SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant [X]
Filed by a party other than the registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Park Electrochemical Corp.
(Name of Registrant as Specified in Its Charter)
Park Electrochemical Corp.
(Name of Person(s) Filing Proxy Statement
Payment of filing fee (Check the appropriate box):
[x] $125 per Exchange Act Rule 0-11(c)(l)(ii), 14a-6(i)(l), 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 transactions 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:
[ ] 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 no.:
(3) Filing party:
(4) Date filed: June 3, 1996
APPENDIX to electronically filed Proxy Statement dated June 3, 1996
of Park Electrochemical Corp. listing all graphic information
included in such proxy statement:
1. Stock Performance Graph appearing on page 8 of proxy statement
dated June 3, 1996 comparing the yearly percentage change in
the cumulative total shareholder return on the Registrant's
Common Stock with the cumulative total return of the New York
Stock Exchange Market Index and a peer group index comprised
of the Company and 224 other companies for the period of the
Company's five fiscal years commencing March 4, 1991 and
ending March 3, 1996, assuming that $100 had been invested in
the Company's Common Stock and each index on March 3, 1991 and
that all dividends on the Company's Common Stock and on each
stock included in each index were reinvested.
Such graph shows that such $100 invested in the Company's
Common Stock would have had a value of $118.40 on March 1,
1992, $112.20 on February 28, 1993, $251.94 on February 27,
1994, $327.42 on February 26, 1995 and $616.67 on March 3,
1996, that such $100 invested in the New York Stock Exchange
Market Index would have had a value of $114.85, $123.63,
$139.65, $141.79 and $187.60, respectively, on such dates and
that such $100 invested in the peer group index would have had
a value of $117.08, $149.12, $204.62, $242.24 and $333.84,
respectively, on such dates.
PARK ELECTROCHEMICAL CORP.
_______________
Notice of Annual Meeting of Shareholders
July 17, 1996
_______________
The Annual Meeting of Shareholders of PARK ELECTROCHEMICAL
CORP. (the "Company") will be held at The Chase Manhattan Bank, One
Chase Manhattan Plaza, New York, New York on July 17, 1996, at 10:00
o'clock A.M., New York time, for the purpose of considering and
acting upon the following:
1. The election of six (6) directors to serve until
the next annual meeting of shareholders and
until their successors are elected and
qualified.
2. The approval of amendments to the 1992 Stock
Option Plan to increase the aggregate number of
shares of Common Stock of the Company authorized
for issuance under such Plan by 550,000 shares
and to add a provision with respect to section
162(m) of the Internal Revenue Code of 1986, as
amended.
3. The transaction of such other business as may
properly come before the meeting.
Only holders of record of Common Stock at the close of
business on May 28, 1996 will be entitled to notice of, and to vote
at, the meeting or any adjournment thereof.
By Order of the Board of Directors,
Jerry Shore,
Chairman of the Board
Dated: June 3, 1996
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE
MEETING. IF YOU DO NOT EXPECT TO BE PRESENT, PLEASE DATE
AND SIGN THE ENCLOSED FORM OF PROXY AND RETURN IT
PROMPTLY TO THE COMPANY IN THE ENCLOSED ENVELOPE WHICH
REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
PARK ELECTROCHEMICAL CORP.
5 Dakota Drive
Lake Success, New York 11042
__________________
P R O X Y S T A T E M E N T
Annual Meeting of Shareholders
July 17, 1996
__________________
This Proxy Statement is furnished in connection with the
solicitation by the Board of Directors (the "Board") of Park
Electrochemical Corp. (the "Company") of proxies with respect to the
Annual Meeting of Shareholders of the Company to be held on July 17,
1996, and any adjournment thereof (the "Meeting"). Any shareholder
giving such a proxy (the form for which is enclosed with this Proxy
Statement) has the power to revoke the same at any time before it is
voted by delivering written notice of such revocation to the Secretary
of the Company.
This Proxy Statement and the accompanying form of proxy are first
being mailed on or about June 3, 1996 to all shareholders of record as
of the close of business on May 28, 1996.
VOTING SECURITIES
At May 28, 1996, the outstanding voting securities of the Company
consisted of 11,582,312 shares of Common Stock, $.10 par value, of the
Company (the "Common Stock"), each share of which, held of record at
the close of business on May 28, 1996, is entitled to one vote.
Presence in person or by proxy of holders of a majority of the
outstanding shares of Common Stock will constitute a quorum for the
transaction of business at the Meeting. At May 28, 1996, all executive
officers and directors of the Company as a group beneficially owned an
aggregate of 1,481,491 shares of Common Stock (including options to
purchase an aggregate of 126,268 shares), constituting approximately
12.6% of the outstanding shares of Common Stock (giving effect to the
exercise of such options).
The following table sets forth information at May 28, 1996 with
respect to each person (including any "group" of persons as that term
is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) who is known to the Company to be the beneficial owner of more
than 5% of the Common Stock:
<TABLE>
<CAPTION>
Amount and
Nature of Percent
Title Name and Address Beneficial of
of Class of Beneficial Owner Ownership Class
<S> <C> <C> <C>
Common Stock............Jerry Shore 1,243,195 (1) 10.7%
5 Dakota Drive
Lake Success, NY 11042
Common Stock............The Capital Group 677,200 (2) 5.8%
Companies, Inc.
Capital Research and
Management Company
333 South Hope Street
Los Angeles, CA 90071
</TABLE>
_____________________
(1) Includes 40,000 shares of Common Stock which Jerry Shore may acquire
pursuant to options, and includes 112,410 shares owned by a member of
Jerry Shore's family, of which he disclaims beneficial ownership.
(2) Capital Research and Management Company, a registered investment
adviser and an operating subsidiary of The Capital Group Companies,
Inc., held sole investment power over all of such shares, but
disclaimed beneficial ownership of such shares, as of February 9,
1996, based on their joint Schedule 13G filed under the Securities
Exchange Act of 1934, as amended.
