<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /
- --------------------------------------------------------------------------------
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
Analogic Corporation
(Name of Registrant as Specified In Its Charter)
Analogic Corporation
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
ANALOGIC CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
ANALOGIC CORPORATION TO BE HELD JANUARY 23, 1998
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
23, 1998 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 three Class III directors for a three-year term, to
hold office until the 2001 Annual Meeting of Stockholders and
until their successors are elected and qualified.
(2) To consider and act upon the matter of adopting and approving
an amendment to the Company's Employee Stock Purchase Plan
dated June 10, 1986. A copy of the amendment is attached as
Exhibit "A" to the within proxy statement.
(3) 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 26,
1997, as the record date for determining the stockholders having the right to
notice of and to vote at the meeting.
Julian Soshnick
Clerk
December 1, 1997
-------------------------------------------
IF YOU ARE ENTITLED TO VOTE AT THE MEETING,
KINDLY EXECUTE AND MAIL THE ENCLOSED PROXY
-------------------------------------------
<PAGE> 3
ANALOGIC CORPORATION
8 CENTENNIAL DRIVE
PEABODY, MASSACHUSETTS 01960
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JANUARY 23, 1998
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 23, 1998 (the "Meeting"), and is being mailed,
together with the form of proxy solicited, to each stockholder of the Company on
or about December 1, 1997.
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 amendment to the Employee
Stock Purchase Plan dated June 10, 1986, 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 26, 1997, may vote at the Meeting. On November 26,
1997, there were issued and outstanding 12,596,586 shares of Common Stock of
the Company (not including 1,239,778 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.
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 26, 1997, 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.
1
<PAGE> 4
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS BENEFICIAL OWNERSHIP OF CLASS
- ------------------ -------------------- --------
Bernard M. Gordon Charitable 4,720,192 (1)(2) 37.5%
Remainder Unitrust
Bernard M. Gordon
Julian Soshnick
Gerald P. Bonder, Trustees
8 Centennial Drive
Peabody, MA 01960
T. Rowe Price 1,516,700 12.0%
100 East Pratt Street
Baltimore, MD 21202
Private Capital Management Inc. 880,975 7.0%
3003 Ninth Street
Naples, FL 33940
(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.
2
<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 three directors, Bernard
M. Gordon, John A. Tarello, and Gerald L. Wilson, will expire at the Meeting.
Bernard M. Gordon, John A. Tarello, and Gerald L. Wilson have been nominated for
election as the Class III directors, to hold office until the 2001 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 III 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.
3
<PAGE> 6
NOMINEE FOR CLASS III DIRECTOR IS INDICATED BY TWO ASTERISKS.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP OF
THE COMPANY'S COMMON
PRINCIPAL OCCUPATION DIRECTOR STOCK AS OF
NAME AGE OR EMPLOYMENT SINCE OCTOBER 31, 1997
- --------------------------------- --- -------------------- -------- -----------------------
<S> <C> <C> <C> <C>
IF ELECTED, TERM EXPIRES IN 2001:
Bernard M. Gordon ** 70 Chairman of the Board 1969 4,720,192 (4)(6)
and Chief Executive
Officer of the Company
John A. Tarello ** 66 Senior Vice President 1979 30,000*
and Treasurer of the
Company
Gerald L. Wilson **(2)(3) 58 Former Dean, School 1980 3,667*
of Engineering and
Professor, Massachusetts
Institute of Technology
TERM EXPIRES IN 2000:
Bruce R. Rusch 54 President and Chief 1993 33,750*(5)
Operating Officer of
the Company
Bruce W. Steinhauer (2)(3) 62 Chief Executive Officer 1993 6,667*(7)
Lahey Hitchcock Clinic,
Burlington, Massachusetts
TERM EXPIRES IN 1999:
M. Ross Brown 63 Vice President of the 1984 15,000*(5)(7)
Company
Edward F. Voboril (2)(3) 54 President and CEO of 1990 6,667*(7)
Wilson Greatbatch Ltd,
Clarence, NY
Beneficial Ownership of Shares
by All Directors and Executive
Officers as a Group (8 persons) 4,845,943 (4)(5)(6)(7)
</TABLE>
* 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).
4
<PAGE> 7
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 trustee of Commonwealth Energy Systems and a
director of ASECO Corporation.
Dr. Bruce W. Steinhauer has been Chief Executive Officer of the Lahey
Hitchcock Clinic in Burlington, Massachusetts, since early 1992. He is also a
trustee of the Lahey Hitchcock Clinic. 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.
The Board of Directors held four (4) meetings during fiscal 1997.
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 1997 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 1997 fiscal year to review and approve salaries of
the Company's officers for fiscal 1998. 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 owns a 48% interest and Mr. Bernard L. Friedman, the
Company's former Vice Chairman of the Board (Mr. Friedman resigned on July 31,
1993), owns a 52% 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, 1999,
subject to an 18 month notice of cancellation, on a triple-net basis.
5
<PAGE> 8
Mr. Gordon owns a 48% interest and Mr. Friedman owns a 52% 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.
