<PAGE> 1
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
Pacific Scientific Company
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
Richard V. Plat, Executive Vice President and Secretary
- --------------------------------------------------------------------------------
(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(j)(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:
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<PAGE> 2
[LOGO]
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 26, 1995
To The Stockholders:
You are cordially invited to attend the 1995 Annual Meeting of Stockholders
of Pacific Scientific Company, which will be held at the Newport Center
Conference Center, located at 610 Newport Center Drive, Suite 130, Newport
Beach, California on Wednesday, April 26, 1995 at 10:00 A.M. for the following
purposes:
(a) To elect a Board of eight Directors for the ensuing year;
(b) To amend the Company's Restated Articles of Incorporation to
increase the authorized number of shares of Common Stock from 15,000,000 to
30,000,000;
(c) To approve the Pacific Scientific Company 1995 Stock Option Plan;
(d) To ratify the appointment of Deloitte & Touche LLP as independent
public accountants; and
(e) To consider and act upon such other matters as may properly come
before the meeting.
The close of business on March 3, 1995 has been fixed as the record date
for stockholders to receive notice of and to vote at the meeting or any
adjournment or postponement thereof. Holders of a majority of the outstanding
shares must be present either in person or by proxy in order for the meeting to
be held. The proxy is revocable at any time in the manner set forth on page 1 of
the Proxy Statement and will not affect your right to vote in person in the
event you attend the meeting.
By Order of the Board of Directors,
RICHARD V. PLAT
Executive Vice President & Secretary
March 16, 1995
WHETHER YOU ATTEND THE MEETING OR NOT, YOU ARE REQUESTED TO SIGN
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED ENVELOPE AT YOUR
EARLIEST CONVENIENCE. FOR THOSE ATTENDING THE MEETING, AMPLE PARKING WILL BE
AVAILABLE.
<PAGE> 3
ANNUAL MEETING OF STOCKHOLDERS
APRIL 26, 1995
------------------------
PROXY STATEMENT
This Proxy Statement is furnished by Pacific Scientific Company, 620
Newport Center Drive, Suite 700, Newport Beach, CA 92660 (the "Company"), in
connection with the solicitation by the Company's Board of Directors of proxies
to be voted at the Annual Meeting of Stockholders to be held on Wednesday, April
26, 1995 at 10:00 a.m., or any adjournments or postponements thereof. The Board
of Directors has fixed the close of business on March 3, 1995, as the record
date for determining stockholders entitled to notice of and to vote at the
annual meeting. As of that date, 10,982,356 shares of the Company's Common Stock
were issued and outstanding.
Any person giving a proxy has the right to revoke it before it is
exercised. It may be revoked by filing with the Secretary of the Company an
instrument of revocation or by delivering at the annual meeting a duly executed
proxy bearing a later date. It also may be revoked by attendance at the meeting
and election to vote in person.
All expenses incurred in connection with solicitation of the enclosed proxy
will be paid by the Company. In addition to solicitation by mail, officers,
directors and regular employees of the Company, who will receive no additional
compensation for their services, may solicit proxies by mail, telephone,
telegraph or personal call. The Company has requested brokers and nominees who
hold stock in their names to furnish this proxy material to their customers and
will reimburse such brokers and nominees for their related out-of-pocket
expenses.
The approximate date on which this Proxy Statement and the enclosed proxy
are first being sent to the Company's stockholders is March 16, 1995. A copy of
the Company's Annual Report for the fiscal year ended December 30, 1994
accompanies this Proxy Statement.
VOTING RIGHTS
Each share of Common Stock outstanding on the record date is entitled to
one vote. As provided by the Company's Bylaws and by California law, in electing
directors no stockholder shall be entitled to cumulate votes (i.e., cast for any
one candidate a number of votes greater than the number of such stockholder's
shares) unless the candidates' names have been placed in nomination prior to the
commencement of voting and at least one stockholder has given notice prior to
commencement of the voting of an intention to cumulate votes. If any stockholder
has given such notice, then each stockholder may cumulate votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which the stockholder's shares are
entitled, or the stockholder may distribute his votes on the same principle
among as many candidates as may be desired. The candidates receiving the highest
number of votes, up to the number of directors to be elected, shall be elected.
If cumulative voting is in effect, the persons named in the accompanying proxy
will vote the shares covered by proxies received by them among the candidates
named herein as they shall determine, unless a contrary direction is made on
such proxies.
An automated system administered by the Company's transfer agent tabulates
the votes. Abstentions and broker non-votes are each included in the
determination of the number of shares present and voting. Each is tabulated
separately. Abstentions are counted in tabulations of the votes cast on
management proposals presented to stockholders, whereas the New York Stock
Exchange determines whether brokers that do not receive instructions from
beneficial owners are entitled to vote on management proposals. In the event of
a broker non-vote with respect to a management proposal, arising from the
absence of authorization by the beneficial owner to vote as to a management
proposal, the proxy will not be deemed as present and entitled to vote as to the
management proposal for determining the total number of shares of which a
majority is required for adoption.
<PAGE> 4
COMMON STOCK OWNERSHIP
The Company declared a two-for-one stock split effected in the form of a
dividend as of December 16, 1994. All references to the Common Stock contained
in this proxy statement (including share quantities and price) have been
adjusted to give effect to that stock split.
The Company knows of no beneficial owners of more than 5% of the Company's
Common Stock as of March 3, 1995.
The following table sets forth information with respect to beneficial
ownership of the Company's Common Stock by its directors, by each of the
executive officers named in the Summary Compensation Table beginning on page 6
(the "Summary Compensation Table"), and by all directors and executive officers
as a group, as of March 3, 1995.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP(1)(2) OF CLASS
------------------- --------------- --------
<S> <C> <C>
Directors:
Walter F. Beran 2,000 *
Ralph O. Briscoe 20,000 *
Edgar S. Brower, Chairman 314,289(3) 2.86%
Ralph D. Ketchum 200 *
William A. Preston 8,000 *
Millard H. Pryor, Jr. 3,000 *
Thomas P. Stafford 0 --
Harry W. Todd 10,000 *
Officers:
Steven L. Breitzka 5,324 *
Ronald B. Nelson 21,762 *
John M. Ossenmacher 2,066 *
Richard V. Plat 179,463 1.63%
All Directors and Executive
Officers as a Group (19 persons): 682,043 6.21%
</TABLE>
- ---------------
* Represents less than 1%.
(1) Information with respect to beneficial ownership is based upon the Company's
stock records, and data supplied to the Company by the stockholders.
(2) Includes certain shares which the following have the right to acquire within
sixty days of March 3, 1995, through the exercise of stock options under the
Company's stock option plan: Mr. Brower, 91,902 shares; Mr. Breitzka, 2,788
shares; Mr. Nelson, 19,262 shares; Mr. Plat, 92,300 shares.
(3) Includes 100,000 shares issued pursuant to a restricted stock agreement. See
the Summary Compensation Table.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's directors, executive officers and
holders of more than 10% of the Company's Common Stock to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
The Company is not aware of any holder of more than 10% of the Company's Common
Stock. The Company believes that during the fiscal year ended December 30, 1994,
its officers and directors complied with all Section 16(a) filing requirements.
In making these statements, the Company has relied upon the representations of
its directors and officers.
2
<PAGE> 5
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
At the annual meeting, it is intended that the persons named in the proxy
will vote for the election of the eight nominees listed below, each director to
serve until the next annual meeting or until his successor is elected and
qualified. All of the nominees are now members of the Board. If any nominee, for
any reason currently unknown, cannot be a candidate for election, proxies will
be voted for the election of a substitute recommended by the Board.
THE BOARD RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" ALL SUCH NOMINEES.
Biographical summaries and ages, as of December 30, 1994, of individuals
nominated by the Board of Directors for election as directors appear below. Data
with respect to the number of shares of the Company's common stock beneficially
owned by each of them, directly or indirectly, as of March 3, 1995, appears on
page 2 of this proxy statement.
INFORMATION CONCERNING NOMINEES FOR DIRECTOR
WALTER F. BERAN; AGE 69; CHAIRMAN, PACIFIC ALLIANCE GROUP
Mr. Beran was elected a director of the Company in 1987. He served as
Vice Chairman and Western Regional Managing Partner of Ernst & Young
LLP from 1971 until his retirement on September 30, 1986, when he
became an independent consultant. He joined the Pacific Alliance Group
(a financial services firm) in 1988, as Chairman. Mr. Beran also serves
as a director of Arco Chemical Company, Fleetwood Enterprises Inc., and
the Hillhaven Corporation.
RALPH O. BRISCOE; AGE 67; BUSINESS CONSULTANT
Mr. Briscoe was elected a director of the Company in 1985. Prior to his
retirement in 1986, Mr. Briscoe was President, Chief Executive Officer
and a director of Triton Group Ltd. Since his retirement, he has worked
as a business consultant.
EDGAR S. BROWER; AGE 64; CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
OF THE COMPANY
Mr. Brower joined the Company in 1985 as Chief Executive Officer and a
member of the Board. He has served as Chairman of the Board since 1990.
Prior to joining the Company, Mr. Brower served as an executive with
Allied Corporation from 1977 until 1985, most recently as Group Vice
President and President of Allied Electronic Components Company. From
1972 to 1977, he served as Assistant Postmaster General of the United
States.
