP INC.
September 13, 1996
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Mallinckrodt Group Inc. to be held on Wednesday, October 16, 1996, in St. Louis,
Missouri. In addition to the formal items of business to be brought before the
meeting, members of management will report on the Company's operations and
answer stockholder questions.
This booklet includes the Notice of the Annual Meeting and the Proxy
Statement. The Proxy Statement describes the formal business that will be
transacted at the Annual Meeting and provides information about the Company and
the items to be voted upon.
Your vote is very important. Whether or not you expect to attend the Annual
Meeting, please ensure that your shares will be represented by promptly
completing, signing, and returning your proxy card in the envelope provided.
Even though you execute this proxy, you may revoke it at any time before it is
voted. If you attend the meeting you will be able to vote in person if you wish
to do so, even if you have previously returned your proxy card.
Thank you for your continued support.
Sincerely,
[C. RAY HOLMAN SIGNATURE]
C. RAY HOLMAN
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
7733 FORSYTH BLVD., ST. LOUIS, MISSOURI 63105 TELEPHONE (314) 854-5200
<PAGE>
[LOGO]
MALLINCKRODT GROUP INC.
HEADQUARTERS OFFICE: 7733 FORSYTH BLVD., ST. LOUIS, MISSOURI 63105
-------------------
NOTICE OF EIGHTY-SEVENTH ANNUAL MEETING OF STOCKHOLDERS
-----------------
To our Stockholders:
The Eighty-Seventh Annual Meeting of Stockholders of Mallinckrodt Group Inc.
will be held on Wednesday, October 16, 1996, at 10:00 a.m. local time, at the
Company's offices at 675 McDonnell Blvd., St. Louis, Missouri to:
1. Elect four directors for terms expiring in 1999, as RECOMMENDED by the
Board of Directors;
2. Ratify the appointment of independent auditors to examine and report on
the financial statements of the Company for fiscal 1997, as RECOMMENDED
by the Board of Directors;
3. Consider and act upon an amendment to Article FIRST of the Company's
Restated Certificate of Incorporation to change the name of the Company
from Mallinckrodt Group Inc. to Mallinckrodt Inc., as RECOMMENDED by the
Board of Directors; and
4. Transact any other business that may properly come before the meeting or
any adjournment thereof.
Only Common and 4% Cumulative Preferred stockholders of record at the close
of business on August 27, 1996, are entitled to notice of and to vote at the
meeting.
Admission to the meeting will be by ticket only. If you are a stockholder of
record and plan to attend, please mark the appropriate box on the enclosed proxy
card so we can mail a ticket to you in advance of the meeting. If your shares
are held through an intermediary such as a bank or brokerage firm, please
request a ticket by writing to the Corporate Secretary, Mallinckrodt Group Inc.,
7733 Forsyth Boulevard, St. Louis, Missouri 63105, enclosing evidence of your
stock ownership with your letter.
Dated: September 13, 1996
By Order of the Board of Directors
[ROGER A. KELLER SIGNATURE]
ROGER A. KELLER
VICE PRESIDENT, SECRETARY AND
GENERAL COUNSEL
Your vote is important. Please complete and return your proxy in the enclosed
envelope.
<PAGE>
PROXY STATEMENT
MALLINCKRODT GROUP INC.
7733 FORSYTH BOULEVARD, ST. LOUIS, MISSOURI 63105
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Mallinckrodt Group Inc. for the Annual
Meeting of Stockholders to be held on October 16, 1996, notice of which, to all
stockholders of record entitled to vote as of August 27, 1996, accompanies this
statement. Only Common and 4% Cumulative Preferred stockholders of record at the
close of business on August 27, 1996, are entitled to vote at this meeting. At
that time, the number of outstanding shares of capital stock of the Company
entitled to vote was as follows: 4% Cumulative Preferred Stock, par value $100
per share, 98,330 shares and Common Stock, par value $1 per share, 74,369,585
shares. Each such share is entitled to one vote on each matter properly brought
before the Annual Meeting.
Shares represented by proxies will be voted in accordance with directions
given on the proxy card by a stockholder. Any signed and returned proxy not
specifying to the contrary will be voted as recommended by the Board of
Directors. A stockholder giving a proxy has the right to revoke it at any time
before it has been voted at the meeting.
Proxies marked as abstaining will be treated as present for purposes of
determining a quorum for the Annual Meeting, but will not be counted as voting
in respect of any matter as to which abstinence is indicated. Proxies returned
by brokers as "non-votes" on behalf of shares held in street name because
beneficial owners' discretion has been withheld as to one or more matters on the
agenda for the Annual Meeting will not be treated as present for purposes of
determining a quorum for the Annual Meeting unless they are voted by the broker
on at least one matter on the agenda; such shares will not be counted as to the
matters for which a non-vote is indicated on the broker's proxy. With respect to
the proposal to amend the Company's Restated Certificate of Incorporation,
abstentions and broker non-votes will have the same effect as a vote against the
proposal, because under New York law, the Company's state of incorporation, the
affirmative vote of holders of a majority of the outstanding shares of 4%
Cumulative Preferred Stock and Common Stock entitled to vote thereon at the
meeting, voting without regard to class, is required for approval.
The Annual Report of the Company for the fiscal year ended June 30, 1996,
this Proxy Statement, and the proxy card are first being mailed to stockholders
commencing on or about September 13, 1996.
AGENDA ITEM 1
ELECTION OF DIRECTORS
At the outset of fiscal 1996, the Board of Directors consisted of twelve
members. Effective December 12, 1995, the Board elected Mack G. Nichols a
director and effective April 1, 1996, elected Gareth C. C. Chang a director.
Of the fourteen current directors, C. Ray Holman, the Company's Chairman and
CEO, and Mack G. Nichols, the Company's President and COO, are the only ones who
are employees of the Company. Raymond F. Bentele was President and CEO of
Mallinckrodt, Inc., a subsidiary, and Executive Vice President of the Company,
until his retirement as an officer in December 1992. The remaining directors
have never been officers or employees of the Company.
Effective on the date of this meeting, Alec Flamm, a director of the Company
since 1986, and Herve M. Pinet, a director since 1973, will retire as directors
in accordance with the Board's retirement policy. Accordingly, the Board will
reduce its size to twelve members at that time.
As provided in the Company's certificate of incorporation and by-laws, the
Board is divided into three classes, with one class standing for election each
year for three-year terms. The classes of the Board are kept as equal in size as
practicable and each class must have a minimum of three directors. The class of
1996 has consisted of four directors: Mr. Bentele and Dr. Evens, and the two
retiring directors, Messrs. Flamm and Pinet. Upon recommendation of the
Corporate Governance Committee,
1
<PAGE>
the Board has nominated Mr. Bentele and Dr. Evens for re-election by the
stockholders for three-year terms and selected Messrs. Chang and Nichols as
nominees for election by the stockholders for three-year terms. Their election
will keep the three classes of directors equal in size.
The shares represented by the proxies named on the enclosed proxy card will
be voted, unless authorization to do so is withheld, in favor of the election of
the nominees as directors to serve for the terms indicated or until their
successors shall have been duly elected and qualified. Each of the nominees is
willing to so serve. Biographical information, current as of July 1, 1996,
concerning each of the nominees and the directors continuing in office follows.
There are no family relationships among any of the nominees or any of the
incumbents or any executive officer of the Company or any of its subsidiaries.
Except for Messrs. Chang and Nichols, all nominees have previously been
considered and elected by the stockholders.
As required by New York law, directors are to be elected by a plurality of
the votes cast at the meeting in person or by proxy by the holders of shares
entitled to vote in the election.
THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF THE FOLLOWING FOUR
NOMINEES (ITEM NO. 1 ON THE PROXY CARD).
<TABLE>
<C> <S>
(PHOTO) RAYMOND F. BENTELE, 59, President and CEO of Mallinckrodt, Inc. from
1981 until his retirement in December 1992. He joined the Company as Senior
Vice President when it acquired Mallinckrodt, Inc. in 1986, and was
Executive Vice President of the Company from 1989 until retirement. He is a
director of Kellwood Company, Leggett & Platt, Inc., and IMC Global Inc.
Mallinckrodt director since 1990. Chair, Audit Committee and member, Social
Responsibility Committee.
(PHOTO) GARETH C. C. CHANG, 53, President, Hughes International and Corporate
Senior Vice President, Hughes Electronics, Los Angeles, CA, since 1993. Mr.
Chang was Corporate Vice President and Head, Asia/Pacific, of McDonnell
Douglas Corporation from 1988 to 1993. Mallinckrodt director since April
1996. Member, Social Responsibility Committee since April 1996.
(PHOTO) RONALD G. EVENS, M.D., 56, Director of the Mallinckrodt Institute of
Radiology at Washington University, St. Louis, MO, head of the
Department of Radiology and Mallinckrodt Professor of Radiology of the
University's Medical School, and Professor of Medical Economics at the Olin
School of Business. He is a director of The Boatmen's National Bank of St.
Louis and RightChoice Managed Care, Inc., a for-profit subsidiary of Blue
Cross Blue Shield of Missouri. Mallinckrodt director since 1990. Member,
Social Responsibility Committee and Corporate Governance Committee.
(PHOTO) MACK G. NICHOLS, 58, President and COO of the Company since December
1995; Senior Vice President of the Company since October 1993; Vice
President of the Company from October 1990 to October 1993; President and
CEO of Mallinckrodt Chemical, Inc., a wholly-owned subsidiary of the
Company, from January 1989 to December 1995. He is a director of The
Boatmen's National Bank of St. Louis. Mallinckrodt director since December
1995.
</TABLE>
2
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The following information is provided concerning directors continuing in
office.
<TABLE>
<C> <S>
(PHOTO) WILLIAM L. DAVIS, III, 52, Senior Executive Vice President of Emerson
Electric Co., St. Louis, MO, since 1993. Mr. Davis joined Emerson in 1977,
and was named Executive Vice President in 1988 with responsibility for that
company's tool business. In 1995, Mr. Davis also assumed operating
responsibilities for Emerson's process control businesses. Mallinckrodt
director since 1995. Member, Audit Committee and Organization and
Compensation Committee. Term expires in 1998.
