<PAGE>1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
_________________________ANALOGIC CORPORATION____________________________
(Name of Registrant as Specified in its Charter)
_________________________________________________________________________
(Name of Person(s) Filing Proxy Statement) Payment of Filing Fee (Check the
appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
[ ] $500 per each party to the controversy pursuant to exchange Act Rule
14a-6(i)(3)
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11
1) Title of each class of securities to which transaction applies:
________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________
* Set forth the amount on which the filing fee is calculated and state
how it was determined.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:________________________________________________
2) Form, Schedule or Registration Statement No.:
_______________________________________________________________________
3) Filing Party:__________________________________________________________
4) Date filed:____________________________________________________________
<PAGE>
<PAGE>2
[COMPANY LOGO]
Analogic Corporation
Notice of Annual Meeting of Stockholders of
Analogic Corporation to be Held January 24, 1997
The Annual Meeting of Stockholders of Analogic
Corporation (the "Company") will be held at the Company's
headquarters located at 8 Centennial Drive, Peabody,
Massachusetts, (Centennial Industrial Park) on Friday, January
24, 1997 at 11:00 o'clock in the morning for the following
purposes:
(1) To determine the number of Directors for the
ensuing year and to elect two Class II directors
for a three-year term, to hold office until the
2000 Annual Meeting of Stockholders and until
their successors are elected and qualified.
(2) To consider and act upon the matter of adopting
and approving the Company's Non-Qualified Stock
Option Plan for Non-Employee Directors, dated
January 31, 1997, a copy of which is attached as
Exhibit "A" to the within proxy statement.
(3) To consider and act upon the matter of ratifying
the selection by the Board of Directors of
Coopers & Lybrand L.L.P. as auditors of the
Company for the current fiscal year.
(4) To act upon any and all matters incidental to any
of the foregoing and transact such other business
as may legally come before the Meeting or any
adjourned session or sessions thereof.
The Board of Directors has fixed the close of business
on November 27, 1996, as the record date for determining the
stockholders having the right to notice of and to vote at the
meeting.
Julian Soshnick
Clerk
December 2, 1996
IF YOU ARE ENTITLED TO VOTE AT THE MEETING
KINDLY EXECUTE AND MAIL THE ENCLOSED PROXY
<PAGE>
<PAGE>3
Analogic Corporation
8 Centennial Drive
Peabody, Massachusetts 01960
PROXY STATEMENT
For the Annual Meeting of Stockholders
to be held on January 24, 1997
This proxy statement is furnished in connection with the
solicitation by and on behalf of the Board of Directors of Analogic
Corporation (the "Company") of proxies for use at the Annual Meeting
of Stockholders of the Company to be held on January 24, 1997 (the
"Meeting"), and is being mailed, together with the form of proxy
solicited, to each stockholder of the Company on or about December 2,
1996.
The enclosed proxy, if executed and returned, will be voted by
the Proxy Holders as directed on the proxy and, in the absence of such
direction, to fix the number of directors for the ensuing year at eight and
for the election of the nominees as directors, for the adoption of the new
Non-Qualified Stock Option Plan for Non-Employee Directors dated
January 31, 1997, for the ratification of the selection of Coopers & Lybrand
L.L.P. as auditors for the current fiscal year, and in accordance with
their best judgment if any other matter shall properly come before the
Meeting.
Any stockholder giving a proxy in the accompanying form (the
"Proxy") retains the power to revoke it at any time prior to the exercise
of the powers conferred thereby. Such revocation may be effected by
any means which are sufficient to revoke a power of attorney, including
giving written notice of revocation to the Company at the above address
or to its transfer agent, or the execution and delivery to the Company or
its transfer agent of a subsequent proxy. Attendance of the stockholder
at the Meeting in person, will not, however, be deemed to revoke the
Proxy unless the stockholder affirmatively indicates his/her intention to
vote the shares in person by so advising the presiding officer or the clerk
at the Meeting.
Stock and Stock Ownership
The holders of record of shares of Common Stock, $.05 par
value, at the close of business on November 27, 1996, may vote at the
Meeting. On November 27, 1996, there were issued and outstanding
12,502,104 shares of Common Stock of the Company (not including
1,272,823 shares held in treasury). Each share of Common Stock is
entitled to one vote on each of the matters listed in the Notice of
Meeting.
<PAGE>
<PAGE>4
The following table sets forth information as to all persons
(including any "group", as that term is used in Section 13(d)(3) of the
Exchange Act) known by the Company to have owned beneficially 5%
or more of its Common Stock as of November 27, 1996, based upon
information received from or on behalf of the persons named. Unless
noted, otherwise, the beneficial owners listed have sole voting and
investment power with respect to the shares listed.
Amount and Nature of Percent
Name and Address Beneficial Ownership of Class
Bernard M. Gordon Charitable 4,720,192 (1)(2) 37.8%
Remainder Unitrust
Bernard M. Gordon
Julian Soshnick
Gerald P. Bonder, Trustees
8 Centennial Drive
Peabody, MA 01960
Private Capital Management Inc. 1,266,975 10.1%
3003 Ninth Street
Naples, FL 33940
T. Rowe Price 943,000 7.5%
100 East Pratt Street
Baltimore, MD 21202
(1) Exclusive of 6,000 shares owned by Mr. Gordon's wife, as to
which he disclaims any beneficial interest.
(2) Mr. Gordon serves as Trustee of the Bernard Gordon Charitable
Remainder Unitrust (the "Trust") along with Julian Soshnick and
Gerald P. Bonder. The three Trustees, acting by a majority, have
full power to vote or dispose of the shares held by the Trust. Upon
the death of Mr. Gordon, all of the assets of the Trust, in general,
will be distributed to The Gordon Foundation, a Section 501(c)(3)
trust formed by Mr. Gordon with its principal office located at 8
Centennial Drive, Peabody, Massachusetts.
<PAGE>
<PAGE>5
PROPOSAL I
ELECTION OF DIRECTORS
The Company's Restated Articles of Organization and By-Laws, as
amended, provide for the division of the Board of Directors into three
classes, each having a three-year term of office following the initial
classification. The term of one class expires each year. The terms of
two directors, Bruce R. Rusch and Bruce W. Steinhauer, will expire at
the Meeting. Bruce R. Rusch and Bruce W. Steinhauer have been
nominated for election as the Class II directors, to hold office until the
2000 Annual Meeting of Stockholders and until their respective
successors have been duly elected and qualified.
It is the intention of the persons named as Proxy Holders to fix the
number of directors for the ensuing year at eight and to vote for the
election of the nominees as Class II directors. In the event that any
nominees should be unable to serve, discretionary authority is reserved
for the named Proxy Holders to vote for a substitute, or to reduce the
number of directors to be elected, or both. Management has no reason
to believe that the said nominees will be unwilling or unable to serve if
elected.
