SCHEDULE 14A
(RULE 14A-101)
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY THE REGISTRANT /x/
FILED BY A PARTY OTHER THAN THE REGISTRANT / /
CHECK THE APPROPRIATE BOX:
/x/ PRELIMINARY PROXY STATEMENT
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS
PERMITTED BY RULE 14A-6(E)(2))
/ / DEFINITIVE PROXY STATEMENT
/ / DEFINITIVE ADDITIONAL MATERIALS
/ / SOLICITING MATERIAL PURSUANT TO RULE 14A-11(C) OR RULE 14A-12
PACIFIC SCIENTIFIC COMPANY
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
- ------------------------------------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
/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 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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The information included herein is as it is expected to be if and when the
definitive proxy materials are mailed to shareholders of Pacific Scientific
Company. This proxy statement will be revised to reflect actual facts at the
time of the filing of definitive proxy materials. No [BLUE] Proxy Card will
accompany these materials until definitive proxy material is distributed.
The information herein relates to a Special Meeting of shareholders of Pacific
Scientific Company which has not yet been called, but which is being sought by
Kollmorgen Corporation to facilitate Kollmorgen's unsolicited offer to acquire
control of Pacific Scientific. These materials are being filed solely to ensure
that Pacific Scientific will be in a position to communicate on a timely basis
with its shareholders and solicit proxies with respect to such a Special Meeting
if one should be held. Pacific Scientific is not hereby agreeing or
acknowledging that a Special Meeting will be held or that the procedure being
pursued by Kollmorgen with respect thereto is proper.
PRELIMINARY PROXY MATERIALS DATED JANUARY 2, 1998
SUBJECT TO COMPLETION
PACIFIC SCIENTIFIC COMPANY
620 NEWPORT CENTER DRIVE, SUITE 700
NEWPORT BEACH, CALIFORNIA 92660
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ________DAY, __________________ __, 1998
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NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the
"Special Meeting") of Pacific Scientific Company will be held at
- -----------------------------------,---------------------------------,
California, on _____day, ____________ __, 1998, at _________ _.m. (local
time) for the following purposes:
(1) To consider and act upon a shareholder proposal to remove all
of the members of the Board of Directors of the Company;
(2) If Proposal 1 is approved, to consider and act upon a
shareholder proposal to elect the six director nominees designated by such
shareholder and all other persons nominated by such shareholder to fill
all vacancies on the Board to serve until the 1998 Annual Meeting of
Shareholders and until their respective successors shall have been duly
elected and qualified.
(3) To consider and act upon a shareholder proposal to repeal any
and all provisions of the Company's Bylaws that have not been duly filed
by the Company with the Securities and Exchange Commission prior to August
11, 1997, including any and all amendments to such Bylaws adopted on or
after December 15, 1997; and
(4) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on ___________
__, 1998 will be entitled to notice of and to vote at the Special Meeting.
All shareholders are invited to attend the Special Meeting.
YOUR VOTE IS VERY IMPORTANT. THE BOARD OF DIRECTORS URGES YOU TO SIGN,
DATE AND MAIL THE ENCLOSED [BLUE] PROXY CARD AS SOON AS POSSIBLE IN THE RETURN
ENVELOPE PROVIDED WHETHER OR NOT YOU HAVE PREVIOUSLY VOTED. This will not
prevent you from voting in person, should you so desire, but will help to secure
a quorum and avoid added solicitation costs. Your proxy may be revoked by you at
any time before it is voted.
By Order of the Board of Directors,
/s/
Lester Hill
Chairman and Chief Executive Officer
Newport Beach, California
______________ __, 1998
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PRELIMINARY PROXY MATERIALS DATED JANUARY 2, 1998
SUBJECT TO COMPLETION
PROXY STATEMENT OF PACIFIC SCIENTIFIC COMPANY
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SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ________ __, 1998
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This Proxy Statement is being furnished by the Board of Directors of
Pacific Scientific Company, a California corporation (the "Company"), to the
holders (the "Shareholders") of shares of common stock, par value $1.00, of the
Company ("Common Stock") in connection with the solicitation of proxies by the
Board of Directors for use at a special meeting of shareholders to be held at
_______________________, ___________________, California, on ________day,
_______________ __, 1998 at _______ _.m. (local time), and any adjournment or
postponement thereof (the "Special Meeting"). The Special Meeting was called
pursuant to a demand by the holders of not less than 10% of all of the shares of
Common Stock entitled to vote at the Special Meeting in accordance with the
California General Corporation Law (the "CGCL") and the Company's Bylaws. The
first date this Proxy Statement and [Blue] proxy card with respect thereto are
being sent or given to shareholders is on or about __________ __, 1998.
At the Special Meeting the Shareholders will consider and act upon
proposals (the "Kollmorgen Proposals") described below that were made by
Kollmorgen Corporation, a New York corporation ("Kollmorgen").
THE BOARD OF DIRECTORS OF THE COMPANY VIGOROUSLY OPPOSES THE
SOLICITATION OF PROXIES BY KOLLMORGEN, BELIEVES THE KOLLMORGEN PROPOSALS ARE NOT
IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS, AND URGES YOU NOT TO
SIGN OR RETURN ANY [COLOR] PROXY CARDS SENT TO YOU BY KOLLMORGEN. IF YOU HAVE
PREVIOUSLY SIGNED AND RETURNED ANY SUCH [COLOR] PROXY CARD TO KOLLMORGEN, YOU
HAVE EVERY RIGHT TO CHANGE YOUR VOTE AND REVOKE YOUR PROXY BY SIGNING, DATING,
AND RETURNING THE ENCLOSED [BLUE] PROXY CARD. THE BOARD URGES YOU TO COMPLETE,
SIGN, DATE, AND MAIL THE ENCLOSED [BLUE] PROXY CARD AS SOON AS POSSIBLE IN THE
POSTAGE-PAID ENVELOPE PROVIDED.