(PHOTO) C. RAY HOLMAN, 53, Chairman of the Company's Board of Directors since
October 1994; CEO of the Company since December 1992; and President of the
Company from December 1992 to December 1995. Mr. Holman joined Mallinc-
krodt, Inc., as Assistant Controller in 1976, and held increasingly more
responsible positions thereafter. He became President and CEO of
Mallinckrodt Medical in 1989, and a Corporate Vice President in 1990. He is
a director of Laclede Gas Company and Boatmen's Bancshares. Member,
Executive Committee. Mallinckrodt director since 1992. Term expires in
1997.
(PHOTO) ROBERTA S. KARMEL, 59, Professor of Law and Co-Director, Center for the
Study of International Business Law, Brooklyn Law School since 1985; of
counsel, Kelley Drye & Warren since January 1, 1995, where she was a
partner from 1987 to 1994. She serves as a director of Kemper National
Insurance Companies. Mrs. Karmel served as a Commissioner of the U.S.
Securities and Exchange Commission from 1977 until 1980 and as a director
of the New York Stock Exchange from 1983 until June 1989. Mallinckrodt
director since 1980. Chair, Organization and Compensation Committee and
member, Corporate Governance Committee. Term expires in 1998.
(PHOTO) CLAUDINE B. MALONE, 60, President of Financial & Management Consult-
ing, McLean, VA. She currently serves as Chairman, Federal Reserve Bank,
Richmond, VA and sits on the boards of Dell Computer Corporation; Hannaford
Bros. Co.; Hasbro, Inc.; Houghton Mifflin Company; Lafarge Corporation; The
Limited Inc.; Lowe's Companies, Inc., Science Applications International
Corporation; and The Union Pacific Resources Corporation. Mallinckrodt
director since 1994. Chair, Social Responsibility Committee and member,
Organization and Compensation Committee. Term expires in 1997.
(PHOTO) MORTON MOSKIN, 69, consultant; retired partner, White & Case. He joined
the law firm of White & Case, New York City, in 1950, and was a partner
from 1962 through 1994. Mallinckrodt director since 1973. Chair, Corporate
Governance Committee and member, Audit Committee and Executive Committee.
Term expires in 1997.
(PHOTO) BRIAN M. RUSHTON, Ph.D., 62, Immediate Past President of the American
Chemical Society. Dr. Rushton served as Senior Vice President, Research and
Development, for Air Products and Chemicals, Inc., from 1992 to 1993. He
joined Air Products in 1981 as Vice President of Research and Development.
He is also a director of Petrolite Corporation. Mallinckrodt director since
1994. Member, Audit Committee and Social Responsibility Committee. Term
expires in 1998.
</TABLE>
3
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<TABLE>
<C> <S>
(PHOTO) DANIEL R. TOLL, 68, corporate and civic director. He serves as a
director of Brown Group, Inc., A.P. Green Industries, Inc., Kemper
National Insurance Companies, Lincoln National Convertible Securities Fund,
Inc., Lincoln National Income Fund, Inc., and NICOR, Inc. He was formerly
President and a director of Walter E. Heller International Corporation, a
financial services firm. Mallinckrodt director since 1985. Member,
Corporate Governance Committee, Organization and Compensation Committee,
and Executive Committee. Term expires in 1998.
(PHOTO) ANTHONY VISCUSI, 63, President, CEO and director of Vasomedical, Inc.,
Westbury, NY, since June 1994. Mr. Viscusi was Senior Vice President,
Worldwide Marketing for the AgVet division of Merck & Co. Inc. from 1987 to
1993. Mallinckrodt director since 1995. Member, Audit Committee and
Corporate Governance Committee. Term expires in 1997.
</TABLE>
INFORMATION ABOUT THE BOARD OF DIRECTORS
In accordance with New York law, the Board of Directors is responsible for
supervising the overall affairs of the Company. Five committees of the Board, as
described below, assist the Board in carrying out its duties.
The Board held six regular meetings and one special telephone meeting during
the 1996 fiscal year. Overall attendance of directors at Board and Committee
meetings was in excess of 98%. All directors attended at least 75% of the
meetings of the Board and all committees of the Board of which they were
members, except Mr. Chang. He only joined the Board three months before the end
of the fiscal year, and because of previously outstanding commitments at the
time of his election to the Board his attendance was limited to one of two Board
meetings held during that time.
COMMITTEES OF THE BOARD
The Board of Directors has established five standing committees: Executive;
Audit; Corporate Governance; Organization and Compensation; and Social
Responsibility. The committees held a total of sixteen regular meetings and one
special telephone meeting during fiscal 1996. The Executive Committee consists
of four non-employee directors and Mr. Holman. The other standing committees
consist of non-employee directors (although Mr. Bentele, who is Chair of the
Audit Committee and a member of the Social Responsibility Committee, is a former
officer and employee of the Company). The current members of these committees
are identified in the personal information about the directors in this Proxy
Statement.
EXECUTIVE COMMITTEE. The Executive Committee, between meetings of the Board
and subject to limitations imposed by law or by the Board of Directors, may
exercise the powers of the Board as necessary in the best interests of the
Company. The Executive Committee met once during the last fiscal year.
AUDIT COMMITTEE. The Audit Committee, which met four times during the past
fiscal year, evaluates the performance of the Company's independent auditors and
their fees for services; reviews the scope and results of the audit examination
to be performed each year with the independent auditors, the Company's internal
auditing staff, and management; reviews the non-auditing services performed by
the independent auditors and considers the effects thereof on their
independence; and reviews the Company's internal accounting control systems with
the independent auditors.
CORPORATE GOVERNANCE COMMITTEE. The Corporate Governance Committee met four
times during the last fiscal year. Its functions include recommending to the
Board persons to be nominated for election as directors of the Company. It also
evaluates Board procedures and the performance of the Board, its members, and
its committees and reviews developments in the governance of publicly held
companies as they may affect the Company. This Committee will consider persons
recommended by stockholders as potential future nominees for election to the
Board if the names of such persons are submitted (in accordance with the bylaws'
time requirements described below under "Miscellaneous
4
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Information") in writing to the Secretary of the Company, together with a full
description of the qualifications and business or professional experience of the
proposed nominees and a statement from them of their willingness to serve.
ORGANIZATION AND COMPENSATION COMMITTEE. The Organization and Compensation
Committee met four times during the last fiscal year. The responsibilities of
this Committee include oversight of the Company's stock option plans, incentive
compensation, pension and other benefit plans; the review of perquisites and
other benefits available to various levels of corporate personnel; and the
review and approval and/or recommendation to the Board for approval of the
amount and nature of compensation to be paid to corporate officers and other key
employees. See pages 16-19 for the report of, and additional information about,
this Committee.
SOCIAL RESPONSIBILITY COMMITTEE. The Social Responsibility Committee met
four times during the last fiscal year. Its function is to review the Company's
policies and procedures in business matters having particular social concern,
including environmental protection, equal employment opportunities, occupational
health and safety, regulatory compliance, and product quality and safety; to
review the aspects of the Company's research and development activities relevant
to the Committee's purpose; and to review political and social developments as
they may affect the Company.
BOARD INTERMEDIARY
When the positions of Chairman and CEO are combined, the Board selects from
its outside members a person to serve as Board intermediary. The
responsibilities of the intermediary include presiding at all executive sessions
of the Board from which the CEO is absent, interacting with the Board and the
CEO in setting agendas and assessing objectives, and coordinating the Board's
formal CEO performance appraisal.
The intermediary is selected by the Board annually at the time of the
regular stockholders' meeting. Unless the Board finds reason for exception, the
intermediary serves at least one full year but no more than three consecutive
one year terms. The Board will reevaluate the intermediary concept from time to
time to be certain that it facilitates interaction between the Board and
management for the ultimate benefit of the Company's stockholders.
Concurrent with the election of Mr. Holman as Chairman in October 1994, the
Board selected Mr. Flamm to serve as Board intermediary for a one-year term. The
Board subsequently re-elected Mr. Flamm to this position for a term expiring on
the date of this meeting, at which time Mr. Toll will begin serving as Board
intermediary for a one-year term.
DIRECTORS' COMPENSATION
COMPENSATION FOR DIRECTORS' SERVICES
Messrs. Holman and Nichols are currently the only employee directors of the
Company. Employee directors receive no fees or remuneration, as such, for
service on the Board or on any committee of the Board.
During the last fiscal year, non-employee directors received an annual
retainer of $30,000, attendance fees of $2,000 for each Board meeting attended
($750 for telephone Board meetings), and $1,000 for each meeting they attended
of a Board committee to which they were assigned ($500 for telephone committee
meetings). Non-employee directors who chaired Board committees (other than the
Executive Committee) also received an annual retainer of $3,600 for such
service. The Board intermediary, who also chairs the Executive Committee,
received an annual retainer of $25,000 for such service. Until last November,
non-employee directors were paid an annual retainer of $3,600 for serving as
members of the Executive Committee. At that time, the annual retainer payable to
members of the Executive Committee was eliminated and the annual retainer paid
to the Board intermediary was set at an amount equal to the annual retainer paid
to non-employee directors for service on the Board, as such amount may be
adjusted from time to time.
5
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Non-employee directors may participate in a deferral election plan under
which they have the option of receiving in cash or Common Stock of the Company
all or part of their directors' compensation on a deferred basis. A director
electing to participate in the deferral plan must file an irrevocable election
with the Company before the first day of any calendar year for which the
election is to apply. Two non-employee directors have elected to defer all of
their retainers and fees, and one non-employee director has elected to defer his
retainer, under this plan.