RALPH D. KETCHUM; AGE 68; PRESIDENT, RDK CAPITAL, INC.
Mr. Ketchum was elected a director in 1994. He also serves on the
boards of Oglebay Norton Company, Thomas Industries, Lithium
Technologies Corporation, Metropolitan Savings Bank and Crescent
Electric Supply Company. He is also the General Partner of RDK Capital,
L.P., and as such is the majority owner and CEO of Heintz Corporation
(a manufacturer of aircraft engine components) which filed for
voluntary reorganization under Chapter 11 of the United States
Bankruptcy Code, in the federal bankruptcy court of the Eastern
District of Pennsylvania, on August 4, 1993. Mr. Ketchum was a
long-time employee of General Electric Company, rising to the position
of Senior Vice President and Group Executive at the time of his
retirement. Mr. Ketchum was with GE from 1946 to 1987, except for a
three year period (1969-1972) when he served as Vice President of
Control Data Corporation.
WILLIAM A. PRESTON; AGE 58; CHAIRMAN AND MAJORITY OWNER OF APM, INC.
Mr. Preston was elected a director in 1979. He has been Chairman and
majority owner of APM, Inc., a specialty plastics manufacturer, since
1969. Mr. Preston is also a director of University National Bank &
Trust Company.
3
<PAGE> 6
MILLARD H. PRYOR, JR.; AGE 61; MANAGING DIRECTOR, PRYOR & CLARK COMPANY
Mr. Pryor became a director in 1992. He is the Managing Director of
Pryor & Clark Company (a real estate and investment holding company),
which he had served as an executive since 1970. In addition to
performing these duties, Mr. Pryor is the Chairman of the Board of GEO
International Company. He has been a director of Corcap, Inc. since
1988 and served as an executive officer with that company from 1988 to
1992. Mr. Pryor is also a director of CompuDyne Corporation, The
Hartford Funds, Infodata Systems Inc., The Wiremold Company and Hoosier
Magnetics Inc. Additionally, Mr. Pryor was the Chief Executive Officer
of Lydall Inc. (a manufacturer of materials from specialty fibers) from
1972 through 1988.
THOMAS P. STAFFORD; AGE 64; CHAIRMAN OF THE BOARD, OMEGA WATCH CORPORATION
OF AMERICA AND VICE CHAIRMAN AND CO-FOUNDER OF STAFFORD, BURKE AND HECKER,
INC.
Mr. Stafford has served as a director of the Company since 1987. In
addition to his duties as Chairman of the Board of Omega Watch
Corporation of America and as Vice Chairman and co-founder of Stafford,
Burke and Hecker, Inc. (a Washington D.C.-based consulting firm), Mr.
Stafford also serves as a director of Allied Signal Inc., Wheelabrator
Technologies, Inc., Tremont Inc., Seagate Technologies, Inc., CMI, Inc.
and Fisher Scientific Inc.
HARRY W. TODD; AGE 72; MANAGING PARTNER OF CARLISLE ENTERPRISES L.P.
Mr. Todd has served as a director of the Company since 1983. He is also
Director Emeritus of Rohr Industries, and a director of Garrett
Aviation Services, and Helmerich & Payne Incorporated. During 1994, Mr.
Todd retired from his position as Chairman of the Board of Precision
Aerotec, Inc., a position he had held since 1990. In 1991, Mr. Todd
completed his term as a director of the Federal Reserve Bank of San
Francisco-Los Angeles Branch. Mr. Todd retired in January 1990 as
Chairman of the Board and Chief Executive Officer of Rohr Industries,
Inc., an aerospace manufacturing company. He joined Rohr in 1980 as
President and Chief Operating Officer. Previously, Mr. Todd had been
Chairman of the Board, President and Chief Executive Officer of The
L.E. Myers Company and Chairman of The L.E. Myers International, Ltd.
COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS
The Company has standing Executive, Audit, Compensation and Nominating
Committees. During the Company's last fiscal year, the Board of Directors held
six meetings; each director attended at least 75% of all Board meetings and
meetings of Committees on which he served.
Executive Committee
The Executive Committee, consisting of Messrs. Brower, Preston (Chairman)
and Todd, has all the powers and authority of the Board of Directors in the
management of the business and the affairs of the Company, except those powers
which by law cannot be delegated by the Board of Directors. Although the
Executive Committee has broad powers, in practice it meets only when it would be
inconvenient to call a meeting of the Board. The Executive Committee did not
meet during the Company's last fiscal year.
Audit Committee
The Audit Committee, consisting of Messrs. Beran (Chairman), Briscoe,
Ketchum, Preston, Pryor, Stafford and Todd, met three times during the last
fiscal year. The Audit Committee makes recommendations concerning the engagement
of the Company's independent auditors, consults with the independent auditors
concerning the audit plan and reviews the comments and recommendations resulting
from the auditors' report and management letter. The Audit Committee also
reviews the Company's program of internal audit and consults with the Company's
internal auditors on questions of interest.
Compensation Committee
The Compensation Committee, consisting of Messrs. Preston, Stafford and
Todd (Chairman), met twice during the last fiscal year. The Compensation
Committee makes recommendations to the Board of Directors on the annual salary
rates of all elected officers of the Company, makes recommendations to the Board
on
4
<PAGE> 7
incentive compensation, stock options and compensation matters and administers
the incentive compensation, stock option and other compensation plans of the
Company.
Nominating Committee
The Nominating Committee, consisting of Messrs. Beran, Briscoe and Stafford
(Chairman), makes recommendations to the Board of Directors regarding candidates
to fill future vacancies on the Board. There is no established procedure for
submission of nominations by stockholders. The Nominating Committee met once
during the last fiscal year.
Succession Committee
The Succession Committee consisting of Messrs. Briscoe, Preston (Chairman)
and Stafford, was created at the February 22, 1995 Board Meeting. The Committee
makes recommendations, as required, concerning the selection of the Company's
executive officers. To date, the Committee has not had a meeting.
Director's Compensation
In 1994, directors' compensation consisted of an annual retainer, an
additional retainer for certain Committee Chairmanship and a per day fee paid
for attendance at meetings or participation in special assignments. The average
compensation received by the directors in 1994 was approximately $19,000. At the
December 8, 1994 Board of Directors' meeting, the directors' compensation was
reviewed. An independent consultant presented a study of compensation for
outside directors. The study indicated, for a company of similar size and
industry, cash compensation for the Company's outside directors should be
approximately $25,000 per year.
Based on the results of this study, the Board revised the directors'
compensation plan. The revised plan provides a $25,000 per year retainer with no
other fees or additional retainer payable. Mr. Brower does not and has not
received an annual retainer for his services as Chairman of the Board.
Director's Retirement Plan
The Company maintains a retirement plan for members of the Board. As a
result of the change in outside directors' compensation described above, the
Board amended the annual benefit paid under the Plan to be $12,000 for directors
retiring before 1994 and $16,000 for directors retiring after 1994. The benefit
commences any time after age sixty-five (65), provided the director is no longer
serving as a director of the Company. Directors who leave the Board before age
sixty-five (65) after completing five (5) years of Board service are eligible to
receive a benefit upon attaining age sixty-five (65).
The plan provides that the retirement benefit will be paid over the lesser
of twelve (12) years or the number of years a director serves on the Board. In
the event of death while a director, a surviving spouse is entitled to receive
an annual benefit equal to 50% of the annual retainer payable to the director at
the date of death, such benefit to be paid for a period equal to the total
number of years of service the deceased director served on the Board, not to
exceed twelve (12) years.
The benefits paid under this plan are a direct obligation of the Company
and are reflected as a financial statement liability determined in accordance
with accepted actuarial assumptions.
5
<PAGE> 8
EXECUTIVE COMPENSATION
The following table discloses compensation received for the three fiscal
years ended December 30, 1994 by the Company's Chief Executive Officer, and the
Company's next four most highly paid executive officers for the year ended
December 30, 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------- LONG TERM
OTHER ANNUAL COMPENSATION ALL OTHER
COMPENSATION AWARDS(3) COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($)(2) OPTIONS(#) ($)(4)
---------------------------- ---- --------- ----------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Edgar S. Brower............................ 1994 $339,954 $ 175,000 $7,500 80,000 $120,620
President, Chief Executive Officer, 1993 319,454 137,233 6,000 100,000 108,497
Chairman of the Board and Director 1992 299,301 85,045 6,000 -- 96,560
Richard V. Plat............................ 1994 234,365 90,000 -- 34,000 4,620
Executive Vice President, Finance and 1993 208,788 71,563 -- 40,000 4,497
Administration and Secretary 1992 194,887 44,247 -- -- 4,364
Ronald B. Nelson........................... 1994 158,415 75,000 -- 7,000 3,850
Vice President; President, Motor & 1993 145,412 73,328 -- 13,050 3,635
Control Division 1992 141,123 70,875 -- -- 3,528
Steven L. Breitzka(5)...................... 1994 137,585 43,392 -- 6,000 4,620
Vice President; President, Fisher Pierce 1993 128,539 59,525 -- 11,150 4,363
Division 1992 118,241 40,019 -- -- 1,947
John M. Ossenmacher(6)..................... 1994 128,765 45,000 -- 14,000 --
Vice President; President, Solium Inc. 1993 116,821 39,460 -- 8,260 133,310
(a wholly owned subsidiary of the 1992 -- -- -- -- --
Company)
</TABLE>
- ---------------
(1) The amounts shown in this column reflect payments under the Company's
Management Incentive Plan which is described more thoroughly in the
Compensation Committee Report on Executive Compensation, which begins on
page 9 of this proxy statement.