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock by each director
and nominee for director of the Company and all directors, nominees for
directors and officers of the Company as a group. The table also sets
forth certain additional information with respect to each director and
nominee for director of the Company, including the year in which the
term of office of each director and nominee for director (if elected)
expires.
<PAGE>
<PAGE>6
Nominee for Class II director is indicated by two asterisks.
<TABLE> Amount and Nature of
<CAPTION> Beneficial Ownership of
The Company's Common
Principal Occupation Director Stock as of
Name Age Or Employment Since October 31, 1996
If elected, Term expires in
2000:
<S> <C> <C> <C> <C>
Bruce R. Rusch ** 53 President and Chief 1993 45,000 * (5)
Operating Officer of
the Company
Bruce W. Steinhauer ** (2)(3) 61 Chief Executive Officer, 1993 5,000 * (7)
Lahey Hitchcock Clinic,
Burlington, Massachusetts
Term expires in 1999:
M. Ross Brown 62 Vice President of the 1984 27,500 * (5)(7)
Company
Edward F. Voboril (2)(3) 53 President and CEO of 1990 5,000 * (7)
Wilson Greatbatch Ltd,
Clarence, NY
Term expires in 1998:
Bernard M. Gordon 69 Chairman of the Board 1969 4,720,192 (4)(6)
and Chief Executive
Officer of the Company
John A. Tarello 65 Senior Vice President 1979 42,500 * (7)
and Treasurer of the
Company
Gerald L. Wilson (2)(3) 57 Former Dean, School 1980 2,000 *
of Engineering and
Professor, Massachusetts
Institute of Technology
Beneficial Ownership of Shares
by All Directors and Executive
Officers as a Group (8 persons) 4,874,276 (4)(5)(6)(7)
</TABLE>
<PAGE>
<PAGE>7
* Represents less than 1% ownership
(1) The amounts shown are based upon information furnished by the
individual directors and officers. Unless otherwise noted the
beneficial owners have sole voting and investment power with
respect to the shares listed.
(2) Member of Audit Committee.
(3) Member of Compensation Committee.
(4) Mr. Gordon serves as Trustee of the Bernard Gordon Charitable
Remainder Unitrust (the "Trust") along with Julian Soshnick and
Gerald P. Bonder. The three Trustees, acting by a majority, have
full power to vote or dispose of the shares held by the Trust.
Upon the death of Mr. Gordon, all the assets of the Trust, in
general, will be distributed to the Gordon Foundation, a Section
501(c)(3) trust formed by Mr. Gordon with its principal office
located at 8 Centennial Drive, Peabody, Massachusetts.
(5) These amounts include certain shares issued under the
Company's Key Employee Stock Bonus Plan which are subject
to forfeiture under certain circumstances (see the section of this
proxy statement entitled Executive Compensation).
(6) Exclusive of 6,000 shares owned by Mrs. Gordon, in which Mr.
Gordon disclaims all beneficial interest.
(7) These amounts include certain shares deemed beneficially owned
under Exchange Act Rule 13d-3(d)(1). <PAGE>
<PAGE>8
Bernard M. Gordon has been the Chairman of the Board of Directors
of the Company since 1969 and was President from 1980 to 1995.
Bruce R. Rusch was appointed a Vice President of the Company in
January 1993 and President in January 1995. Mr. Rusch has been
President of SKY Computers, Inc. since 1987. SKY Computers, Inc.
was acquired by Analogic effective April 1, 1992. Mr. Rusch is a
director of Astea International, Inc.
John A. Tarello was the Company's Controller from May 1970
through July 1982, a Vice President of the Company from 1971 to 1980,
and has been Senior Vice President since 1980, and Treasurer since
1985. He is also a director of Spire Corporation.
Dr. Gerald L. Wilson is the former Dean of the School of Engineering
at Massachusetts Institute of Technology and the Vannevar Bush
Professor of Engineering at the Massachusetts Institute of Technology.
Dr. Wilson has served on MIT's faculty since 1965, and currently serves
as a professor of Electrical and Mechanical Engineering. He is a
director of Commonwealth Energy Systems and ASECO Corporation.
He also served as Vice President of Technology and Manufacturing for
Carrier Corporation during 1991 and 1992.
Dr. Bruce W. Steinhauer has been Chief Executive Officer of the
Lahey Hitchcock Clinic in Burlington, Massachusetts, since early 1992.
Prior to that he was Senior Vice President for Medical Affairs and
Chairman of the Board of Governors for the Medical Group Practice of the
Henry Ford Hospital from 1988 to 1992.
M. Ross Brown joined the Company in August 1984 and is
responsible for managing its manufacturing operations. He was elected
a Vice President in October 1984.
Mr. Voboril has been President and CEO of Wilson Greatbatch Ltd.
of Clarence, New York since December 1990.
By reason of Mr. Gordon's beneficial ownership of Common Stock set
forth above, he may be deemed to control the Company. In addition, in
their capacity as trustees of the Bernard M. Gordon Charitable
Remainder Unitust, Mr. Gordon, along with Mr. Soshnick and Mr.
Bonder, may be deemed to control the Company.
<PAGE>
<PAGE>9
The Board of Directors held four (4) meetings during fiscal 1996.
The Company has an Audit Committee and a Compensation
Committee. Mr. Voboril, Dr. Wilson and Dr. Steinhauer serve on the
Audit Committee. Mr. Voboril, Dr. Wilson and Dr. Steinhauer serve
on the Compensation Committee, with Bernard M. Gordon serving as an
ex officio member of the Compensation Committee. The function of the
Audit Committee is to confer with the Company's independent auditors
concerning the scope and results of their audit and any recommendations
they may have, and to consider such other matters relating to auditing
and accounting as the Committee may deem appropriate. During the
1996 fiscal year, the Committee met once with Coopers & Lybrand
L.L.P. The function of the Compensation Committee is to make
recommendations to the Board of Directors concerning officers' salaries
and other compensation matters. The Compensation Committee met
once during the 1996 fiscal year to review and approve salaries of the
Company's officers for fiscal 1997. The Board does not have a
nominating committee.
EXECUTIVE OFFICERS
The Company has one executive officer who is not a Director.