Non-employee directors participate in the stockholder-approved Directors'
Stock Option Plan under which, commencing with the 1990 annual meeting until
that held in the year 2000, annual grants of stock options are automatically
made to each individual who is elected to the Board of Directors at such meeting
or who had previously been elected to the Board and is continuing on the Board
for a term extending beyond such meeting. Each option grant permits the
non-employee director, for a period of up to ten years from the date of grant
(unless the period is shortened under provisions taking effect upon death or
retirement), to purchase from the Company up to 1,500 shares of the Company's
Common Stock at the fair market value of such shares on the date the option is
granted. One-half of the total number of shares covered by each option grant
become exercisable on and after its first anniversary and the remaining one-half
on and after the second anniversary. An aggregate of 225,000 shares of Common
Stock are subject to the Plan. The following automatic grants have been made
under the Plan: 15,000 shares in the aggregate to the ten non-employee directors
on October 17, 1990, at an exercise price of $18.54 per share (as adjusted to
reflect a three-for-one stock split effective November 12, 1991); 15,000 shares
in the aggregate to the ten non-employee directors on October 16, 1991, at a
split adjusted exercise price of $40.00 per share; 13,500 shares in the
aggregate to nine such directors on October 21, 1992, at an exercise price of
$34.75 per share; 13,500 shares in the aggregate to nine non-employee directors
on October 21, 1993, at an exercise price of $34.44 per share; 13,500 shares in
the aggregate to nine non-employee directors on October 19, 1994, at an exercise
price of $31.81 per share; and 16,500 shares in the aggregate to eleven
non-employee directors on October 18, 1995 at an exercise price of $36.94 per
share. Additional grants of 1,500 shares to each eligible director will
automatically be made effective and at the market value on the date of this
Annual Meeting. The options are nonstatutory options not intended to qualify
under Section 422A of the Internal Revenue Code. The Plan is administered by the
Board of Directors. The Board, however, has no authority in respect of grants,
which occur automatically as provided in the Plan, and, in general, may not
materially increase the benefits under the Plan or, without further approval of
the stockholders, amend the Plan in any respect involving grants.
Non-employee directors are also provided with accident coverage while on
Company business and may participate in the Company's matching gift program for
gifts to eligible non-profit organizations up to $2,000 per year.
Pursuant to a Director Retirement Service Plan adopted in 1984, as amended,
non-employee directors who serve at least five years as a director, agree to
remain available to provide consultation services to Mallinckrodt management,
and do not work for a competitor, will upon attainment of age 70 and after
retirement from the Board, receive an annual nonqualified pension from the
Company. The annual pension is payable for the longer of the retired director's
years of service or ten years, in an amount equal to a percentage of the annual
retainer in effect at retirement, depending upon the length of the director's
service (60% if five-six years, 70% if seven, 80% if eight, 90% if nine, and
100% if ten years or more). If any retired director dies before receiving the
full benefit, the remaining benefit is payable to the surviving spouse until
completion or the spouse's earlier death. The Company accrued $326,000 in fiscal
1996 against future liabilities under the Plan.
In accordance with Board policy, the Chief Executive Officer, the Chairman
of the Board (if he or she is not the Chief Executive Officer), and non-employee
directors retire from the board at the annual meeting next following their
reaching age 70. Directors who are officers retire at the annual meeting next
following the end of their service as an officer subject to the Board's
discretion to recommend that the retired officer (if otherwise eligible) be
elected as a non-employee director.
6
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COMPENSATION FOR NON-DIRECTOR SERVICES
Dr. Evens has for many years, beginning before his joining the Company's
Board in 1990, rendered consulting services to the Company's imaging division.
During fiscal 1996, he was paid $39,802 for these services. In general, there
has been a history of research grants and contributions to, and other support by
Mallinckrodt and its businesses of Washington University, with which Dr. Evens
is associated in several capacities; in fiscal 1996, this totaled about
$807,507.
The firm of White & Case, of which Mr. Moskin is a former partner, performed
legal services for the Company during fiscal 1996 for which that firm was paid
its usual and customary charges.
Mr. Pinet rendered international consulting services for the Company and its
subsidiaries in fiscal 1996, for which he received $120,000.
OWNERSHIP OF THE COMPANY'S SECURITIES
SECURITIES OWNED BY DIRECTORS AND OFFICERS
The following table shows the number of shares of the Company's Common Stock
held beneficially as of June 30, 1996, by each director and nominee for
director, each of the named executive officers in the Summary Compensation
Table, and all directors and executive officers as a group. The following named
individuals have sole voting and investment power over all stock reflected in
the table.
<TABLE>
<CAPTION>
NUMBER OF
COMMON
SHARES OWNED
BENEFICIALLY
AS OF PERCENT OF CLASS
NAME 6/30/96 (1)(2) OUTSTANDING
--------------------------- -------------- ------------------
<S> <C> <C>
Raymond F. Bentele 116,080 *
Gareth C. C. Chang 500 *
Paul D. Cottone 15,635 *
William L. Davis 500 *
Ronald G. Evens 9,700 (3) *
Alec Flamm 7,650 *
C. Ray Holman 231,938 *
Roberta S. Karmel 9,250 *
Claudine B. Malone 1,900 *
Morton Moskin 7,353 *
Robert G. Moussa 69,921 *
Mack G. Nichols 152,654 *
Herve M. Pinet 17,250 *
Michael A. Rocca 24,927 *
Brian M. Rushton 1,150 *
Daniel R. Toll 8,250 *
Anthony Viscusi 1,000 *
All directors and executive
officers as a group (33
individuals) 1,148,604 1.54%
</TABLE>
- - ------------------------
(1) The Securities and Exchange Commission ("SEC") considers any person who has
or shares voting and/or investment power with respect to a security or who
has the right to acquire a security within sixty days (such as through the
exercise of an option), to be the beneficial owner of that security.
(2) Included are 507,325 shares which are subject to stock options held by all
directors and executive officers of the Company as a group which may be
exercised within sixty days of June 30, 1996. The table does not include
share equivalents credited to director participants in the Deferral Election
Plan for Non-Employee Directors as described on page 6 as to which no voting
or investment power exists prior to share issuance.
7
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(3) This does not include 1,300 shares for which Dr. Evens disclaims beneficial
ownership.
* Less than 1.0% of the Common Stock outstanding.
DIRECTOR SHARE OWNERSHIP REQUIREMENTS
The Board adopted in 1995 a policy on director share ownership to underscore
the importance of better aligning the interests of the directors with those of
the Company's stockholders. Ownership targets are tied to the amount of the
annual retainer paid to directors. Neither unexercised stock options granted
under the Directors Stock Option Plan nor share equivalents credited under the
Deferral Election Plan for Non-Employee Directors can be included for purposes
of satisfying a director's minimum share ownership requirement. Each new
director must, within three years after joining the Board, own shares of
Mallinckrodt Common Stock with a market value at the time of acquisition of at
least one times the annual retainer; and must within two years thereafter (and
for so long as service on the Board continues), own shares of Mallinckrodt
Common Stock with a value when acquired of at least two times the annual
retainer or 1,000 shares, whichever is greater. Directors serving when the
policy was adopted must meet similar ownership requirements within three years
and five years, respectively, after adoption. In addition to the foregoing, any
future candidate for nomination as a non-employee director must beneficially own
Common Stock of the Company at the time share ownership is reported in the Proxy
Statement in which such nomination is first submitted for stockholder approval.
OWNERSHIP OF VOTING STOCK BY OTHERS
On the basis of filings with the SEC and other information deemed reliable
by the Company (but excluding holdings of Cede & Co. and Kray & Co., nominees
for depositories of the New York and Chicago Stock Exchanges, respectively), the
Company believes that as of on or about June 30, 1996, the following named
institutions owned of record more than 5% of the Company's Common Stock. No
changes in these holdings have come to the Company's attention since then. To
the Company's knowledge, no person or concern beneficially owns more than 5% of
its Preferred Stock.
<TABLE>
<CAPTION>
VOTING DISPOSITIVE TOTAL
AUTHORITY AUTHORITY AMOUNT OF
-------------------------- -------------------------- BENEFICIAL
NAME AND ADDRESS SOLE SHARED SOLE SHARED OWNERSHIP
- - ----------------------------------------------------- --------- --------------- --------- --------------- ------------
<S> <C> <C> <C> <C> <C>
College Retirement Equities Fund .................... 4,143,050 0 4,143,050 0 4,143,050
New York, N.Y.
Investment Company
Trimark Financial Corporation ....................... 4,010,900 0 4,010,900 0 4,010,900
Toronto, Ontario
<CAPTION>
% OF
NAME AND ADDRESS CLASS
- - ----------------------------------------------------- ----------
<S> <C>
College Retirement Equities Fund .................... 5.54
New York, N.Y.
Investment Company
Trimark Financial Corporation ....................... 5.36
Toronto, Ontario
</TABLE>
Trimark Financial Corporation is a parent holding company for Trimark
Investment Management Inc., an investment adviser to certain Trimark mutual
funds which are the record holders of the Company's stock.
8
<PAGE>
EMPLOYMENT CONTRACTS AND CONTRACTUAL CHANGE
IN CONTROL ARRANGEMENTS
When first employed by the Company, Mr. Cottone and Mr. Rocca were granted
employment contracts. Mr. Cottone has an employment contract with the Company
that provides for his serving as Senior Vice President of the Company and CEO
and President of Mallinckrodt Veterinary, Inc., a wholly-owned subsidiary of the
Company, for a minimum base salary of $300,000 per annum until October 1, 1996,
and participation in incentive compensation programs and other benefits. His
base salary was increased to $337,100 per annum effective July 1, 1996. Mr.
Rocca had a two-year employment contract with the Company (through April 5,
1996) as Senior Vice President and CFO of the Company, that provided a minimum
base salary of $260,000 per annum and participation in incentive compensation
programs and other benefits.
Change in control severance agreements with the named executive officers are
intended to assure the Company of the continued services of those executives. In
general, all provide that, in the event there is a change in control of the
Company (as defined in the agreements), and the executive is either terminated
by the Company without cause or terminates employment for good reason (as
defined in the severance agreements) during the 3-year period immediately
following a change in control (or such a termination of employment occurs at the
request of a third party who ultimately effectuates a change in control), then
the executive shall receive certain severance benefits including a pro rata
target bonus for the year of termination, a lump-sum cash amount equal to 2 1/2
times the sum of (i) the executive's base salary plus (ii) the executive's
target bonus for the year in which the change in control occurs, 2 1/2 years'
credited service for the Company's SERP and continued participation in welfare
insurance benefits for a 30 month period. In the event change in control related
payments to any executive under a severance agreement or otherwise are subject
to the 20% parachute payment excise tax under Section 4999 of the Internal
Revenue Code, the Company shall reimburse the executive in an amount sufficient
to enable the executive to retain his change in control benefits as if the
excise tax had not applied. Pursuant to the severance agreements, the executives
agree to remain employed by the Company for a 90-day period following a change
in control.