All of the foregoing rents are on a net lease basis, and accordingly the
Company pays, in addition to the above rental payments, all taxes, maintenance,
insurance, and other costs relating to the leased premises.
The terms of the several lease agreements, at the time they were executed,
were at least as favorable as those that could have been obtained from
unaffiliated third parties. Prior to execution of each such lease, two
independent appraisals were obtained in order to establish the fair market rate
for subject premises. A rent, in each case discounted below the fair market rate
established by the appraisals, was then agreed upon by the parties.
The leases each incorporated periodic rent escalation clauses, based upon the
CPI. At the present time, the rents that the Company is paying under the several
leases reflect fair rental value for the properties.
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.
<TABLE>
<CAPTION>
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 1997 $325,000 $50,000 $375,000 ---- ---- $3,645
Chairman (CEO) 1996 325,000 25,000 350,000 ---- ---- 3,024
1995 325,000 50,000 375,000 ---- ---- 3,186
Bruce R. Rusch 1997 $225,000 $50,000 $275,000 ---- ---- $3,442
President (COO) 1996 225,000 21,000 246,000 ---- ---- 2,855
1995 206,519 35,000 241,519 ---- ---- 3,007
John A. Tarello 1997 $210,000 $50,000 $260,000 ---- ---- $3,691
Senior Vice President 1996 210,000 21,000 231,000 ---- ---- 3,062
and Treasurer 1995 210,000 35,000 245,000 ---- ---- 3,225
M. Ross Brown 1997 $185,000 $30,000 $215,000 ---- ---- $3,521
Vice President 1996 185,000 18,000 203,000 ---- ---- 2,921
1995 185,000 30,000 215,000 ---- ---- 3,076
Julian Soshnick 1997 $185,000 $40,000 $225,000 ---- ---- $3,555
Vice President and 1996 185,000 18,000 203,000 ---- ---- 2,949
General Counsel 1995 185,000 30,000 215,000 ---- ---- 3,106
</TABLE>
6
<PAGE> 9
(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.
(B) As of July 31, 1997, 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 22,500 $821,250
M. Ross Brown 15,000 547,500
Julian Soshnick 8,750 319,375
(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, 1997; and
(iii) the fiscal year-end value of "in-the-money" unexercised options.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
NUMBER OF AT FISCAL YEAR END AT FISCAL YEAR END(A)(B)
SHARES ACQUIRED VALUE ---------------------------- ---------------------------
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 $173,750 ---- ---- ---- ----
M. Ross Brown 5,000 $ 87,500 ---- 5,000 ---- $108,125
Julian Soshnick ---- ---- 3,750 1,250 $81,094 $27,031
</TABLE>
(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, 1997, 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, 1997.
7
<PAGE> 10
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.
The following table sets forth options granted pursuant to the 1988 plan as
of July 31, 1997:
<TABLE>
<CAPTION>
Date of Options Option Options Options Options
Grant Granted Price Exercised Exercisable Unexercisable
------- ------- ------- --------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Dr. Wilson 2/01/88 5,000 $ 7.125 5,000 --- ---
Dr. Wilson 6/12/96 5,000 $27.750 --- 1,667 3,333
Mr. Voboril 6/12/91 5,000 $10.875 --- 5,000 ---
Mr. Voboril 6/12/96 5,000 $27.750 --- 1,667 3,333
Dr. Steinhauer 10/08/93 5,000 $14.750 --- 5,000 ---
Dr. Steinhauer 6/12/96 5,000 $27.750 --- 1,667 3,333
</TABLE>
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.
8
<PAGE> 11
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 delay consideration of officer base salary
adjustments.
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.
Mr. Gordon's base salary rate has not been increased since August, 1994.
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
9
<PAGE> 12
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, 1992, 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.
[GRAPHIC]
The following legend represents data presented in graphical form.
<TABLE>
<CAPTION>
CRSP Total Returns Index for: 7/31/92 7/31/93 7/31/94 7/31/95 7/31/96 7/31/97
<S> <C> <C> <C> <C> <C> <C>
ANALOGIC CORPORATION 101.1 133.0 140.7 167.8 253.9 324.3
Nasdaq Stock Market (US Companies) 117.4 142.8 147.0 206.3 225.0 282.5
NASDAQ Stocks (SIC 3800-3899 US
Companies) 99.4 93.5 88.1 139.5 136.4 181.0
Measuring instruments; photo, med
& optical goods; timepieces
</TABLE>
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 7/31/92.
10
<PAGE> 13
PROPOSAL 2
APPROVAL OF THE OCTOBER 9, 1997 AMENDMENT
TO THE EMPLOYEE STOCK PURCHASE PLAN
DATED JUNE 10, 1986
On October 9, 1997, subject to stockholder approval, the Board of Directors
approved an amendment to the Employee Stock Purchase Plan dated June 10, 1986.
Subject to the plans other limitations, the amendment increases the maximum
value of stock that each eligible employee can purchase from $1,000 in each of
the two payment periods per year to $2,000 in each of the two payment periods
per year.
