PERKIN ELMER
Notice Of
1994
Annual Meeting
Of Shareholders
And
Proxy Statement
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TABLE OF CONTENTS
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Page
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Notice of Annual Meeting of Shareholders
Proxy Statement
Election of Directors (Proposal 1)................................................. 2
Voting Securities.................................................................. 6
Executive Compensation............................................................. 7
Ratification of Selection of Independent Accountants (Proposal 2).................. 14
Miscellaneous Matters.............................................................. 14
Submission of Shareholder Proposals for Inclusion in 1995 Proxy Materials.......... 14
Multiple Copies of Annual Report................................................... 15
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RETURN OF PROXY
Please complete, sign, date and return the accompanying proxy promptly in
the enclosed addressed envelope even if you plan to attend the Annual Meeting.
Postage need not be affixed to the enclosed envelope if mailed in the United
States. If you attend the Annual Meeting and vote in person, the proxy will not
be used. The immediate return of your proxy will be of great assistance in
preparing for the Annual Meeting and is therefore urgently requested.
IF YOU PLAN TO ATTEND THE MEETING
The Annual Meeting will be held at the Corporate Headquarters of The
Perkin-Elmer Corporation at 50 Danbury Road (old U.S. Route 7), Wilton,
Connecticut, approximately 1.7 miles north of Exit 40B (northbound or
southbound) on the Merritt Parkway (Connecticut Route 15). Signs will direct you
to the auditorium where the Annual Meeting will be held.
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[LOGO]
The Perkin-Elmer Corporation
761 Main Avenue
Norwalk, CT 06859-0001
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD THURSDAY,
OCTOBER 20, 1994
September 16, 1994
Notice is hereby given that the Annual Meeting of Shareholders of The
Perkin-Elmer Corporation, a New York corporation (hereinafter called the
"Corporation"), will be held in the Corporation's auditorium at 50 Danbury Road,
Wilton, Connecticut, on Thursday, October 20, 1994. The meeting will commence at
11:00 a.m. and will be held for the following purposes and to transact such
other business as may properly come before the meeting or any adjournment or
adjournments thereof:
(1) To elect 11 directors for the ensuing year; and
(2) To consider and act upon a proposal to ratify the selection of Price
Waterhouse LLP as independent accountants for the fiscal year ending
June 30, 1995.
The Board of Directors has fixed the close of business on September 6, 1994
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting, and, accordingly, only shareholders of record
at the close of business on that date will be entitled to vote at the meeting. A
list of those shareholders will be available for inspection at the Annual
Meeting upon request of a shareholder. The transfer books of the Corporation
will not be closed.
By Order of the Board of Directors,
William B. Sawch
Secretary
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[LOGO]
The Perkin-Elmer Corporation
761 Main Avenue
Norwalk, CT 06859-0001
September 16, 1994
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of The
Perkin-Elmer Corporation (hereinafter called the "Corporation") for use at the
Annual Meeting of Shareholders to be held on Thursday, October 20, 1994, and at
any adjournment or adjournments thereof. This Proxy Statement and the
accompanying proxy are first being sent to shareholders on or about September
19, 1994.
The Board of Directors has fixed the close of business on September 6, 1994
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting. As of such date, there were issued and
outstanding 42,489,989 shares of Common Stock of the Corporation (the "Common
Stock"), each of which is entitled to one vote. The presence, in person or by
properly executed proxy, of the holders of a majority of the outstanding shares
of Common Stock entitled to vote is necessary to constitute a quorum for the
transaction of business at the Annual Meeting.
The accompanying proxy provides space for a shareholder to withhold voting
for any or all nominees for the Board of Directors and to abstain from voting if
he or she chooses to do so. Directors are elected by a plurality of the votes
cast and the ratification of the selection of independent accountants (Proposal
2) requires the approval of a majority of the votes cast. Votes withheld in
connection with the election of one or more nominees for director will not be
counted as votes cast for such nominees, and abstentions and "broker non-votes"
will not be counted in determining the number of votes cast in connection with
the ratification of the selection of independent accountants.
A proxy may be revoked by a shareholder at any time before it is voted at
the Annual Meeting by (1) giving notice in writing of such revocation to the
Secretary of the Corporation, (2) submission of another proxy bearing a later
date, or (3) voting in person at the Annual Meeting. Unless so revoked, the
shares represented by a properly signed proxy will be voted at the Annual
Meeting as specified by the shareholder. If a proxy is properly signed and
returned and no specification is made, the shares represented thereby will be
voted FOR the election of all nominees for director (Proposal 1) and FOR the
ratification of the selection of independent accountants (Proposal 2).