Under the severance agreements, a "change in control" is defined generally
to mean: (i) a person becomes the beneficial owner of 20% or more of the voting
power of the Company; (ii) a change in a majority of the Board (or their
approved successors); (iii) the consummation of a reorganization, merger,
consolidation or sale of substantially all of the assets of the Company (unless
the Company's stockholders receive 50% or more of the voting stock of the
surviving or purchasing company, no person acquires more than 20% of such voting
stock, and the Company's Board of Directors remains a majority of the continuing
board of directors of the surviving or purchasing company); or (iv) a
liquidation or dissolution of the Company.
In 1988, the Company adopted the Management Compensation and Benefit
Assurance Program to ensure that persons who were then or thereafter became
officers and other key managers would receive the compensation and benefits that
have been committed to or are reasonably expected by them under the terms of
certain unfunded compensation and benefit plans, including severance as
described above. Under the Program, trusts were established (subject to the
rights of creditors of the Company) and letters of credit were obtained so that
the Company's commitments, grants and awards to such personnel would be honored,
including deferred compensation, annual bonus, long term incentive compensation,
supplemental retirement provisions, contingent employment and gross-up
agreements and stock options and related LSARs. The annual cost to the Company
to maintain the Program in fiscal 1995 was approximately $364,000. During the
past year, the Company has consolidated the seven existing trusts into a single
trust, limited the application of the trust to deferred compensation and
supplemental retirement plans and eliminated the letter of credit funding,
thereby reducing the annual cost to $44,969 in fiscal 1996. Additional benefit
plans of the Company which could be impacted by a change in control of the
Company include: (i) the Supplemental Executive Retirement Plan (acceleration of
vesting if a participant's employment is terminated within three years following
a change in control); (ii) the Long Term Incentive Compensation Plan (following
a change in control, awards may not be adversely amended or adjusted and
participants who are
9
<PAGE>
terminated without cause or terminated for good reason will receive payments at
the end of any pending performance cycle as if employment had continued); (iii)
the Management Incentive Compensation Program (provides minimum payment of
target award for year of change in control and pro rata target payment if
employment is terminated without cause or for good reason during the 1-year
period following a change in control); and (iv) the Company's pension plans
(unvested benefits vest upon a change in control). The amount of funding under
the letter-of-credit arrangements that would occur if the Board of Directors
determined funding was appropriate would depend upon the Company's outstanding
compensation commitments subject to the Program at the time and the extent the
Board then determined to fund them.
In August 1996, the Company approved a retention arrangement with Mr.
Cottone and other senior executives of its veterinary division. This arrangement
is designed to retain and incentivize such persons as employees while the
Company explores strategic alternatives for the veterinary division. Under this
arrangement, if the veterinary division is sold and Mr. Cottone remains employed
by the Company through the closing of such transaction, he would receive the
following amounts: (i) one year of his then current base salary; (ii) up to two
times his annual bonus under the Company's annual incentive plan; (iii) an
amount equal to the long-term incentive otherwise payable to him under the
Company's Long-Term Incentive Compensation Plan; and (iv) additional
compensation based upon the terms of the sale.
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires directors and
certain officers and beneficial owners of the Company's equity securities to
file with the SEC reports about such ownership and changes in ownership. The
Company is required to conduct a review and to identify in its proxy statement
each director or officer who failed to file any required report under Section 16
on a timely basis. Based upon that review, the Company has determined that all
required reports were filed on a timely basis for the fiscal year, except (a) a
filing to reflect the sale by Mr. Chang in May 1996 of 500 shares of the
Company's Common Stock was inadvertently made nine days late, and (b) a filing
to reflect the purchase by Mr. Cottone in November 1995 of 145 shares of the
Company's Common Stock was inadvertently not made until July 1996.
AGENDA ITEM 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Since 1913 the firm of Ernst & Young LLP, independent auditors, has examined
and reported on the consolidated financial statements of the Company. The Board
of Directors, upon recommendation of the Audit Committee, has appointed Ernst &
Young LLP as independent auditors to examine and report on the financial
statements of the Company for the year ending June 30, 1997, subject to
stockholder approval.
During the year ended June 30, 1996, Ernst & Young LLP provided the Company
with audit services, including examinations of and reporting on the Company's
consolidated financial statements, as well as those of several of its
subsidiaries and of certain of its employee benefit plans. Audit services also
included accounting advisory services and review of filings with the SEC and the
annual report to shareholders. Ernst & Young LLP's fees for such services during
fiscal 1996, including travel and related expenses, totaled $2,330,400.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will have the opportunity to make any statements they may
desire. They will also be available to respond to appropriate questions of the
stockholders.
Ratification of the appointment of Ernst & Young LLP as independent auditors
requires the affirmative vote of a majority of the votes cast at the meeting by
holders of the Company's 4% Cumulative Preferred Stock and Common Stock, voting
without regard to class.
10
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THIS APPOINTMENT (ITEM NO. 2 ON THE PROXY CARD).
AGENDA ITEM 3
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The Board of Directors has adopted resolutions proposing that the Company's
Restated Certificate of Incorporation be amended to change the Company's name
from Mallinckrodt Group Inc., to Mallinckrodt Inc., and has directed that the
proposed amendment be submitted for the approval and authorization of the
stockholders at this Meeting.
In March 1994, the name of the Company was changed from IMCERA Group Inc.,
to Mallinckrodt Group Inc. At that time, about 70% of the Company's business was
already conducted under the Mallinckrodt name. The new name reflected the
Company's desire to unify its operations under the Mallinckrodt name. The
inclusion of "Group" as part of the Company's name was appropriate because the
business of the Company was then conducted by a group of three separately
operated and distinct operating subsidiaries.
In December 1995, the Company announced a strategic change initiative which
included consolidation of all operating activities under a chief operating
officer. Although the three subsidiaries continue to exist, the operating
company format has been phased-out, and the Company's business is now being
conducted through eight divisions.
As a result of the Company's revised organization structure, the Board of
Directors believes the word "Group" no longer accurately describes the Company's
manner of conducting business. In addition, the use of "Group" has caused some
confusion about the nature of the Company's business. The costs necessary to
implement the change in the Company's name will not be material and stockholders
will not need to exchange their present stock certificates.
To be adopted the proposed amendment must be approved by the affirmative
vote of the holders of a majority of all outstanding shares of 4% Cumulative
Preferred Stock and Common Stock entitled to vote thereon at a meeting of
stockholders voting as one class. The effective date of the amendment, when so
approved, will be the date of its filing in the office of the Secretary of State
of New York, which is expected to be within a few days after stockholder
approval is obtained.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE PROPOSED
AMENDMENT (ITEM NO. 3 ON THE PROXY CARD).
11
<PAGE>
EXECUTIVE COMPENSATION
The following table shows compensation information for Mr. Holman and the
four other most highly compensated executive officers in fiscal 1996. Executive
officers are the corporate officers of the Company elected by the Board of
Directors.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ---------------------
OTHER
ANNUAL AWARDS ALL OTHER
COMPEN- --------------------- COMPEN-
SALARY SATION RESTRICTED OPTIONS/ SATION
NAME AND PRINCIPAL POSITION YEAR ($) BONUS ($) ($)(1) STOCK (2) SARS (3) ($)(4)
- - ------------------------------------ ---- --------- --------- ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
C.R. Holman
Chairman and CEO 1996 $ 684,840 $ 450,000 59,593 $ 0 41,250 $ 9,450
Chairman, President and CEO 1995 617,520 470,000 -- 0 41,250 9,450
President and CEO 1994 525,060 470,000 -- 846,973 31,300 13,634
M.G. Nichols
President and COO 1996 451,530 200,000 -- 0 20,000 9,450
Senior Vice President; President, 1995 376,200 192,000 50,759 0 20,000 9,450
Mallinckrodt Chemical
(same as 1995) 1994 341,940 220,000 -- 196,763 13,500 7,095
R.G. Moussa
Senior Vice President; President, 1996 368,000 135,900 74,494 0 16,500 9,450
International
Senior Vice President, President, 1995 343,200 179,100 -- 0 16,500 9,450
Mallinckrodt Medical
(same as 1995) 1994 312,000 175,000 -- 196,763 13,500 12,948
M.A. Rocca
Senior Vice President and CFO 1996 285,000 93,300 41,897 0 13,600 9,450
Senior Vice President, CFO and 1995 265,320 122,700 333,588 0 13,600 8,358
Treasurer
(same as 1995) 1994 63,176(5) 50,000 -- 156,563(6) 12,000 0
P.D. Cottone
Senior Vice President 1996 321,000 152,700 -- 0 16,500 9,450
President, Mallinckrodt 1995 225,000(7) 143,700 152,829 0 30,000 9,450
Veterinary (both years)
</TABLE>
- - ----------------------------------
(1) Consistent with applicable regulations, this column does not include
perquisites that, when aggregated, did not exceed the lesser of $50,000 or
10% of compensation for any of the named executives. The amounts shown in
this column include: (a) for Mr. Holman in fiscal 1996, club dues and
expenses ($15,211) and tax payments ($16,901) made on behalf of Mr. Holman
relating to perquisites received by him; (b) for Mr. Nichols in fiscal 1995,
spousal travel expenses ($17,230) and club dues and expenses ($12,818); (c)
for Mr. Moussa in fiscal 1996, club dues and expenses ($44,504); (d) for Mr.
Rocca in fiscal 1995, reimbursement for relocation expenses (grossed-up for
tax payments) in connection with Mr. Rocca's employment by the Company
($288,316) and in fiscal 1996, additional reimbursement for relocation
expenses ($13,824) and tax payments ($13,048) made on behalf of Mr. Rocca
relating to perquisites received by him; and (e) for Mr. Cottone in fiscal
1995, reimbursement for relocation expenses (grossed-up for tax payments) in
connection with Mr. Cottone's employment by the Company ($78,692).