(2) The amounts shown in this column reflect the non-preferential dividends
earned by Mr. Brower as part of his long-term incentive agreement with the
Company. Mr. Brower holds 100,000 shares of restricted common stock valued
at $875,000 when awarded on April 23, 1986 as a long-term incentive. Mr.
Brower has all voting, dividend (non-preferential) and other stockholder
rights with respect to these shares. In order to receive the shares, Mr.
Brower must retain his position with the Company until July 1995 when the
restricted term expires. The restricted term also expires in the event of
death, disability and certain types of involuntary termination.
(3) For the three-year period ended December 30, 1994, no restricted stock
awards were made.
(4) The amounts disclosed in this column include:
(a) Accrual by the Company in fiscal 1994 of $116,000, $104,000 and $92,208
in fiscal 1994, 1993 and 1992, respectively, on behalf of Mr. Brower for
his supplementary Executive Retirement Plan. The Executive Retirement
Plan is provided to Mr. Brower only, and is in addition to and duplicates
the benefits provided by the Post-1985 Company Plan for employees hired
after January 1, 1985. This plan is not separately funded and rights to
receive payment are identical to those of an unsecured creditor.
(b) Company contributions under Pacific Scientific's Savings Plan, a defined
contribution plan were:
<TABLE>
<CAPTION>
1994 1993 1992
------ ------ ------
<S> <C> <C> <C>
Mr. Brower........................... $4,620 $4,497 $4,352
Mr. Plat............................. 4,620 4,497 4,364
Mr. Nelson........................... 3,850 3,635 3,528
Mr. Breitzka......................... 4,620 4,363 1,947
</TABLE>
(c) Payments for Mr. Ossenmacher's relocation expenses made by the Company
during 1993 in the amount of $133,310.
6
<PAGE> 9
(5) Mr. Breitzka was promoted to the position of Vice President and President of
the Fisher Pierce Division in January 1995. He has been an executive officer
of the Company since January of 1992 when he was promoted to Vice President
and President of the HTL/Kin-Tech Division.
(6) Mr. Ossenmacher was promoted to the position of Vice President and President
of Solium Inc. (a wholly owned subsidiary of the Company) in January 1995.
He has been an executive officer of the Company since March of 1993 when he
was promoted to Vice President and President of the Fisher Pierce Division.
He was not an executive officer prior to that date; therefore, no executive
compensation is reported for 1992.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal 1994 to
the named executive officers.
All options granted by the Company are pursuant to the Pacific Scientific
Company 1992 Key Employee Stock Option Plan, as described in the Compensation
Committee Report on Executive Compensation under the caption "Long-Term
Incentive Compensation" on page 10 of this proxy statement.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL
--------------------------------------------------- REALIZED VALUE AT
% OF TOTAL ASSUMED ANNUAL
OPTIONS RATES OF STOCK PRICE
GRANTED TO APPRECIATION
OPTIONS EMPLOYEES IN EXERCISE FOR OPTION TERM
GRANTED FISCAL YEAR PRICE EXPIRATION -----------------------
NAME (#)(1) 1994(2) ($/SH) DATE 5%($) 10%($)
---- ------- ------------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Edgar S. Brower............................... 80,000 25% 13.81 June 2004 $1,799,603 $2,865,567
Richard V. Plat............................... 34,000 10% 13.81 June 2004 764,831 1,217,866
Ronald B. Nelson.............................. 7,000 2% 13.81 June 2004 157,465 250,737
Steven L. Breitzka............................ 6,000 2% 13.81 June 2004 134,970 214,918
John M. Ossenmacher........................... 14,000 4% 13.81 June 2004 315,000 501,480
</TABLE>
- ---------------
(1) The shares become fully exercisable after five years with normal vesting
occurring at a rate of 20% per year.
(2) The Company granted options representing 324,800 shares to employees in
fiscal 1994.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on the number of unexercised
options and the value of the in-the-money unexercised options held by the named
executive officers at December 30, 1994. The Company currently does not grant
stock appreciation rights.
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED VALUE AT FISCAL YEAR-END(#)(1) AT FISCAL YEAR-END($)(2)
ON EXERCISE REALIZED ----------------------------- -----------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ------------ ------------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C>
Edgar S. Brower...................... -- -- 91,902 155,000 $1,240,088 $1,466,563
Richard V. Plat...................... -- -- 92,300 64,000 1,190,363 599,500
Ronald B. Nelson..................... -- -- 19,262 16,788 263,212 162,723
Steven L. Breitzka................... 27,200 $149,463 2,788 14,362 33,498 139,093
John M. Ossenmacher.................. -- -- 2,066 20,194 24,487 163,536
</TABLE>
- ---------------
(1) The numbers shown reflect options accumulated over a ten-year period.
(2) The closing price of the Company's Common Stock on December 30, 1994 on the
New York Stock Exchange was $20.25.
7
<PAGE> 10
RETIREMENT BENEFITS
To provide for retirement income for its employees, the Company has pension
plans designed to qualify under applicable provisions of the Internal Revenue
Code of 1986, as amended. All full-time employees and certain part-time
employees in the United States are eligible to participate in a pension plan
after one year of service. The plans are funded solely by Company contributions.
Effective January 1, 1985, the Company Plan was revised to combine all
existing employee group retirement plans of the Company into one defined benefit
plan. Employees hired on and after January 1, 1985 participate in the revised
Company Plan (the "Post-1985 Company Plan"). Employees hired prior to January 1,
1985 have the option of receiving retirement benefits from whichever plan
provides the higher retirement benefit.
COMPANY PLAN
ESTIMATED ANNUAL RETIREMENT BENEFITS
<TABLE>
<CAPTION>
HIGHEST
FIVE-YEAR 15 20 25 30 35
AVERAGE YEARS OF YEARS OF YEARS OF YEARS OF YEARS OF
COMPENSATION SERVICE SERVICE SERVICE(1) SERVICE(1) SERVICE(1)
------------ ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$125,000..................................... $ 49,500 $ 66,500 $ 81,000 $ 81,000 $ 81,000
175,000..................................... 71,400 95,700 116,000 116,000 116,000
225,000..................................... 93,300 124,900 151,000 151,000 151,000
275,000..................................... 115,200 154,100 186,000 186,000 186,000
325,000..................................... 137,100 183,300 221,000 221,000 221,000
375,000..................................... 159,000 212,500 256,000 256,000 256,000
425,000..................................... 180,900 241,700 291,000 291,000 291,000
475,000..................................... 202,800 270,900 326,000 326,000 326,000
525,000..................................... 224,700 300,100 361,000 361,000 361,000
</TABLE>
POST-1985 COMPANY PLAN
ESTIMATED ANNUAL RETIREMENT BENEFITS
<TABLE>
<CAPTION>
HIGHEST
FIVE-YEAR 15 20 25 30 35
AVERAGE YEARS OF YEARS OF YEARS OF YEARS OF YEARS OF
COMPENSATION SERVICE SERVICE SERVICE SERVICE SERVICE
------------ ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$125,000..................................... $ 26,600 $ 35,400 $ 44,300 $ 53,100 $ 62,000
175,000..................................... 37,800 50,400 63,000 75,600 88,200
225,000..................................... 49,100 65,400 81,800 98,100 114,500
275,000..................................... 60,300 80,400 100,500 120,600 140,700
325,000..................................... 71,600 95,400 119,300 143,100 167,000
375,000..................................... 82,800 110,400 138,000 165,600 193,200
425,000..................................... 94,100 125,400 156,800 188,100 219,500
475,000..................................... 105,300 140,400 175,500 210,600 245,700
525,000..................................... 116,600 155,400 194,300 233,100 272,000
</TABLE>
- ---------------
(1) Maximum benefits are obtained at 24 pension service years.
The compensation covered by the plans for which benefits are summarized in
the tables above include salary, wages, bonuses and commissions. The covered
compensation for each of the executive officers named in the Summary
Compensation Table is the highest 5 consecutive years' average of the past 10
years of salary and bonus. Mr. Brower is provided with a supplementary Executive
Retirement Plan which is in addition to and duplicates the benefits provided by
the Post-1985 Company Plan.
8
<PAGE> 11
The officers named in the Summary Compensation Table have been credited
with the following years of service: Mr. Brower, 9 years: Mr. Plat, 17 years;
Mr. Nelson, 5 years; Mr. Breitzka, 12 years and Mr. Ossenmacher, 2 years. Of
these officers, Mr. Plat is the only one to have the option of receiving
benefits under either of the plans as described above.
The benefits under the Company Plan are subject to the deduction of a
portion of Social Security or equivalent benefits (maximum deduction limited to
50%, which is reached at 18.75 pension service years) and are computed on the
ten-year certain and life amounts.
The benefits under the Post-1985 Company Plan are not subject to any
deduction for Social Security (nor are there any other offset amounts) and are
computed on the basis of an excess plan.