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1. ELECTION OF DIRECTORS
The Board of Directors has nominated 11 candidates for election as
directors of the Corporation at the Annual Meeting, each to serve until the 1995
Annual Meeting and until their successors have been duly elected and qualified.
Each of the nominees is currently serving as a director of the Corporation and
has consented to being named in this Proxy Statement and to serve if elected. If
prior to the Annual Meeting any nominee should become unavailable to serve for
any reason, the shares represented by all properly executed proxies not
containing contrary instructions will be voted for such other person as may be
designated by the Board of Directors, unless the Board shall determine to reduce
the number of directors pursuant to the By-laws.
The following brief biographies of the 11 nominees include their principal
occupations, their ages, an account of their recent business experience, the
name of certain corporations of which they are directors, the committees of the
Board on which they serve, and the number of shares of Common Stock which they
beneficially owned as of August 12, 1994. Unless otherwise indicated, each of
the nominees, individually or with his or her spouse, has sole voting or
investment power with respect to the shares indicated. No nominee beneficially
owns more than one percent of the outstanding Common Stock.
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--------------------- Mr. Abely is the retired Chairman of the Board of Directors and
Chief Executive Officer of Sea-Land Corporation, having served in
that capacity from April, 1984 through April, 1987. From 1979 to
JOSEPH F. ABELY, JR. [PHOTO] April, 1984, he served as Vice Chairman of the Board and Chairman
65 Years Old of the Finance Committee of R. J. Reynolds Industries, Inc.
Became Director 1984 Previously, he was Vice Chairman of General Foods Corporation. Mr.
Beneficially Owns Abely formerly served as a director of the Corporation from
2,397 Shares of February, 1976 to April, 1977. He is also a director of Burlington
Common Stock(1) Industries, Inc., C.R. Bard, Inc., and Marine Spill Response
Corporation. Mr. Abely is a member of the Audit, Executive, and
--------------------- Finance Committees.
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--------------------- Mr. Ayers is Chairman and Chief Executive Officer of The Stanley
Works, a position he has held since May, 1989. He was President
and Chief Executive Officer from 1987 until May, 1989, and he
RICHARD H. AYERS [PHOTO] previously held various other positions at The Stanley Works, a
51 Years Old tool and hardware manufacturer, including Division President and
Became Director 1988 General Manager, Group Vice President, Executive Vice President,
Beneficially Owns and Chief Operating Officer. Mr. Ayers is also a director of
1,046 Shares of Southern New England Telecommunications Corporation, Connecticut
Common Stock(2) Mutual Investment Accounts, Inc., and Connecticut Mutual Financial
Services Series Fund I, Inc. Mr. Ayers is a member of the
--------------------- Management Resources and Nominating Committees.
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--------------------- Mr. Belingard is Director General of the Diagnostics Division and
JEAN-LUC BELINGARD a member of the Executive Committee of F. Hoffmann-La Roche Ltd.,
45 Years Old a pharmaceutical manufacturer and strategic partner of the
Became Director 1993 [PHOTO] Corporation in the biotechnology field. He joined Hoffmann-La
Beneficially Owns Roche in 1982, and held various positions prior to being named to
491 Shares of his current positions in 1990. Mr. Belingard is also a Foreign
Common Stock(3) Trade Advisor to the French Government. Mr. Belingard is a member
--------------------- of the Technology Advisory Committee.
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ROBERT H. HAYES --------------------- Dr. Hayes is the Philip Caldwell Professor of Business
58 Years Old Administration and Senior Associate Dean for Faculty Planning at
Became Director 1985 [PHOTO] the Harvard Business School, a position he has held since 1992. He
Beneficially Owns has held various other positions at Harvard since 1966. He is also
917 Shares of a director of Molex, Inc. Dr. Hayes is a member of the Audit and
Common Stock(4) --------------------- Finance Committees.
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--------------------- Mr. Kelley is Chairman and Chief Executive Officer of the
Corporation. Previously, he held various other offices in the
GAYNOR N. KELLEY Corporation, including President, Chief Operating Officer,
63 Years Old [PHOTO] Executive Vice President-Operations, Senior Vice
Became Director 1984 President-Instrument Group, and Vice President, Deputy General
Beneficially Owns Manager-Instrument Group. He is also a director of Hercules, Inc.