(2) Under the Long-Term Incentive Plan for Senior Management, a three-year Plan
which ended June 30, 1994, awards totaling 132,832 restricted shares were
made during fiscal 1994 to 41 individuals, including Mr. Holman, 28,410
shares; Mr. Nichols, 6,600 shares; and Mr. Moussa, 6,600 shares. Valuation
is based on the market price of the stock at the time of grant. All such
restricted shares have vested. Dividends were paid on the restricted shares
at the same rate as paid to all holders of the Company's Common Stock.
(3) The Company did not grant stock appreciation rights during the last three
fiscal years.
(4) These amounts reflect the Company's contributions under the Investment Plan,
described on page 15 below.
(5) Mr. Rocca joined the Company in April 1994.
(6) The Company awarded 5,000 restricted shares of its Common Stock to Mr. Rocca
in April 1994 concurrent with his employment. All shares vested two years
from the grant date.
(7) Mr. Cottone joined the Company in October 1994.
STOCK OPTIONS
The Company has three stock option plans: the Directors Plan described at
page 6 above, which is limited to non-employee directors, the 1973 Stock Option
and Award Plan (the 1973 Plan) and the 1981 Stock Option Plan (the 1981 Plan).
Non-employee directors are not eligible for grants under the latter two plans.
The 1981 Plan expired in accordance with its terms on December 16, 1991, except
as to then outstanding grants and awards. The terms of options thereunder are
substantially the same as the terms of options under the 1973 Plan. The 1973
Plan is a non-qualified plan under Section 401(a) of the Internal Revenue Code.
Since 1990, all employees of the Company worldwide are eligible for grants under
the 1973 Plan, and the Company has made grants periodically to virtually all of
its then current regular employees. The following tables summarize all employee
stock options granted in fiscal 1996 and all employee stock options exercised in
fiscal 1996 and remaining outstanding at the close of fiscal 1996 for each of
the named executive officers.
12
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------------
PERCENT OF
TOTAL
OPTIONS
NUMBER OF GRANTED TO
SECURITIES ALL
UNDERLYING EMPLOYEES IN EXERCISE OR
OPTIONS FISCAL YEAR BASE PRICE EXPIRATION
NAME GRANTED (1) (2) ($/SH) DATE
- - ----------------------------------------------------------------- ------------- ------------ ----------- ----------
<S> <C> <C> <C> <C>
C. R. Holman..................................................... 41,250 2.9% $ 34.79 12/11/05
M. G. Nichols.................................................... 20,000 1.4 34.79 12/11/05
R. G. Moussa..................................................... 16,500 1.2 34.79 12/11/05
P. D. Cottone.................................................... 16,500 1.2 34.79 12/11/05
M. A. Rocca...................................................... 13,600 0.9 34.79 12/11/05
Gain for all Shareholders at Assumed Rates of Appreciation (5)................................................................
<CAPTION>
POTENTIAL REALIZABLE VALUE
AT ASSUMED ANNUAL RATES OF
STOCK PRICE APPRECIATION
FOR OPTION TERM (3)
-----------------------------------------------
0% ($)
($34.79) 5% ($) 10% ($)
NAME (4) ($56.67) ($90.24)
- - ----------------------------------------------------------------- ----------- -------------- --------------
<S> <C> <C> <C>
C. R. Holman..................................................... $ 0 $ 902,550 $ 2,287,313
M. G. Nichols.................................................... 0 437,600 1,109,000
R. G. Moussa..................................................... 0 361,020 914,925
P. D. Cottone.................................................... 0 361,020 914,925
M. A. Rocca...................................................... 0 297,568 754,120
Gain for all Shareholders at Assumed Rates of Appreciation (5)... 0 $1,625,258,828 $4,118,857,496
</TABLE>
- - ----------------------------------
(1) These awards were made pursuant to the 1973 Plan. Under this Plan, the
option price must not be less than 100% of the fair market value of the
stock at the time the option is granted. "Fair market value" is defined in
the Plan to be the average of the means between the highest and lowest
prices at which the stock is traded for each of the fifteen business days
preceding the date of grant as reflected on the composite tape of New York
Stock Exchange issues. An employee is obligated to remain in the employ of
the Company or its subsidiaries for at least one year from the date of grant
before he or she may exercise any such option and not more than 50% of the
shares granted may be exercised within the twelve months after that year.
The option becomes fully exercisable two years after the grant date. The
exercise price and tax withholding obligations related to exercise may be
paid by delivery of already owned shares of Common Stock or by offset of the
underlying shares, subject to certain conditions. The Company did not grant
stock appreciation rights during fiscal 1996.
(2) The Company granted options to purchase a total of 1,433,122 shares of its
Common Stock to employees in fiscal 1996 including the options granted to
the named executive officers as stated in this table. Options granted to
employees in fiscal 1996 have an average exercise price of $34.95 per share
and expire at various times, 10 years from the respective grant dates.
(3) Total dollar gains based on indicated rates of appreciation over a 10 year
term. Assumed future stock prices are shown in parentheses.
(4) No gain to the optionees is possible without an increase in the stock price,
which will benefit all stockholders commensurately. A zero percent stock
price appreciation will result in zero dollars for the optionees.
(5) Hypothetical dollar gains based on the 74,280,568 common shares outstanding
(less shares held in treasury) at June 30, 1996 for comparison with assumed
appreciation in shares subject to options granted in fiscal 1996 to the
named executive officers.
The potential realizable value of each grant of employee stock options,
assuming that the market price of the underlying security appreciates in value
from the date of grant to the end of the option term at the rates of 5% and 10%,
are shown above. Hypothetical future values, based on the difference between the
option price at date of grant and the stock prices resulting from the assumed
rates of growth, indicate what gain would be realized if such options were
exercised immediately prior to their expiration date. The actual future gain, if
any, of the stock options will depend upon the future appreciation in the market
price of the Company's Common Stock. There is no assurance that the assumed
future values reflected in the preceding table will actually be attained. Use of
this model should not be viewed in any way as a forecast of the future
performance of the Company's stock, which will be determined by future events
and unknown factors.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
IN-
THE-MONEY
OPTIONS
NUMBER OF UNEXERCISED OPTIONS AT AT FISCAL
YEAR-END
FISCAL YEAR-END (1) ($)(2)
SHARES ACQUIRED VALUE REALIZED -------------------------------- -------------
NAME ON EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE
- - --------------------------------------- ----------------- -------------- ------------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
C. R. Holman........................... 0 $ 0 156,925 61,875 $ 1,503,755
M. G. Nichols.......................... 4,500 127,125 129,800 30,000 1,880,424
R. G. Moussa........................... 0 0 61,550 24,750 557,684
P. D. Cottone.......................... 0 0 15,000 31,500 123,923
M. A. Rocca............................ 0 0 18,800 20,400 137,654
<CAPTION>
NAME UNEXERCISABLE
- - --------------------------------------- ----------------
<S> <C>
C. R. Holman........................... $ 352,172
M. G. Nichols.......................... 170,750
R. G. Moussa........................... 140,869
P. D. Cottone.......................... 191,325
M. A. Rocca............................ 116,110
</TABLE>
- - ----------------------------------
(1) Options granted in fiscal 1993 to officers of the Company who file reports
pursuant to Section 16(a) of the Securities Exchange Act of 1934 have
limited stock appreciation rights attached. A limited stock appreciation
right is exercisable only if attached to an exercisable option and only in
the event of a change in control of the Company. The Company has not granted
stock appreciation rights in tandem with any of the options reflected in
this table.
(2) Values are based on the June 30, 1996 market price of $38.875 per share less
option exercise at base price. These values are presented pursuant to SEC
rules and the actual amount, if any, realizable upon exercise will depend
upon the market price of the common stock relative to the exercise price per
share of common stock at the time the stock options are exercised. There is
no assurance that the values of unexercised in-the-money options reflected
in the table will be realized.
13
<PAGE>
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS UNDER
OTHER PERIOD UNTIL NON-STOCK PRICE - BASED PLANS
MATURATION OR -------------------------------------
NAME, POSITION PAYOUT THRESHOLD TARGET MAXIMUM
- - ------------------------------------------------------ ------------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
M. G. Nichols......................................... June 30, 1997 $ 93,000 $ 232,500 $ 418,500
President and COO
</TABLE>
In December 1995, Mack G. Nichols, a Senior Vice President of the Company
and President of the Company's subsidiary, Mallinckrodt Chemical, Inc., was
promoted to the positions of President and Chief Operating Officer of the
Company. In recognition of his increased responsibilities, the Company granted
Mr. Nichols a long-term compensation opportunity as described in the table
above. It is in addition to an award previously made to Mr. Nichols under the
Company's Long-Term Incentive Compensation Plan adopted by the stockholders in
1994 (the 1994 Plan) (see page 17 for a discussion of the 1994 Plan). Payment
will be made in cash and will depend upon the Company's achievement of the same
performance goals established for the 1994 Plan.
PENSION PLANS
The Company maintains a non-contributory qualified pension plan that covers
virtually all salaried employees, including officers, and most non-union hourly
employees. The Company also has a Supplemental Executive Retirement Plan that
provides a supplemental pension benefit for managers above a specified salary
grade who have been approved for participation by the Chief Executive Officer.
Participants include the named officers and are generally limited to key
managers of the Company and its subsidiaries.
Based on certain assumptions, including continuance of the qualified pension
plan and the Supplemental Executive Retirement Plan, the following table shows
the estimated annual pension benefits that would be payable to participants in
both plans at age 65 for various compensation and years-of-service combinations,
based upon a straight-life annuity form of benefit. If elected, any of several
optional forms of pension (apart from the lump sum option) would, on an
actuarial basis, reduce benefits to the participant but provide benefits to a
surviving beneficiary.