[/TABLE]
For information with respect to the beneficial ownership of shares of
Common Stock by each director and each nominee for director of the Company,
see "Election of Directors" below.
ELECTION OF DIRECTORS
The Board to be elected at the Meeting consists of six members.
Proxies will be voted in accordance with their terms and, in the absence of
contrary instructions, for the election as directors of the nominees whose
names appear in the following table, to serve for the ensuing year and until
their successors are elected and qualified. Should any of the nominees not
remain a candidate at the time of the Meeting (a situation which is not now
anticipated), proxies solicited hereunder will be voted in favor of those
nominees who do remain as candidates and may be voted for substituted
nominees. The six nominees who receive a plurality of the votes cast at the
Meeting in person or by proxy shall be elected. Each of the nominees is
presently a member of the Board.
<TABLE>
<CAPTION>
Principal Occupation; Shares of Common
Positions and Offices Stock Beneficially
with the Company; Director Owned at May 28, 1996
Name Other Directorships Age Since Number Percent of Class
<S> <C> <C> <C> <C> <C>
Anthony Chiesa..... Former Vice President 75 1954 75,000 Less than 1%
of the Company
Lloyd Frank........ Partner, Parker Chapin 70 1985 4,000(1) Less than 1%
Flattau & Klimpl, LLP,
New York City; and
director of Metro-Tel
Corp.
Norman M. Schneider Business Consultant; 85 1981 9,674 Less than 1%
and director of
Datascope Corp.
Brian E. Shore..... President of the 44 1983 70,854(2) Less than 1%
Company
Jerry Shore........ Chairman of the Board 70 1954 1,243,195(3) 10.7%
and Chief Executive
Officer of the Company
E. Phillip Smoot... Executive Vice President 58 1988 78,768(4) Less than 1%
of the Company
_________________
<FN>
(1) Includes 2,000 shares owned by a member of Mr. Frank's family, of which he
disclaims beneficial ownership.
(2) Includes 38,250 shares which Brian Shore may acquire pursuant to options.
(3) See note (1) to the table under "Voting Securities" for information with
respect to these shares.
(4) Includes 48,018 shares which E. Phillip Smoot may acquire pursuant to
options.
</TABLE>
Each of the persons named in the above table has had the principal
occupation set forth opposite his name for at least the past five years,
except for Brian E. Shore, who was elected President of the Company
effective March 4, 1996, the first day of the Company's current fiscal year,
an Executive Vice President of the Company in May 1994 and a Vice President
of the Company in January 1993 and served as the Company's General Counsel
for more than five years prior to May 1994. Parker Chapin Flattau & Klimpl,
LLP, a law firm of which Lloyd Frank is a partner, was retained to provide
counsel to the Company during its last fiscal year and the Company has
retained this firm during its current fiscal year.
By virtue of his ownership of approximately 10.7% of the outstanding
voting securities of the Company and his positions as Chairman of the Board
and a director of the Company, Jerry Shore may be deemed to be a "control
person" of the Company, as such term is defined in the rules under the
Securities Exchange Act of 1934, as amended.
There are no family relationships among any of the persons named in
the above table or among any of such persons and any of the other executive
officers of the Company, except that Jerry Shore is the father of Brian E.
Shore.
The Company's Audit Committee consists of Anthony Chiesa, Lloyd Frank
and Norman M. Schneider. Its functions are to review the Company's
financial statements with the Company's independent auditors, recommend to
the Board the appointment of the independent auditors, review the
performance and scope of services to be provided by the independent auditors
and review the adequacy of internal auditing and accounting procedures and
controls. The Company has a CEO Compensation Committee consisting of
Anthony Chiesa, Lloyd Frank and Norman M. Schneider. Its functions are
described herein under "Executive Compensation--Compensation Report". The
Company does not have a nominating committee or other compensation committee
or committees performing similar functions.
During the Company's last fiscal year, the Board of directors met six
times and authorized action by unanimous written consent on six occasions,
the Audit Committee met once, and the CEO Compensation Committee met once.
Each of the directors attended at least 75% of the meetings held by the
Board and each committee thereof of which he was a member during the
Company's last fiscal year.
Each director who is not an employee of the Company or any of its
subsidiaries receives a fee of $10,000 per annum for his services as a
director and is reimbursed for travel expenses incurred in attending
meetings of the Board of Directors of the Company.
EXECUTIVE COMPENSATION
Summary Compensation
The following table shows the annual compensation and long-term
compensation for each of the three most recent fiscal years for the
Company's Chief Executive Officer and the four executive officers whose
salary and bonus for the most recent fiscal year exceeded $100,000.
INSERT COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Name and Other Annual Securities All Other
Principal Year Compensation Underlying Compensation
Position (1) Salary Bonus (2) Options/SARs(#) (3)
<S> <C> <C> <C> <C> <C> <C>
Jerry Shore(4) 1996 $369,217 $ -0- $34,850 -0- $36,922
Chairman of the Board 1995 350,000 150,000 34,850 20,000 48,876
and Chief Executive 1994 250,000 49,800 34,850 40,000 29,980
Officer
Brian E. Shore(5) 1996 230,281 180,000 -0- 20,000 15,000
President 1995 209,280 40,000 -0- 20,000 13,876
1994 158,550 30,000 -0- 7,000 18,855
E. Phillip Smoot(6) 1996 299,297 225,000 -0- 40,000 52,430
Executive Vice President 1995 271,790 160,000 -0- 20,000 42,055
1994 251,390 150,000 -0- 20,000 23,584
Paul R. Shackford(7) 1996 103,846 25,000 -0- 10,000 -0-
Secretary, Treasurer,
Vice President and
Chief Financial Officer
Allen Levine(8) 1996 126,215 50,000 -0- -0- 15,000
Secretary, Treasurer, 1995 181,170 45,000 -0- 4,000 13,876
Vice President and 1994 152,250 25,000 -0- 7,000 17,725
Chief Financial Officer
_________________
<FN>
(1) Information is provided for the Company's fiscal years ended March 3,
1996 (53 weeks), February 26, 1995 and February 27, 1994,
respectively.