242,320 Shares of and Clark Equipment Company, and a trustee of Northeast Utilities.
Common Stock(5) Mr. Kelley is a member of the Executive and Finance Committees,
--------------------- and an ex officio member of the Nominating Committee.
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DONALD R. MELVILLE --------------------- Mr. Melville is the retired Chairman of the Board and Chief
67 Years Old Executive Officer of Norton Company, a diversified manufacturer of
Became Director 1981 [PHOTO] industrial products. He was Chief Executive Officer from 1980 to
Beneficially Owns 1988 and Chairman from 1985 to 1988. He is also a director of
697 Shares of Bowater, Inc. and Acme-Cleveland Corporation. Mr. Melville is a
Common Stock(6) --------------------- member of the Management Resources and Nominating Committees.
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RICCARDO PIGLIUCCI --------------------- Mr. Pigliucci has been President and Chief Operating Officer of
47 Years Old the Corporation since April, 1993. He held various managerial and
Became Director 1993 [PHOTO] executive positions in Europe and the United States prior to
Beneficially Owns becoming President, Instrument Group in 1991, and Senior Vice
60,813 Shares of President of the Corporation in 1992. Mr. Pigliucci is a member of
Common Stock(7) -------------------- the Executive and Technology Advisory Committees.
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--------------------- Mr. Roberts is Chairman of Sweetheart Holdings Inc., a
manufacturer of disposable products for the food industry, a
position he has held since September, 1993. In May, 1992, Mr.
BURNELL R. ROBERTS Roberts retired as Chairman and Chief Executive Officer of Mead
67 Years Old [PHOTO] Corporation, a forest products and electronic publishing
Became Director 1985 corporation. Mr. Roberts became Chairman of Mead Corporation in
Beneficially Owns 1982, having served as President from 1981 to 1982 and Senior Vice
996 Shares of President from 1979 to 1981. He is also a director of National
Common Stock(8) City Corporation, DPL Inc., Armco Inc., and Universal Protective
Packaging, Inc., and a Limited Partner of American Industrial
Partners. Mr. Roberts is a member of the Audit, Executive, and
---------------------- Finance Committees.
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--------------------- Mr. Scott is the Chairman of Cambridge Biotech Corporation.(10) He
served as President and Chief Executive Officer of
JOHN S. SCOTT Richardson-Vicks, Inc., a diversified consumer products subsidiary
68 Years Old [PHOTO] of The Procter & Gamble Company, from 1975 until being named
Became Director 1976 Chairman in 1986. He was a director of Richardson-Vicks from 1975,
Beneficially Owns and of Procter & Gamble from 1986, until his retirement in 1987.
5,447 Shares of He is also a director of Fleet Financial Group, Inc., The Stanley
Common Stock(9) Works, and Creative Product Resources, Inc. Mr. Scott is a member
of the Executive, Management Resources, Technology Advisory, and
--------------------- Nominating Committees.
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--------------------- Dr. Slayman is the Sterling Professor and Chairman of the
CAROLYN W. SLAYMAN Department of Genetics at Yale University School of Medicine, a
57 Years Old position she has held since 1984. She joined the Yale faculty in
Became Director 1994 [PHOTO] 1967. Dr. Slayman is a consultant to the National Institutes of
Beneficially owns Health, most recently having served as a member of the National
200 shares of Advisory General Medical Sciences Council, and a member of the
Common Stock Scientific Review Board of the Howard Hughes Medical Institute.
--------------------- Dr. Slayman is a member of the Technology Advisory Committee.
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RICHARD F. TUCKER ---------------------
67 Years Old Mr. Tucker is the retired Vice Chairman of Mobil Corporation and
Became Director 1983 [PHOTO] the retired President of Mobil Oil Corporation. He is also a
Beneficially Owns director of U.S. Trust Corporation. Mr. Tucker is a member of the
891 Shares of Executive and Management Resources Committees.
Common Stock(11) ---------------------
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(1) Includes 397 units representing full shares of Common Stock deferred by Mr.
Abely under the 1993 Director Stock Purchase and Deferred Compensation Plan
described below (the "Director Plan").
(2) Includes 546 units representing full shares of Common Stock deferred by Mr.
Ayers under the Director Plan.