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THE KOLLMORGEN PROPOSALS
Kollmorgen is soliciting proxies from the Company's shareholders to vote
in favor of the Kollmorgen Proposals, which are as follows:
(1) To remove all of the members of the Board of
Directors of the Company ("Proposal 1");
(2) If proposal (1) above is approved, to elect the six
director nominees designated by Kollmorgen and all other persons
nominated by Kollmorgen to fill all vacancies on the Board to serve
until the 1998 Annual Meeting of Shareholders and until their
respective successors shall have been duly elected and qualified
("Proposal 2"); and
(3) To repeal any and all provisions of the Company's Bylaws
that have not been duly filed by the Company with the Securities and
Exchange Commission (the "SEC") prior to August 11, 1997, including
any and all amendments to such Bylaws adopted on or after December
15, 1997 ("Proposal 3").
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors has carefully considered the Kollmorgen Proposals,
information filed by Kollmorgen with the SEC, information delivered to the
Company by Kollmorgen outlining its proposed plans to replace the Company's
Board of Directors, and the potential effects of the removal of the current
Board of Directors and the election of Kollmorgen's director nominees on the
Company, its shareholders, its employees, and its business operations. The Board
of Directors has determined that the Kollmorgen Proposals are not in the best
interests of the Company and its shareholders and urges shareholders to vote
AGAINST the Kollmorgen Proposals by returning the [BLUE] proxy card, which is
being solicited by the Board of Directors. See "Background" and "Reasons for the
Company Board's Recommendation."
THE BOARD OF DIRECTORS HAS DETERMINED THAT THE KOLLMORGEN PROPOSALS ARE
NOT IN THE BEST INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS, VIGOROUSLY
OPPOSES KOLLMORGEN'S SOLICITATION OF PROXIES, AND URGES SHAREHOLDERS TO VOTE
AGAINST THE KOLLMORGEN PROPOSALS BY SIGNING, DATING, AND RETURNING THE ENCLOSED
[BLUE] PROXY CARD.
VOTING PROCEDURE
VOTING RIGHTS
Except as set forth below, each share of Common Stock outstanding on
the Record Date is entitled to one vote on all matters to be voted on at the
Special Meeting. Approval of Proposal
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1 to remove all of the Company's directors will require the affirmative
vote for removal of a majority of the issued and outstanding shares of Common
Stock.
As provided by the Company's Bylaws and by California law, in electing
directors no stockholder shall be entitled to cumulate votes for the election of
directors (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.
Approval of Proposal 3 will require the affirmative vote of a majority of
the issued and outstanding shares of Common Stock.
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 entitled to vote for purposes
of determining the presence of a quorum. Abstentions and broker non-votes are
tabulated separately. Abstentions and broker non-votes do not constitute a vote
"for" or "against" any matter and thus will be disregarded in any calculation of
"votes cast," except for Proposals 1 and 3 as to which abstentions and broker
non-votes will have the effect of votes "against" such proposals. 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.
EFFECT OF [BLUE] PROXY
The Company's Board of Directors is soliciting proxies AGAINST the
Kollmorgen Proposals.
If the [BLUE] proxy card is duly completed and returned, it will be voted
in accordance with the instructions thereon. If a shareholder returns the [BLUE]
proxy card duly executed, but does not indicate the manner in which it is to be
voted, it will be voted AGAINST each of the Kollmorgen Proposals and in the
discretion of the proxies named thereon as to any other matters properly coming
before the Special Meeting.
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Any shareholder executing and delivering the enclosed [BLUE] proxy
card may revoke such Proxy by (i) filing with the Secretary of the Company, at
or before the Special Meeting, a written notice of revocation bearing a date
later than the date of the proxy card, (ii) signing and returning a later dated
proxy card, or (iii) attending the Special Meeting and voting in person
(although attendance at the Special Meeting will not in and of itself constitute
revocation of a proxy). Any written notice revoking a proxy should be sent to:
Pacific Scientific Company, 620 Newport Center Drive, Newport Beach, California
92660, Attention: _____________________.
The Board of Directors urges you NOT to sign the [COLOR] proxy card sent
to you by Kollmorgen. Whether or not you have previously executed a [COLOR]
proxy card, the Board urges you to show your support for the Board of Directors
by executing and dating the enclosed [BLUE] proxy card and mailing it in the
enclosed postage-paid envelope as soon as possible. A later dated and signed
[BLUE] proxy card will revoke any previously provided [COLOR] proxy card.