(2) Amounts shown for Jerry Shore are the costs for the purchase of
certain term life insurance policies for Jerry Shore, the
beneficiaries of which are certain members of Jerry Shore's family.
(3) Reflects the amount of Company contributions to the Profit Sharing
Plan which were accrued for the fiscal years shown pursuant to such
Plan for the accounts of the named executive officers. These amounts
vest in accordance with a graduated scale based on years of service of
the employee with the Company. The amounts shown for Jerry Shore also
include $21,922, $35,000 and $6,396 for 1996, 1995 and 1994,
respectively, credited by the Company to a separate account maintained
by the Company in accordance with Jerry Shore's employment agreement.
The amounts shown for E. Phillip Smoot for 1996 and 1995 include
$37,430 and $28,179, respectively, credited by the Company to a
separate account maintained by the Company in accordance with Mr.
Smoot's employment agreement. These amounts are determined as the
amounts the Company would have contributed to the Profit Sharing Plan
for Jerry Shore and E. Phillip Smoot for such years but for the
limitations imposed by the Internal Revenue Code of 1986, as amended.
(4) Jerry Shore was President of the Company until March 4, 1996, at which
time Brian E. Shore became President of the Company. Jerry Shore
continues to serve as Chairman of the Board and Chief Executive
Officer. In accordance with the provisions of an amended and restated
employment agreement between Jerry Shore and the Company, as amended,
pursuant to which he has agreed to serve as chairman of the board,
chief executive officer or president of the Company for an initial
term ending on February 28, 1999, Jerry Shore receives a base salary
of $350,000 per annum (subject to annual review by the CEO
Compensation Committee of the Board) and an incentive bonus equal to
4% of the amount by which consolidated net earnings, after taxes, of
the Company and its subsidiaries for each fiscal year, exceed
$7,500,000. The bonus is limited to a maximum of $350,000 per year.
Although under the incentive bonus formula Jerry Shore would have been
entitled to a bonus of $350,000 for each of the 1995 and 1996 fiscal
years, he decided to limit his bonus to $150,000 for 1995 and to waive
his bonus entirely for 1996. The agreement also provides that the
initial term will be automatically extended for additional successive
one-year periods unless the Board of Directors of the Company elects
to terminate the agreement by notification to Jerry Shore at least
four years prior to the commencement of each such one-year period, in
which event the agreement will terminate four years from the first day
of March following such notification. No such notification has been
given to date and, therefore, Jerry Shore's employment term under the
agreement will continue until February 28, 2001. Pursuant to the
agreement, Jerry Shore has the right to retire from full-time
employment and serve as a consultant to the Company for a period of
five years. In such event, he will be paid an annual consulting fee
equal to 60% of his base salary in effect under the employment
agreement at the time of his retirement, subject to an indexed cost of
living increase. Pursuant to the agreement, Jerry Shore has deferred
receipt of certain amounts payable to him under the agreement and his
prior employment agreement with the Company until his retirement, and
the Company has agreed to pay Jerry Shore interest on the amounts
deferred at the prime rate.
(5) Brian E. Shore served as Vice President of the Company from January
1993 to May 1994 and as Executive Vice President from May 1994 to
March 4, 1996, when he became President of the Company.
(6) E. Phillip Smoot is employed as Executive Vice President of the
Company and President and Chief Executive Officer of Nelco
International Corporation, a subsidiary of the Company, pursuant to an
employment agreement entered into in March 1996 for a term of
employment ending on February 28, 1999, provided, however, that Mr.
Smoot's employment will continue for at least two years subsequent to
a "Change in Control" of the Company, as defined in the agreement.
The agreement provides for a base salary of $325,000 per annum,
commencing March 1, 1996 (subject to annual review by the Board).
After a "Change in Control" of the Company, he may terminate his
employment for "Good Reason" (as defined in such agreement), such as
his being assigned duties inconsistent with his status as an executive
officer of the Company, a substantial adverse alteration in the nature
of his responsibilities, a reduction of his salary, a relocation of
Mr. Smoot by more than 25 miles, the failure by the Company to pay Mr.
Smoot any portion of his current compensation or deferred compensation
or the failure by the Company to continue any compensation, or benefit
plan. If, after a "Change in Control" of the Company, the Company
terminates Mr. Smoot's employment other than for "Cause" or his
disability or Mr. Smoot terminates his employment for "Good Reason",
the Company will pay him an amount equal to three times the sum of his
salary and the annual bonus awarded to him in respect of the fiscal
year immediately prior to the fiscal year in which occurs the "Change
in Control" or the date of termination of his employment, whichever
resulting bonus is greater, and will maintain for the continued
benefit of Mr. Smoot and his dependents for three years all employee
welfare benefit plans and programs in which he was entitled to
participate prior to the termination of his employment. In addition,
if termination of Mr. Smoot's employment after a "Change in Control"
of the Company is disputed and the dispute is ultimately resolved in
his favor, the Company may be obligated to pay his salary through the
date of final resolution of the dispute, and the employment agreement
requires the Company to pay all legal expenses incurred by Mr. Smoot
following a "Change in Control" of the Company in connection with the
resolution of disputes under the agreement.
(7) Mr. Shackford was employed by, and elected Secretary, Treasurer, Vice
President and Chief Financial Officer of, the Company on August 16,
1995, and the salary shown for Mr. Shackford is for only the portion
of the fiscal year during which he was employed by the Company. Mr.
Shackford owns no shares of Common Stock.