(3) Includes 391 shares of Common Stock acquired by Mr. Belingard under the
Director Plan.
(4) Includes 417 units representing full shares of Common Stock deferred by Dr.
Hayes under the Director Plan.
(5) Includes 210,000 shares of Common Stock which Mr. Kelley has the right to
acquire within 60 days after August 12, 1994 through the exercise of vested
stock options.
(6) Includes 397 units representing full shares of Common Stock deferred by Mr.
Melville under the Director Plan.
(7) Includes 49,486 shares of Common Stock which Mr. Pigliucci has the right to
acquire within 60 days after August 12, 1994 through the exercise of vested
stock options.
(8) Includes 546 units representing full shares of Common Stock deferred by Mr.
Roberts under the Director Plan.
(9) Includes 150 shares of Common Stock held by Mr. Scott's wife as to which
Mr. Scott disclaims beneficial ownership. Also includes 397 units
representing full shares of Common Stock deferred by Mr. Scott under the
Director Plan.
(10) Cambridge Biotech Corporation filed a voluntary petition under Chapter
11 of the federal Bankruptcy Code on July 7, 1994.
(11) Includes 391 shares of Common Stock acquired by Mr. Tucker under the
Director Plan.
THE BOARD OF DIRECTORS AND COMMITTEES
The business of the Corporation is managed under the direction of the Board
of Directors. The Board of Directors held eight meetings during the fiscal year
ended June 30, 1994. Attendance at these meetings averaged 96%, and all
incumbent directors attended at least 75% of the meetings of the Board and of
the committees on which they served.
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The Board of Directors of the Corporation has established Executive,
Management Resources, Nominating, Audit, Finance, and Technology Advisory
committees.
The Executive Committee is composed of the Chairman of the Board, the
President, and at least four non-employee directors. The Executive Committee has
the authority during the intervals between meetings of the Board of Directors to
exercise the powers of the Board (except for certain powers reserved solely for
the Board) in situations generally arising from unforeseen events, necessitating
Board action before a meeting can be convened. The Executive Committee did not
meet during the fiscal year ended June 30, 1994.
The Management Resources Committee is composed of non-employee directors.
It reviews and approves all forms of remuneration for the senior management of
the Corporation and administers the Corporation's employee stock plans. The
Management Resources Committee also reviews management development and
succession programs. It met five times during the fiscal year ended June 30,
1994.
The Nominating Committee recommends nominees to fill vacancies on the Board
and will consider responsible recommendations by shareholders of candidates to
be nominated as directors of the Corporation. All such recommendations must be
in writing and addressed to the Secretary of the Corporation in accordance with
the Corporation's By-laws. By accepting a shareholder recommendation for
consideration, the Nominating Committee does not undertake to adopt or to take
any other action concerning the recommendation or to give the proponent its
reasons for any action or failure to act. The Nominating Committee also reviews
the functioning and effectiveness of the Board, its committees, and its
individual members, and makes recommendations to the Board concerning the
compensation of non-employee directors and membership assignments for committees
of the Board. The Nominating Committee met five times during the fiscal year
ended June 30, 1994.
The Audit Committee is composed of non-employee directors. The Audit
Committee recommends to the Board of Directors the selection of independent
accountants, reviews the annual financial statements of the Corporation, reviews
the scope and performance of audit services provided by the independent
accountants, monitors proposed non-audit services to be provided by the
independent accountants to avoid conflicts of interest, reviews internal
accounting controls and the findings and recommendations of the Corporation's
internal auditors, and reviews the fees for audit and non-audit services
provided by the independent accountants. The Audit Committee met three times
during the fiscal year ended June 30, 1994.
The Finance Committee advises the Board and management concerning certain
issues with respect to the financial structure of the Corporation, such as the
Corporation's financial and tax strategies, capital structure, financing, risk
management policies, dividend policies, pension policies, and investment
performance. The Finance Committee met six times during the fiscal year ended
June 30, 1994.
The Technology Advisory Committee advises the Board and management
concerning certain issues related to the development and implementation of the
Corporation's technological assets, including strategies for developing and
expanding these assets and assisting management in assessing third party
technology opportunities. The newly-formed Technology Advisory Committee met
once during the fiscal year ended June 30, 1994.
COMPENSATION OF DIRECTORS
Employee directors receive no additional compensation for service on the
Board of Directors or its committees. Non-employee directors receive an annual
retainer of $35,000. No additional amounts are paid for participation on
committees. All directors are reimbursed for expenses incurred in attending
Board and committee meetings.