The full text of the Stock Purchase Plan (as amended) is set forth in
Exhibit A to this Proxy Statement. The following summary of the principal
provisions of the Stock Purchase Plan does not purport to be complete and is
subject in all respects to, and is qualified in its entirety by reference to the
full text of the Stock Purchase Plan.
Eligible Employees. All employees of the Company or any of its participating
subsidiaries, with the exception of officers, directors, and "highly compensated
employees" as that term is defined in Section 414(Q) of the Internal Revenue
Code, who have completed one year of employment with the Company or any of its
subsidiaries on or before the first day of the applicable Payment Period (as
defined below) will be eligible to receive options under the Stock Purchase Plan
to purchase the Company's Common Stock (except employees in countries whose laws
make participation impractical). However, in no event may an employee be granted
an option if such employee, immediately after the option is granted, owns stock
possessing five percent or more of the total combined voting power or value of
all classes of the Company's stock. Furthermore, no employee may be granted an
option which permits his rights to purchase Common Stock under the Stock
Purchase Plan and any similar plans of the Company to accrue at a rate which
exceeds $25,000 of fair market value of such stock (determined at the time such
option is granted) for each calendar year in which such option is outstanding at
any time. For the purpose of the Stock Purchase Plan, the term "employee" shall
not include an employee whose customary employment is 20 hours or less per week
or is for not more than five months in any calendar year.
Stock Subject to the Stock Purchase Plan. Up to 700,000 shares of the
Company's Common Stock, $.05 par value, may be issued pursuant to options
granted under the Stock Purchase Plan, subject however, to increase or decrease
by reason of stock split-ups, reclassifications, stock dividends, changes in par
value and the like.
Payment Periods and Stock Options. The six-month periods, July 1 to December
31 and January 1 to June 30 will be considered Payment Periods during which
payroll deductions will be accumulated for the purpose of exercising options
granted under the Stock Purchase Plan.
Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Stock Purchase Plan an option to purchase on the last day of such Payment Period
at the Option Price (as defined below) that number of full shares of the
Company's Common Stock reserved for the Stock Purchase Plan as his accumulated
payroll deductions on the last day of such Payment Period will pay for at such
Option Price. The Option Price for each Payment Period shall be the lessor of
(i) 85% of the fair market value of the Company's Common Stock on the first
business day of the Payment Period, or (ii) 85% of the fair market value of the
Company's Common Stock on the last business day of the Payment Period. The term
fair market value means closing price of the Company's Common Stock as reported
on the National Association of Securities Dealers Automated Quotation System.
Each eligible employee who continues to be a participant in the Stock
Purchase Plan throughout the Payment Period shall be deemed to have exercised
his option on the last business day of the Payment Period and shall be deemed to
have purchased from the Company such number of full shares of Common Stock
reserved for the Stock Purchase Plan as his accumulated payroll deductions on
such date will pay for at the Option Price. If a participant is not an employee
on the last business day of and throughout a Payment Period, he will not be
entitled to exercise his option.
Payroll Deductions. An employee may authorize payroll deductions in any even
dollar amount up but not more than the lesser of (i) ten percent of his regular
base pay, or (ii) an aggregate of $2,000 in any Payment Period: provided,
however, that the minimum deduction in respect of any payroll period will be
five dollars.
The Company will accumulate and hold for the employee's account the amounts
deducted from his pay. No interest will be paid thereon. Participating employees
may not make any separate cash payments into their account.
Deductions may be increased or decreased during a Payment Period, and an
employee may withdraw from the Stock Purchase Plan and withdraw all but not less
than all of the payroll deductions credited to his account at any time prior to
the last business day of each Payment Period.
11
<PAGE> 14
Only Full shares of Common Stock may be purchased. Any balance remaining in
an employee's account after a purchase will be reported to the employee and will
be carried forward to the next Payment Period. If for any Payment Period the
amount of unused payroll deductions should exceed the Option Price per share,
the amount of the excess for any participant will be refunded to such
participant, without interest.
No Transfer or Assignment of Employee's Rights. An employee's rights under
the Stock Purchase Plan may not be transferred or assigned to, or availed of by,
any other person. Any option granted to an employee may be exercised only by
him.
Termination of Employee's Rights. Except as set forth in the next paragraph,
an employee's rights under the Stock Purchase Plan will terminate when he ceases
to be an employee because of retirement, resignation, lay-off, discharge, death,
change of status, failure to remain in the customary employ of the Company for
at least 20 hours per week, or for any other reason.
Upon termination of the participating employee's employment because of his
death, his beneficiary designated under the Stock Purchase Plan will have the
right to elect, by written notice to the Company within 30 days after the death
of the employee either (i) to withdraw, without interest, all of the payroll
deductions credited to the employee's account, or (ii) to exercise the
employee's option for the purchase of shares of Common Stock on the last day of
the Payment Period next following the date of the employee's death for the
purchase of that number of full shares of Common Stock reserved for the Stock
Purchase Plan which the accumulated payroll deductions in the employee's account
at the date of the employee's death will purchase at the applicable Option
Price. Any excess in such account (in lieu of fractional shares) will be
returned to the beneficiary. In the event that no such written notice of
election is received by the Company, the beneficiary automatically will be
deemed to have elected to withdraw the payroll deductions credited to the
employee's account at the date of the employee's death and the same will be paid
promptly to said beneficiary, without interest.