BACKGROUND
On December 9, 1997, the Company received a written proposal by Kollmorgen
(the "Original Kollmorgen Proposal") for a business combination between
Kollmorgen and the Company in which Kollmorgen proposed that the Company's
shareholders would receive consideration of $20.50 per share, half in cash and
the balance in Kollmorgen stock (without specifying the basis on which such
stock would be valued), and related matters. At such meeting, the Board
authorized Lester Hill, Chairman of the Board and Chief Executive Officer of the
Company, to respond to Kollmorgen and inform it that the Company would respond
to the Original Kollmorgen Proposal after having had the chance to fully
consider the matter. On December 15, 1997, Kollmorgen filed with the SEC a
Tender Offer Statement on Schedule 14D-1 (the "Schedule 14D-1") with respect to
the Kollmorgen Offer and a Consent Solicitation Statement/Preliminary Prospectus
(the "Kollmorgen Consent Solicitation Statement") with respect to the
solicitation of consents to call a special meeting of the Company's shareholders
to act on the proposals described herein (the "Kollmorgen Solicitation"). The
Special Meeting is being held as a result of the Kollmorgen Solicitation.
Kollmorgen proposes to have shareholders act at the Special Meeting to (i)
remove from office all members of the Company Board; (ii) fill the newly created
vacancies on the Company Board by electing six persons nominated by Kollmorgen
to the Company Board, who are expected to take such actions, subject to their
fiduciary duties under applicable law, as may be necessary to consummate the
Kollmorgen Offer and the Proposed Merger (as defined below); and (iii) repeal
any and all provisions of the Bylaws of the Company that have not been duly
filed by the Company with the SEC prior to August 11, 1997, including any and
all amendments to the Bylaws of the Company adopted on or after December 15,
1997. Additional information as to certain matters relating to the Kollmorgen
Proposals may be found in the Kollmorgen Prosxy Statement dated ___________,
1998, filed by Kollmorgen with the Securities and Exchange Commission as
definitive proxy materials under cover of a Schedule 14A. Shareholders are urged
to consult the Kollmorgen Proxy Statement for additional details as to the
Proposed Merger and related matters.
5
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In accordance with California law and the Company's Bylaws, the
Company's Board of Directors has fixed ___________ __, 1998 (the "Record Date")
as the date for determining the shareholders of the Company entitled to receive
notice of and to vote at the Special Meeting. As of the Record Date, there were
__________________ shares of Common Stock issued and outstanding. As of December
15, 1997, Kollmorgen beneficially owned ____________ shares of Common Stock,
representing less than _________% of the outstanding shares as of such date.
The Kollmorgen Offer was commenced on December 15, 1997. The Board met on
December 17 and 21, 1997 to consider the Kollmorgen Offer and related matters.
At those meetings, the Board considered the Company's business, financial
condition, results of operations, current business strategy and future
prospects, recent and historical market prices for the Common Stock, the terms
of the Original Kollmorgen Proposal, the terms and conditions of the Kollmorgen
Offer and the Proposed Merger, strategic and other potential alternatives to the
Kollmorgen Offer and the Proposed Merger, and other matters, including
information presented by the Company's management, BancAmerica Robertson
Stephens ("BARS"), the Company's financial advisor, and the Company's legal
advisors. At its December 21st meeting, the Board unanimously (i) determined to
redeem the preferred share purchase rights currently issued and outstanding
under the its existing preferred share purchase rights plan (the "Existing
Rights") and simultaneously adopted a new Preferred Share Purchase Rights Plan
(the "New Rights Agreement") and declared a dividend distribution of new
preferred share purchase rights ("New Rights") thereunder; (ii) declined to
render the Existing Rights or the New Rights inapplicable to the Kollmorgen
Offer or the Proposed Merger; and (iii) declined to recommend the Kollmorgen
Offer or the Proposed Merger or to approve the Proposed Merger for purposes of
Article FIFTH of the Company's Articles of Incorporation.
ACCORDINGLY, THE BOARD UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS REJECT THE
KOLLMORGEN PROPOSALS. The Board has directed management and the Company's
advisors to explore such strategic and other alternatives and to report back to
the Board promptly with respect thereto.
Kollmorgen and Torque Corporation ("Bidder"), a Delaware Corporation and
wholly owned subsidiary of Kollmorgen, have made the Kollmorgen Offer to
purchase 6,347,241 shares of Common Stock (or such greater or lesser number of
shares of Common Stock that, when added to the number of shares of Common Stock
owned by Kollmorgen and Bidder, will constitute a majority of the Common Stock
outstanding on a fully diluted basis), at a price of $20.50 per share, net to
the seller in cash on the terms and subject to the conditions set forth in the
Offer to Purchase, dated December 15, 1997, and in the related Letter of
Transmittal (which together constitute the "Kollmorgen Offer").
According to the Schedule 14D-1, Kollmorgen is also seeking to negotiate
with the Company a definitive merger agreement pursuant to which the Company
would, as soon as practicable following consummation of the Kollmorgen Offer,
consummate a merger or similar business combination with Kollmorgen, Bidder or
another direct or indirect subsidiary of Kollmorgen (the "Proposed Merger").