(8) Mr. Levine resigned as Secretary, Treasurer and Chief Financial
Officer on August 16, 1995 and as Vice President on October 31, 1995,
when he retired.
</TABLE>
Stock Options
The Company's 1982 Stock Option Plan and 1992 Stock Option Plan (the
"Plans") provide for the grant to key employees of the Company of both
options which qualify as incentive stock options under the Internal Revenue
Code of 1986 and non-qualified stock options. The Plans are each
administered by a committee appointed by the Board. The following table
sets forth certain information for the Company's last fiscal year with
respect to options to purchase shares of Common Stock granted pursuant to
the Plans:
Insert Option/SAR Grants Table
<TABLE>
<CAPTION>
Option/SAR Grants in Last Fiscal Year
Number of Potential Realizable Value
Securities % of Total at Assumed
Underlying Options/SARs Exercise Annual Rates of Stock Price
Options/SARs Granted to or Base Appreciation for Option
Granted (#) Employees in Price Term (2)
Name (1) Fiscal Year ($/sh.) Expiration Date 0% ($) 5% ($) 10% ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Jerry Shore -0- - $ - - $ - $ - $ -
Brian E. Shore 20,000 16.1% 18.31 May 8, 2005 -0- 230,333 583,708
E. Phillip Smoot 40,000 32.3% 18.31 May 8, 2005 -0- 460,665 1,167,416
Paul R. Shackford 10,000 8.1% 27.19 August 8, 2005 -0- 170,981 433,299
Allen Levine -0- - - - - - -
_____________________
<FN>
(1) Options become exercisable 25% one year from the date of grant with an
additional 25% exercisable each succeeding year. The Company has not
granted stock appreciation rights.
(2) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of the options at the
expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the life of the options.
This schedule does not take into account provisions of the options
providing for termination of the option following termination of
employment, nontransferability or vesting over periods of four years. The
dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, of the Company's stock price. The Company did not use an alternative
formula for a grant date valuation, as the Company is not aware of any
formula which will determine with reasonable accuracy a present value
based on future unknown or volatile factors. The column indicating 0%
appreciation is included to reflect the fact that a zero percent gain in
stock price appreciation will result in zero dollars for the optionee. No
gain to the optionees is possible without an increase in stock price
appreciation, which will benefit all shareholders commensurately.
</TABLE>
Aggregated Option Exercises in the Last Fiscal Year and Fiscal Year-End
Option Values
The following table provides information regarding the pre-tax value
realized from the exercise of stock options during the Company's last fiscal
year and the value of unexercised options held by the named individuals as
of the end of such fiscal year.
Insert Aggregated Options Table
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Acquired Value Underlying Unexercised In-the-Money Options/SARs
On Exercise (#) Realized Options/SARs at FY-End (#) at FY-End ($) (3)
Name (1) (2) Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Jerry Shore -0- $ -0- 65,000 35,000 $1,649,250 $ 788,750
Brian E. Shore -0- -0- 25,000 40,000 617,813 695,563
E. Phillip Smoot 30,750 809,953 24,763 68,255 594,835 1,184,129
Paul R. Shackford -0- -0- -0- 10,000 -0- 51,875
Allen Levine 13,750 226,391 -0- -0- -0- -0-
<FN>
(1) The Company has not granted stock appreciation rights.
(2) Value realized equals market value on the date of exercise, less the
exercise price, times the number of shares acquired, without deducting any
taxes paid by the employee.
(3) Value of unexercised options equals market value of the share underlying
"in-the-money" options at March 3, 1996 ($32.375), less exercise price,
times the number of options outstanding.
</TABLE>
During the last fiscal year, 118 employees of the Company and its
subsidiaries as a group (including all executive officers and directors of
the Company) were granted options to purchase an aggregate of 124,000 shares
of Common Stock under the Plans. At May 28, 1996, 106 employees of the
Company and its subsidiaries were participants in the Plans and
approximately 150 employees were eligible to participate in the Plans. As
of such date, an aggregate of 574,568 shares of Common Stock were subject to
options under the Plans at prices ranging between $5.50 and $27.19 per share
and expiring between December 16, 1996 and May 14, 2006.
Compensation Report
Compensation of the Company's executive officers is composed of
salary, annual cash bonuses, stock options and the Company's Profit Sharing
Plan. The Board has a CEO Compensation Committee which considers and takes
any necessary action regarding the compensation of the Company's Chief
Executive Officer, other than the grant of stock options or compensation
pursuant to plans administered by the Board. The Board does not have any
other compensation committee. Brian Shore, President of the Company,
determines the annual salary and cash bonus for each executive officer other
than himself and the Chief Executive Officer. Jerry Shore, Chairman of the
Board and Chief Executive Officer, determines the annual salary and cash
bonus for the President. A committee of the Board administers the Plans,
including decisions as to the number of options to grant to each executive
officer. The amount of discretionary contributions to the Profit Sharing
Plan for each fiscal year is determined by the Board of Directors.
Salaries of executive officers are determined based on the
significance of the position to the Company, individual experience and
expertise, individual performance and information gathered informally as to
compensation levels of comparable companies in the same geographic location
as the Company.
Decisions as to the award of annual cash bonuses to executive officers
other than Jerry Shore with respect to each fiscal year are made after the
close of the fiscal year. The amount awarded to each executive officer is
based on the Company's overall performance, individual performance, base
salary level, bonuses paid in prior years and overall equity and fairness.
The Company typically grants stock options under the Plans once each
year. The stock option committee bases its decisions on individual
performance, base salary and bonus levels, recommendations from senior
management and overall equity and fairness.