Termination and Amendments to the Stock Purchase Plan. The Stock Purchase
Plan may be terminated at any time by the Company's Board of Directors. In any
event, it will terminate when all of the shares of Common Stock reserved for the
Stock Purchase Plan have been purchased. If at any time shares of Common Stock
reserved for the Stock Purchase Plan remain available for purchase but not in
sufficient number to satisfy all then unfilled purchase requirements, the
available shares will be apportioned among participating employees, in
proportion to their options and the Stock Purchase Plan will terminate. Upon
such termination or any other termination of the Stock Purchase Plan, all
payroll deductions not used to purchase Common Stock will be refunded.
The Board of Directors has reserved the right to amend the Stock Purchase
Plan from time to time in any respect, provided, however, that no amendment will
be effective without prior approval of the stockholders, which would (a) in
general, increase the number of shares of Common Stock to be offered under the
Stock Purchase Plan, (b) change the class of employees eligible to receive
options or (c) permit payroll deductions at a rate in excess of the lessor of
(i) ten percent of an employee's regular base pay, or (ii) an aggregate of
$2,000 in any Payment Period.
Administration of the Stock Purchase Plan. The Stock Purchase Plan will be
administered by a committee appointed by the Board of Directors (the
"Committee"). The Committee will consist of not less than three members of the
Company's Board of Directors. The Board of Directors may from time to time
remove members from, or add members to, the Committee. Vacancies on the
Committee will be filled by the Board of Directors. No member of the Committee
shall be eligible to participate in the Plan while serving as a member of the
Committee.
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it will be final unless otherwise
determined by the Board of Directors.
Application of Funds. The proceeds received by the Company from the sale of
Common Stock pursuant to options granted under the Stock Purchase Plan may be
used for any corporate purposes, and the Company will not be obligated to
segregate participating employees' payroll deductions.
Merger or Consolidation. If the Company should at any time merge into or
consolidate with another corporation, the Board of Directors may, at its
election, either (i)terminate the Stock Purchase Plan and refund without
interest the entire balance of each participating employee's payroll deduction,
or (ii) entitle each participating employee to receive on the last day of the
Payment Period upon the exercise of such option for each share of Common Stock
as to which such option is exercised the securities or property to which a
holder of one share of Common Stock was entitled upon and at time of such merger
or consolidation.
12
<PAGE> 15
Government Regulation. The Board of Directors may, in its discretion,
require as a condition to the exercise of any option that a Registration
Statement under the Securities Act of 1933, as amended, with respect to the
shares of Common Stock reserved for issuance upon exercise of the option shall
be effective. The Board of Directors intends to register the aggregate number of
shares of Common Stock under the Stock Purchase Plan with the Securities
Exchange Commission pursuant to the Securities Act of 1933, as amended. An
employee, therefore, will be permitted to sell Common Stock purchased under the
Stock Purchase Plan at any time; provided, however, that because of certain
federal tax requirements, each employee will agree by entering the Stock
Purchase Plan, promptly to give the Company notice of any such Common Stock
disposed of within two years after the date of the last day of the Payment
Period during which the Common Stock was purchased showing the number of such
shares disposed of.
Federal Tax Consequences. The Stock Purchase Plan has been designed to
qualify as an "employee stock purchase plan" under Section 423 of the Internal
Revenue Code of 1954, as amended (the "Code"). Pursuant to the Code, no taxable
income will be realized by the employee either at the time the option is granted
or at the time the option is exercised. If the employee transfers the shares of
Common Stock received upon exercise of the option two or more years after the
grant of the option, the employee will recognize ordinary income in an amount
equal to the spread between the Option Price and the lessor of (i) the fair
market value of the Common Stock on the date of grant of the option, or (ii) the
fair market value of the Common Stock at the time of disposition. In addition,
the employee may recognize long term capital gain or loss in an amount equal to
the difference between the amount realized on the transfer of the Common Stock
and the employee's basis in the Common Stock.
If the employee disposes of the shares of Common Stock before the end of the
two year holding period, the employee will recognize ordinary income in an
amount equal to the difference between the Option Price and the fair market
value of the Common Stock on the date of exercise. The difference between the
amount realized upon the sale of the Common Stock and the employee's basis in
the Common Stock will be recognized as capital gain or loss.
The Company will not be entitled to any deduction for federal income tax
purposes in connection with the issuance of shares of Common Stock pursuant to
the exercise of options if the two year holding period requirements are met by
the employee. However, if an employee does not meet the holding period
requirements, the Company may be entitled to a deduction in the amount of the
ordinary income realized by the employee at the time of such disposition.
General. As of October 31, 1997, approximately 857 employees would have been
eligible to participate in the Stock Purchase Plan. Approximately 128 employees
were participants in the Plan on October 31, 1997. As of July 1, 1997, there
were 598,910 shares available under the plan.
The Board of Directors recommends an affirmative vote for Proposal 2.