According to the Schedule 14D-1, in the Proposed Merger, each share of Common
Stock then outstanding (other than shares held by the Company
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or any wholly owned subsidiary of the Company and shares of Common Stock
owned by Kollmorgen, Bidder or any other direct or indirect wholly owned
subsidiary of Kollmorgen and shares held by shareholders who properly exercised
their appraisal rights) would be converted into the right to receive shares of
common stock, par value $2.50 per share, of Kollmorgen ("Kollmorgen Common
Stock"). The Schedule 14D-1 states that the exact number of shares of Kollmorgen
Common Stock into which each share of Common Stock will be converted in the
Proposed Merger will be determined by a formula based upon the price of
Kollmorgen Common Stock during a fixed period prior to the time the Proposed
Merger would be voted upon by the holders of Common Stock and having a nominal
value of $20.50 per share of Common Stock, subject to a collar which could have
the effect, should the price of the Kollmorgen Common Stock fall below a
specified trading price, of rendering the immediate market value of the shares
of Kollmorgen Common Stock which would be received in the Proposed Merger less
than $20.50. . Should the price of Kollmorgen Common Stock rise above a
specified trading range, the immediate market value of the shares of Kollmorgen
Common Stock which would be received in the Proposed Merger could also be
greater than $20.50. In either case, if the Company's shareholders tender more
shares pursuant to the Kollmorgen Offer than Kollmorgen seeks to acquire through
the Kollmorgen Offer, tendering shareholders will not receive the $20.50 cash
payment for all of their tendered shares and instead will receive a mixture of
cash and Kollmorgen Common Stock. As a result of this fact, and the fact that
only Kollmorgen Common Stock will be paid in connection with the Proposed
Merger, any shares of Common Stock in respect of which cash is not paid in
connection with the Kollmorgen Offer (whether as a result of proration in the
Kollmorgen Offer or because such shares were not tendered in the Kollmorgen
Offer) will be converted into Kollmorgen Common Stock assuming consummation of
the Proposed Merger.
THE KOLLMORGEN OFFER AND THE KOLLMORGEN PROPOSALS ARE INTEGRAL PARTS OF
KOLLMORGEN'S ATTEMPT TO ACQUIRE THE COMPANY. Election of Kollmorgen's nominees
to the Company Board will facilitate the satisfaction of the conditions to the
Kollmorgen Offer and the consummation of the Kollmorgen Offer, as such nominees
will, if elected, in their capacity as members of the Company Board, be able to
take action to cause the Company to satisfy certain of the conditions to the
Kollmorgen Offer that would not otherwise be satisfied. The Kollmorgen Offer, in
turn, is designed to give Kollmorgen control of the Company through the purchase
of a majority of the Company's Common Stock. By controlling a majority of the
Common Stock, Kollmorgen will be assured of shareholder approval of the Proposed
Merger if and when shareholders were to vote on the Proposed Merger. Thus, in
order to assure consummation of the Kollmorgen Offer and Company Board approval
of the Proposed Merger, Kollmorgen is seeking to replace the Company Board with
Kollmorgen's own nominees, which Kollmorgen expects will act to facilitate the
Proposed Merger. If Kollmorgen is successful in its effort, Kollmorgen will
effectively gain the board approval it requires to complete the Kollmorgen Offer
and the Proposed Merger. Such board approval, together with the control of the
Company's Common Stock Kollmorgen seeks to gain through the Kollmorgen Offer,
would ensure consummation of the Kollmorgen Offer and the Proposed Merger.
7
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INFORMATION REGARDING THE DIRECTORS OF THE COMPANY
Certain information regarding each of the current director including their
principal occupation, age and period of service as a director of the Company are
set forth below.
WALTER F. BERAN; AGE 71; 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 Vencor Inc.
RALPH O. BRISCOE; AGE 69; 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.
LESTER "BUCK" HILL; AGE 53; CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF
EXECUTIVE OFFICER OF THE COMPANY Mr. Hill was elected a director,
Chairman of the Board, President and Chief Executive Officer of the
Company in February 1997. Prior to joining the Company, Mr. Hill was a
business consultant since 1996; from 1992 to 1995, he was Executive
Vice President of the Communications Division of General Instrument
Corporation; from 1989 to 1992, he was President of Portable Systems
Division of Symbol Technologies, Inc.; from 1987 to 1989, he was
President and CEO of Data Design Laboratories Inc.; and from 1968 to
1987, he was employed by TRW, Inc., most recently as Vice President
and General Manager of the Electronic Components Group. Mr. Hill also
serves as a director of Metrologic Instruments, Inc. and the Board of
Advisors of Femtometrics, Inc.
RALPH D. KETCHUM; AGE 70; PRESIDENT, RDK CAPITAL, INC. Mr. Ketchum was
elected a director of the Company 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.
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WILLIAM A. PRESTON; AGE 60; CHAIRMAN AND MAJORITY OWNER OF APM, INC.
Mr. Preston was elected a director of the Company 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.
MILLARD H. PRYOR, JR.; AGE 63; MANAGING DIRECTOR, PRYOR & CLARK COMPANY
Mr. Pryor became a director of the Company in 1992. He is a
Managing Director of Pryor & Clark Company (a real estate and
investment holding company), which he had served as an executive
since 1970. 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 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.
COMMITTEES AND COMPENSATION OF THE BOARD OF DIRECTORS
The Company has standing Executive, Audit, Compensation and Nominating
Committees and a Succession Committee. During the Company's 1997 fiscal year,
the Board of Directors held ___ meetings [and each director attended at least
75% of all Board meetings and meetings of Committees on which he served].
Executive Committee
The Executive Committee, during the 1997 fiscal year consisted of Messrs.
Briscoe, Brower and Preston (Chairman), 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 1997 fiscal year.]
Audit Committee
The Audit Committee, consisting of Messrs. Beran (Chairman), Briscoe,
Ketchum, Preston, Pryor and Stafford, met ____ times during the 1997 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 auditor on questions of interest.