Under the terms of the Director Plan, each non-employee director of the
Corporation is required to apply at least 50% of his or her annual retainer to
the purchase of Common Stock. Purchases under the Director Plan are made
automatically on the date during each fiscal quarter on which the quarterly
installment of the annual retainer is paid. The purchase price of the Common
Stock is the fair market value of a share of Common Stock on such date. The
Director Plan also permits non-employee directors to defer receipt of their
annual retainer, including the portion of the annual retainer that would
otherwise be
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applied to the purchase of Common Stock. The stock portion of the annual
retainer is credited to the account of a participant in units, each unit
representing one share of Common Stock. Participants in the Director Plan do not
have voting rights with respect to any such units. The stock portion of a
participant's account is adjusted to take into account dividends paid on the
Common Stock, and the cash portion of a participant's account is credited
quarterly with interest at the prevailing prime rate of Citibank, N.A.
As part of the Corporation's overall program to promote charitable giving,
the Board of Directors established a Director's Charitable Award Program in
1993. Under the Program, following a director's death, the Corporation will
donate $1,000,000 to the educational or charitable organizations selected by the
director and approved by the Corporation. In order to fund the donations, the
Corporation has acquired joint life insurance contracts on the lives of its
directors. Each policy will insure two directors with the death benefit payable
on the death of the second director. Individual directors will derive no
financial benefit from the Program since all insurance proceeds accrue solely to
the Corporation. The overall cost of the Program is not material to the
Corporation.
The Corporation has entered into a consulting agreement with Dr. Hayes
dated April 1, 1994 pursuant to which Dr. Hayes provides consulting services to
the Corporation in connection with its quality and competitiveness programs.
During the fiscal year ended June 30, 1994, Dr. Hayes received $15,000 for
consulting services rendered to the Corporation.
VOTING SECURITIES
The following are the only persons known by the Corporation, as of August
12, 1994, to own beneficially more than 5% of the outstanding Common Stock.
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NAME AND ADDRESS OF AMOUNT AND NATURE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
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George Soros and Purnendu Chatterjee....... 3,809,349(1) 8.7
c/o Akin, Gump, Strauss, Hauer & Feld, L.L.P.
65 East 55th Street
New York, NY 10022
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(1) Based on an amendment dated April 15, 1994 to a Schedule 13D and filed with
the Securities and Exchange Commission (the "SEC"), these shares are held as
follows: Mr. Soros and Mr. Chatterjee have sole voting and dispositive power
with respect to 542,382 and 393,136 shares, respectively. Mr. Soros and Mr.
Chatterjee have shared voting and dispositive power with respect to 2,035,775
shares owned by an entity for which an affiliate of Mr. Soros is the
investment advisor and with respect to which Mr. Chatterjee is a sub-advisor.
Mr. Soros has shared voting and dispositive power with respect to an
additional 838,056 shares owned by a trust of which Mr. Soros is one of three
trustees.
The following table sets forth, as of August 12, 1994, certain information
with respect to the beneficial ownership of Common Stock by each of the five
executive officers named in the Summary Compensation Table below under
"Executive Compensation," and by all directors and executive officers of the
Corporation as a group. As of such date, no director or executive officer
beneficially owned more than one percent of the outstanding Common Stock, and
all directors and executive officers as a group owned 1.4% of the outstanding
Common Stock. Unless otherwise indicated, voting and investment power is
exercised solely by the beneficial owner or is shared by such owner with his or
her spouse or children.
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NAME OF NUMBER
BENEFICIAL OWNER OF SHARES(1)
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Gaynor N. Kelley............................................. 242,320
Riccardo Pigliucci........................................... 60,813
William F. Emswiler.......................................... 27,000
Andre F. Marion.............................................. 77,240(2)
Joseph E. Malandrakis........................................ 49,476
All directors and executive officers as a group (19)......... 581,147(3)
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(1) Includes shares which the following have the right to acquire within 60 days
after August 12, 1994 through the exercise of vested stock options: Mr.
Kelley, 210,000; Mr. Pigliucci, 49,486; Mr. Emswiler, 25,000; Mr. Marion,
74,494; Mr. Malandrakis, 40,800; and all directors and executive officers
as a group, 490,290.
(2) Includes 1,090 shares of Common Stock held by a family trust of which Mr.