During 1994, the Company adopted the Pacific Scientific Company Pension
Restoration Plan. This plan was implemented to restore the pension benefit that
would otherwise be payable but for the $150,000 per year pay limitation imposed
during 1994 by Section 401(A)(17) of the Internal Revenue Code. This plan
preserves the pension benefit in effect prior to 1994.
TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
The Company has entered into agreements with Messrs. Brower and Plat
pursuant to which adequate and fair severance compensation will be provided to
these officers if their employment should cease after a "change in control of
the Company," which is effectively defined as a change in control which must be
disclosed under Schedule 14A of Regulation 14A of the Exchange Act. Upon a
change in control of the Company, each agreement allows the named officer to
terminate his employment upon a change in duties or responsibilities or a
reduction in compensation. The present value of these severance benefits would
include accrued salary plus an amount up to 2.99 times a base amount defined as
the average annual gross income for the five years prior to the termination.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
The Compensation Committee of the Board of Directors (the "Committee") is
composed of outside directors and is responsible for developing and making
recommendations to the Board with respect to the compensation received by the
Company's executive officers (including the named executive officers).
The Committee has available to it an outside compensation consultant and
access to independent compensation data. The general objectives of the
compensation program are:
- Competitiveness and design flexibility to attract and retain top caliber
management
- Pay for performance
- Focus on stockholder value creation
The executive compensation program provides an overall level of
compensation opportunity that is competitive within similar industries as well
as within a broader group of companies of comparable size and complexity. Actual
compensation levels may be higher or lower than the average competitive levels
in the surveyed group of companies based upon the discretion of the Committee as
well as individual performance.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Company's executive officer compensation program is comprised of base
salary, annual incentive compensation, long-term incentive compensation in the
form of stock options and various benefits including medical and pension plans
generally available to employees of the Company.
Base Salary
Base salary levels for the Company's executive officers are competitive and
generally set at the median, relative to other comparable manufacturing
companies of similar size and complexity. In determining base
9
<PAGE> 12
salary, the Committee also takes into consideration qualifications, experience,
performance and other specific issues particular to the Company.
Annual Incentive Compensation
The Management Incentive Plan is the Company's annual bonus program for
executive officers and key managers. Approximately 75 employees were eligible
for bonus incentive compensation during 1994. The purpose of the plan is to
provide a direct financial incentive in the form of an annual cash bonus to
executives and key employees to achieve their respective business units' or the
Company's annual goals. Target goals for the Company's and the business units'
performances are set at the beginning of each year. The measures of the
Company's performance include pre-tax income, management of receivables,
inventory turns and other factors. No bonus is paid unless a 75% performance
threshold is exceeded. A full target bonus is paid only if the goals are fully
met. Exceeding goals can result in a bonus equal to 150% of the target bonus.
Target bonus awards, as a percent of base salary, are set at a competitive level
for a broad group of companies of comparable size and complexity.
Long-Term Incentive Compensation
The 1992 Key Employee Stock Option Plan is the Company's long-term
incentive program for executive officers and key employees. The objective of the
program is to align the executives' and stockholders' long-term interests by
creating a strong and direct link between executive pay and stockholder return
and to enable the executives to develop and maintain a significant, long-term
stock ownership position in the Company's common stock. The proportion of stock
options awarded is a function of salary and position in the Company.
Benefits
The Company provides medical and pension benefits to the executive officers
that are generally available to Company employees. The amount of perquisites, as
determined in accordance with the rules of the Securities and Exchange
Commission relating to executive compensation, did not exceed 10% of salary for
fiscal 1994.
Chief Executive Officer Compensation
Mr. Brower's base salary was $339,954, $319,454 and $299,301 for the years
1994, 1993 and 1992, respectively. During 1994, his annual salary was increased
by 6%. This increase was 1% more than the 5% average merit increase received by
the Company's other salaried employees. The Committee believes that Mr. Brower
has successfully restructured the Company's business to adjust to declines in
the aerospace business and effectively directed the Company during difficult
economic conditions.
Mr. Brower's annual base salary is at approximately the 50th percentile of
other chief executive officers' base salaries, calculated using a compensation
data base for manufacturing companies of like size and, where possible,
organized similarly to Pacific Scientific's divisional structure.
Mr. Brower's bonus was $175,000, $137,233 and $85,045 in fiscal 1994, 1993
and 1992, respectively. The bonus payment was determined using the same formula
as used for all other key employees.
In accordance with the 1992 Key Employee Stock Option Plan (as described
above), Mr. Brower received 80,000 stock options in fiscal 1994 and 100,000
stock options were awarded in fiscal 1993. No stock options were awarded to Mr.
Brower during fiscal 1992.
MEMBERS OF THE COMPENSATION COMMITTEE
Harry W. Todd, Chairman
Thomas P. Stafford
William A. Preston
10
<PAGE> 13
STOCK PRICE PERFORMANCE GRAPH
The information in the foregoing report of the Compensation Committee and
the following graph shall not be incorporated by reference (by any general
statement incorporating this proxy statement by reference or otherwise) into any
prior or future filing under the Exchange Act or the Securities Act of 1933,
except to the extent Pacific Scientific Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
Note: The stock price performance shown on the graph below is not
necessarily indicative of future price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
OF PACIFIC SCIENTIFIC COMPANY, S&P 500 INDEX
AND S&P HIGH TECHNOLOGY COMPOSITE INDEX
<TABLE>
<CAPTION>
PACIFIC
MEASUREMENT PERIOD SCIENTIFIC S & P HIGH-
(FISCAL YEAR COVERED) COMPANY S & P 500 TECH
<S> <C> <C> <C>
1989 $100 $100 $100
1990 53 97 102
1991 62 126 117
1992 107 136 121
1993 147 149 149
1994 269 152 174
</TABLE>
The cumulative total return calculation assumes $100 invested on December
29, 1989 and dividend reinvestment. The graph above is calculated through the
fiscal year ended December 30, 1994.
AMENDMENT TO RESTATED ARTICLES OF INCORPORATION
(PROPOSAL NO. 2)
The Company is authorized to issue 15,000,000 shares of Common Stock, par
value $1 per share, and 2,000,000 shares of Preferred Stock, par value $1 per
share. As of March 3, 1995, no Preferred Stock was outstanding, and
approximately 12,848,000 shares of Common Stock were outstanding or reserved for
issuance under the Company's stock option plans, and upon conversion of the
Company's outstanding convertible subordinated debentures.
In the opinion of the Board of Directors, the number of unreserved shares
of Common Stock available for issuance may be insufficient to meet future needs
of the Company. The two-for-one stock split effected in the form of a dividend
as of December 16, 1994 substantially depleted the number of authorized, but
unissued, shares of Common Stock. For this reason, the Board has approved and
directed that it be submitted to the stockholders for approval, an Amendment to
Article FOURTH of the Company's Restated Articles of Incorporation to increase
the authorized number of shares of Common Stock from 15,000,000 to 30,000,000.
Although the Company has no specific plans for the issuance of such additional
shares, such shares could be issued in the future in connection with stock
dividends, acquisitions, employee benefit plans or other corporate
11
<PAGE> 14
purposes. Authorized but unissued Common Stock will be subject to issuance as
determined by the Company's Board of Directors without further action by the
stockholders.
The holders of Common Stock have full voting rights, as described above
under "Proxy Statement -- Voting Rights." Shares of Common Stock are not
convertible into other securities, are not subject to redemption or to any
liability for further calls and are nonassessable. Stockholders have no
preemptive or other rights to subscribe for the purchase of additional shares.
The proposal to increase the number of authorized shares of Common Stock
has been made to facilitate the Company's normal conduct of its business, and
not in response to any existing or planned attempt to gain control of the
Company known to the Company. However, if the proposed amendment is adopted, the
Board will have the ability (to the extent consistent with its duty to the
company and its stockholders) to cause the Company to issue a substantial number
of additional shares of Common Stock, without further action by the
stockholders, for the purpose of discouraging takeover attempts by diluting the
stock ownership and voting power of persons seeking to obtain control of the
Company. In addition, to the extent the Amendment may discourage takeover
attempts, it may make removal of the Company's Board of Directors and management
more unlikely.
Based on the stockholder protection plan adopted by the Company in 1988,
each share of common stock carries one right (a "Right"). Under certain
conditions, each Right may be exercised to purchase one one-hundredth of a share
of Series A Junior Participating Preferred Stock at a purchase price of $45.00,
subject to adjustments. Each share of Series A Junior Participating Preferred
Stock issued under this Plan will entitle its holder to receive dividends equal
to the greater of $4.00 or 100 times the dividend on common stock, a liquidation
preference of $100, and voting rights approximately 100 times greater than the
voting rights of one share of common stock. A Right itself does not have voting,
liquidation or dividend right, and is redeemable at the option of the Company at
$0.01 per Right prior to the time it becomes exercisable, if ever. The Rights
expire in November 1998. The purpose of the stockholder protection plan is to
discourage takeover attempts determined by the independent members of the
Company's Board of Directors to be unfair or otherwise not in the best interest
of the Company and its stockholders. Other than as provided by this plan, the
Board has no intentions at this time of issuing any authorized Preferred Stock.