13
<PAGE> 16
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 1999 Annual Meeting of Stockholders, a stockholder must give
the aforesaid notice and submit his proposal no later than August 15, 1998. 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.
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 1, 1997
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.
14
<PAGE> 17
EXHIBIT A
---------
ANALOGIC CORPORATION
EMPLOYEE STOCK PURCHASE PLAN
DATED JUNE 10, 1986
(AS AMENDED OCTOBER 9, 1997)
15
<PAGE> 18
1. PURPOSE
The Analogic Corporation Employee Qualified Stock Purchase Plan
(hereinafter the "Plan") is intended to provide a method whereby employees of
Analogic Corporation (the "Company") and participating subsidiaries will have an
opportunity to acquire a proprietary interest in the Company through the
purchase of shares of the Company's Common Stock. It is the intention of the
Company to have the Plan qualify as an "employee stock purchase plan" under
Section 423 of the Internal Revenue Code of 1954, as amended (the "Code"). The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that Section
of the Code.
2. ELIGIBLE EMPLOYEES
All employees of the Company or any of its participating subsidiaries, with
the exception of "highly compensated employees" as that term is defined in
Section 414(q) of the Code, who have completed one (1) year of employment with
the Company or any of its subsidiaries on or before the first day of the
applicable Payment Period (as defined below) shall be eligible to receive
options under this Plan to purchase the Company's Common Stock (except employees
in countries whose laws make participation impractical). In no event may an
employee be granted an option if such employee, immediately after the option is
granted, owns stock possessing five (5%) percent or more of the total combined
voting power or value of all classes of stock of the Company or of its parent
corporation or subsidiary corporation as the terms "parent corporation" and
"subsidiary corporation" are defined in Section 424(e) and (f) of the Code. For
the purposes of determining stock ownership under this paragraph, the rules of
Section 424(d) of the Code shall apply and stock which the employee may purchase
under outstanding options shall be treated as stock owned by the employee.
For the purpose of this Plan, the term employee shall not include an
employee whose customary employment is twenty (20) hours or less per week or is
for not more than five (5) months in any calendar year.
3. STOCK SUBJECT TO THE PLAN
The stock subject to the options granted hereunder shall be shares of the
Company's authorized but unissued Common STock, $.05 par value, or shares of
Common Stock reacquired by the Company, including shares purchased in the open
market. The aggregate number of shares which may be issued pursuant to the Plan
is 700,000 subject to increase or decrease by reason of stock split-ups,
reclassifications, stock dividends, changes in par value and the like.
4. PAYMENT PERIODS AND STOCK OPTIONS
The period commencing on the first day of the next succeeding month
following the approval of the Plan by the Company's stockholders and ending on
either the next June 30 or December 31, whichever occurs earlier, and
thereafter, the six-month periods, January 1 to June 30 and July 1 to December
31, are Payment Periods during which payroll deductions will be accumulated
under the Plan. Each Payment Period includes only regular pay days falling
within it.
Twice each year, on the first business day of each Payment Period, the
Company will grant to each eligible employee who is then a participant in the
Plan an option to purchase on the last day of such Payment Period at the Option
Price, as hereinafter provided, that number of full shares of the Common Stock
of the Company reserved for the purpose of the Plan as his accumulated payroll
deductions on the last day of such Payment Period will pay for at such Option
Price, but not more than the number of shares equal in value to $2,000 divided
by the Option Price on the first business day of the Payment Period; provided
and on the condition that such employee remains eligible to participate in the
Plan throughout such Payment Period. The Option Price for each Payment Period
shall be the lesser of
(i) eighty-five percent (85%) of the fair market value of the
Company's Common Stock on the first business day of the
Payment Period, or
(ii) eighty-five percent (85%) of the fair market value of the
Company's Common Stock on the last business day of the
Payment Period, in either case rounded up to avoid
fractions other than multiples of 1/8.
In the event of an increase or decrease in the number of outstanding shares
of Common Stock of the Company through stock split-ups, reclassifications, stock
dividends, changes in par value and the like, an appropriate adjustment shall be
made in the number of shares and Option Price per share provided for under the
Plan, either by proportionate increase in the number of shares and proportionate
decrease in the Option Price per share, or by a proportionate decrease in the
number of shares and a proportionate increase in the Option Price per share, as
may be required to enable an eligible employee who is then a participant in the
Plan as to whom an option is exercised on the last day of any then current
Payment Period to acquire such number of full shares as his accumulated payroll
deductions on such date will pay for at the adjusted Option Price.
16
<PAGE> 19
For purposes of this Plan the term "fair market value" means, if the Common
Stock is listed on a national securities exchange or is on the Nation Market
List of the National Association of Securities Dealers Automated Quotation
("NASDAQ") system, the closing price of the Common Stock of the Company on such
exchange or as reported on NASDAQ or such other national securities exchange as
shall be designated by the Board of Directors or, if the Common Stock is traded
in the over-the-counter securities market but not on the National Market List of
NASDAQ, the average bid and asked closing prices of the Common Stock.