Marion is a trustee. Also includes 1,656 shares of Common Stock held by Mr.
Marion's children as to which Mr. Marion disclaims beneficial ownership.
(3) Includes 2,700 units representing full shares of Common Stock deferred by
non-employee directors under the Director Plan. Also includes 150 shares of
Common Stock held by Mr. Scott's wife as to which Mr. Scott disclaims
beneficial ownership.
The Corporation is required to identify any officer or director who failed
to timely file with the SEC a required report relating to beneficial ownership
of Common Stock. Mr. Marion filed one late report with respect to shares held by
a family trust at the time he became an officer of the Corporation. The shares
held by this trust were disclosed on Mr. Marion's initial report of ownership,
which was timely filed. Mr. Marion also filed one late report with respect to
one transaction. In addition, Rhonda L. Seegal, Vice President and Treasurer of
the Corporation, filed one late report with respect to one transaction.
EXECUTIVE COMPENSATION
REPORT OF THE MANAGEMENT RESOURCES COMMITTEE
The Management Resources Committee (the "MRC") of the Board of Directors is
comprised of four non-employee directors, none of whom participate in any of the
executive compensation plans. One of the duties of the MRC is to review and
approve all forms of remuneration for the senior management of the Corporation.
OVERVIEW AND PHILOSOPHY
The overall objectives of the Corporation's executive compensation plans
are to:
- Attract and retain the highest quality talent to lead the Corporation,
- Reward key executives based on business performance,
- Provide incentives designed to maximize shareholder value, and
- Assure that objectives for corporate and individual performance are
established and measured.
For the fiscal year ended June 30, 1994, the Corporation employed three
programs in compensating its senior management: base salary, contingent
compensation (a short-term incentive plan), and a stock option program (a
long-term incentive plan).
The philosophy which governs the compensation program is to provide a
competitive total compensation package to senior management based upon
professionally compiled surveys of the Corporation's peer group and other
comparable companies of similar size. To provide incentive to senior managers to
attain competitive returns for the Corporation, separate short-term pay for
performance and long-term stock option plans have been designed with the
assistance of external professional compensation consultants.
The Corporation expects to be competitive with the market for base pay and
annual incentive payments if corporate objectives are met.
BASE SALARY
Each year, the Corporation obtains studies of compensation trends and
practices from several internationally known independent compensation
consultants in order to determine the competitiveness of the pay structure for
its senior managers. Within the broad comparative group of companies which our
consultants survey, the Corporation and its consultants have identified a group
of companies which compete in similar markets, and which approximate the size of
the Corporation in terms of employees, revenue, and capitalization. This group
includes some of the companies contained in the industry index selected by the
Corporation for purposes of the Performance Graph set forth under that heading
below.
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On the basis of this comparative information, the MRC recommended to the
Board of Directors that Mr. Kelley's base pay be set at $540,000 which places
Mr. Kelley slightly above the median base pay of the comparative group of
companies. The MRC believes that Mr. Kelley's managerial performance supports
his base pay relative to the size, scope, and performance of the peer group.
CONTINGENT COMPENSATION PLAN
Using similar techniques as described in the Base Salary section above, the
MRC reviews the incentive compensation practices among comparable companies.
From this survey information, individual incentive plan participation
percentages are approved by the MRC at the beginning of the fiscal year for each
senior executive. The MRC uses Net Income and Return on Invested Capital as its
measures of corporate financial performance and establishes corporate goals
based upon such criteria at the beginning of each fiscal year. These two
financial measures have been used as a standard and are well recognized
throughout various industries. The MRC believes that achieving financial goals
based upon these measures helps to maximize shareholder return.
In addition to the financial goals, the MRC considers other business
actions taken during the fiscal year which contribute to the strategic growth
and competitiveness of the Corporation. In the past, these actions have included
managerial leadership in acquiring new businesses, divesting the Corporation of
major assets which do not meet its strategic business plan, and reorganizing
business units to attain greater operating efficiencies.
Mr. Kelley's contingent compensation formula is based entirely on the
achievement of the Corporation's goals. Mr. Kelley would receive an incentive
payment of 55% of base salary for achievement of all corporate goals, and a
maximum payment equal to 82.5% of base salary when corporate achievements exceed
125% of objectives. For the fiscal year ended June 30, 1994, Mr. Kelley earned a
contingent compensation award of $232,256. This award represents 43% of Mr.