Executive officers of the Company are elected annually by the Board
of Directors and hold office until their successors are chosen and
qualified, subject to early removal by the Board of Directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Bernard M. Gordon and Mr. Bernard L. Friedman, the
Company's former Vice Chairman of the Board (Mr. Friedman resigned
on July 31, 1993), each own 50% interest in a limited partnership
(Audubon Realty, Ltd.), which owns the Danvers, Massachusetts
facilities leased by the Company for a term to July 31, 2001. These
facilities include a 50,000 square foot building completed in 1978; a
40,000 square foot addition to that building, completed in 1982; and an
80,000 square foot building which the Company moved into during
1980. The fixed annual rent on the entire 170,000 square feet was
increased from $1,042,000 to $1,125,000 effective March 1, 1995, and
shall be adjusted as of March 1 every third year to reflect increases in
the cost of living. Both of the facilities are sublet on a self-renewing
lease to Siemens Medical Electronics, Inc. for a term which as presently
extended will end on December 1, 1998, subject to an 18 month notice
of cancellation, on a triple-net basis.
Mr. Gordon and Mr. Friedman each own a 50% interest in a limited
partnership (Audubon Realty, Ltd.) which owns the facility located at 360
Audubon Road, Wakefield, Massachusetts, which is leased by the Company for a
term to July 31, 2003. This facility has been utilized by the Company for
manufacturing and office space since May 1, 1981. The fixed annual rent for
this facility was increased from $315,000 to $333,000 effective May 1, 1996,
and shall be adjusted as of May 1 every third year to reflect increases in
the cost of living.
<PAGE>
<PAGE>10
<TABLE>
<CAPTION>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain compensation information for the Chief Executive Officer and
each of the next four most highly compensated executive officers of the Company during the last fiscal
year ("Named Officers") for services rendered in all capacities for the last three fiscal years.
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
AWARDS
Restricted
Stock Stock All other
Name and Total Annual Awards Options Compensation
Principal Position Year Salary Bonuses Compensation (A)(B) (C)
<S> <C> <C> <C> <C> <C> <C> <C>
Bernard M. Gordon 1996 $325,000 $25,000 $350,000 ---- ---- $3,024
Chairman (CEO) 1995 325,000 50,000 375,000 ---- ---- 3,186
1994 300,000 50,000 350,000 ---- ---- 4,698
Bruce R. Rusch 1996 $225,000 $21,000 $246,000 ---- ---- $2,855
President (COO) 1995 206,519 35,000 241,519 ---- ---- 3,007
1994 159,958 47,000 206,958 ---- ---- ----
John A. Tarello 1996 $210,000 $21,000 $231,000 ---- ---- $3,062
Senior Vice President 1995 210,000 35,000 245,000 ---- ---- 3,225
and Treasurer 1994 195,000 35,000 230,000 ---- ---- 3,842
M. Ross Brown 1996 $185,000 $18,000 $203,000 ---- ---- $2,921
Vice President 1995 185,000 30,000 215,000 ---- ---- 3,076
1994 175,000 30,000 205,000 ---- ---- 3,316
Julian Soshnick 1996 $185,000 $18,000 $203,000 ---- ---- $2,949
Vice President and 1995 185,000 30,000 215,000 ---- ---- 3,106
General Counsel 1994 175,000 30,000 205,000 ---- ---- 3,345
</TABLE>
<PAGE>
<PAGE>11
______________________
(A) Represents stock grants under the Company's Key Employee Stock Bonus Plan
dated March 14, 1983, as amended and restated on January 27, 1988, pursuant
to which Common Stock of the Company may be granted to key employees to
encourage them to exert their best efforts on behalf of the Company. Each
recipient of the Common Stock pursuant to the Bonus Plan is required to
execute a noncompetition agreement in a form satisfactory to the Company.
The Bonus Plan is administered by a committee appointed by the Board of
Directors consisting of the Chairman of the Board and three other Directors
who are not eligible to participate in the Bonus Plan. Generally, the Common
Stock granted pursuant to the Bonus Plan is not transferable for a period of
three years from the date of the grant and is subject to a risk of forfeiture
in the event that the recipient leaves the employ of the Company during this
period for any reason. Generally, during the subsequent four-year period,
the transfer restrictions will lapse with respect to 25% of the Common Stock
for each year the recipient remains in the employ of the Company. Failure to
remain in the Company's employ during all of the subsequent four-year period
will result in a forfeiture of shares as to which restrictions on disposition
still exist. The Common Stock granted pursuant to the Bonus Plan is held in
escrow by the Company until such restrictions on disposition lapse. However,
while in escrow, the recipient has the right to vote such shares of Common
Stock and to receive any cash dividends thereon. The Board of Directors,
acting upon the recommendation of the Stock Bonus Plan committee, may at the
time of grant designate a different schedule upon which the transfer
restrictions lapse. <PAGE>
<PAGE>12
(B) As of July 31, 1996, the following table reflects aggregate stock
bonus awards, granted in 1993, for which transfer restrictions have not
yet lapsed:
Shares Market Value
Bruce R. Rusch 33,750 $961,875
M. Ross Brown 22,500 641,250
Julian Soshnick 17,500 498,750
(C) Represents amounts allocated to the Named officers pursuant to the
Company's profit sharing plan under which it may, but is not required
to, make contributions to a trust for the purpose of providing retirement
benefits to employees.
STOCK OPTION GRANTS IN LAST FISCAL YEAR
There were no stock options awarded to named officers under the
Company's Key Employee Stock Option Plans during the last fiscal year.
STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES
The following table indicates (i) stock options exercised by the Named
Officers during the last fiscal year; (ii) the number of shares subject to
exercisable (vested) and unexercisable (unvested) stock options as of July
31, 1996; and (iii) the fiscal year-end value of "in-the-money"
unexercised options.
<PAGE>
<PAGE>13
<TABLE>
<CAPTION>
Number of Value of Unexercised
Number of Unexercised Options In-The-Money Options
Shares Acquired Value at Fiscal Year End At Fiscal Year End(A)(B)
Name On Exercise Realized (A) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Bernard M. Gordon ---- ---- ---- ---- ---- ----
Bruce R. Rusch ---- ---- ---- ---- ---- ----
John A. Tarello ---- ---- 10,000 ---- $136,250 ----
M. Ross Brown ---- ---- 2,500 7,500 $34,062 $102,188
Julian Soshnick ---- ---- 2,500 2,500 $34,062 $34,062
(A) The value realized or the unrealized value of in-the-money options at year-end represents the
aggregate difference between the market value on the date of exercise or July 31, 1996, in the case of
the unrealized values, and the applicable exercise prices.
(B) "In-the-money" options are options whose exercise price was less than the market price of Common
Shares at July 31, 1996.
</TABLE>
<PAGE>
<PAGE>14
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company is entitled to
an annual fee of $10,000 plus a fee of $1,000 per meeting for each of
the first four meetings of the Board or any Board Committee attended by
him, together with reimbursement of travel expenses under certain
circumstances.