For purposes of this Plan the term "business day" as used herein means a
day on which there is trading on the New York Stock Exchange or such other
national securities exchange as shall be designated by the Board of Directors
pursuant to the preceding paragraph.
No employee shall be granted an option which permits his rights to purchase
Common Stock under the Plan and any similar plans of the Company or any parent
or subsidiary corporations to accrue at a rate which exceeds $25,000 of fair
market value of such stock (determined at the time such option is granted) for
each calendar year in which such option is outstanding at any time. The purpose
of the limitation in the preceding sentence is to comply with and shall be
construed in accordance with Section 423(b)(8) of the Code.
5. EXERCISE OF OPTION
Each eligible employee who continues to be a participant in the Plan on the
last business day of a Payment Period shall be deemed to have exercised his
option on such date and shall be deemed to have purchased from the Company such
number of full shares of Common Stock reserved for the purpose of the Plan as
his accumulated payroll deductions on such date will pay for at such Option
Price. If a participant is not an employee on the last business day of and
throughout a Payment Period, he shall not be entitled to exercise his option.
6. AUTHORIZATION FOR ENTERING PLAN
An eligible employee may enter the Plan by filing out, signing and
delivering to the Human Resources Department an Authorization:
(a) stating the amount to be deducted regularly from his pay;
(b) authorizing the purchase of stock for him in each Payment
Period in accordance with the terms of the Plan;
(c) specifying the exact name in which Common Stock purchased
for him is to be issued in accordance with Article 11
hereof.
Such Authorization must be received by the Human Resources Department at
least ten (10) business days before the beginning date of such next succeeding
Payment Period.
The Company will accumulate and hold for the employee's account the amounts
deducted from his pay. No interest will be paid thereon. Participating employees
may not make any separate cash payments into their account.
Unless an employee files a new Authorization or withdraws from the Plan,
his deductions and purchases under the Authorization he has on file under the
Plan will continue as long as the Plan remains in effect. An employee may
increase or decrease the amount of his payroll deductions as of the beginning of
the next Payment Period by filling out, signing and delivering to the Human
Resources Department a new Authorization. Such new Authorization must be
received by the Human Resources Department at least ten (10) business days
before the beginning date of such next succeeding Payment Period.
7. MAXIMUM AMOUNT OF PAYROLL DEDUCTIONS
An employee may authorize payroll deductions in any even dollar amount up
to but not more than the lesser of
(i) ten percent (10%) of his regular base pay, or
(ii) an aggregate of $2,000 in any Payment Period; provided,
however, that the minimum deduction in respect of any
payroll period shall be five dollars ($5.00).
8. UNUSED PAYROLL DEDUCTIONS
Only full shares of Common Stock may be purchased. Any balance remaining in
an employee's account after a purchase will be reported to the employee and will
be carried forward to the next Payment Period. However, in no event will the
amount of the unused payroll deductions carried forward from a Payroll Period
exceed the Option Price per share for the Payment Period. If for any Payment
Period the amount of unused payroll deductions should exceed the Option Price
per share, the amount of the excess for any participant shall be refunded to
such participant, without interest.
17
<PAGE> 20
9. CHANGE IN PAYROLL DEDUCTIONS
Deductions may be increased or decreased during a Payment Period. A new
Authorization will be required and must be received by the Human Resources
Department at least ten (10) business days prior to the payroll period in which
such change in deductions will take effect. New Authorizations received by the
Human Resources Department after such date will take effect in the next
succeeding payroll period.
10. WITHDRAWAL FROM THE PLAN
An employee may withdraw from the Plan and withdraw all but not less than
all of the payroll deductions credited to his account under the Plan at any time
prior to the last business day of each Payment Period by delivering a With
drawal Notice to the Human Resources Department in which event the Company will
promptly refund without interest the entire balance of such employee's
deductions not theretofore used to purchase Common Stock under the Plan.
An employee who withdraws from the Plan is like an employee who has never
entered the Plan; the employee's rights under the Plan will be terminated and no
further payroll deductions will be made. To re-enter, such an employee must file
a new Authorization at least ten (10) business days before the beginning date of
the next Payment Period which cannot, however, become effective before the
beginning of the next Payment Period following his withdrawal.
11. ISSUANCE OF STOCK
Certificates for Common Stock issued to participants will be delivered as
soon as practicable after each Payment Period.
Common Stock purchased under the Plan will be issued only in the name of
the employee, or if his Authorization so specifies, in the name of the employee
and another person of legal age as joint tenants with rights of survivorship.
12. NO TRANSFER OF ASSIGNMENT OF EMPLOYEE'S RIGHTS
An employee's rights under the Plan are his alone and may not be
transferred or assigned to, or availed of by, any other person. Any option
granted to an employee may be exercised only by him.
13. TERMINATION OF EMPLOYEE'S RIGHTS
Except as set forth in the last paragraph of this Article 13, an employee's
rights under the Plan will terminate when he ceases to be an employee because of
retirement, resignation, lay-off, discharge, death, change of status, failure to
remain in the customary employ of the Company for at least twenty (20) hours per
week, or for any other reason. A Withdrawal Notice will be considered as having
been received from the employee on the day his employment ceases, and all
payroll deductions not used to purchase Common Stock will be refunded.