<TABLE>
<CAPTION>
ANNUAL AVERAGE OF HIGHEST
FIVE YEARS COVERED
REMUNERATION FOR PENSION ANNUAL BENEFITS FOR YEARS
PURPOSES IN TEN YEARS OF SERVICE INDICATED
PRECEDING NORMAL ----------------------------------------------------------------------------
RETIREMENT DATE 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS
- - -------------------------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
$ 100,000 $ 40,000 $ 50,000 $ 60,000 $ 60,000 $ 60,000 $ 60,000
300,000 120,000 150,000 180,000 180,000 180,000 180,000
500,000 200,000 250,000 300,000 300,000 300,000 300,000
700,000 280,000 350,000 420,000 420,000 420,000 420,000
900,000 360,000 450,000 540,000 540,000 540,000 540,000
1,100,000 440,000 550,000 660,000 660,000 660,000 660,000
1,300,000 520,000 650,000 780,000 780,000 780,000 780,000
</TABLE>
A subsidiary of the Company, Mallinckrodt, Inc., had a separate Supplemental
Executive Retirement Plan, a non-contributory, non-qualified pension plan to
provide upon retirement an additional pension benefit for its key executives. As
amended, the Plan has been incorporated into the Company's SERP and now applies
only to four current executives of the Company (including two of the named
executive officers, Messrs. Holman and Nichols), each of whom has been employed
by the
14
<PAGE>
Company for at least 15 years. The following table shows the additional amount
of retirement benefit payable to these four executives at age 65 for various
compensation and years-of-service combinations based upon a life only form of
annuity:
<TABLE>
<CAPTION>
ANNUAL AVERAGE OF HIGHEST
THREE YEARS COVERED
REMUNERATION FOR PENSION NET ADDITIONAL ANNUAL BENEFITS
PURPOSES IN TEN YEARS FOR YEARS OF SERVICE INDICATED
PRECEDING NORMAL -----------------------------------------------------
RETIREMENT DATE 15 YRS. 20 YRS. 25 YRS. 30 YRS. 35 YRS.
- - -------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 5,750 $ 1,330 $ 6,900 $ 6,900 $ 6,900
300,000 17,250 3,990 20,700 20,700 20,700
500,000 28,750 6,650 34,500 34,500 34,500
700,000 40,250 9,310 48,300 48,300 48,300
900,000 51,750 11,970 62,100 62,100 62,100
1,100,000 63,250 14,630 75,900 75,900 75,900
1,300,000 74,750 17,290 89,700 89,700 89,700
</TABLE>
Compensation covered by the pension plans will generally be equal to the
dollar amounts in the salary and bonus columns of the Summary Compensation
Table. Social security benefits, qualified plan limitations on eligible
compensation, and applicable integration adjustments are not reflected in the
above tables. The current credited years of service for the individuals named in
the Summary Compensation Table are as follows: Mr. Holman, 19 yrs., 10 mos.; Mr.
Nichols, 16 yrs., 11 mos.; Mr. Moussa, 18 yrs., 5 mos.; Mr. Cottone, 1 yr., 9
mos.; and Mr. Rocca, 2 yrs., 3 mos.
INVESTMENT PLAN AND OTHER BENEFITS
The Company has an Investment Plan under which salaried and most non-union
hourly employees of the Company, including officers, who elect to participate in
the Plan may make regular contributions by salary reduction and/or by payroll
deduction of from 1% to a maximum of 15% of their annual base salaries. Under
the Plan and subject to certain statutory limitations, the Company contributes
an amount equal to 20%, or such greater amount as may be approved by the Board
of Directors, of a participant's contributions up to 6% of his or her annual
base salary. For fiscal 1996, the Company's contribution in excess of 20%
depended and was based upon the Company's return on invested capital, and was an
additional 80% for a total of 100%. All contributions are invested, as selected
by the participant, in one or more of a Fixed Income Fund (composed primarily of
contracts with two insurance companies), a Mallinckrodt Group Inc. Stock Fund,
an S&P 500 Index Fund, and a Balanced Fund. The Company's contributions to the
Plan on behalf of the named executive officers are reflected in the Summary
Compensation Table.
The Company maintains a supplemental death benefit program for officers and
key employees that provides individual pre-tax death benefits equal to four
times annual salary grossed up for income taxes. This program is provided at
corporate expense and continues in effect post-retirement for participants who
retire while employed by the Company. Each of Messrs. Holman, Nichols, Moussa,
Cottone and Rocca are participants.
The Company maintains a comprehensive employee benefit program that provides
medical, dental, death, disability, and similar benefits in the context of a
cafeteria benefit plan as defined in Section 125 of the Internal Revenue Code.
Employees may pay for certain benefits by means of salary reduction
contributions pursuant to the plan, known as the Flexsecurity Plan.
15
<PAGE>
REPORT OF ORGANIZATION AND COMPENSATION COMMITTEE
ON EXECUTIVE COMPENSATION
The Company's primary financial objective is to maximize shareholder value
over time. To this end, the Company has created a comprehensive business
strategy. A primary function of the Organization and Compensation Committee (the
"Committee") is to develop and administer total compensation policies that are
consistent with the Company's strategic business objectives. The Committee
recommends compensation actions for the Chairman and Chief Executive Officer and
for all other corporate officers to the Board for approval. The Committee
approves the compensation for all other key executives. The Committee is
comprised entirely of independent outside directors.
The Committee adheres to a number of guiding principles in structuring the
compensation packages of key executives, including the five named executive
officers.
GUIDING PRINCIPLES
- EQUITY-BASED COMPENSATION. Equity-based plans comprise a major part of the
variable portion of total compensation to link compensation to Company
performance and shareholder interests.
- PAY AT RISK. At least half of the TOTAL compensation for executives is
comprised of short- and long-term performance-based variable pay. The
Committee believes in placing a high percentage of executives'
compensation at risk.
- MANAGEMENT CONTINUITY. Compensation programs are structured to attract,
motivate and retain LONG-TERM, those individuals who can contribute to the
creation of shareholder value.
- COMPETITIVENESS. Total compensation is designed to provide executives with
market-level compensation and with an opportunity to earn at a level above
comparable companies, IF COMPANY PERFORMANCE IS SUBSTANTIALLY HIGHER THAN
THAT ACHIEVED BY OTHER COMPANIES IN THE COMPANY'S "COMPARATOR GROUP" (AS
DEFINED BELOW). The Company's ability to significantly challenge and
motivate its management team is enhanced by providing executives the
opportunity to earn at this level of compensation.
COMPONENTS OF EXECUTIVE COMPENSATION
The four elements of executive compensation are:
- Base Salary
- Annual Incentives
- Long-Term Incentives
- Stock Options
These elements are structured to recognize meaningful differences in
individual performance and cumulatively to provide executives with the
OPPORTUNITY to significantly exceed competitive levels of total compensation if
the Company's performance is significantly better than that of its competitors.
In structuring compensation, the Committee reviews competitive data provided by
independent compensation consultants. These data compare the Company's
compensation levels and practices with a group of companies (the "comparator
group") that tend to have similar sales volumes, similar lines of business, and
established records of successful performance against financial measures deemed
important by the Company. Competitive data for compensation programs includes
that from many of the companies in the S&P indices shown in the performance
graph on page 19 below.
The Committee periodically revises the mix of the various components of
total compensation. Currently, base salary comprises about 35%, annual
incentives approximately 15%, and long-term incentives and stock options about
50% of total compensation. The total compensation program is considered in
setting the individual components.
16
<PAGE>
BASE SALARY. Base salary increases are provided to executives consistent
with an evaluation of each executive's performance, salary levels within the
comparator group, as well as the performance of the Company as a whole. In
addition to measuring performance in financial terms, the Committee also
evaluates the success of the executive in areas that cannot be measured by
traditional accounting criteria, including the development and execution of
strategic plans, the growth and development of management and employees, and the
exercise of leadership within the industry and in the communities that the
Company serves. Salary reviews normally occur at twelve-month intervals.
ANNUAL INCENTIVES. A target annual incentive is established for each
eligible executive in the form of percentage of salary range midpoint.
Incentives earned are based primarily on: performance of the executive's
operating unit (achievement of pre-established profit, return on invested
capital, revenue, and cash flow objectives); contribution of the relevant
operating unit to implementation of the Company's strategic plan; achievement by
the executive's operating unit of non-financial goals, such as employee safety
and environmental compliance; and individual performance against pre-established
objectives. Actual incentives paid can range from 0% to 175% of target. In
fiscal 1996, for the Chief Executive Officer and staff executives, incentives
earned were based on Company earnings per share, asset management objectives,
and individual performance. Although the Company announced organizational
changes in December 1995 under which its three operating companies were
consolidated under a chief operating officer and the Company's businesses are
now being conducted through eight divisions, the annual incentive program for
fiscal 1996, which was established by the Board in June 1995, was not effected.
Accordingly, for each of the presidents of the Company's three former operating
subsidiaries, 37.5% of the annual incentive was based on the performance of
their respective business units, 37.5 % was based on Company performance, and
25% was based on individual performance.
LONG-TERM INCENTIVES. Long-term incentives comprise about half of the total
compensation for key executives, including the five named executive officers.
Each of the long-term incentive programs is discussed below.
- LONG-TERM INCENTIVE PLAN. At the 1994 Annual Meeting, the Company's
stockholders approved a new Long-Term Incentive Compensation Plan (the
1994 Plan) for approximately 50 of the Company's most highly compensated
executives. The Plan succeeded a long-term compensation plan for senior
management that was in effect for the three prior fiscal years. The 1994
Plan is designed to provide awards based on the attainment of long-term
financial objectives as measured over three-year performance cycles. The
initial performance cycle is the three-year period commenced July 1, 1994.
Awards under the 1994 Plan will be paid 50% in cash and 50% in shares of
the Company's Common Stock. Target levels of incentive compensation
established under the 1994 Plan for each participant are competitive with
levels for similar positions within the Company's comparator group. Target
levels of compensation will be achieved, however, ONLY if a combination of
vigorous financial goals have been achieved at the end of the three-year
performance cycle. Such goals will include any or all of the following:
net after-tax income; net after-tax income per share; earnings from
continuing operations; earnings from continuing operations per share;
operating earnings; operating earnings per share; return on assets; return
on equity; return on invested capital; debt ratings; revenues; and revenue
growth. The specific performance goals vary among business groups within
the Company and were determined, in part, by reference to the projected
performance of other companies in the Company's comparator group (based on
published analysts' consensus expectations for such other companies as of
Plan inception). Compensation for corporate officers will be based
entirely on performance of the Company against established goals.
Compensation for all other participants will be based both on performance
of the Company and the performance of their business unit against the
established goals.
During fiscal 1996, the Company awarded an additional long-term incentive
compensation opportunity to Mr. Nichols in recognition of his promotion to
the positions of President and Chief Operating Officer (see page 14
hereof).