The Company's Restated Articles of Incorporation were amended by a vote of
the stockholders in 1984 to add an article requiring, in the event of certain
business combinations, a majority vote of all shares entitled to vote, exclusive
of shares held by certain persons, and a two-thirds vote of all shares entitled
to vote, unless such business combination was either approved by the Board or
met certain fair price and other requirements. This amendment, adopted to
protect the interests of all stockholders by providing greater assurance of
equal treatment to stockholders in the event of a takeover or business
combination which may be coercive, also could have the effect of discouraging
takeover attempts.
The affirmative vote of the holders of a majority of the Company's
outstanding Common Stock is required to adopt the Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE AMENDMENT TO INCREASE THE AUTHORIZED NUMBER OF COMMON SHARES.
APPROVAL OF THE PACIFIC SCIENTIFIC COMPANY 1995 STOCK OPTION PLAN
(PROPOSAL NO. 3)
In 1992, the stockholders approved the adoption of the Pacific Scientific
Company 1992 Key Employee Stock Plan (the "1992 Plan"). The 1992 Plan allowed
for the issuance of 637,574 shares of Common Stock upon exercise of options
granted thereunder previously available but not granted under the then expired
Pacific Scientific Company 1982 Key Employee Stock Option Plan (the "1982
Plan"). As of December 30, 1994, only 6,214 shares remain available to be
granted under the 1992 Plan. Therefore, on February 22, 1995, the Board of
Directors adopted the Pacific Scientific Company 1995 Stock Option Plan (the
"1995 Plan"), and directed that it be submitted for approval to stockholders at
the 1995 annual meeting.
12
<PAGE> 15
THE FOLLOWING SUMMARY OF THE 1995 PLAN IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO THE FULL TEXT OF THE 1995 PLAN AS SET FORTH IN EXHIBIT A TO THIS
PROXY STATEMENT.
The 1995 Plan is intended to promote the long-term success of the Company
by affording certain eligible employees, executive officers and directors with
an opportunity to acquire a proprietary interest in the Company, in order to
provide an incentive for such persons and to align the long-term financial
interests of such persons with the stockholders of the Company. The Company has
no long-term incentive compensation plan other than the 1995 Plan. The 1995 Plan
is the successor plan to the 1982 and 1992 Plans (the "Predecessor Plans"). Upon
approval of the 1995 Plan by stockholders, no further awards will be made to
participants under the Predecessor Plans. Options outstanding under the
Predecessor Plans shall be subject to and administered pursuant to the
provisions thereof, except that, in the discretion of the Board, the Predecessor
Plans may be administered under the 1995 Plan, but only to the extent allowed by
certain rules under the Exchange Act and only in a manner not inconsistent with
the Predecessor Plans or the options granted thereunder.
The 1995 Plan is to be administered by the "Committee," which is defined in
the 1995 Plan to mean the Board of Directors of the Company; provided however,
that (i) with respect to administration of the Plan to executive officers,
outside directors and any officers or other persons who are subject to Section
16 of the Exchange Act, the "Committee" will be the Compensation Committee of
the Company's Board of Directors. Furthermore, the Board may, in its discretion
but subject to its continued oversight, delegate to an Employee Benefits
Committee (which would generally consist of employees of the Company and would
constitute the "Committee") administration of the Plan with respect to
participants in the 1995 Plan, other than those persons noted above who are
subject to Section 16 of the Exchange Act. Subject to the provisions of the 1995
Plan, the Committee shall have the authority to (i) determine the individuals to
whom Options (as defined in the 1995 Plan) will be granted under the 1995 Plan
and the conditions on which they will be granted; (ii) determine the time when
Options shall be granted, the exercise price of any Option, the period(s) during
which Options shall be exercisable (whether in whole or in part), the
restrictions to be applicable to Options, and the other terms and provisions of
Options; (iii) accelerate the exercisability of any Options and waive or amend
any and all restrictions and conditions of any Options; and (iv) make all
determinations, perform all other acts, exercise all other powers and establish
any other procedures it considers necessary, appropriate or advisable in
administering the 1995 Plan and to maintain compliance with any applicable law.
Unless terminated by the Board of Directors, the 1995 Plan will remain in
effect for a period of ten (10) years from the date it was approved by the
Company's Board of Directors.
One share of Pacific Scientific Company Common Stock, $1 par value, shall
be the underlying security for any Options. As of March 3, 1995, the closing
price per share for Pacific Scientific Company Common Stock (the "Common Stock")
on the New York Stock Exchange was $19.625.
The Common Stock issuable under the Plan shall be subject to the following
limitations. The maximum number of shares of Common Stock that may be granted in
any calendar year for all purposes under the 1995 Plan shall be one percent (1%)
of the shares of Common Stock outstanding (excluding any shares of such Common
Stock held in the Company's treasury) on the first day of such calendar year,
provided, however, that in the event that fewer than the full aggregate number
of shares of Common Stock available for issuance in any calendar year are issued
in such year, the shares not issued shall be added to the shares available for
issuance in any subsequent year or years. If, for some reason, any shares of
Common Stock as to which Options have been granted cease to be subject to
exercise or purchase, such underlying shares of Common Stock shall thereafter be
available for grants under the 1995 Plan during any calendar year until
expiration of the 1995 Plan.
13
<PAGE> 16
Stock options shall entitle the optionee to purchase shares of Common
Stock. Amounts owed to the Company upon exercise of a stock option shall be
payable (i) in cash or by an equivalent means acceptable to the Committee, (ii)
by delivery (constructive or otherwise) to the Company of shares of Common Stock
already owned by the optionee, or (iii) by any combination of (i) and (ii) as
the Committee shall permit. At the discretion of the Committee, a stock option
may or may not be an incentive stock option under the provisions of Section 422
of the Internal Revenue Code of 1986, as amended, provided that non-employee
directors may not be granted incentive stock options. In no event shall the
exercise price of any stock option be less than the fair market value of Common
Stock on the date such option is granted. No stock option shall be exercisable
after the expiration of ten (10) years from the date such stock option is
granted. In the event an optionee surrenders already-owned shares of Common
Stock in connection with the exercise of a stock option, the Committee may, at
its sole discretion, authorize a grant of additional stock options ("Reload
Options") equal in number to the shares surrendered. Notwithstanding the
foregoing, (i) the Committee shall have the right, at its sole discretion, to
withdraw a Reload Option to the extent that the grant thereof will result in any
adverse accounting consequences to the Company and (ii) no additional Reload
Options shall be granted upon the exercise of a Reload Option.
An optionee will not realize taxable income upon the granting of a stock
option under the 1995 Plan, nor would the Company be entitled to a deduction at
such time. There will be no realization of taxable income by the optionee upon
the exercise of an incentive stock option (if exercised no later than three
months after termination of employment). If the optionee sells or otherwise
disposes of the Common Stock received upon exercise of the incentive stock
option after one year from the exercise date or two years or more from the date
of grant of the incentive stock option, any gain or loss on the sale will be
treated as long term, and the Company will not be entitled to any deduction on
account of the issuance of Common Stock or the grant of the incentive stock
option. Upon the exercise of a non-qualified stock option, the optionee will
realize compensation income in the amount of the excess of the fair market value
of the Common Stock on the day of exercise over the stock option exercise price,
and the Company will receive a corresponding deduction. The tax basis of any
non-qualified stock option shares of Common Stock received will be the fair
market value of such shares on the date the stock option is exercised.
The Committee, which has sole discretion to grant Options, has not yet done
so under the 1995 Plan, nor has it identified any specific Options to be granted
in the future. Therefore, the amount of any Options to be received by the Chief
Executive Officer, Executive Officers, any Eligible Employee, or outside
directors is currently indeterminable.
In the event there is any change in the Common Stock by reason of any
consolidation, combination, liquidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split-off, spin-off, combination of shares,
exchange of shares or other like change in capital structure of the Company, the
number or kind of shares or interests subject to any Option and the per share
price or value thereof shall be appropriately adjusted by the Committee at the
time of such event.
The affirmative vote of a majority of the shares represented in person or
by proxy and entitled to vote at the annual meeting is required to adopt the
1995 Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" APPROVAL OF
THE PACIFIC SCIENTIFIC COMPANY 1995 PLAN.
APPOINTMENT OF AUDITORS
(PROPOSAL NO. 4)
The firm of Deloitte & Touche LLP, certified public accountants, has been
the Company's independent accountants since 1972 and has been selected by the
Board of Directors to serve as its independent accountants for the fiscal year
ending December 29, 1995.
The independent accountants meet periodically with the Audit Committee of
the Board of Directors. The members of the Audit Committee are Messrs. Beran,
Briscoe, Ketchum, Preston, Pryor, Stafford and Todd.
14
<PAGE> 17
Professional services performed by Deloitte & Touche LLP for the fiscal
year ended December 30, 1994 consisted of an audit of the consolidated financial
statements of the Company and its subsidiaries, limited reviews of interim
financial information, services related to filings with the Securities and
Exchange Commission, meetings with the Company's Audit Committee, and
consultation on various matters relating to accounting and financial reporting.
The Audit Committee approved in advance or ratified each of the major
professional services provided by Deloitte & Touche LLP and considered the
possible effect of each such service on the independence of that firm.
Representatives of Deloitte & Touche LLP are expected to be present at the
annual meeting with the opportunity to make a statement, if they desire, and
will be available to respond to appropriate questions during the meeting.