In February 1988, the Board of Directors adopted and stockholders
approved at the January 1989 Annual Meeting of Stockholders, the 1988
Non-Qualified Stock Option Plan for Non-Employee Directors (the "1988
Plan"). Pursuant to the 1988 Plan, options to purchase 50,000 shares of
common stock may be granted only to directors of the Company or any
subsidiary who are not otherwise employees of the Company or any
subsidiary. The exercise price of options granted under the 1988 Plan
is the fair market value of the Common Stock on the date of grant. The
1988 Plan provides that each Non-Employee director as of the date on
which the Board of Directors adopted the 1988 Plan shall be granted an
option to acquire 5,000 shares. Each Non-Employee director who is
subsequently elected to the Board of Directors shall be granted an option
to acquire 5,000 shares after one year of service. In June, 1996 the
Board of Directors amended the 1988 plan to increase the number of
options that could be granted to each Non-Employee director to 10,000
shares.
Options granted under the 1988 Plan are exercisable for a nine-year
period commencing one year after the date of grant. During that
exercise period, subject to the occurrence of certain events, options may
be exercised only to the extent of (a) 33 1/3% of the number of shares
covered by the option one or more years after the date of grant, (b) 66
2/3% of the number of shares subject to the option two or more years
after the date of grant, and (c) 100% of the number of shares subject to
the option three or more years after the date of grant.
The 1988 Plan is administered by members of the Company's Board
of Directors.
<PAGE>
<PAGE>15
The following table sets forth options granted pursuant to the 1988
plan as of July 31, 1996:
Date of Options Option Options Options Options
Grant Granted Price Exercised Exerc. Unexerc.
Dr. Wilson 2/01/88 5,000 $7.125 5,000 --- ---
Dr. Wilson 6/12/96 5,000 $27.750 --- --- 5,000
Mr. Voboril 6/12/91 5,000 $10.875 --- 5,000 ---
Mr. Voboril 6/12/96 5,000 $27.750 --- --- 5,000
Dr. Steinhauer 10/08/93 5,000 $14.750 --- 3,334 1,666
Dr. Steinhauer 6/12/96 5,000 $27.750 --- --- 5,000
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
OF DIRECTORS ON EXECUTIVE COMPENSATION
Analogic Corporation is engaged in the design, manufacture and
marketing of advanced precision data conversion and computer-based
signal processing instruments and equipment which are used to acquire,
condition, translate, compute, interpret, store, transmit, or display
critical data in modern industrial, scientific, medical, communications
and other system applications.
Analogic's technology-driven philosophy and strategic growth
objectives require an ability to recruit and retain competent executives
with substantial qualities in managerial breadth and technical depth.
Such retention requires provision of remuneration programs which
motivate and reward performance results directly related to enhancement
of shareholder value.
It is the charter of the Compensation Committee to develop,
implement and control executive remuneration practices which:
Align management objectives with shareholder interest,
Balance short-term (annual) business plans with longer-term
strategic goals,
Link individual and Company performance to executive
remuneration, and
Provide for remunerative practices which are highly motivational to
the individual and competitive in the marketplace.
The Committee determines and approves all recommendations for
salary adjustment, cash incentive awards and/or stock incentive awards
pertaining to the Chief Executive Officer and other Senior Executives of
the Company.<PAGE>
<PAGE>16
ANNUAL COMPENSATION
Executive salary ranges and annual incentive award targets are
established annually after reviewing comparative data from companies in
similar industries, with similar sales volume. The Company's practice
is to compensate executives at a competitive level for its industry.
Each position is placed in a salary range appropriate to the scope of
the position, considering both external survey data and internal equity.
Annual salary increases and incentive awards are based on overall
Company results and achievement of individual objectives during the
fiscal year. Measures of Company performance include: sales growth,
profit attainment, new product introduction, manufacturing efficiency,
product quality, employee morale and employee turnover.
Individual performance factors are relevant to the area of
responsibility for each executive, and include division performance where
appropriate.
The committee elected to keep executive base salaries for fiscal year
1997 at their current levels.
LONGER-TERM INCENTIVES
Stock incentives, which include stock options and/or stock grants,
were provided through the following Plans which were previously
approved by vote of the shareholders:
Key Employee Non-Qualified Stock Option Plan dated May 13,
1985.
Key Employee Incentive Stock Option Plan amended on January 28,
1987.
Key Employee Stock Bonus Plan as restated January 27, 1988.
Key Employee Incentive Stock Option Plan dated June 11, 1993.
The award of stock incentives to individual recipients considers the
contribution of the individual to longer-term results, his/her impact upon
divisional or corporate objectives, and level of position within the
organization.
The potential realization from these awards is directly related to the
continuing success of the Company as measured by increasing
shareholder value.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The compensation of the Chief Executive Officer, Mr. Bernard M.
Gordon, is determined by the Committee following evaluation of his
individual performance and the overall Company performance with
considerable respect to financial results. The key performance measure
for this position is the ability to provide the leadership and vision
necessary to assure continuing success. Other measures of quantitative
and qualitative performance are similar to those used for all Corporate
Officers, as is the method of evaluating competitive compensation
practices.
<PAGE>
<PAGE>17
Mr. Gordon's base salary was not increased in 1996 which reflects the
Committee's election to keep executive base salaries at their current
levels. The amount of Mr. Gordon's incentive award was based on
annual financial results. Due to his position as founder of the Company,
Mr. Gordon personally identifies with the future of the organization and
has declined to participate in stock incentive arrangements. Overall, his
compensation is conservative, particularly in light of his leadership
position in the electronics industry.
COMPENSATION COMMITTEE
Bruce W. Steinhauer
Edward F. Voboril
Gerald L. Wilson
<PAGE>
<PAGE>18
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
The graph below compares the cumulative total shareholder return on
the Company's Common Shares with the cumulative total return on the
Center for Research in Security Prices of the University of Chicago
("CRSP") Total Return Index for the NASDAQ Stock Market (U.S.
Companies) and the CRSP Total Return Index for all NASDAQ stocks
within the Company's primary SIC Code. The graph assumes $100
invested on July 31, 1991, in the Company's Common Shares and $100
invested at that time in each of the NASDAQ indexes. The comparison
assumes that all dividends are reinvested.
<TABLE>
<CAPTION>
[G R A P H I C]
The flowing legend represents data presented in graphical form.
CRSP Total Returns Index for: 7/31/91 7/31/92 7/31/93 7/31/94 7/31/95 7/31/96
<S> <C> <C> <C> <C> <C> <C>
ANALOGIC CORPORATION 100.0 101.1 133.0 140.7 167.8 253.9
Nasdaq Stock Market (US Companies) 100.0 117.4 142.8 147.0 206.3 225.0
NASDAQ Stocks (SIC 3800-3899 US
Companies) 100.0 99.4 93.5 88.1 139.5 136.4
Measuring instruments; photo, med
& optical goods; timepieces
Notes:
A. The lines represent monthly index levels derived from compounded daily returns that include
all dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding
trading day is used.