Compensation Committee
The Compensation Committee, consisting of Messrs. Ketchum, Preston and
Stafford (Chairman), met ___ times during the 1997 fiscal year. The Compensation
Committee makes recommendations to the Board of Directors on the annual salary
rates of all elected officers of the
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Company, makes recommendations to the Board on 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 did not meet during the 1997 fiscal year.]
Succession Committee
The Succession Committee, consisting on Messrs. Briscoe, Preston
(Chairman) and Stafford, makes recommendations, as required, concerning the
selection of the Company's executive officers. The Succession Committee met
___ times during the past year.
Director's Compensation
The Directors' Compensation Plan provides a $25,000 per year retainer with
no other meeting fees or additional retainer payable. Any employee of the
Company, who is also a director, receives no additional compensation or benefit
as a result of being a director.
Director's Retirement Plan
The Company maintains a retirement plan for non-employee members of the
Board. The annual benefit paid under the Plan is $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.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's directors,
executive officers and any persons holding more than ten percent of the
outstanding shares of Common Stock are
10
<PAGE>
required to report their ownership of such shares and any changes in that
ownership to the SEC and the New York Stock Exchange (the "NYSE"). These persons
also are required by SEC regulations to furnish the Company with copies of these
reports. Specific due dates for these reports have been established and the
Company is required to report in this Proxy Statement any failure to file by
these dates during the 1997 fiscal year. Based solely on a review of the reports
furnished to the Company or written representations from the Company's directors
and executive officers, the Company believes that all of these filing
requirements were satisfied by the Company's directors, executive officers and
ten percent holders during the 1997 Fiscal Year except [__________.]
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The Company knows of no beneficial owners of more than five percent (5%)
of the shares of Common Stock as of December 15, 1997. The Company has no other
class of equity security outstanding.
The following table sets forth information with respect to beneficial
ownership as of December 15, 1997 by the Company's directors, the named
executive officers and by all directors and executive officers as a group,
together with the percentage of the outstanding shares of Common Stock which
such ownership represents. Unless otherwise indicated, the beneficial ownership
consists of sole voting and investment power with respect to the shares
indicated, except to the extent that authority is shared by spouses under
applicable law.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP(1)(2) CLASS
------------------------ --------------- --------
<S> <C> <C>
Walter F. Beran...................... 6,000 *
- ---------------------------------------
Ralph O. Briscoe..................... 20,000 *
- ---------------------------------------
Lester Hill.......................... 50,000 *
- ---------------------------------------
Ralph D. Ketchum..................... 11,500 *
- ---------------------------------------
William A. Preston................... 13,000 *
- ---------------------------------------
Millard H. Pryor, Jr. ............... 7,000 *
- ---------------------------------------
David L. Schlotterbeck............... -- *
- ---------------------------------------
Winston E. Hickman................... -- *
- ---------------------------------------
Richard V. Plat...................... 262,278 2.1%
- ---------------------------------------
William R. Fejes..................... 8,000 *
- ---------------------------------------
Richard G. Knoblock.................. 17,050 *
- ---------------------------------------
Edgar S. Brower(3)................... 116,000 *
- ---------------------------------------
All Directors and Current
Executive Officers as
a Group (13 persons)............... 415,962 3.3%
- ----------
* Represents less than 1%.
11
<PAGE>
<FN>
(1) Information with respect to beneficial ownership is based upon the Company's
stock records and data supplied to the Company by the individuals.
(2) Includes certain shares which the following have the right to acquire within
60 days of December 15, 1997 through the exercise of stock options to
purchase shares of Common Stock: Messrs. Beran, Briscoe, Ketchum, Preston
and Pryor, 3,000 shares each; Mr. Hill, 50,000 shares; Mr. Plat, 103,000
shares; Mr. Fejes, 8,000 shares; Mr. Knoblock, 17,050 shares; Mr. Brower,
15,000 shares; Mr. Day, 1,800 shares, Mr. Nelson, 27,750 shares; and all
directors and current executive officers as a group, 146,700 shares. In the
event of a change of control (as defined in the relevant plan and related
documents) of the Company, all outstanding options granted to employees
shall vest and become immediately exercisable. Does not include an
additional 50,000 shares that Mr. Hill will have the right to acquire as a
result of the vesting of an option on February 18, 1998.
(3) Mr. Brower resigned as a director and officer on February 19, 1997.
</FN>
</TABLE>
EXECUTIVE COMPENSATION
The following table discloses compensation received for the three fiscal
years ended December 27, 1996 by the Chief Executive Officer at such time and
the Company's next four most highly paid executive officers (collectively, the
"named executive officers"):
12
<PAGE>
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
OTHER
ANNUAL SECURITIES ALL
COMPENS- UNDERLYING OTHER
NAME AND PRINCIPAL ATION OPTIONS COMPENS
POSITION YEAR SALARY($) BONUS($)(1) ($)(2) (#)(4) -ATION ($)(4)
-------- ---- --------- ----------- ------ ------ -------------
- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Edgar S. Brower(5).... 1996 $403,198 -- -- 20,000 $4,750
Former Chairman of 1995 376,640 $155,341 $6,000 20,000 90,620
the Board, Director, 1994 339,954 175,000 7,500 80,000 120,620
and Chief Executive
Officer
Richard V. Plat....... 1996 298,355 -- -- 10,000 4,750
Executive Vice 1995 284,904 100,924 -- 10,000 4,620
President 1994 234,365 90,000 -- 34,000 4,620
Former Chief
Financial Officer and
Secretary
Ronald B. Nelson...... 1996 179,036 61,805 -- 5,000 4,476
Former Vice President 1995 167,178 87,768 -- 4,000 4,180
and President, Motor 1994 158,415 75,000 -- 7,000 3,850
Products
Richard G. Knoblock... 1996 163,270 66,086 -- 5,000 4,031
Vice President and 1995 147,117 64,150 -- 4,000 3,678
President, 1994 130,000 -- -- 5,600 1,875
HTL/Kin-Tech and
Electro Kinetics
Robert L. Day(6)...... 1996 132,056 59,772 -- 1,000 2,969
Former Vice President 1995 128,657 12,343 -- 2,000 2,722
and President, Energy 1994 117,416 21,208 -- 5,200 2,248
Dynamics Division
- ----------
<FN>
(1) The amounts shown in this column reflect payments under the Company's
Management Incentive Plan.