An affirmative vote of a majority of the shares present and voting at the
meeting is required for ratification of the appointment of the auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF THE AUDITORS.
STOCKHOLDER PROPOSALS
Proposals by stockholders to be presented at the Company's 1996 annual
meeting must be received by the Company no later than 120 days prior to March 9,
1996, in order to be considered for inclusion in the Company's proxy statement
and form of proxy for such meeting.
OTHER MATTERS
Management knows of no other business to be presented at the annual
meeting. If other matters do properly come before the meeting, or any
adjournments or postponements thereof, it is the intention of the persons named
in the proxy to vote on such matters according to their best judgment.
By Order of the Board of Directors,
RICHARD V. PLAT
Executive Vice President & Secretary
Dated: March 16, 1995
IT IS IMPORTANT THAT THE ENCLOSED PROXY CARD BE COMPLETED AND RETURNED. YOUR
COOPERATION IN PROMPTLY RETURNING YOUR SIGNED PROXY CARD WILL BE HELPFUL IN
REDUCING EXPENSES INCIDENTAL TO FOLLOWING UP THIS PROXY SOLICITATION.
15
<PAGE> 18
EXHIBIT A
PACIFIC SCIENTIFIC COMPANY
1995 STOCK OPTION PLAN
I. Purpose.
The Pacific Scientific Company 1995 Stock Option Plan (the "Plan") is
intended to promote the long-term success of Pacific Scientific Company (the
"Company") by affording certain eligible employees, executive officers and
directors of the Company and its Subsidiaries (as defined below) with an
opportunity to acquire a proprietary interest in the Company in order to provide
an incentive for such persons and to align the long-term financial interests of
such persons with the stockholders of the Company.
II. Definitions.
The following defined terms are used in the Plan:
A. "Agreement" shall mean the agreement accepted by the Participant as
described in Section VIII. of the Plan between the Company and a Participant
under which the Participant receives an Option pursuant to this Plan.
B. "Board" or "Board of Directors" shall mean the Board of Directors of the
Company.
C. "Code" shall mean the Internal Revenue Code of 1986, as amended.
D. "Committee" shall mean the Board; provided, however, that (i) with
respect to administration of the Plan to Executive Officers, Outside Directors
and any officers or any other person who is subject to Section 16 of the
Exchange Act, "Committee" shall mean the Compensation Committee of the Board,
which Compensation Committee shall be composed of not less than two directors
who are "disinterested" pursuant to Rule 16b-3 promulgated under the Exchange
Act; and (ii) the Board may, in its discretion but subject to the continued
oversight of the Board, delegate to an Employee Benefits Committee (which shall
mean a committee consisting of employees of the Company or any related entity,
as appointed by the Board) administration of the Plan with respect to Eligible
Participants, other than those persons enumerated in the immediately preceding
clause (i).
E. "Common Stock" means the common stock of the Company, $1 par value.
F. "Company" means Pacific Scientific Company.
G. "Disabled" or "Disability" shall mean long-term disability as determined
under the provisions of any Pacific Scientific Company disability plan
maintained for the benefit of eligible employees of the Company or any Related
Entity.
H. "Disinterested Person" shall have the meaning set forth in Rule
16b-3(c)(2)(i) and its successor promulgated under the Exchange Act.
I. "Effective Date" shall mean February 22, 1995.
J. "Eligible Participant" shall mean any Outside Director, Executive
Officer or employee of the Company or any Related Entity who the Committee
selects to receive an Option and who is so serving as a director or who is so
employed, as the case may be, on the date of the grant of an Option.
K. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
L. "Executive Officer" shall mean any officer of the Company or any Related
Entity who, at the time of an Option, is subject to the reporting requirements
of Section 16(a) of the Exchange Act.
M. "Fair Market Value" shall mean the closing price of a share of Common
Stock as reported on the New York Stock Exchange for the applicable date.
A-1
<PAGE> 19
N. "Grant Date" as used with respect to a particular Option means the date
as of which such Option is granted by the Committee pursuant to the Plan.
O. "Incentive Option" shall mean an incentive stock option under the
provisions of Section 422 of the Code.
P. "Nonqualified Option" shall mean an Option which does not qualify under
Section 422 of the Code.
Q. "Option" shall mean an option granted by the Company to purchase Common
Stock pursuant to the provisions of this Plan, including Incentive Options,
Nonqualified Options and Reload Options.
R. "Optionee" shall mean a Participant to whom one or more Options have
been granted.
S. "Option Price" shall mean the price per share payable to the Company for
shares of Common Stock upon the exercise of an Option.
T. "Outside Director" shall mean an individual not employed by the Company
or any Related Entity and who serves on the Board.
U. "Parent Corporation" shall mean any corporation within the meaning of
Section 424(e) of the Code.
V. "Participant" shall mean an Eligible Participant who is granted an
Option.
W. "Plan" shall mean the Pacific Scientific Company 1995 Stock Option Plan.
X. "Predecessor Plans" shall mean the Pacific Scientific Company 1992 Key
Employee Stock Option Plan and the Pacific Scientific Company 1982 Key Employee
Stock Option Plan, as applicable.
Y. "Related Entity" shall mean any Parent Corporation or Subsidiary of the
Company.
Z. "Reload Option" shall mean the right to receive a further Option for a
number of shares equal to the number of shares of Common Stock surrendered by
the Optionee upon exercise of the original Option as provided in Section IX.E of
the Plan.
AA. "Retirement" shall mean, with respect to any Eligible Participant, that
such person has retired from the Company or any Related Entity and such person
is currently eligible to receive a service pension benefit under either of the
Pacific Scientific Pension Plans or a pension benefit under any written
agreement or arrangement that the Company or any Related Entity may have entered
into with the Eligible Participant.
BB. "Securities Act" shall mean the Securities Act of 1933, as amended.
CC. "Subsidiary" shall mean with respect to any Option, any corporation,
joint venture or partnership in which the Company owns, directly or indirectly,
(i) with respect to a corporation, stock possessing twenty percent (20%) or more
of the total combined voting power of all classes of stock in the corporation or
(ii) in the case of a joint venture or partnership, the Company possesses a
twenty percent (20%) interest in the capital or profits of such joint venture or
partnership. In the case of any Incentive Option, Subsidiary shall mean any
corporation within the meaning of Section 424(f) of the Code.
DD. "Vested" shall mean the status that results with respect to an Option
which may be immediately exercised under the terms of the Agreement granting
such Option pursuant to the provisions of the Plan.
III. Administration.
A. The Plan shall be administered by the Committee. The Committee may adopt
such rules, regulations and guidelines as it determines necessary for the
administration of the Plan.
A-2
<PAGE> 20
B. The Committee may delegate to one or more of its members, or to one or
more agents, such administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties as aforesaid may employ
one or more persons to render advice with respect to any responsibility the
Committee or such person may have under the Plan. The Committee may employ such
legal or other counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion or computation received
from any such counsel, consultant or agent. Expenses incurred by the Committee
in the engagement of such counsel, consultant or agent shall be paid by the
Company or such Related Entity whose employees have benefitted from the Plan, as
determined by the Committee. The Company shall indemnify members of the
Committee and any agent of the Committee who is an employee of the Company or a
Related Entity against any and all liabilities or expenses to which they may be
subjected by reason of any act or failure to act with respect to their duties on
behalf of the Plan, except in circumstances involving such person's gross
negligence or willful misconduct.
C. In furtherance of and not in limitation of the Committee's discretionary
authority, subject to the provisions of the Plan, the Committee shall have the
authority to:
1. determine the Participants to whom Options shall be granted and the
number of and terms and conditions upon which Options shall be granted;
2. establish, in its sole discretion, annual or long-term financial
goals of the Company, Related Entity, or division, department, or group of
the Company or Related Entity, or individual goals which the Committee
shall consider in granting Options, if any;
3. determine the satisfaction of performance goals established by the
Committee based upon periods of time or any combinations thereof;
4. determine the time when Options shall be granted, the Option Price
of each Option, the period(s) during which Options shall be exercisable
(whether in whole or in part), the restrictions to be applicable to
Options, and the other terms and provisions of Options;
5. modify grants of Options pursuant to Paragraph D. of this Section
III. or rescind grants of Options pursuant to Section IX.H(v),
respectively;
6. provide the establishment of a procedure whereby a number of shares
of Common Stock may be withheld from the total number of shares of Common
Stock to be issued upon exercise of an Option (other than an Incentive
Option) to meet the obligation of withholding for income, social security
and other taxes incurred by a Participant upon such exercise or required to
be withheld by the Company in connection with such exercise;
7. adopt, modify and rescind rules and regulations and guidelines
relating to the Plan;
8. adopt modifications to the Plan and procedures, as may be necessary
to comply with provisions of the laws and applicable regulatory rulings of
countries in which the Company or a Related Entity operates in order to
assure the legality of Options granted under the Plan to Participants who
reside in such countries; and
9. make all determinations, perform all other acts, exercise all other
powers and establish any other procedures determined by the Committee to be
necessary, appropriate or advisable in administering the Plan and to
maintain compliance with any applicable law.
D. The Committee may at any time, in its sole discretion, accelerate the
exercisability of any Options and waive or amend any and all restrictions and
conditions of any Options.