If an employee's payroll deductions are interrupted by any legal process, a
Withdrawal Notice will be considered as having been received from him on the day
the interruption occurs.
Upon termination of the participating employee's employment because of his
death, his beneficiary (as defined in Article 14) shall have the right to elect,
by written notice given to the Company's Human Resources Department prior to the
expiration of the thirty (30) day period commencing with the date of the death
of the employee, either
(i) to withdraw, without interest, all the payroll deductions
credited to the employee's account under the Plan, or
(ii) to exercise the employee's option for the purchase of
shares of Common Stock on the last day of the Payment
Period next following the date of the employee's death
for the purchase of that number of full shares of Common
Stock reserved for the purposes of the Plan which the
accumulated payroll deductions in the employee's account
at the date of the employee's death will purchase at the
applicable Option Price, and any excess in such account
(in lieu of fractional shares) will be returned to said
beneficiary. In the event that no such written notice of
election shall be duly received by the Human Resources
Department, the beneficiary shall automatically be deemed
to have elected to withdraw the payroll deductions
credited to the employee's account at the date of the
employee's death and the same will be paid promptly to
said beneficiary, without interest.
18
<PAGE> 21
14. DESIGNATION OF BENEFICIARY
A participating employee may file a written designation of a beneficiary
who is to receive any Common Stock and/or cash in case of his death. Such
designation of beneficiary may be changed by the employee at any time by written
notice. Upon the death of a participating employee and upon receipt by the
Company of proof of the identity and existence at the employee's death of a
beneficiary validly designated by him under the Plan, the Company shall deliver
such Common Stock and/or cash to such beneficiary. In the event of death of a
participating employee and in the absence of a beneficiary validly designated
under the Plan who is living at the time of such employee's death, the Company
shall deliver such Common Stock and/or cash to the executor or administrator of
the estate of the employee, or if, to the knowledge of the Company, no such
executor or administrator has been appointed, the Company, in its discretion,
may deliver such Common Stock and/or cash to the spouse or to any one or more
dependents of the employee as the Company may designate. No beneficiary shall,
prior to the death of the employee by whom he has been designated, acquire any
interest in the Common Stock or cash credited to the employee under the Plan.
15. TERMINATION AND AMENDMENTS TO PLAN
The Plan may be terminated at any time by the Company's Board of Directors.
It will terminate in any case when all of the shares of Common Stock reserved
for the purposes of the Plan have been purchased. If at any time shares of
Common Stock reserved for the purposes of the Plan remain available for purchase
but not in sufficient number to satisfy all then unfilled purchase requirements,
the available shares shall be apportioned among participating employees, in
proportion to their options and the Plan shall terminate. Upon such termination
or any other termination of the Plan, all payroll deductions not used to
purchase Common Stock will be refunded.
The Board of Directors also reserves the right to amend the Plan from time
to time in any respect, provided, however, that no amendment shall be effective
without prior approval of the stockholders, which would
(a) except as provided in Articles 3 and 4, increase the
number of shares of Common Stock to be offered under the
Plan,
(b) change the class of employees eligible to receive options
under the Plan, or
(c) Permit payroll deductions at a rate in excess of the
lesser of
(i) ten percent (10%) of an employee's regular base pay,
or
(ii) an aggregate of $2,000 in any Payment Period.
16. LIMITATIONS OF SALE OF STOCK PURCHASED UNDER THE PLAN
The Plan is intended to provide eligible employees an opportunity to
acquire the Company's Common Stock for investment. The Company does not,
however, intend to restrict or influence any employee with respect to the resale
of the Common Stock purchased under the Plan. An employee may, therefore, sell
Common Stock purchased under the Plan at any time; provided, however, that
because of certain Federal tax requirements, each employee will agree by
entering the Plan, promptly to give the Company notice of any such Common Stock
disposed of within two years after the date of the last day of the Payment
Period during which the Common Stock was purchased showing the number of such
shares disposed. The employee assumes the risk of any market fluctuations in the
price of such Common Stock.
17. COMPANY'S PAYMENT OF EXPENSES RELATED TO PLAN
The Company will bear all costs of administering and carrying out the Plan.
18. PARTICIPATING SUBSIDIARIES
The term "participating subsidiaries" shall mean any subsidiary of the
Company which is designated by the Board of Directors to participate in the
Plan. The Board of Directors shall have the power to make such designation
before or after the Plan is approved by the stockholders.
19. ADMINISTRATION OF THE PLAN
The Plan shall be administered by a committee appointed by the Board of
Directors of the Company (the "Committee"). The Committee shall consist of not
less than three members of Company's Board of Directors. The Board of Directors
may from time to time remove members from, or add members to, the Committee.
Vacancies on the Committee, howsoever caused, shall be filled by the Board of
Directors. The Committee shall select one of its members as Chairman, and shall
hold meetings at such times and places as it may determine. Acts by a majority
of the Committee, or acts reduced to or approved in writing by a majority of the
members of the Committee, shall be the valid acts of the Committee.