The Board decides annually the amount of the Company's contribution to
the Profit Sharing Plan. The amount of such contribution is discretionary,
but may not exceed 15% of the total remuneration paid to eligible employees
or such other amount as is allowed under the Internal Revenue Code of 1986,
as amended (the "Code"). Subject to this limit, the Board determines the
amount to be contributed for each year based on the Company's overall
performance, the amount contributed in prior years and the amounts of prior
contributions recently forfeited by eligible employees due to termination of
employment prior to vesting. The Profit Sharing Plan is a broad-based plan
in which numerous employees as well as executive officers are eligible to
participate. Once the Company contribution is made, amounts are allocated
to eligible employees in accordance with a formula based on their
remuneration.
During the last fiscal year, Jerry Shore received an annual salary of
$362,250 pursuant to his employment agreement (the "Employment Agreement").
See Note 4 to the table set forth under "Executive Compensation -- Summary
Compensation" elsewhere herein. Although under the incentive bonus formula
in the Employment Agreement Jerry Shore would have been entitled to a bonus
of $350,000 for the last fiscal year, he decided to waive his bonus entirely
for the last fiscal year. The Employment Agreement provides for a base
salary of $350,000 subject to annual review by the CEO Compensation
Committee. At Jerry Shore's request, the Committee limited the increase in
his annual base salary for the last fiscal year to 3 1/2%.
The Board, the CEO Compensation Committee, the stock option committee
and Jerry Shore use no set formulas in making their determinations and may
afford different weight to different factors for each executive officer.
Such weighing may vary from year to year.
The Board and the CEO Compensation Committee have reviewed the impact
of recently enacted Section 162(m) of the Code which, beginning in the
Company's 1995 fiscal year, limits the deductibility of certain otherwise
deductible compensation in excess of $1 million paid to the Chief Executive
Officer and the other executive officers named in the table set forth under
"Executive Compensation--Summary Compensation" elsewhere herein. It is the
Company's policy to attempt to design its executive compensation plans and
arrangements to be treated as tax deductible compensation wherever, in the
judgment of the Board or the CEO Compensation Committee, as the case may be,
to do so would be consistent with the objectives of that compensation plan
or arrangement. Accordingly, the Board has approved an amendment to the
1992 Stock Option Plan, described under the caption "Approval of Amendments
to the 1992 Stock Option Plan" on page __ hereof, subject to shareholder
approval, to fulfill one of the requirements of Section 162(m) of the Code.
The Board and the CEO Compensation Committee from time to time may consider
whether further changes in the Company's compensation plans and
arrangements, particularly the Plans, may be appropriate to continue to
fulfill the requirements for treatment as tax deductible compensation under
the Code.
The Board of Directors CEO Compensation Committee
Anthony Chiesa Lloyd Frank, Chairman
Lloyd Frank Anthony Chiesa
Norman M. Schneider Norman M. Schneider
Brian E. Shore
Jerry Shore
E. Phillip Smoot
Compensation Committee Interlocks and Insider Participation
Anthony Chiesa, a member of the committee of the Board which
administers the Plans, is a former Vice President of the Company who retired
in 1977. Lloyd Frank, also a member of such committee, is a partner of the
law firm Parker Chapin Flattau & Klimpl, LLP, which firm was retained to
provide counsel to the Company during its last fiscal year and which the
Company has retained during its current fiscal year. Jerry Shore, Brian E.
Shore and E. Phillip Smoot, directors of the Company who are also executive
officers of the Company, participated in deliberations of the Board relating
to the amount of the Company's contribution to the Profit Sharing Plan
during the Company's last fiscal year.
STOCK PERFORMANCE GRAPH
The graph set forth below compares the annual cumulative total return
for the Company's five fiscal years ended March 3, 1996 among the Company,
the New York Stock Exchange Market Index and a peer group index comprised of
the Company and 224 other companies. The peer group companies are
classified in the same three-digit industry group in the Standard Industrial
Classification Code system. These companies are described as companies
primarily engaged in the manufacture of electronic components and
accessories. The returns of each company in the peer group have been
weighted according to the company's stock market capitalization. The graph
has been prepared based on an assumed investment of $100 on March 3, 1991
and the reinvestment of dividends (where applicable).
[Chart to come]
APPROVAL OF AMENDMENTS TO THE 1992 STOCK OPTION PLAN
At the Annual Meeting, the shareholders will be asked to approve an
amendment to increase the number of shares available under, and make one
other change in, the 1992 Stock Option Plan (the "Amendments"). The Board
of Directors of the Company adopted the proposed Amendments, subject to
shareholder approval, on May 14, 1996.
The Board of Directors is of the opinion that the 1992 Stock Option
Plan, and its predecessor plans, the 1974 Stock Option Plan and the 1982
Stock Option Plan, have been of significant importance and benefit to the
Company and its shareholders in enabling the Company to attract and retain
officers and other key employees and in increasing their commitment to the
Company's continued success and their identification with the Company and
its shareholders. In the view of the Board of Directors, the proposed
Amendments will enable the Company to continue to realize the benefits of
employee stock options.
A summary of the proposed Amendments is set forth below, followed by a
description of the terms of the 1992 Stock Option Plan. The full text of
the Amendments is annexed to this proxy statement as Exhibit A, and the
summary is qualified in its entirety by reference to Exhibit A.
Amendments
Shares Subject to the 1992 Stock Option Plan. The Amendments increase
the number of shares of the Company's Common Stock with respect to which
options may be granted under the 1992 Stock Option Plan by 550,000 shares.
At May 28, 1996, there were only 35,581 shares remaining for grant as stock
options under the 1992 Stock Option Plan. The Amendments increase the total
number of shares with respect to which stock options may be granted under
the 1992 Stock Option Plan to 1,150,000, subject to adjustment (together
with the exercise price of options) to reflect any change in the Company's
outstanding shares by reason of stock dividends, stock splits,
recapitalizations, mergers, consolidations or other similar events affecting
the number or kind of outstanding shares.