17
<PAGE>
- STOCK OPTIONS. Non-qualified stock options are granted to provide key
executives with the opportunity to acquire an equity interest in the
Company, align their interests with that of the Company's stockholders,
and share in the appreciation of the value in the Company's stock. Again,
grant size and potential compensation value are based on option programs
utilized by companies in the comparator group. Normally stock options are
granted annually. THE COMPANY HAS NEVER RE-PRICED ANY STOCK OPTION GRANT.
As part of the stock option program, grants are also made annually, on the
same date and at the same option price as for executives, to virtually all
of the Company's employees on the grant date worldwide.
As part of their total compensation, executives are also provided with
various benefits. In addition to the benefits offered to the general employee
population, executives are provided with higher levels of life insurance and
disability coverage, as well as benefits such as tax planning, annual physical,
and luncheon club memberships for business purposes. The executive officers
along with certain other executives are also covered by a Supplemental Executive
Retirement Plan (SERP). One of the primary purposes of this Plan is to attract
and retain high caliber mid-career talent. Further information on this Plan is
provided on pages 14-15.
The executive compensation programs of the Company cannot anticipate all
situations that may occur from time to time. When unusual circumstances occur,
the Committee reserves the right to take appropriate actions which, in its best
judgment, are in the best long-term interests of the Company and its
shareholders.
DISCUSSION OF COMPENSATION FOR THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Mr. Holman's compensation for fiscal 1996 was determined in accordance with
the executive compensation policies as described above. In addition, the
Committee considered the compensation of chief executive officers of other
companies in the comparator group.
Mr. Holman received a merit increase of 7% on July 1, 1995 which brought his
annual base salary to $684,840. Mr. Holman was granted an annual incentive award
of $450,000 for fiscal 1996 based predominantly on earnings per share, which
approximated target, as well as his own personal performance. For fiscal 1996,
Mr. Holman's total cash compensation was approximately 93% of the level of CEOs
of companies within the comparator group.
On December 12, 1995, the Committee approved a stock option grant for Mr.
Holman of 41,250 shares. The number of stock options granted to Mr. Holman is
consistent with the targeted levels established for the CEO based on practices
within the comparator group.
POLICY ON DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended, limits the
annual tax deduction to $1 million per person for compensation paid to the five
named executive officers, unless certain requirements are met. It is the
Committee's policy to maximize the effectiveness, as well as the tax
deductibility, of the Company's Executive Compensation Programs. Therefore, the
Committee considers it to be in the best interest of the Company's stockholders
to retain discretion in the Company's annual incentive program to award
executives based on a full range of performance criteria important to the
Company's success. As a result of such discretion, compensation paid to covered
employees under the annual incentive program will not be exempt from the
deduction limit. In order to preserve tax deductibility, the Committee may, but
will not be obligated, to award compensation under the annual incentive program
on a deferred basis.
It is presently expected that any compensation paid under the 1994 Plan will
qualify as performance based and will not be counted towards the deduction
limit. Any compensation paid to Mr. Nichols, however, under the long-term
compensation opportunity described on page 14 hereof, will not qualify as
performance based for purposes of Section 162(m), because the award is not
pursuant to a stockholder approved plan. The Committee's present intention is to
comply with the requirements of Section 162(m) unless the Committee feels that
such compliance would not be in the best interest of
18
<PAGE>
the Company and its stockholders. In view of the compensation levels of the
covered employees in fiscal 1996, the Committee expects the impact, if any, on
the Company of any loss of deductions resulting from the application of Section
162(m) will be immaterial.
ORGANIZATION AND
COMPENSATION COMMITTEE:
Roberta S. Karmel, Chair
William L. Davis
Alec Flamm
Claudine B. Malone
Daniel R. Toll
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
None of the members of the Organization and Compensation Committee during
any part of fiscal 1996 was at any time in the past an officer or employee of
the Company or any subsidiary. There are no executive officer interlocks with
another company.
PERFORMANCE GRAPH
The following graph compares the total return (assuming an investment of
$100 on June 30, 1991 and the reinvestment of dividends) of Mallinckrodt common
stock with those of the S&P 500, S&P Health Care Composite, and S&P Specialty
Chemicals Group indices:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
MALLINCKRODT GROUP INC., SP 500,
S&P HEALTH CARE COMPOSITE, AND S&P SPECIALTY CHEMICALS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MALLINCKRODT S&P 500 S&P HEALTH CARE S&P CHEMICALS
<S> <C> <C> <C> <C>
6/91 $100.00 $100.00 $100.00 $100.00
6/92 $103.09 $113.36 $107.95 $112.72
6/93 $98.40 $128.74 $94.87 $133.34
6/94 $108.19 $130.59 $94.90 $119.56
6/95 $120.15 $164.53 $137.75 $153.34
6/96 $133.68 $207.19 $191.30 $172.19
</TABLE>
*Total return assumes reinvestment of dividends on a quarterly basis.
19
<PAGE>
MISCELLANEOUS INFORMATION
The Board of Directors and management know of no matters that will be
presented for consideration at the meeting other than those stated in the Notice
of Meeting and described in this Proxy Statement.
Pursuant to the by-laws of the Company, for a matter to be properly brought
before the annual meeting for consideration a shareholder must, not less than
seventy days and not more than ninety-five days before the date of the meeting,
deliver or cause to be delivered a written notice to the Secretary of the
Company specifying certain details concerning the nature of the proposed
business, including the reasons why it is sought to be raised and submitted for
a vote of the stockholders, and otherwise meeting certain requirements of the
by-laws. Full details regarding the requirements of the by-laws are available
upon request to the Secretary. Pursuant thereto, the last day for receipt of
such a notice to be effective for this meeting was August 7, 1996.
Notwithstanding satisfaction of the notice and other requirements, the proposed
business described in the notice may still be deemed not to be properly brought
before the meeting if, pursuant to state law or to any rule or regulation of the
SEC, it was offered as a stockholder proposal and was omitted, or had it been so
offered, it could have been omitted, from the notice of, and proxy materials
for, the meeting (or any supplement thereto) authorized by the Board of
Directors.
For stockholders who may be interested in submitting a resolution for
consideration at the next annual stockholders' meeting, the deadline pursuant to
SEC rules for submitting such proposals for consideration for inclusion in the
proxy statement will be May 16, 1997. The deadline for receipt of proposals
subject to the Company's by-law advance notice requirement will be August 6,
1997, on the assumption the Board will fix the date of next year's meeting on
the third Wednesday in October, as has been customary, or if the Board fixes
another date, the tenth day following public disclosure of the meeting date.
Proposals should be sent to the Secretary of the Company, 7733 Forsyth Blvd.,
St. Louis, Missouri 63105.
If any matter properly comes before the meeting the persons named in the
accompanying proxy will vote such proxy in accordance with their judgment
regarding such matter, including without limitation the election of a director
or directors other than those nominated herein should an emergency or unexpected
occurrence make the use of discretionary authority necessary, and also regarding
matters incident to the conduct of the meeting.
Proxies will be solicited to assure that stockholders who are unable to
attend the meeting have the opportunity nonetheless to cast a vote on the issues
to come before the meeting. In addition to the use of the mails, proxies may be
solicited by personal interview, telephone, and telegrams by directors,
officers, and employees of the Company. Arrangements may also be made with
brokerage houses and other custodians, nominees, and fiduciaries for the
forwarding of solicitation material to the beneficial owners of stock held of
record by such persons, and the Company may reimburse them for reasonable
out-of-pocket expenses incurred by them in connection therewith. In addition,
the Company has retained Georgeson & Co. to aid in the solicitation, at an
estimated cost of $9,000 plus expenses. The cost of all proxy solicitation,
including payments to Georgeson & Co., will be borne by the Company.
20
<PAGE>
Pursuant to Section 726(d) of the New York Business Corporation Law,
shareholders of record entitled to vote for the election of directors are hereby
informed that the Company has obtained directors and officers indemnification
insurance under a four-year policy ending June 1, 1999. The insurance carriers
are National Union Fire Insurance Co., CNA, Aetna Casualty and Surety Co.,
Reliance Insurance Co., Federal (Chubb), and Zurich American in various and
successive layers of coverage that total $110,000,000 (subject to retention and
co-insurance). The annual cost is $620,000 during the first three years of the
policy, decreasing to $496,305 in the fourth year. All directors and corporate
and staff officers of the Company and of its wholly-owned subsidiary
corporations are insured thereunder.
By Order of the Board of Directors
[ROGER A. KELLER SIGNATURE]
Roger A. Keller
VICE PRESIDENT, SECRETARY AND
GENERAL COUNSEL
Dated: September 13, 1996
21
<PAGE>
PLEASE MARK YOUR
/X/ VOTE AS IN THIS
EXAMPLE.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR proposals 1, 2 and 3. As
to all other matters arising at the meeting, this proxy will be voted in the
discretion of the named proxies, all in accordance with the Notice and Proxy
Statement for the meeting, receipt of which is acknowledged.
- - --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
- - --------------------------------------------------------------------------------
FOR WITHHELD AS TO ALL NOMINEES
1. Election of / / / /
Directors.
To withhold authority to vote for any nominee(s), mark the "FOR" box and write
the name of each such nominee on the line provided below.
FOR AGAINST ABSTAIN
2. Appointment of independent auditors. / / / / / /
3. Amendment of Restated / / / / / /
Certificate of Incorporation.
4. In the discretion of the proxies, upon such other business as may properly
come before the meeting.
- - --------------------------------
/ / Please check this box to request a ticket to the
Annual Meeting.
SIGNATURE(S)______________________________________ DATE _______________ , 1996
NOTE: Please date and sign exactly as name appears hereon. If shares are held
jointly or by two or more persons, each stockholder named should sign.
Executors, administrators, trustees, etc., should so indicate when signing. If
the signer is a corporation, please sign full corporate name by duly authorized
officer. If a partnership, please sign in partnership name by authorized person.