19
<PAGE> 22
The interpretation and construction by the Committee of any provisions of
the Plan or of any option granted under it shall be final unless otherwise
determined by the Board of Directors. The Committee may from time to time adopt
such rules and regulations for carrying out the Plan as it may deem best. No
member of the Board of Directors or the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any option
granted under it. No member of the Committee shall be eligible to participate in
the Plan while serving as a member of the Committee.
20. OPTIONEES NOT STOCKHOLDERS
Neither the granting of an option to an employee nor the deductions from
his pay shall constitute such employee a stockholder of the shares covered by an
option until such shares have been purchased by and issued to him.
21. Application of Funds
The proceeds received by the Company from the sale of Common Stock pursuant
to options granted under the Plan may be used for any corporate purposes, and
the Company shall not be obligated to segregate participating employee's payroll
deductions.
22. GOVERNMENTAL REGULATION
The Company's obligation to sell and deliver shares of the Company's Common
Stock under this Plan is subject to the approval of any governmental authority
required in connection with the authorization, issuance or sale of such stock.
In this regard, the Board of Directors may, in its discretion, require as a
condition to the exercise of any option that a Registration Statement under the
Securities Act of 1933, as amended, with respect to the shares of Common Stock
reserved for issuance upon exercise of the option shall be effective.
23. TRANSFERABILITY
Neither payroll deductions credited to an employee's account nor any rights
with regard to the exercise of an option or to receive stock under the Plan may
be assigned, transferred, pledged, or otherwise disposed of in any way by the
employee. Any such attempted assignment, transfer, pledge, or other disposition
shall be without effect, except that the Company may treat such act as an
election to withdraw funds in accordance with Article 10.
24. EFFECT OF CHANGES OF COMMON STOCK
If the Company should subdivide or reclassify the Common Stock which has
been or may be optioned under the Plan, or should declare thereon any dividend
payable in shares of such Common Stock, or should take any other action of a
similar nature affecting such Common Stock, then the number and class of shares
of Common Stock which may thereafter be optioned (in the aggregate and to any
individual participating employee) shall be adjusted accordingly.
25. MERGER OR CONSOLIDATION
If the Company should at any time merge into or consolidate with another
corporation, the Board of Directors may, at its election, either
(i) terminate the Plan and refund without interest the entire
balance of each participating employee's payroll
deductions, or
(ii) entitle each participating employee to receive on the
last day of the Payment Period upon the exercise of such
option for each share of Common Stock as to which such
option shall be exercised the securities or property to
which a holder of one share of the Common Stock was
entitled upon and at the time of such merger or
consolidation, and the Board of Directors shall take such
steps in connection with such merger or consolidation as
the Board of Directors shall deem necessary to assure
that the provisions of this Article 25 shall thereafter
be applicable, as nearly as reasonably possible.
A sale of all or substantially all of the assets of the Company shall be
deemed a merger or consolidation for the foregoing purposes.
20
<PAGE> 23
26. WITHHOLDING OF ADDITIONAL FEDERAL INCOME TAX
The Company, in accordance with Section 3402(a) of the Code, and the
Regulations and Rulings promulgated thereunder, will withhold from the wages of
participating employees, in all payroll periods following and in the same
calendar year as the date on which compensation is deemed received by the
employee, additional income taxes in respect of the amount that is considered
compensation includable in the employee's gross income.
27. APPROVAL OF STOCKHOLDERS
The Plan shall not take effect until approved by the holders of a majority
of the outstanding shares of Common Stock of the Company, which approval must
occur within the period beginning twelve (12) months before and ending twelve
(12) months after the date the Plan is adopted by the Board of Directors. The
Plan was adopted by the Board of Directors on November 4, 1985 and amended on
January 21, 1986. The Plan was approved by the stockholders on January 22, 1986.
21
<PAGE> 24
P R O X Y
ANALOGIC CORPORATION
Proxy for Annual Meeting of Stockholders to be held January 23, 1998
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 23, 1998, 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.
Election of Three Directors: Nominees
Bernard M. Gordon, John A. Tarello, Gerald L. Wilson
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> 25
- --------------------------------------------------------------------------------
Reverse side of PROXY
- --------------------------------------------------------------------------------
THIS IS YOUR PROXY.
YOUR VOTE IS IMPORTANT.
Regardless of whether you plan to attend the Annual Meeting of Stockholders, you
can be sure your shares are represented at the Meeting by promptly returning
your proxy (attached below) in the enclosed envelope. Thank you for your
attention to this important matter.
- --------------------------------------------------------------------------------
DETACH HERE
/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.
The Board of Directors recommends a vote FOR Proposals 1 and 2.
1. To fix the number of Directors
for the ensuing year at eight
and the election of Directors
(See Reverse). / / FOR / / WITHHELD / / _______________
For all nominees
2. To consider and act upon the except as noted
matter of adopting and approving above
an amendment to the Company's
Employee Stock Purchase Plan
dated June 10, 1986. / / FOR / / WITHHELD / / ABSTAIN
3. 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.
MARK HERE FOR ADDRESS CHANGE
AND NOTE AT LEFT / /
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
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