Compliance with Section 162(m) of the Code. Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), which was part of
the Omnibus Budget Reform Act of 1993, generally disallows a tax deduction
to public companies for compensation over $1 million paid, or otherwise
taxable, to persons named in the table set forth under "Executive
Compensation--Summary Compensation" elsewhere herein and employed by the
Company at the end of the applicable year. Qualifying performance-based
compensation is not subject to the deduction limit if certain requirements
are met. In the case of stock options, one requirement is that an employee
stock plan state a maximum number of shares with respect to which options
may be granted during a specified period. The Amendments provide that no
eligible employee shall be granted stock options for more than the greater
of (i) 50% of the total number of options granted pursuant to the 1992 Stock
Option Plan in any fiscal year or (ii) 100,000 shares of Common Stock under
the 1992 Stock Option Plan in any fiscal year, thereby satisfying the
requirements of Section 162(m).
Summary of Plan
The following summary of the material features of the Plan does not
purport to be complete and is qualified in its entirety by the terms of the
1992 Stock Option Plan (the "Plan").
The Plan is administered by a committee (the "Committee") of three
members appointed by the Board of Directors. At present, the Committee
consists of Messrs. Lloyd Frank, Anthony Chiesa and Norman M. Schneider.
The Committee has authority to determine the individuals to receive options,
the number of shares subject to each option, whether options shall be
incentive stock options or non-qualified stock options and other pertinent
terms and provisions of the options and to determine other matters relating
to the Plan.
Options granted under the Plan will be subject to, among other things,
the following terms and conditions:
(i) The option price per share will be determined by the
Committee but will not be less than 100% of the fair market value of
the Common Stock on the date the options are granted. The option
price will be payable in full upon exercise in cash, shares of
Common Stock or any combination thereof. The Committee may, in its
discretion, include a provision in a particular option to allow the
holder to surrender such option in whole or in part in lieu of the
exercise of such option if the fair market value of the shares of
Common Stock subject to such option exceeds the option price and to
receive a payment in cash, shares of Common Stock or a combination
of cash and shares of Common Stock equal to the amount by which such
fair market value exceeds the option price.
(ii) Options may be granted for terms up to but not
exceeding ten years, in the case of incentive stock options, and ten
years and one month, in the case of non-qualified stock options.
(iii) Incentive stock options may not be granted under the
Plan to any employee who, at the time of grant, owns stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of any subsidiary or of a parent
of the Company unless the option price is at least 110% of the fair
market value of the Common Stock on the date the option is granted
and the term of the option does not exceed five years from the date
of grant.
(iv) In addition, the aggregate fair market value of the
shares of Common stock as to which incentive stock options may be
granted under the Plan (and any other incentive stock options
satisfying the requirements of the Code granted under any other plan
of the Company and its subsidiaries and any parent of the Company)
which options are exercisable for the first time by any particular
optionee during any calendar year shall not exceed $100,000.
(v) An option may not be transferred other than by will or
by the laws of descent and distribution and an option may be
exercised during the holder's lifetime only by the holder.
(vi) If an optionee's employment is terminated for any
reason other than disability or death, unless otherwise provided in
connection with the grant of a particular option, the option may be
exercised only within three months after such termination (but not
after the date the option would otherwise expire) to the extent
shares were purchasable at the date of termination; provided that if
the optionee's employment is terminated for cause or without the
consent of the Company, the option shall (to the extent not
previously exercised) terminate immediately.
(vii) If an optionee's employment is terminated by reason of
disability, unless otherwise provided in connection with the grant
of a particular option, the option may be exercised, to the extent
that the optionee was entitled to do so at the termination of his
employment, at any time within one year after such termination (but
not after the date the option would otherwise expire).
(viii) In the case of the death of an optionee while employed
or within three months after termination of his employment (unless
such termination was for cause or without the consent of the
Company), unless otherwise provided in connection with the grant of
a particular option, the option may be exercised by the optionee's
executor, administrator or other persons entitled by law to his
rights under the option, to the extent the optionee was entitled to
do so at the date of his death, at any time within six months after
the date of such employee's death (but not after the date the option
would otherwise expire).
(ix) In connection with the termination of employment of any
particular optionee, as described in paragraph (vi) or (vii) above
and in connection with the death of any particular optionee as
described in paragraph (viii) above, the Committee may, in its
discretion, permit a longer period for exercise of an option than
that referred to in paragraph (vi), (vii) or (viii) above, as the
case may be, or permit such option to be exercisable in whole or in
part with respect to shares of Common Stock as to which such option
was not otherwise exercisable at the time of such termination,
disability or death, as the case may be. Any such action of the
Committee with respect to incentive stock options is subject to the
limitations provided by the Code.
The Board shall make appropriate adjustments in the number of shares and
option price of shares subject to outstanding options and in the number of
shares available for option under the Plan in the event of any change in the
Common Stock by reason of any stock dividend, recapitalization, merger,
consolidation, split-up, subdivision, combination or exchange of shares or
the like.
If certain transactions occur, then the holders of outstanding options
shall become entitled to receive a cash payment equal to the number of
shares of Common Stock subject to the option multiplied by the amount by
which the applicable transaction price for shares of Common Stock exceeds
the option price, upon surrender of the options and cancellation of the
options by the Company. The transactions in which holders may become
entitled to such payment include (1) certain mergers and consolidations, (2)
a sale of all or substantially all of the Company's assets, (3) dissolution
of the Company, (4) a third person becomes the beneficial owner of 30% or
more of the Company's voting stock or (5) individuals who constitute the
members of the Company's Board of Directors as of the date the Plan was
adopted by the Board (the "Incumbent Board") cease to constitute a majority
of the Board, provided that persons whose election or nomination for
election by the shareholders is approved by a vote of at least 80% of the
Incumbent Board are considered to be members of the Incumbent Board, in each
case if such transaction is not approved by a majority of the Board in
actions taken prior to, and with respect to, such transaction. The
applicable transaction price for shares of Common Stock is (1) the per share
price offered to shareholders of the Company in any merger, consolidation,
sale of assets or dissolution, (2) the price offered for shares of Common
Stock in any tender offer which results in a change in beneficial ownership
as described above, or (3) the fair market value of the shares of Common
Stock as determined by the Committee in the case of other changes in
beneficial ownership or a change in the Incumbent Board as described above.