E. Subject to and not inconsistent with the express provisions of the Plan,
the Code and Rule 16b-3 of the Exchange Act, the Committee shall have the
authority to require, as a condition to the granting of any Option to any
Outside Director or Executive Officer of the Company or any Related Entity or
other person subject to Section 16 of the Exchange Act that such Outside
Director, Executive Officer or other person receiving such Option agree not to
sell or otherwise dispose of such Option or Common Stock acquired pursuant to
such Option (as defined by Rule 16a-1(c) under the Exchange Act) for a period of
six (6) months following the later of (i) the date of the grant of such Option,
or (ii) the date when the Option Price of such Option is fixed, if such Option
Price is not fixed at the date of grant of such Option.
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<PAGE> 21
F. Any options granted to a Participant under the Predecessor Plans which
remain outstanding as of the Effective Date may, in the discretion of the
Committee, be governed by the terms and conditions of the Plan, except to the
extent the provisions of the Plan are inconsistent with the terms of the
Predecessor Plans or such options granted thereunder, in which event the
applicable provisions of the Predecessor Plans or such options shall govern;
provided, however, that (i) in no event shall there be a modification of the
terms of any Incentive Option granted under the Predecessor Plans, and (ii) such
administration of the Predecessor Plans under the Plan shall in no event affect
the compliance of the Predecessor Plans with the requirements of Rule 16b-3
under the Exchange Act.
IV. Decisions Final.
Any decision, interpretation or other action made or taken in good faith by
the Committee arising out of or in connection with the Plan shall be final,
binding and conclusive on the Company and all Participants and their respective
heirs, executors, administrators, successors and assigns.
V. Arbitration.
Any dispute that may arise in connection with the Plan or any Option under
the Plan shall be determined solely by arbitration in Newport Beach, California
under the rules of the American Arbitration Association. Any claim with respect
to an Option must be established by a preponderance of the evidence submitted to
the impartial arbitrator. The arbitrator shall have the authority to award the
prevailing party damages incurred as a result of any breach, costs, reasonable
attorneys' fees incurred in connection with the arbitration, and direct that the
non-prevailing party pay the expenses of arbitration. The decision of the
arbitrator (i) shall be final and binding; (ii) shall be rendered within ninety
(90) days after the impanelment of the arbitrator; and (iii) shall be kept
confidential by the parties to such arbitration. The arbitration award may be
enforced in any court of competent jurisdiction. The Federal Arbitration Act, 9
U.S.C. 1-16, not state law, shall govern the arbitrability of all claims.
VI. Duration of the Plan.
The Plan shall remain in effect for a period of ten (10) years from the
Effective Date, unless terminated by the Board pursuant to Section XIV.
VII. Shares Available -- Limitations.
A. The maximum aggregate number of shares of Common Stock of the Company
which may be granted in any calendar year for all purposes under the Plan shall
be one percent (1%) of the shares of Common Stock outstanding (excluding shares
of such Common Stock held in the Company's treasury) on the first day of such
calendar year, provided, however, that in the event that fewer than the full
aggregate number of shares of Common Stock available for issuance in any
calendar year are issued in such year, the shares not issued shall be added to
the shares available for issuance in any subsequent year or years. If, for any
reason, any shares of Common Stock as to which Options have been granted cease
to be subject to exercise or purchase hereunder, the underlying shares of Common
Stock shall thereafter be available for grants to Participants under the Plan
during any calendar year. Options granted under the Plan may be fulfilled in
accordance with the terms of the Plan with (i) authorized and unissued shares of
the Common Stock or (ii) issued shares of Common Stock reacquired by the
Company, in each situation, as the Board of Directors or the Committee may
determine from time to time at its sole discretion.
VIII. Grant of Options.
A. The Committee shall determine the type or types of Options to be made to
each Participant.
B. Each grant of an Option under this Plan shall be evidenced by an
Agreement dated as of the date of the grant of the Option. Such Agreement shall
set forth the terms and conditions of the Option, as may be determined by the
Committee, and shall indicate whether the Option that it evidences is intended
to be an Incentive Option or a Nonqualified Option. Each grant of an Option is
conditioned upon the acceptance by the
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<PAGE> 22
Participant of the terms of the Agreement. Unless otherwise extended by the
Committee, a Participant shall have ninety (90) days from the date of the
Agreement to accept its terms.
IX. Options.
The Committee, in its sole discretion, may grant Incentive Options or
Nonqualified Options to Eligible Participants, officers and Executive Officers,
provided that the Committee may only grant Nonqualified Options to Outside
Directors. The terms and conditions of the Options granted under this Plan shall
be determined from time to time by the Committee, as set forth in the Agreement
granting the Option, and subject to the following conditions:
A. Nonqualified Options. The Option Price for each share of Common Stock
issuable pursuant to a Nonqualified Option may be an amount at or above the Fair
Market Value on the date such Option is granted.
B. Incentive Options. The Option Price for each share of Common Stock
issuable pursuant to an Incentive Option shall not be less than one hundred
percent (100%) of the Fair Market Value on the date such Option is granted.
C. Incentive Options -- Special Rules. Options granted in the form of
Incentive Options shall be subject to the following provisions:
1. Grant. No Incentive Option shall be granted pursuant to this Plan
more than ten (10) years after the Effective Date.
2. Annual Limit. The aggregate Fair Market Value (determined at the
time the Option is granted) of the shares of Common Stock with respect to
which one or more Incentive Options are exercisable for the first time by
any Optionee during any calendar year under the Plan or under any other
stock plan of the Company or any Related Entity shall not exceed $100,000
or such other maximum amount permitted under Section 422 of the Code. Any
Option purporting to constitute an Incentive Option in excess of such
limitation shall constitute a Nonqualified Option.
3. 10% Stockholder. If any Optionee to whom an Incentive Option is to
be granted pursuant to the provisions of the Plan is, on the date of grant,
an individual described in Section 422(b)(6) of the Code, then the
following special provisions shall be applicable to the Option granted to
such individual:
(a) the Option Price of shares subject to such Incentive Option
shall not be less than 110% of the Fair Market Value of Common Stock on
the date of grant; and
(b) the Option shall not have a term in excess of (5) years from
the date of grant.
D. Other Options. The Committee may establish rules with respect to, and
may grant to Eligible Participants, Options to comply with any amendment to the
Code made after the Effective Date providing for special tax benefits for stock
options.
E. Reload Options. Without in any way limiting the authority of the
Committee to grant Options hereunder, the Committee shall have the authority to
grant Reload Options. Any such Reload Option shall be subject to such other
terms and conditions as the Committee may determine. Notwithstanding the above,
(i) the Committee shall have the right, in its sole discretion, to withdraw a
Reload Option to the extent that the grant thereof will result in any adverse
accounting consequences to the Company and (ii) no additional Reload Options
shall be granted upon the exercise of a Reload Option.
F. Term of Option. No Option shall be exercisable after the expiration of
ten (10) years from the date of grant of the Option.
G. Exercise of Stock Option. Each Option shall be exercisable in one or
more installments as the Committee in its sole discretion may determine at the
time the Option is granted and as provided in the Agreement. The right to
purchase shares shall be cumulative so that when the right to purchase any
shares has accrued such shares or any part thereof may be purchased at any time
thereafter until the expiration or termination of the Option. The Option Price
shall be payable (i) in cash or by an equivalent means acceptable to the
Committee, (ii) by delivery (constructive or otherwise) to the Company of shares
of Common Stock owned by the Optionee or (iii) by any combination of the above
as provided in the Agreement. Shares
A-5
<PAGE> 23
delivered to the Company in payment of the Option Price shall be valued at the
Fair Market Value on the date of the exercise of the Option.
H. Vesting. The Agreement shall specify the date or dates on which the
Optionee may begin to exercise all or a portion of his Option. Subsequent to
such date or dates, the Option shall be deemed vested and fully exercisable.
(i) Death. In the event of the death of any Optionee, all Options held
by such Optionee on the date of his death shall become Vested Options and
the estate of such Optionee shall have the right, at any time and from time
to time within one year after the date of death, or such other period, if
any, as the Committee in its sole discretion may determine, to exercise the
Options of the Optionee (but not after the earlier of the expiration date
of the Option or, in the case of an Incentive Option, one (1) year from the
date of death).
(ii) Disability. If the employment of any Optionee is terminated
because of Disability, all Options held by such Optionee on the date of his
Disability shall become Vested Options and such Optionee shall have the
right, at any time and from time to time within one year after the date of
termination, or such other period, if any, as the Committee in its sole
discretion may determine, to exercise the Options of the Optionee (but not
after the earlier of the expiration date of the Option or one (1) year from
the date of Disability in the case of an Incentive Option).
(iii) Retirement. Upon an Optionee's Retirement (i) all Options held
by such Optionee that are not Vested Options shall terminate unless the
Committee, in its sole discretion, determines otherwise, and (ii) such
Optionee shall have the right, at any time and from time to time within
five (5) years after the date of his Retirement (but in no event after the
expiration date of the Option), to exercise the Vested Options held by such
Optionee immediately prior to the time of Retirement.