(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 held 100,000 shares of restricted common stock. The
restricted term expired in July 1995, therefore, this amount represents the
non-preferential dividends paid by the Company during 1994 and the first two
quarters of 1995. The fair market value of the 100,000 shares of restricted
stock was $1,950,000 on the date that the restriction expired.
(3) For the three-year period ended December 27, 1997, no restricted stock
awards were made.
(4) The amounts disclosed in this column include:
(a) For Mr. Brower, the Company accrued $86,000 and $116,000 in fiscal 1995
and 1994, respectively, on behalf of Mr. Brower for his supplementary
Executive Retirement Plan. No accrual was necessary for this Plan during
1996, as the Plan expense was fully accrued at December 29, 1995. The
Executive Retirement Plan is provided to Mr. Brower only, and is in
addition to and duplicates the benefits provided by the Post-1985
Retirement 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) The Company contributions, under Pacific Scientific's Savings Plan, a
defined contribution, were:
</FN>
</TABLE>
13
<PAGE>
1996 1995 1994
---- ---- ----
Mr. Brower........ 4,750 $4,620 $4,620
Mr. Plat.......... 4,750 4,620 4,620
Mr. Nelson........ 4,476 4,180 3,850
Mr. Knoblock...... 4,031 3,678 1,875
Mr. Day........... 2,969 2,722 2,248
(5) Mr. Brower resigned as a director and officer on February 19, 1997.
(6) Mr. Day retired from the Company on December 27, 1996.
OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal 1996
to the named executive officers.
<TABLE>
<CAPTION>
POTENTIAL
INDIVIDUAL GRANTS REALIZABLE
---------------- VALUE AT ASSUMED
NUMBER OF % OF TOTAL ANNUAL
SECURITIES OPTIONS RATES OF STOCK
UNDERLYING GRANTED TO PRICE
OPTIONS EMPLOYEES EXERCISE APPRECIATION FOR
GRANTED IN FISCAL PRICE EXPIRATION OPTION TERM (3)
---------------
NAME (#)(1) YEAR 1996(2) ($/SH) DATE 5% 10%
- ---------------- ------ ------------ ----- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Edgar S. Brower(4) 20,000 17% $20.88 June 2006 $680,064 $1,082,887
Richard V. Plat. 10,000 9% 20.88 June 2006 340,032 541,444
Ronald B. Nelson 5,000 4% 20.88 June 2006 170,016 270,722
Richard G.
Knoblock........ 5,000 4% 20.88 June 2006 170,016 270,722
Robert L. Day(5) 1,000 1% 20.88 June 2006 34,003 54,144
- ----------
<FN>
(1) All options granted by the Company reflected in the above table were granted
pursuant to the Pacific Scientific Company 1995 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. The shares become fully exercisable after four years with
normal vesting occurring at a rate of 25% per year. The Stock Option Plan
grants broad discretion to the Board of Directors to change or modify the
material terms of option grants.
(2) The Company granted options representing 117,000 shares to employees in
fiscal 1996.
(3) The dollar amounts in these columns are determined using assumed rates of
appreciation set by the Securities and Exchange Commission and are not
intended to forecast future appreciation, if any, in the market value of the
Company's Common Stock. Such amounts are based on the assumption that the
named persons hold the options for the full ten-year term. The actual value
of the options will vary in accordance with the market price of the
Company's Common Stock.
(4) Mr. Brower resigned as a director and officer on February 19, 1997.
14
<PAGE>
(5) Mr. Day retired from the Company on December 27, 1996.
</FN>
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
The following table provides information on the number of exercised and
unexercised options and the value of the in-the-money unexercised options
held by the named executive officers at December 27, 1996. The Company
currently does not grant stock appreciation rights.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED OPTIONS AT FISCAL AT FISCAL
ON VALUE YEAR-END(#) YEAR-END($)(2)
EXERCISE REALIZED -------------------------- ---------------------------
NAME (#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ----------------- ------- ------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Edgar S. Brower(3) -- -- 174,000 100,000 $519,938 $85,938
Richard V. Plat. 52,300 $614,525 79,500 44,500 248,438 34,375
Ronald B. Nelson -- -- 20,286 14,764 55,614 9,045
Richard G. -- -- 11,000 13,200 19,125 6,375
Knoblock........
Robert L. Day(4) -- -- 3,500 6,800 4,644 4,644
- ----------
<FN>
(1) The amounts in this column were calculated using the difference between the
closing market price of the Company's Common Stock at exercise minus the
option exercise price.
(2) The amounts in this column were calculated by using the difference between
the closing price of the Company's Common Stock on December 27, 1996 and the
option exercise prices. The closing price of the Company's Common Stock on
December 27, 1996 on the New York Stock Exchange was $11.50.