Holders of options will be entitled to such cash payment whether or not such
options are exercisable at the time any such transaction occurs. In
addition, in connection with a merger, consolidation, sale of all or
substantially all of the Company's assets and certain other transactions in
which the outstanding options are not assumed or new options are not
substituted under the terms of such transaction, the Company may
unilaterally cancel the outstanding options and pay the holders an amount
equal to the same net consideration the holders would have received if such
holders had exercised such options and sold the shares of Common Stock on
the effective date of such transaction.
Upon the expiration or termination of unexercised options, shares of
Common Stock subject thereto will again be available for grant under the
Plan. No options may be granted under the Plan after March 24, 2002.
Options outstanding on such date shall, however, in all respects continue
subject to the Plan. The Board may terminate the Plan at any time with
respect to any shares of Common Stock not at the time subject to option and
may amend or modify the Plan, provided, however, that without the approval
of shareholders no amendment or modification may be made which would (1)
increase the maximum number of shares available for option (except for anti-
dilution adjustments described above), or (2) change the eligibility
requirements for individuals entitled to receive options under the Plan.
United States Federal Income Tax Consequences
The following is a summary of the United States federal income tax
consequences under current tax law (without regard to any proposed changes,
which may be retroactive in effect) with respect to incentive stock options
and non-qualified stock options granted to U.S. employees. For this
purpose, it is assumed that the shares acquired pursuant to the exercise of
any option are held by the optionee as a capital asset. Certain other rules
not discussed here apply to the use of previously acquired shares of Common
Stock in payment of the option exercise price.
Incentive Stock Options
In general, no taxable income will be recognized by an optionee upon the
grant or exercise of an incentive stock option. The optionee's tax basis in
the shares received on the exercise of such an option will be equal to the
option price paid by the optionee for such shares.
If the shares received upon the exercise of any incentive stock option
are held for more than one year after the date of transfer of such shares to
the optionee and more than two years from the date of grant of the option,
any gain or loss recognized by the optionee on the subsequent sale of the
stock will be a long-term capital gain or loss, as the case may be.
If the shares received upon the exercise of an incentive stock option
are disposed of prior to the end of such holding periods, an amount equal to
the excess (if any) of (a) the lower of the disposition price or the fair
market value of such shares on the date of exercise of the incentive stock
option, over (b) the optionee's tax basis in such shares will be treated as
ordinary income, and any further gain will be a short-term or long-term
capital gain depending upon the period the shares were held. Any loss on
the disposition of such shares will be a short-term or long-term capital
loss depending upon the period the shares were held.
The Company will not receive any tax deduction on the grant or exercise
of an incentive stock option. However, the Company will be entitled to a
tax deduction in the amount of any ordinary income recognized by an
optionee.
Non-Qualified Options
No taxable income will be recognized by an optionee upon the grant of a
non-qualified stock option. Upon the exercise of the option, the excess of
the fair market value of the shares at the time of such exercise over the
exercise price will be treated as compensation. Any amounts treated as
compensation (i) will be taxable as ordinary income to the optionee and (ii)
generally will be allowed as an income tax deduction to the Company. The
optionee's tax basis for shares acquired upon exercise of the option will be
increased by any amounts so treated as compensation.
Any gain or loss realized by an optionee on the subsequent sale of
shares acquired upon the exercise of a non-qualified stock option will be
short-term or long-term capital gain or loss depending on the period the
shares were held.
Cancellation or Surrender
Consideration received by an optionee upon the surrender to, or
cancellation by, the Company of either an incentive or non-qualified stock
option will be taxable as ordinary income to the optionee and generally
allowed as an income tax deduction to the Company.
Alternative Minimum Tax
In addition to the federal income tax consequences described above, an
optionee may also be subject to the federal alternative minimum tax. In
general, upon the exercise of any incentive stock option an amount equal to
the excess of the fair market value of the shares acquired on the exercise
date over the exercise price will be treated as an item of adjustment for
purposes of the alternative minimum tax. If, however, the shares are
disposed of in the same taxable year in which the exercise occurs, the
maximum amount that will be treated as an item of adjustment will be an
amount equal to the excess of the amount received upon such disposition over
the exercise price.
New Plan Benefits
Options under the 1992 Stock Option Plan will be granted at the sole
discretion of the Committee and performance criteria, if any, may vary from
year to year and from participant to participant. Therefore, benefits under
the 1992 Stock Option Plan are not determinable. Compensation paid and
other benefits granted to directors and executive officers of the Company
for the 1996 fiscal year are set forth elsewhere herein. See "Election of
Directors" and "Executive Compensation" elsewhere herein.
Vote Required
The affirmative vote of the holders of a majority of the outstanding
shares of Common Stock entitled to vote at the Annual Meeting is required to
approve the Amendments.
The Board of Directors recommends that shareholders vote FOR the
approval of the Amendments to the 1992 Stock Option Plan. Proxies will be
voted in accordance with their terms and, in the absence of contrary
instructions, for the approval of the Amendments.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1997 Annual
Meeting of Shareholders must be received by the Company at the Company's
principal executive offices for inclusion in the Proxy Statement and form of
Proxy relating to that meeting by January 31, 1997.
OTHER MATTERS
The Board of the Company has selected Ernst & Young LLP, the Company's
auditors for the past fiscal year, as the auditors of the Company for the
current fiscal year. A representative of Ernst & Young LLP is expected to
be present at the Annual Meeting. He will have the opportunity to make a
statement if he so desires and will be available to respond to appropriate
questions.