D. The index level for all series was set to $100.0 on 7/31/91.
</TABLE>
<PAGE>
<PAGE>19
PROPOSAL 2
APPROVAL OF THE 1997 NON-QUALIFIED
STOCK OPTION PLAN FOR
NON-EMPLOYEE DIRECTORS
The Board of Directors has adopted, subject to the approval of the
stockholders, the Non-Qualified Stock Option Plan for Non-Employee
Directors dated January 31, 1997 ("The 1997 Plan"), a copy of which is
attached as Exhibit A to this proxy statement. The Board of Directors
believes that the granting of such stock options helps the Company in its
efforts to attract and retain highly qualified directors and to encourage
them to exert their best efforts on behalf of the Company. Accordingly,
the Board recommends that the stockholders vote for approval of the 1997
Plan, and the proxies will be so voted unless a stockholder specifies
otherwise. The affirmative vote of a majority of the shares voting on
the matter (provided such majority is at least a majority of the number
of shares required to constitute a quorum) will be necessary to approve
the 1997 Plan.
The following is a summary description of the 1997 Plan. For
information concerning the participation by executive officers and
directors of the Company in all of the Company's stock option and
benefit plans, see "Executive Compensation" in this Proxy Statement.
Purpose
The purpose of this 1997 Non-Qualified Stock Option Plan for Non-
Employee Directors is to attract and retain the services of experienced
and knowledgeable independent directors of the Corporation for the
benefit of the corporation and its stockholders and to provide additional
incentives for such independent directors to continue to work for the best
interests of the Corporation and its stockholders through continuing
ownership of its common stock.
Stock Available for Options
A total of up to 50,000 shares of Common Stock may be issued upon
exercise of options granted under the 1997 Plan. The shares of Common
Stock to be issued upon exercise of options may include treasury shares,
authorized but unissued shares and shares previously reserved for
issuance upon exercise of options which have expired or terminated.
Shares subject to an option that ceases to be exercisable for any reason
are available for subsequent option grants.
Administration of the Plan
The Plan shall be administered by the Board of Directors of the
Corporation. The Board shall, subject to the provisions of the Plan,
grant options under the Plan and shall have the power to construe the
Plan, to determine all questions as to eligibility, and to adopt and amend
such rules and regulations for the administration of the Plan as it may
deem desirable.
<PAGE>
<PAGE>20
Eligibility; Grant of Option
Options will be granted only to directors of the Corporation or of a
Subsidiary who are not otherwise employees of the Corporation or any
Subsidiary. Each new Non-Employee Director who is elected to the
Board shall be granted an option to acquire 5,000 Shares, effective as of
the date he or she is first elected to the Board; provided, however, that
upon such first election a new Non-Employee Directors shall not receive a
grant under both this Plan and the 1988 Plan. Every four (4) years
from the date on which a Non-Employee Director was last granted a
Non-Employee Director option, whether under this Plan or the 1988
Plan, that Non-Employee Director shall be granted an option to acquire
5,000 Shares, effective as of the date of that fourth anniversary.
Option Prices
The price at which any Shares may be purchased pursuant to the
exercise of an Option shall be the Fair Market Value of the Shares on the
date of grant, but in no event shall the price be less than the par value
of the Shares.
Exercise of Options. Options granted under the 1997 Plan are
exercisable during the period commencing one year after the date of
grant and ending 10 years after the date of grant (the "Option Exercise
Period") with respect to the following indicated percentage of the total
number of shares of Common Stock subject to an option at the expiration
of the following indicated periods from the date of grant of an option:
(a) 33 1/3% of the number of shares subject to an option one or more
years after the date of grant;
(b) 66 2/3% of the number of shares subject to an option two or more
years after the date of grant; and
(c) 100% of the number of shares subject to an option three or more
years after the date of grant.
Payment of the Exercise Price, together with the amount of any tax
or excise due in respect of the sale of the shares of Common Stock
subject to an option must be made in full upon exercise of an option in
whole or in part in cash, by delivery of shares of Common Stock or any
combination of cash and shares of Common Stock as the Board of
Directors may determine. As a condition to the exercise of options, the
Company may require the option holder to pay the Company the amount
of any taxes which the Company may be required to withhold. The
Company will not issue a certificate for shares of Common Stock until
full payment for such shares has been made and until all legal
requirements applicable to the issuance and transfer of such shares have
been satisfied. An option holder has none of the rights of a stockholder
until shares are issued to him or her.
Rights in the Event of Termination of Employment or Death. If
an option holder retires or dies during the Option Exercise Period, his
or her options will be exercisable only during the 12 months following
such retirement or death with respect to the number of shares as to which
the options were exercisable immediately prior to such retirement or
death (unless the Option Exercise Period expires sooner).
<PAGE>
<PAGE>21
In the event an option holder ceases to be an independent director of
the Company for any reason other than retirement or death, the options
held by him or her will be exercisable with respect to the number of
shares as to which the options were exercisable immediately prior to the
date such person ceases to be an independent director during the seven
month period following such date.
Transfer Restrictions. An option is exercisable only by the option
holder during his or her lifetime, and no option or right or interest in an
option is assignable or transferable by the holder except by will or the
laws of descent and distribution.
Change in Common Stock. If the Company is a party to any
merger or consolidation, purchase or acquisition of property or stock, or
any separation, reorganization or liquidation, the Board of Directors has
the power to make arrangements for the substitution of new options for,
or the assumption by another corporation of, any unexpired options.
If by reason by recapitalization, reclassification, stock split,
combination of shares or dividend payable in shares of Common Stock,
the outstanding shares of Common Stock are increased or decreased or
changed into a different number or kind of shares or other securities of
the Company, the Board of Directors will conclusively determine the
appropriate adjustment in the Exercise Price of outstanding options and
in the number and kind of shares as to which outstanding options will be
exercisable.
In the event of any of the foregoing transactions, the total number of
shares of Common Stock for which options may be granted will be
appropriately adjusted by the Board of Directors.
Indemnity. The Board of Directors shall not be liable for any act,
omission, interpretation, construction or determination made in good faith
in connection with their responsibilities under the 1997 Plan. The
Company has agreed to indemnify the members of the Board of
Directors, in respect of any claim, loss, damage or expense (including
counsel fees) arising from any such act, omission, interpretation,
construction or determination to the fullest extent permitted by law.