- - --------------------------------------------------------------------------------
FOLD AND DETACH PROXY CARD HERE
MALLINCKRODT
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
BY TEARING OFF THE TOP PORTION OF THIS SHEET AND
RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
- - --------------------------------------------------------------------------------
MALLINCKRODT
PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING OF STOCKHOLDERS, OCTOBER 16, 1996
The undersigned appoints William L. Davis, III, Brian M. Rushton, and
Anthony Viscusi or any of them, with full power of substitution, proxies to
vote the shares which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of Mallinckrodt
Group Inc. to be held on October 16, 1996, at the Company's offices at 675
McDonnell Blvd., St. Louis, Missouri, at 10 a.m., local time, and any
adjournments thereof, hereby revoking any proxy heretofore given.
---------------------------
Election of Four Directors. Nominees: Raymond F. Bentele, Gareth C. C.
Chang, Dr. Ronald G. Evens, and Mack G. Nichols, for terms expiring in
1999.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to
vote in accordance with the Board of Directors' recommendations. The Proxy
Committee cannot vote your shares unless you sign and return this card.
----------------
SEE REVERSE SIDE
----------------
- - --------------------------------------------------------------------------------
FOLD AND DETACH PROXY CARD HERE
MALLINCKRODT
To: Mallinckrodt Group Stockholders
If you plan to attend the Annual Meeting of Stockholders, please check the
appropriate box on the proxy card so we can mail a ticket to you in advance of
the meeting.
Please mark, sign, and date the proxy card and return it promptly to ensure your
representation at the meeting.
YOUR VOTE IS IMPORTANT.
Thank you.
MALLINCKRODT GROUP INC.
- - -------------------------------------------------------------------------------
<PAGE>
PLEASE MARK YOUR 2599
/X/ VOTE AS IN THIS
EXAMPLE.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR proposals 1, 2 and 3. As
to all other matters arising at the meeting, this proxy will be voted in the
discretion of the named proxies, all in accordance with the Notice and Proxy
Statement for the meeting, receipt of which is acknowledged.
- - --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
- - --------------------------------------------------------------------------------
FOR WITHHELD AS TO ALL NOMINEES
1. Election of / / / /
Directors.
To withhold authority to vote for any nominee(s), mark the "FOR" box and write
the name of each such nominee on the line provided below.
FOR AGAINST ABSTAIN
2. Appointment of independent auditors. / / / / / /
3. Amendment of Restated / / / / / /
Certificate of Incorporation.
4. In the discretion of the proxies, upon such other business as may properly
come before the meeting.
- - --------------------------------
/ / Please check this box to request a ticket to the
Annual Meeting.
SIGNATURE(S)______________________________________ DATE _______________ , 1996
NOTE: Please date and sign exactly as name appears hereon. If shares are held
jointly or by two or more persons, each stockholder named should sign.
Executors, administrators, trustees, etc., should so indicate when signing. If
the signer is a corporation, please sign full corporate name by duly authorized
officer. If a partnership, please sign in partnership name by authorized person.
- - --------------------------------------------------------------------------------
FOLD AND DETACH PROXY CARD HERE
MALLINCKRODT
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
BY TEARING OFF THE TOP PORTION OF THIS SHEET AND
RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
- - --------------------------------------------------------------------------------
MALLINCKRODT
PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING OF STOCKHOLDERS, OCTOBER 16, 1996
The undersigned appoints William L. Davis, III, Brian M. Rushton, and
Anthony Viscusi or any of them, with full power of substitution, proxies to
vote the shares which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of Mallinckrodt
Group Inc. to be held on October 16, 1996, at the Company's offices at 675
McDonnell Blvd., St. Louis, Missouri, at 10 a.m., local time, and any
adjournments thereof, hereby revoking any proxy heretofore given.
---------------------------
Election of Four Directors. Nominees: Raymond F. Bentele, Gareth C. C.
Chang, Dr. Ronald G. Evens, and Mack G. Nichols, for terms expiring in
1999.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to
vote in accordance with the Board of Directors' recommendations. The Proxy
Committee cannot vote your shares unless you sign and return this card.
----------------
SEE REVERSE SIDE
----------------
- - --------------------------------------------------------------------------------
FOLD AND DETACH PROXY CARD HERE
MALLINCKRODT
To: Mallinckrodt Group Stockholders
If you plan to attend the Annual Meeting of Stockholders, please check the
appropriate box on the proxy card so we can mail a ticket to you in advance of
the meeting.
Please mark, sign, and date the proxy card and return it promptly to ensure your
representation at the meeting.
YOUR VOTE IS IMPORTANT.
Thank you.
MALLINCKRODT GROUP INC.
- - --------------------------------------------------------------------------------
<PAGE>
PLEASE MARK YOUR 2205
/X/ VOTE AS IN THIS
EXAMPLE.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR proposals 1, 2 and 3. As
to all other matters arising at the meeting, this proxy will be voted in the
discretion of the named proxies, all in accordance with the Notice and Proxy
Statement for the meeting, receipt of which is acknowledged.
- - --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
- - --------------------------------------------------------------------------------
FOR WITHHELD AS TO ALL NOMINEES
1. Election of / / / /
Directors.
To withhold authority to vote for any nominee(s), mark the "FOR" box and write
the name of each such nominee on the line provided below.
FOR AGAINST ABSTAIN
2. Appointment of independent auditors. / / / / / /
3. Amendment of Restated / / / / / /
Certificate of Incorporation.
4. In the discretion of the proxies, upon such other business as may properly
come before the meeting.
- - --------------------------------
/ / Please check this box to request a ticket to the
Annual Meeting.
SIGNATURE(S)______________________________________ DATE _______________ , 1996
NOTE: Please date and sign exactly as name appears hereon. If shares are held
jointly or by two or more persons, each stockholder named should sign.
Executors, administrators, trustees, etc., should so indicate when signing. If
the signer is a corporation, please sign full corporate name by duly authorized
officer. If a partnership, please sign in partnership name by authorized person.
- - --------------------------------------------------------------------------------
FOLD AND DETACH PROXY CARD HERE
MALLINCKRODT
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
BY TEARING OFF THE TOP PORTION OF THIS SHEET AND
RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
- - --------------------------------------------------------------------------------
MALLINCKRODT
PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING OF STOCKHOLDERS, OCTOBER 16, 1996
The undersigned appoints William L. Davis, III, Brian M. Rushton, and
Anthony Viscusi or any of them, with full power of substitution, proxies to
vote the shares which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of Mallinckrodt
Group Inc. to be held on October 16, 1996, at the Company's offices at 675
McDonnell Blvd., St. Louis, Missouri, at 10 a.m., local time, and any
adjournments thereof, hereby revoking any proxy heretofore given.
---------------------------
Election of Four Directors. Nominees: Raymond F. Bentele, Gareth C. C.
Chang, Dr. Ronald G. Evens, and Mack G. Nichols, for terms expiring in
1999.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to
vote in accordance with the Board of Directors' recommendations. The Proxy
Committee cannot vote your shares unless you sign and return this card.
----------------
SEE REVERSE SIDE
----------------
- - --------------------------------------------------------------------------------
FOLD AND DETACH PROXY CARD HERE
MALLINCKRODT
To: Mallinckrodt Group Stockholders
If you plan to attend the Annual Meeting of Stockholders, please check the
appropriate box on the proxy card so we can mail a ticket to you in advance of
the meeting.
Please mark, sign, and date the proxy card and return it promptly to ensure your
representation at the meeting.
YOUR VOTE IS IMPORTANT.
Thank you.
MALLINCKRODT GROUP INC.
- - --------------------------------------------------------------------------------
<PAGE>
PLEASE MARK YOUR 6334
/X/ VOTE AS IN THIS
EXAMPLE.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR proposals 1, 2 and 3. As
to all other matters arising at the meeting, this proxy will be voted in the
discretion of the named proxies, all in accordance with the Notice and Proxy
Statement for the meeting, receipt of which is acknowledged.
- - --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
- - --------------------------------------------------------------------------------
FOR WITHHELD AS TO ALL NOMINEES
1. Election of / / / /
Directors.
To withhold authority to vote for any nominee(s), mark the "FOR" box and write
the name of each such nominee on the line provided below.
FOR AGAINST ABSTAIN
2. Appointment of independent auditors. / / / / / /
3. Amendment of Restated / / / / / /
Certificate of Incorporation.
4. In the discretion of the proxies, upon such other business as may properly
come before the meeting.
- - --------------------------------
/ / Please check this box to request a ticket to the
Annual Meeting.
SIGNATURE(S)______________________________________ DATE _______________ , 1996
NOTE: Please date and sign exactly as name appears hereon. If shares are held
jointly or by two or more persons, each stockholder named should sign.
Executors, administrators, trustees, etc., should so indicate when signing. If
the signer is a corporation, please sign full corporate name by duly authorized
officer. If a partnership, please sign in partnership name by authorized person.
- - --------------------------------------------------------------------------------
FOLD AND DETACH PROXY CARD HERE
MALLINCKRODT
YOUR VOTE IS IMPORTANT
PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY
BY TEARING OFF THE TOP PORTION OF THIS SHEET AND
RETURNING IT IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
<PAGE>
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MALLINCKRODT
PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING OF STOCKHOLDERS, OCTOBER 16, 1996
The undersigned appoints William L. Davis, III, Brian M. Rushton, and
Anthony Viscusi or any of them, with full power of substitution, proxies to
vote the shares which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders of Mallinckrodt
Group Inc. to be held on October 16, 1996, at the Company's offices at 675
McDonnell Blvd., St. Louis, Missouri, at 10 a.m., local time, and any
adjournments thereof, hereby revoking any proxy heretofore given.
---------------------------
Election of Four Directors. Nominees: Raymond F. Bentele, Gareth C. C.
Chang, Dr. Ronald G. Evens, and Mack G. Nichols, for terms expiring in
1999.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to
vote in accordance with the Board of Directors' recommendations. The Proxy
Committee cannot vote your shares unless you sign and return this card.
----------------
SEE REVERSE SIDE
----------------
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FOLD AND DETACH PROXY CARD HERE
MALLINCKRODT
To: Mallinckrodt Group Stockholders
If you plan to attend the Annual Meeting of Stockholders, please check the
appropriate box on the proxy card so we can mail a ticket to you in advance of
the meeting.
Please mark, sign, and date the proxy card and return it promptly to ensure your
representation at the meeting.
YOUR VOTE IS IMPORTANT.
Thank you.
MALLINCKRODT GROUP INC.
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