(3) Mr. Brower resigned as a director and officer on February 19, 1997.
(4) Mr. Day retired from the Company on December 27, 1996.
</FN>
</TABLE>
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's pension plans were 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 Post-1985 Retirement Plan. Employees hired prior to January 1, 1985 have
the option of receiving retirement benefits from the Pre-1985 or Post-1985
Retirement Plan whichever plan provides the higher benefits.
15
<PAGE>
PRE-1985 RETIREMENT PLAN
ESTIMATED ANNUAL RETIREMENT BENEFITS
HIGHEST 15 20 25 30 35
FIVE-YEAR YEARS YEARS YEARS YEARS YEARS
AVERAGE OF OF OF OF OF
COMPENSATION SERVICE SERVICE SERVICE(1) SERVICE(1) SERVICE(1)
- ------------ ------- ------- ---------- ---------- ----------
$125,000..... $ 48,800 $ 65,500 $ 80,000 $ 80,000 $ 80,000
175,000..... 70,700 94,700 115,000 115,000 115,000
225,000..... 92,600 123,900 150,000 150,000 150,000
275,000..... 114,500 153,100 185,000 185,000 185,000
325,000..... 136,400 182,300 220,000 220,000 220,000
375,000..... 158,300 211,500 255,000 255,000 255,000
425,000..... 180,200 240,700 290,000 290,000 290,000
475,000..... 202,100 269,900 325,000 325,000 325,000
525,000..... 224,000 299,100 360,000 360,000 360,000
- --------------
POST-1985 RETIREMENT PLAN
ESTIMATED ANNUAL RETIREMENT BENEFITS
HIGHEST 15 20 25 30 35
FIVE-YEAR YEARS YEARS YEARS YEARS YEARS
AVERAGE OF OF OF OF OF
COMPENSATION SERVICE SERVICE SERVICE SERVICE SERVICE
- ------------ ------- ------- ------- ------- -------
$125,000..... $ 26,100 $ 34,700 $ 43,400 $ 52,100 $ 60,800
175,000..... 37,300 49,700 62,200 74,600 87,000
225,000..... 48,600 64,700 80,900 97,100 133,300
275,000..... 59,800 79,700 99,700 119,600 139,500
325,000..... 71,100 94,700 118,400 142,100 165,800
375,000..... 82,300 109,700 137,200 164,600 192,000
425,000..... 93,600 124,700 155,900 187,100 218,300
475,000..... 104,800 139,700 174,700 209,600 244,500
525,000..... 116,100 154,700 193,400 232,100 270,800
- ------------
(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, including the Pacific Scientific Company Pension
Restoration Plan. Mr. Hill is provided with a Special Supplemental Retirement
Plan, consisting of a monthly defined contribution of $5,000. This Plan is in
addition to the Company's regular Employee Pension Plan and the Pacific
Scientific Company Pension Restoration Plan.
The officers named in the Summary Compensation Table have been credited
with the following years of service: Mr. Brower, 11 years; Mr. Plat, 19 years;
Mr. Nelson, 7 years; Mr. Knoblock, 8 years and Mr. Day, 15 years. Of these
officers, Mr. Plat is the only one to have the option of receiving benefits in
either of the plans as described above.
16
<PAGE>
The benefits under the Pre-1985 Retirement 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 Retirement 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. As a result, if an
individual's compensation exceeds the prescribed limits, the excess benefits
will be paid by the Company pursuant to this plan.
INTERESTS OF CERTAIN PERSONS
Additional information as to certain interests of the Company Board and
the Company's executive officers is set forth in the Solicitation/Recommendation
Statement on Schedule 14D-9 filed by the Company with the Commission on December
22, 1997 and previously delivered to shareholders of the Company.
PROXY SOLICITATION
Revocations are being solicited by and on behalf of the Company. All
expenses of the Company Solicitation, including the cost of preparing and
mailing this Revocation Solicitation Statement, will be borne by the Company. In
addition to solicitation by use of the mails, Revocations may be solicited by
directors, certain officers, and employees of the Company in person or by
telephone, telegram, advertisement, courier service, or other means of
communication. Such directors, officers and employees will not be additionally
compensated, but may be reimbursed for out-of-pocket expenses in connection with
such solicitation. In addition, the Company has retained MacKenzie Partners,
Inc. ("MacKenzie") to assist in the solicitation of Revocations. The Company has
agreed that MacKenzie will be paid a fee not to exceed $ , plus reimbursement
for their reasonable out-of-pocket expenses. The Company has also agreed to
indemnify MacKenzie against certain liabilities and expenses, including certain
liabilities and expenses under the federal securities law. It is anticipated
that MacKenzie will employ approximately 40 persons, respectively, to solicit
shareholders.
The Company has engaged BARS to act as its financial advisor in connection
with Kollmorgen's unsolicited offer and related matters, including this
solicitation. BARS may assist in the solicitation of Revocations. Information as
to the terms of BARS' engagement is set forth in the Schedule 14D-9 provided
herewith. BARS will not receive any fee for, or in connection with, any
solicitation activities apart from the fees it is otherwise entitled to receive
under its engagement. BARS does not admit or deny that any of its directors,
officers, or employees is a "participant" as defined in Schedule 14A promulgated
by the SEC under the Securities Exchange
17
<PAGE>
Act of 1934, as amended, or that such Schedule 14A requires the disclosure
of certain information concerning such persons. In the normal course of its
business, BARS regularly buys and sells the Common Stock and other securities
for its own account and for the accounts of its customers, which transactions
may result from time to time in BARS and its associates having a net "long" or
net "short" position in the Common Stock or other securities or option contracts
or derivatives in or relating to the Company's securities. If BARS assists the
Company in connection with the solicitation of Revocation, such activity will be
carried out by a team of individuals consisting of officers and employees of
BARS.