Duration of the 1997 Plan. The 1997 Plan may be discontinued at
any time by the Board of Directors. Subject to being so discontinued,
it will terminate on the tenth anniversary from the date of its adoption by
the Board, and no options may be granted under the 1997 Plan after such
date. Termination will not affect the validity of options granted prior to
the date of termination.
Federal Tax Consequences. The 1997 Plan does not qualify as an
incentive stock option plan within the meaning of section 422 of the
code.
An option holder under the 1997 Plan generally will not be taxed
upon the grant of an option, but rather at the time of exercise of the
option.
<PAGE>
<PAGE>22
Ordinarily, an option holder will recognize ordinary income at the
time an option is exercised in an amount equal to the excess of the fair
market value (upon exercise) of the shares of Common Stock purchased
over the Exercise Price. However, in general, option holders under the
1997 Plan will be subject to Section 16(b) of the Securities Exchange Act
of 1934 (the "Exchange Act") upon their sale of shares of Common
Stock. In the case of exercise of an option by someone whose sale of
shares of Common Stock would subject him or her to liability under
Section 16(b) of the Exchange Act, recognition of income by the option
holder will be postponed so long as sale of the shares would expose the
option holder to liability, unless the option holder makes an election
pursuant to Section 83(b) of the Code within 30 days after exercise to be
taxed as of the exercise date as described above.
If the option holder fails to make a Section 83(b) election, he or she
will recognize ordinary income at the time of exercise. Such sale would no
longer expose him or her to liability under Section 16(b) of the Exchange
Act in an amount equal to the excess of the fair market value of the shares
of Common Stock at that time over the Option Exercise Price.
The Company generally will be entitled to a federal income tax
deduction at the same time as, and in the same amount that, the option
holder recognizes ordinary income provided that the Company satisfies
its withholding obligations.
When an option holder disposes of the shares of Common Stock
received upon exercise of an option, he or she will recognize capital gain
or loss in an amount equal to the difference between the sales price and
the fair market value on the date on which the option holder recognized
ordinary income as a result of the exercise of the option.
An option holder who pays the Exercise Price, in whole or in part, by
delivering shares of Common Stock already owned by him or her will recognize
no gain or loss for federal income tax purposes on the shares surrendered,
but otherwise will be taxed according to the rules described above. If the
shares acquired upon exercise are equal in number to the shares surrendered,
the basis of the shares received will be equal to the basis of the shares
surrendered. The basis of additional shares received upon exercise will be
equal to the fair market value of such shares on the date of exercise, and
the holding period for such additional shares will commence on that date.
The 1997 Plan is not qualified under Section 401 of the Code and is
not subject to the provision of the Employee Retirement Income Security
Act of 1974, as amended.
Vote Required to Adopt the 1997 Plan.
The affirmative vote of the holders of a majority of shares of
Common Stock present, in person or by proxy, and entitled to vote at the
meeting, is required to approve the 1997 Plan.
The Board of Directors recommends a vote FOR the adoption of the
1997 Plan.
Amendment or Termination of the 1997 Plan. The Board of Directors
may at any time amend, suspend or terminate the 1997 Plan (as provided by
paragraph 12 of the Plan). No amendment, suspension or termination of the
1997 Plan, except as described herein, may affect the rights of an option
holder without his or her consent.<PAGE>
<PAGE>23 PROPOSAL 3
APPROVAL OF AUDITORS
It is proposed that the stockholders ratify the appointment of Coopers
& Lybrand L.L.P. as independent auditors of the Company to audit its
financial statements for the fiscal year ending July 31, 1997. The Board
of Directors recommends an affirmative vote for the ratification of the
appointment of Coopers & Lybrand L.L.P. as the Company's auditors.
The affirmative vote of the holders of a majority of the shares of
Common Stock present, in person or by proxy, and entitled to vote at the
Meeting is required to approve Proposal 3.
PROPOSALS OF STOCKHOLDERS
A stockholder of the Company who intends to present a proposal for
action at the next Annual Meeting of Stockholders of the Company may
seek to have his proposal included in the Company's proxy material for
the Meeting by notifying the Company of such intention and furnishing
the text of the proposal to the Company. Such notice must also include
the stockholder's address and statement of the number of shares of
Common Stock of the Company held of record or beneficially by such
stockholder and of the date or dates upon which such shares were
acquired, and must be accompanied by documentary support for a claim
of beneficial ownership. To have a proposal considered for inclusion in
the proxy material for the 1998 Annual Meeting of Stockholders, a
stockholder must give the aforesaid notice and submit his proposal no
later than August 15, 1997. The notice and text should be sent to the
attention of John A. Tarello, Senior Vice President and Treasurer,
Analogic Corporation, 8 Centennial Drive, Peabody, MA 01960
OTHER MATTERS
The Company knows of no business which will be presented for
consideration at the Meeting other than that set forth in this Proxy
Statement. However, if any such other business shall come before the
Meeting, the persons named in the Proxies or their substitutes shall vote
the Proxies in respect of any such business in accordance with their best
judgment.
The cost of preparing, assembling, and mailing the proxy material
will be borne by the Company. The Company may solicit Proxies
otherwise than by the use of the mails, in that certain officers and regular
employees of the Company, without additional compensation, may use
their personal efforts, by telephone, correspondence or in person, to
obtain Proxies. The Company will also request persons, firms and
corporations holding shares in their names, or in the names of their
nominees, which are beneficially owned by others, to send proxy
material to and obtain Proxies from such beneficial owners and will
reimburse such holders for their out-of-pocket expenses in so doing.
<PAGE>
<PAGE>24
THE COMPANY WILL FURNISH TO ANY STOCKHOLDER UPON WRITTEN REQUEST,
WITHOUT CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K,
INCLUDING THE FINANCIAL STATEMENTS AND SCHEDULES THERETO, FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. A request for the Form 10-K should
be addressed to John A. Tarello, Senior Vice President and Treasurer,
Analogic Corporation, 8 Centennial Drive, Peabody, Massachusetts 01960.
For the Board of Directors
December 2,1996
Julian Soshnick
Clerk
IF YOU DO NOT EXPECT TO BE PRESENT AT THIS MEETING AND WISH YOUR STOCK TO BE
VOTED, YOU ARE REQUESTED TO SIGN, DATE AND MAIL PROMPTLY THE ENCLOSED
PROXY, WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A
RETURN ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES
OR CANADA, IS ENCLOSED FOR THAT PURPOSE.