In May 1996, the Company purchased from Reliance Insurance Company
insurance covering the directors and officers of the Company and its
subsidiaries against certain claims arising out of their service to the
Company and subsidiaries. The insurance policy runs for a period of one
year at a total cost of $64,000.
The Company will bear the expense of proxy solicitation. Directors,
officers and employees of the Company and its subsidiaries may solicit
proxies by telephone, telegraph, facsimile or in person (but will receive no
additional compensation for such solicitation). The Company also has
retained D.F. King & Co., Inc., New York, New York, to assist in the
solicitation of proxies in the same manner at an anticipated fee of
approximately $5,000, plus out-of-pocket expenses. In addition, brokerage
houses and other custodians, nominees and fiduciaries will be requested to
forward the soliciting material to beneficial owners and to obtain
authorizations for the execution of proxies, and if they in turn so request,
the Company will reimburse such brokerage houses and other custodians,
nominees and fiduciaries for their expenses in forwarding such material.
If a proxy or ballot indicates that a shareholder, including a broker
or nominee, abstains from voting or does not vote shares on a particular
proposal, the shares will be counted as in attendance at the meeting for
purposes of a quorum but will not be counted as having been voted on the
particular proposal. Abstentions will not be included in the final tally of
votes cast for the election of directors under New York law and the
Company's By-laws. Abstentions and shares not voted will have the effect of
negative votes in determining whether the proposed amendments to the 1992
Stock Option Plan are authorized under New York law and the Company's By-
laws, because such authorization requires the affirmative vote of the
holders of a majority of the shares entitled to vote at the Meeting.
The Board does not know of any other matters to be brought before the
meeting. If any other matters not mentioned in the Proxy Statement are
properly brought before the meeting, including matters incident to the
conduct of the meeting or relating to the adjournment thereof, the persons
named in the enclosed proxy intend to vote such proxy in accordance with
their best judgment on such matters.
The Annual Report, including financial statements, of the Company for
the fiscal year ended March 3, 1996 is enclosed herewith but is not a part
of the proxy soliciting material.
By Order of the Board of Directors,
Jerry Shore,
Chairman of the Board
Dated: June 3, 1996
[PROXY CARD]
PARK ELECTROCHEMICAL CORP.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS July 17, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints BRIAN E.
SHORE, ANTHONY CHIESA and NORMAN M. SCHNEIDER, and each of them,
the attorneys and proxies of the undersigned, with full power
of substitution, to attend the Annual Meeting of Shareholders
of PARK ELECTROCHEMICAL CORP. to be held at The Chase Manhattan
Bank, One Chase Manhattan Plaza, New York, New York on July 17,
1996 at 10:00 o'clock A.M., New York time, and any adjournments
thereof, to vote all the shares of Common Stock of the Company
which the undersigned would be entitled to vote if personally
present upon the following matters:
(1) ELECTION OF DIRECTORS
[ ] FOR all nominees listed below (except as marked to
the contrary below).
[ ] WITHHOLD AUTHORITY to vote for all nominees listed
below.
ANTHONY CHIESA, LLOYD FRANK, NORMAN M. SCHNEIDER,
BRIAN E. SHORE, JERRY SHORE and E. PHILLIP SMOOT
(INSTRUCTION: To withhold authority to vote for any individual
nominee, write the nominee's name in the space provided below.)
____________________________________________________________
(2) APPROVAL OF AMENDMENTS TO 1992 STOCK OPTION PLAN to
increase the aggregate number of shares of Common Stock
authorized for issuance under such Plan by 550,000 shares and
to add a provision with respect to section 162(m) of the
Internal Revenue Code of 1986, as amended
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(3) The transaction of such other business as may properly come
before the meeting.
Each properly executed proxy will be voted in accordance
with specifications made hereon. If no specification is made,
the shares represented by this Proxy will be voted "FOR" the
nominees, "FOR" the proposed amendments to the 1992 Stock Option
Plan, and in the discretion of the Proxies on any other
business.
The undersigned hereby acknowledges receipt of the
Company's 1996 Annual Report and the accompanying Notice of
Meeting and Proxy Statement and hereby revokes any proxy or
proxies heretofore given.
Dated:____________________, 1996
________________________________
________________________________
(Signature(s) of Shareholder(s))
Please date and sign exactly as name appears
hereon. Executors, Administrators, Trustees,
etc. must so indicate when signing. If shares
are held jointly, both owners must sign.
<PAGE>
Exhibit A
PROPOSED AMENDMENTS TO
1992 STOCK OPTION PLAN
FIRST AMENDMENT TO
PARK ELECTROCHEMICAL CORP.
1992 STOCK OPTION PLAN
The Park Electrochemical Corp. 1992 Stock Option Plan (the "Plan") is hereby
amended as follows:
1. The first sentence of Paragraph 2 of the Plan is hereby
amended and restated in its entirety to read as follows:
"Options may be granted under the Plan to purchase in the
aggregate not more than 1,150,000 shares of Common Stock, par
value $.10 per share, of the Company ("Common Stock"), which
shares may, in the discretion of the Board of Directors,
consist either in whole or in part of authorized but unissued
shares of Common Stock or shares of Common Stock held in the
treasury of the Company."
2. Paragraph 4 is hereby amended by adding to the end thereof
the sentence to read as follows:
"Commencing in the Company's fiscal year ending March 2,
1997, no Participant may, in any such fiscal year, receive
Options relating to Shares which in the aggregate exceed the
greater of (i) 50% of the total number of Shares granted
pursuant to the Plan in any such year or (ii) 100,000
Shares."
3. Ratification. Except as expressly set forth in this First
Amendment to the Plan, the Plan is hereby ratified and
confirmed without modification.
4. Effective Date. The effective date of this Amendment to the
Plan shall be May 14, 1996.