The Company estimates that its total expenditures relating to the Company
Solicitation (excluding costs representing salaries and wages of regular
employees and officers of the Company) will be approximately $ . The Company to
date has incurred estimated total expenses of approximately $ .
In addition to the members of the Company Board (which consists of
Messrs. Beran, Briscoe, Hill, Ketchum, Preston and Pryor), Mr. David L.
Schlotterbeck, President of the Company, and Mr. Winston E. Hickman, Senior
Vice President and Chief Financial Officer of the Company, may solicit
Revocations. The business address for each of the members of the Company
Board and executive officers named above is, and the Company's executive
offices are located at: 620 Newport Center Drive, Suite 700, Newport Beach,
California 92660.
SHARE TRANSACTIONS BY PARTICIPANTS
The following table sets forth all purchases and sales of Common Stock
during the past two years by the directors of the Company and those executive
officers that are participants in the solicitation of proxies:
Type of Number of
------- ---------
Name Transaction Shares Date Per Share Price
---- ----------- ------ ---- ---------------
Walter F. Beran Purchase 1,000 3/1/96 $22.825
Ralph D.
Ketchum Purchase 3,500 7/2/97 $13.00
Purchase 2,000 5/24/96 $18.875
Purchase 1,000 4/12/96 $18.375
Purchase 1,000 2/2/96 $21.00
William A.
Preston Purchase 2,000 7/12/96 $12.375
Additional information regarding option grants within the last two years
to the members of the Company's Board of Directors and to Messrs. Hill,
Schlotterbeck and Hickman, is set forth in the Solicitation recommendation
Statement on Schedule 14D-9 filed by the Commission
18
<PAGE>
on December 22, 1997, as amended, and previously delivered to the Shareholders
under the caption "Item 3(b)-IDENTITY AND BACKGROUND--Certain Stock Ownership
Information."
SHAREHOLDER PROPOSALS FOR 1998 PROXY MATERIALS
The Board will make provision for presentation of proposals by
shareholders at the 1998 annual meeting of shareholders provided such proposals
are submitted in accordance with the Company's Bylaws by eligible shareholders.
In order for any such proposals to be included in the proxy materials for
consideration at the 1998 annual meeting, the proposals, which must comply with
relevant SEC regulations, must have been received no later than __________,
1997.
OTHER BUSINESS
The management of the Company is not aware of any other matters to be
brought before the Special Meeting. However, if any other matters are properly
brought before the Special Meeting, including proposals to adjourn or postpone
the Special Meeting, the persons named in the enclosed form of proxy will have
discretionary authority to vote all proxies with respect to such matters in
accordance with their best judgment.
19
<PAGE>
APPENDIX A
PROXY
PACIFIC SCIENTIFIC COMPANY
SPECIAL MEETING OF SHAREHOLDERS, , 1998
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints ________________ or _______________, or
either of them, as proxies with power of substitution to vote all shares of the
undersigned at the special meeting of the shareholders of Pacific Scientific
Company to be held on __, 1998, at p.m. (local time) at ________, ____________,
California, and at any adjournments or postponements thereof, in accordance with
the directions given on the reverse side.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSALS 1 AND 3 AND TO
WITHHOLD AUTHORITY TO VOTE AS TO EACH OF THE NOMINEES FOR DIRECTOR SET FORTH IN
PROPOSAL 2.
(1) [TO COME]
[ ] AGAINST [ ] FOR [ ] ABSTAIN
(2) To elect the following director nominees nominated by Kollmorgen.
[ ] WITHHOLD AUTHORITY AS TO ALL [ ] FOR ALL
[ ] WITHHOLD AUTHORITY AS TO ALL EXCEPT
(INSTRUCTION: TO VOTE FOR ANY INDIVIDUAL NOMINEE, CHECK THE BOX TO
"WITHHOLD AUTHORITY AS TO ALL EXCEPT" AND WRITE THAT
NOMINEE'S NAME ON THE LINE BELOW.)
- ------------------------------------------------------------------------------
[NAMES OF NOMINEES]
(3) [TO COME]
[ ] AGAINST [ ] FOR [ ] ABSTAIN
(4) In their discretion, on such other matters as may properly come before the
meeting or any adjournment or postponement thereof.
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTIONS
ARE GIVEN, THE SHARES WILL BE VOTED AGAINST PROPOSALS 1 AND 3 AND TO WITHHOLD
AUTHORITY TO VOTE FOR EACH OF THE DIRECTOR NOMINEES NAMED IN PROPOSAL 2.
----------------------------------------
SIGNATURE
----------------------------------------
SIGNATURE (IF HELD JOINTLY)
DATED:____________________________, 1998
SIGNATURE OF SHAREHOLDER(S) SHOULD CORRESPOND EXACTLY WITH THE NAME PRINTED
HEREON. JOINT OWNERS SHOULD EACH SIGN PERSONALLY. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD GIVE FULL TITLE AND AUTHORITY.
2