<PAGE>
<PAGE>25
P R O X Y
ANALOGIC CORPORATION
Proxy for Annual Meeting of Stockholders to be held January 24, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, having received the notice of the meeting and proxy
statement therefor, and revoking all prior proxies, hereby appoint(s)
Bernard M. Gordon, John A. Tarello, and Julian Soshnick, or any one of
them attorney or attorneys of the undersigned (with full power of
substitution) to attend the Annual Meeting of Stockholders of Analogic
Corporation (the "Company") to be held at the Company's headquarters
located at Eight Centennial Drive, Peabody, Massachusetts on January
24, 1997, at 11:00 a.m. and at any adjourned sessions thereof, and
there to vote and act with respect to all shares of the Company which
the undersigned shall be entitled to vote or act upon, with all the
powers the undersigned would possess if personally present. This proxy
will be voted as directed by the undersigned and if no direction is
indicated, it will be voted FOR the nominees as directors and FOR
Proposal 2, and FOR Proposal 3.
Election of all Directors: Nominees
Bruce R. Rusch, Bruce W. Steinhauer
SEE REVERSE SIDE: If you wish to vote in accordance with the Board of
Directors' recommendations, please sign on the reverse side. You need
not mark any boxes.
CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE SEE REVERSE
SIDE
<PAGE>
<PAGE>26
- --------------------------------------------------------------------------
Reverse side of PROXY
/x/ Please mark
votes as in
this example.
This Proxy, when executed, will be voted in the manner directed herein.
If no direction is made, this Proxy will be voted FOR the election of
Directors and FOR Proposal 2, and FOR Proposal 3.
The Board of Directors recommends a vote FOR Proposals 1, 2, and 3.
1. To fix the number of Directors
for the ensuing year at eight
and the election of Directors. / / FOR / / WITHHELD / / FOR ALL
NOMINEES
EXCEPT AS
NOTED ABOVE
2. To consider and act upon the
matter of adopting and approving
the Company's Non-Qualified Stock
Option Plan for Non-Employee
Directors, dated January 31,
1997. / / FOR / / AGAINST / / ABSTAIN
3. To consider and act upon the
matter of ratifying the
selection by the Board of
Directors of Coopers &
Lybrand L.L.P. as auditors
of the Company for the
current fiscal year. / / FOR / / AGAINST / / ABSTAIN
4. To act upon any and all matters incidental to any of the forgoing
and transact such other business as may legally come before the
Meeting or any adjourned session or sessions thereof.
Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee
or guardian, please give full title as such.
Signature______________Date________ Signature______________Date_______
<PAGE>
<PAGE>27
ANALOGIC CORPORATION
APPENDIX
On page 10 of the printed document a graph appears containing the following
information:
(1) Five year graphical comparison of the cumulative total shareholder
return on the Company's Common Shares.
<PAGE>
<PAGE>1
EXHIBIT A
ANALOGIC CORPORATION
NON-QUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. Purpose
The purpose of this 1997 Non-Qualified Stock Option Plan for
Non-Employee Directors is to attract and retain the services of
experienced and knowledgeable independent directors of the
Corporation for the benefit of the corporation and its stockholders
and to provide additional incentives for such independent directors
to continue to work for the best interests of the Corporation and
its stockholders through continuing ownership of its common stock.
2. Definitions
As used herein, each of the following terms has the indicated
meaning:
"Corporation" means Analogic Corporation.
"Fair Market Value" means high and low sale price quoted on the
NASDAQ or such other national securities exchange on which the
shares may be traded on the date of the granting of the Option.
"Option" means the contractual right to purchase shares upon the
specific terms set forth in this Plan.
"Option Exercise Period" means the period commencing one (1)
year after the date of grant of an Option pursuant to this Plan and
ending ten (10) years from the date of grant.
"1988 Plan" means the Analogic Corporation 1988 Non-Qualified
Stock Option Plan For Non-Employee Directors Dated February 1, 1988.
"Plan" means this Analogic Corporation 1997 Non-Qualified Stock
Option Plan for Non-Employee Directors.
"Shares" means the Common Stock, $.05 par value, of the
Corporation.
"Subsidiary" means any corporation in an unbroken chain of
corporations beginning with the Corporation if, at the time of grant
of the Option, each of the corporations other than the last in the
unbroken chain owns stock representing fifty (50%) percent or more
of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
A-1
<PAGE>
<PAGE>2
3. Stock Subject to the Plan
The aggregate number of Shares that may be issued and sold under
the Plan shall be 50,000 shares. The Shares to be issued upon
exercise of Options granted under this Plan shall be made available,
at the discretion of the Board of Directors, from (i) treasury
shares and Shares reacquired by the Corporation for such purposes,
including Shares purchased in the open market, (ii) authorized but
unissued Shares, and (iii) Shares previously reserved for issuance
upon exercise of Options which have expired or been terminated. If
any Option granted under this Plan shall expire or terminate for any
reason without having been exercised in full, the unpurchased Shares
covered thereby shall become available for grant under additional
Options under the Plan so long as it shall remain in effect.
4. Administration of the Plan
The Plan shall be administered by the Board of Directors of the
Corporation (the "Board"). The Board shall, subject to the
provisions of the Plan, grant options under the Plan and shall have
the power to construe the Plan, to determine all questions as to
eligibility, and to adopt and amend such rules and regulations for
the administration of the Plan as it may deem desirable.
5. Eligibility; Grant of Option
Options will be granted only to directors of the Corporation or
of a Subsidiary who are not otherwise employees of the Corporation
or any Subsidiary ("Non-Employee Directors"). Each new Non-Employee
Director who is elected to the Board shall be granted an option to
acquire 5,000 Shares, effective as of the date he or she is first
elected to the Board; provided, however, that upon such first
election, a new Non-Employee Director shall not receive a grant
under both this Plan and the 1988 Plan. The Board of Directors
shall determine under which of said Plans such grant shall be made.
Every four (4) years from the date on which a Non-Employee Director
was last granted a Non-Employee Director option, whether under this
Plan or the 1988 Plan, that Non-Employee Director shall be granted
an option to acquire 5,000 Shares, effective as of the date of that
fourth anniversary.
6. Terms of Options and Limitations Thereon
(a) Option Agreement. Each Option granted under this Plan
shall be evidenced by an Option agreement between the Corporation
and the Option holder and shall be upon such terms and conditions
not inconsistent with this Plan, as the Board may determine.
(b) Price. The price at which any Shares may be purchased
pursuant to the exercise of an Option shall be the Fair Market Value
of the Shares on the date of grant, but in no event shall the price
be less than the par value of the Shares.