(iv) Other Termination. If the employment with the Company or a
Related Entity (or service with the Company in the case of an Outside
Director) of an Optionee is terminated for any reason other than for death,
Disability or Retirement and other than "for cause" as defined in
subparagraph (v) below, such Optionee shall have the right, in the case of
a Vested Option, for a period of three (3) months after the date of such
termination or such longer period as determined by the Committee, to
exercise any such Vested Option, but in any event not after the expiration
date of any such Option.
(v) Termination For Cause. Notwithstanding any other provision of the
Plan to the contrary, if the Optionee's employment (or service with the
Company in the case of an Outside Director) is terminated by the Company or
any Related Entity "for cause" (as defined below), such Optionee shall
immediately forfeit all rights under his Options except as to the shares of
Common Stock already purchased prior to such termination, and as to a
Vested Option, for a period of three (3) months after the date of such
termination or such longer period as determined by the Committee, to
exercise any such Vested Option, but in no event after the expiration date
of any such Option. Termination "for cause" shall mean (unless another
definition is agreed to in writing by the Company and the Optionee)
termination by the Company because of: (a) the Optionee's willful and
continued failure to substantially perform his duties (other than any such
failure resulting from the Optionee's incapacity due to physical or mental
impairment) after a written demand for substantial performance is delivered
to the Optionee by the Company, which demand specifically identifies the
manner in which the Company believes the Optionee has not substantially
performed his duties, (b) the willful conduct of the Optionee which is
demonstrably and materially injurious to the Company or Related Entity,
monetarily or otherwise, or (c) the conviction of the Optionee for a felony
by a court of competent jurisdiction.
X. Foreign Options and Rights.
The Committee may grant Options to Eligible Participants who are subject to
the tax laws of nations other than the United States, which Options may have
terms and conditions as determined by the Committee as necessary to comply with
applicable foreign laws. The Committee may take any action which it deems
advisable to obtain approval of such Options by the appropriate foreign
governmental entity; provided, however, that no such Option may be granted
pursuant to this Section X and no action may be taken which would result in a
violation of the Exchange Act, the Code or any other applicable law.
A-6
<PAGE> 24
XI. Federal Securities Law.
With respect to grants of Options to Executive Officers, Outside Directors
or any other person subject to Section 16 of the Exchange Act, the Company
intends that the provisions of this Plan and all transactions effected in
accordance with this Plan shall comply with Rule 16b-3 under the Exchange Act.
Accordingly, the Committee shall administer and interpret the Plan to the extent
practicable, to maintain compliance with such rule.
XII. Adjustment of Shares.
In the event there is any change in the Common Stock by reason of any
consolidation, combination, liquidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split-off, spin-off, combination of shares,
exchange of shares or other like change in capital structure of the Company, the
number or kind of shares subject to an Option and the per share price or value
thereof shall be appropriately adjusted by the Committee at the time of such
event, provided that each Participant's economic position with respect to the
Option shall not, as a result of such adjustment, be worse than it had been
immediately prior to such event. Any fractional shares of interests resulting
from such adjustment shall be rounded up to the next whole share of Common
Stock. Notwithstanding the foregoing, (i) each such adjustment with respect to
an Incentive Option shall comply with the rules of Section 424(a) of the Code,
and (ii) in no event shall any adjustment be made which would render any
Incentive Option granted hereunder other than an "incentive stock option" for
purposes of Section 422 of the Code.
XIII. Miscellaneous Provisions.
A. Investment Representation; Legends. The Committee may require each
Participant acquiring shares of Common Stock pursuant to an Option to represent
to and agree with the Company in writing that such Participant is acquiring the
shares without a view to distribution thereof.
No Options or shares of Common Stock shall be issued until all applicable
securities law and other legal and stock exchange requirements have been
satisfied. The Committee may require the placing of stop-orders and restrictive
legends on certificates for Common Stock as it deems appropriate.
B. Withholding Taxes. In the case of issuances of Common Stock, the
Company, as a condition of such issuance, may require the payment (through
withholding from the Participant's salary, payment of cash by the Participant,
reduction of the number of shares of Common Stock or other securities to be
issued (except in the case of an Incentive Option), or otherwise) of any
federal, state, local or foreign taxes required by law to be withheld with
respect to such distribution.
C. Costs and Expenses. The costs and expenses of administering the Plan
shall be borne by the Company and shall not be charged against any Option nor to
any Participant receiving an Award.
D. Other Incentive Plans. The adoption of the Plan does not preclude the
adoption by appropriate means of any other incentive plan for employees or
Outside Directors.
E. Effect on Employment. Nothing contained in the Plan or any agreement
related hereto or referred to herein shall affect, or be construed as affecting,
the terms of employment or service of any Participant except to the extent
specifically provided herein or therein. Nothing contained in the Plan or any
agreement related hereto or referred to herein shall impose, or be construed as
imposing, an obligation on (i) the Company or any Related Entity to continue the
employment or service of any Participant and (ii) any Participant to remain in
the employ or service of the Company or any Related Entity.
F. Noncompetition. Any Agreement may contain, among other things,
provisions prohibiting Participants from competing with the Company or any
Related Entity in a form or forms acceptable to the Committee, in its sole
discretion.
A-7
<PAGE> 25
G. Governing Law. This Plan and actions taken in connection herewith shall
be governed and construed in accordance with the laws of the State of
California.
XIV. Amendment or Termination of Plan.
The Board shall have the right to amend, modify, suspend or terminate the
Plan at any time, provided that no amendment shall be made which shall (i)
increase the total number of Options with respect to Common Stock which may be
granted in total or to any single Participant, (ii) to decrease the minimum
Option Price in the case of an Incentive Option, or (iii) modify the provisions
of the Plan with respect to Incentive Options, unless such amendment is made by
or with the approval of the stockholders or unless the Board receives an opinion
of counsel to the Company that stockholder approval is not necessary with
respect to any modifications relating to Incentive Options. With respect to
Options made to Executive Officers, Outside Directors or other persons subject
to Section 16 of the Exchange Act, no amendment shall be made which either (i)
materially increases the benefits accruing to such Executive Officers, Outside
Directors or other persons subject to Section 16 of the Exchange Act, (ii)
materially increases the number of such Options which may be issued under the
Plan to Executive Officers, Outside Directors or other persons subject to
Section 16 of the Exchange Act, or (iii) materially modifies the requirements as
to eligibility for participation of Executive Officers, Outside Directors or
other persons subject to Section 16 of the Exchange Act, in the Plan unless such
amendment is made with the approval of stockholders. No amendment, modification,
suspension or termination of the Plan shall alter or impair any Options
previously granted under the Plan, without the consent of the holder thereof.
XV. Adoption of the Plan.
The Plan shall become effective on the date on which the stockholders
approve the Plan.
A-8
<PAGE> 26
NOTICE OF
ANNUAL
MEETING OF
STOCKHOLDERS
AND PROXY
STATEMENT
APRIL 26, 1995
[LOGO]
<PAGE> 27
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.
/X/
Please mark
your votes
as this
------------------
COMMON
(1) ELECTION OF DIRECTORS
FOR all nominees listed at right
(except as marked to the
contrary at right) / /
WITHHOLD AUTHORITY
to vote for all nominees
listed at right / /
(INSTRUCTION: To withhold authority to vote for any individual nominee strike a
line through the nominee's name in the list below)
W. Beran, R. Briscoe, E. Brower, R. Ketchum, W. Preston, M. Pryor, Jr.,
T. Stafford, H. Todd
(2) PROPOSAL TO AMEND the Restated Articles of Incorporation.
FOR AGAINST ABSTAIN
/ / / / / /
(3) PROPOSAL TO APPROVE the Pacific Scientific Company 1995 Stock Option Plan.
FOR AGAINST ABSTAIN
/ / / / / /
(4) PROPOSAL TO APPROVE THE ELECTION OF Deloitte & Touche LLP as the Company's
independent public accountants.
FOR AGAINST ABSTAIN
/ / / / / /
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders to be held April 26, 1995 and the Proxy Statement furnished
herewith.
-------------------------------
Signature
Dated: , 1995
------------------
Please sign exactly as name appears hereon. When signing as attorney, executor,
administrator, trustee or guardian, give full title as such. If more than one
name appears hereon, all persons named should sign.
PACIFIC SCIENTIFIC COMPANY
The undersigned stockholder of PACIFIC SCIENTIFIC COMPANY hereby appoints
EDGAR S. BROWER, RICHARD V. PLAT, or either of them, proxies of the
undersigned, each with full power to act without the other and with the power
of substitution to represent the undersigned at the Annual Meeting of
Stockholders of Pacific Scientific Company to be held at Newport Center
Conference Center, 610 Newport Center Drive, Suite 130, Newport Beach,
California 92660 on April 26, 1995 at 10:00 A.M. (California time), and at any
adjournments or postponements thereof, and to vote all shares of stock of the
Company standing in the name of the undersigned with all the powers the
undersigned would possess if personally present, in accordance with the
instructions below and on the reverse hereof, and in their discretion upon such
other business as may properly come before the meeting; provided however, that
such proxies, or either of them, shall have the power to cumulate votes and
distribute them among the nominees listed below as they see fit, and to drop
any of such nominees, in order to ensure the election of the greatest number of
such nominees.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS BELOW AND ON
THE REVERSE HEREOF, AND WILL BE VOTED IN FAVOR OF ANY MATTER BELOW AS TO WHICH
NO INSTRUCTIONS ARE INDICATED.
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