A-2
<PAGE>
<PAGE>3
(c) Exercise of Option. Subject to Paragraphs 4 and 7 of
this Plan, each Option granted under this Plan may be exercised in
full at one time or in part from time to time only during the Option
Exercise Period by the giving of written notice, signed by the
person or persons exercising the Option, to the Corporation stating
the numbers of Shares with respect to which the option is being
exercised, accompanied by full payment for such Shares pursuant to
Section 7(b) hereof; provided however, if a person to whom an Option
has been granted retires or dies during the Option Exercise Period,
such Option shall be exercisable by him or her or by the executors,
administrators, legatees or distributees of his or her estate during
the (i) twelve (12) months following his or her retirement or death;
and, (ii) if a person to whom an Option has been granted ceases to
be a Non-Employee Director of the Corporation for any cause other
than retirement or death, such Option shall be exercisable during
the seven month period following the date such person ceased to be
a Non-Employee Director, but, in any event, only to the extent
vested pursuant to Section 7(a) hereof.
(d) Non-Assignability. No Option or right or interest in an
Option shall be assignable or transferable by the holder, except by
will or the laws of descent and distribution and during the lifetime
of the holder, shall be exercisable only by him or her.
7. Vesting; Payment
(a) Subject to Paragraphs 4 and 6 of this Plan, Options
granted under this Plan may be exercised during the Option Exercise
Period with respect to the following indicated percentage of the
total number of shares of Stock subject to the Option at the
expiration of the following indicated periods from the date of grant
of the Option: 33 1/3% of the number of Shares subject to the
Option one (1) or more years after the date of grant; 66 2/3% of
the number of Shares subject to the Option two (2) or more years
after the date of grant; and 100% of the Shares of Stock subject to
the Option three (3) or more years after the date of grant.
However, if one of the events referred to in clauses (i) and (ii) of
Paragraph 6(c) occurs, the Option shall be exercisable during the
specified period following said retirement or death only as to the
number of Shares as to which it was exercisable immediately prior to
said retirement or death.
(b) The purchase price of Shares upon exercise of an Option
shall be paid by the Option holder in full upon exercise and may be
paid (i) in cash, (ii) by delivery of Shares, or (iii) any
combination of cash and Shares, as the Board may determine.
(c) No Shares shall be issued or transferred upon exercise
of any Option under this Plan unless and until all legal
requirements applicable to the issuance or transfer of such shares
and such other requirements as are consistent with the Plan have
been complied with to the satisfaction of the Board, including
without limitation those requirements described in Paragraph 10
hereof.
A-3
<PAGE>
<PAGE>4
8. Stock Adjustments
(a) If the Corporation is a party to any merger or
consolidation, any purchase or acquisition of property or stock, or
any separation, reorganization or liquidation, the Board of
Directors (or, if the Corporation is not the surviving corporation,
the Board of Directors of the surviving corporation) shall have the
power to make arrangements, which shall be binding upon the holders
of unexpired Options, for the substitution of new options for, or
the assumption by another corporation of, any unexpired options then
outstanding hereunder.
(b) If by reason of recapitalization, reclassification,
stock split-up, combination of shares, separation (including a spin-
off) or dividend on the stock payable in Shares, the outstanding
Shares of the Corporation are increased or decreased or changed into
or exchanged for a different number or kind of shares or other
securities of the Corporation, the Board of Directors shall
conclusively determine the appropriate adjustment in the exercise
prices of outstanding Options and in the number and kind of shares
as to which outstanding Options shall be exercisable.
(c) In the event of a transaction of the type described in
Paragraphs (a) and (b) above, the total number of Shares on which
Options may be granted under this Plan shall be appropriately
adjusted by the Board of Directors.
9. No Rights Other Than Those Expressly Created
Other than Non-Employee Directors, no person affiliated with the
Corporation or any Subsidiary or any other person shall have any
claim or right to be granted an Option hereunder. Neither this Plan
nor any action taken hereunder shall be construed as (i) giving any
Option holder any right to continue to be affiliated with
Corporation, (ii) giving any Option holder any equity or interest of
any kind in any assets of the Corporation, or (iii) creating a trust
of any kind or a fiduciary relationship of any kind between the
Corporation and any such person. No Option holder shall have any of
the rights of a stockholder with respect to Shares covered by an
Option until such time as the Option has been exercised and Shares
have been issued to such person.
10. Miscellaneous
(a) Withholding of Taxes. Pursuant to applicable federal,
state, local or foreign laws, the Corporation may be required to
collect income or other taxes upon the grant of an Option to, or
exercise of an Option by, a holder. The Corporation may require, as
a condition to the exercise of an Option, that the recipient pay the
Corporation, at such time as the Board determines, the amount of any
taxes which the Board may determine is required to be withheld.
A-4
<PAGE>
<PAGE>5
(b) Securities Law Compliance. Upon exercise of an Option,
the holder shall be required to make such representation and furnish
such information as may, in the opinion of counsel for the
Corporation, be appropriate to permit the Corporation to issue or
transfer the Shares in compliance with the provisions of applicable
federal or state securities laws. The Corporation, in its
discretion, may postpone the issuance and delivery of Shares upon
any exercise of an Option until completion of such registration or
other qualification of such Shares under any federal or state laws,
or stock exchange listing, as the Corporation may consider
appropriate. The Corporation is not obligated to register or
qualify the Shares under federal or state securities laws and may
refuse to issue such Shares if neither registration nor exemption
therefrom is practical. The Board may require that prior to the
issuance or transfer of any Shares upon exercise of an Option, the
recipient enter into a written agreement to comply with any
restriction on subsequent disposition that the Board or the
Corporation deems necessary or advisable under any applicable
federal and state securities laws. Certificates representing the
Shares issued hereunder may be legended to reflect such
restrictions.
(c) Indemnity. The Board of Directors shall not be liable
for any act, omission, interpretation, construction or determination
made in good faith in connection with their responsibilities with
respect to the Plan, and the Corporation hereby agrees to indemnify
the members of the Board of Directors, in respect of any claim,
loss, damage, or expense (including counsel fees) arising from any
such act, omission, interpretation, construction or determination to
the fullest extent permitted by law.
12. Effective Date; Amendment; Termination
(a) The effective date of this Plan shall be the date of the
approval of stockholders of the Corporation holding at least a
majority of the voting stock of the Corporation.
(b) The date of grant of any Option granted hereunder shall
be the effective date, as set forth in Paragraph 5 of this Plan.
(c) Except as otherwise provided below, the Board of
Directors of the Corporation may at any time, and from time to time,
amend, suspend or terminate this Plan in whole or in part. However,
except as provided herein, no amendment, suspension or termination
of this Plan may affect the rights of any person to whom an Option
has been granted without such person's consent. Paragraphs 5, 6(a),
and 6(b) of this Plan may not be amended more than once every six
(6) months, other than to comply with changes in the Internal
Revenue Code.
(d) This Plan shall terminate ten (10) years from its
effective date, and no Option shall be granted under this Plan
thereafter, but such termination shall not affect the validity of
Options granted prior to the date of termination.
Date of Board of Director Adoption: June 12, 1996.
A-5<PAGE>