Kelley's base salary and was based solely on the financial performance of the
Corporation during fiscal year 1994.
The contingent compensation award formula applicable to all of the
Corporation's executive officers except Mr. Kelley consists of two main
components. The primary component, 75% of the total award, is based on the
achievement of corporate objectives. The remaining 25% component is based upon
the achievement of personal performance objectives.
Combining the achievement results, and multiplying the results by the
individual's target percentage of salary (which ranges from 30% to 50%), yields
the final contingent compensation award.
INCENTIVE STOCK OPTION PLAN
The MRC believes that in order to achieve its long-term growth objectives
and to align management and shareholder interests, it is in the Corporation's
best interest to grant stock options to key members of its management staff. The
number of stock options granted to senior management is dependent upon the
participant's management level in the Corporation. The allocation for a
particular management level is determined by applying a percentage of salary
against the salary grade midpoint, and dividing the value by the estimated fair
market value of a share of Common Stock on the date of grant.
The MRC approves the number of options granted to each participant in the
stock option plan during each fiscal year. The price of each option granted is
the fair market value of a share of Common Stock on the date of grant. All
options are exercisable for a period of ten years from the date of grant.
On April 21, 1994, the MRC granted stock options to officers of the
Corporation which vest in three equal annual installments commencing April 21,
1995. These options were granted with the expectation that they would replace
the customary annual grants over a period of three years, and the intent is to
provide greater incentive to senior management to improve the Corporation's
performance and shareholder value. Other eligible participants received
customary annual grants in fiscal year 1994.
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Based upon the foregoing, Mr. Kelley was granted options for 120,000 shares
of Common Stock at an exercise price of $30.25 per share in April, 1994.
CONCLUSION
The Corporation has designed its executive compensation plans, as described
above, to link the compensation of senior management with the achievement of
corporate and individual performance goals. These goals have been established at
levels necessary to achieve above average performance within our industry, and
with our comparative group of companies.
The MRC intends to continue its policy of linking executive compensation
with positive corporate performance and maximizing shareholder returns to the
extent possible through the measurement procedures described in this report.
Management Resources Committee
Richard F. Tucker, Chairman
Richard H. Ayers
Donald R. Melville
John S. Scott
9
<PG$PCN>
PERFORMANCE GRAPH
The following line graph compares the yearly percentage change in the
Corporation's cumulative total shareholder return on the Common Stock for the
last five fiscal years with the cumulative total return on the Standard & Poor's
500 Stock Index (the "S&P 500") and the Dow Jones Diversified Technology Group
Index, a published industry index that includes the Corporation (the "DJ DTG").
The other companies in the DJ DTG are: Varian Associates, Inc., Tektronix, Inc.,
Corning Incorporated, EG&G, Inc., Minnesota Mining and Manufacturing Company,
Rockwell International Corporation, Raytheon Company, TRW Inc., Texas
Instruments Incorporated, and United Technologies Corporation.
The rules of the SEC require that if an index is selected which is
different from the index used in the immediately preceding fiscal year, the
Corporation's total return must be compared with both the newly selected index
and the index used in the immediately preceding year. Millipore Corporation
("Millipore"), which was included in the peer group index contained in the
Corporation's 1993 Proxy Statement (the "1993 Peer Group"), announced in
November, 1993 that it was divesting its Instrumentation Divisions and that it
was treating such divisions as discontinued operations for financial reporting
purposes. As a consequence, the Corporation believes that the change in
Millipore's business makes it no longer appropriate to include Millipore in its
peer group index for purposes of the performance graph. In order to address this
change and to avoid the need to make similar changes in the future, the
Corporation has elected to replace the 1993 Peer Group with the DJ DTG.
Accordingly, the following graph also includes a composite index consisting of
the 1993 Peer Group.
Cumulative total returns are calculated assuming that $100 was invested on
July 28, 1989 in each of the Common Stock, the S&P 500, the DJ DTG, and the 1993
Peer Group, and that all dividends were reinvested.
THE PERKIN-ELMER CORPORATION
Comparison of 5 Year Cumulative Returns
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Perkin-Elmer 100.00 82.54 101.98 119.22 129.12 121.69
S&P 500 100.00 106.87 119.29 137.03 148.12 152.40
DJ DTG 100.00 108.77 118.37 136.57 158.73 170.15
1993 Peer Group 100.00 94.42 121.87 106.64 122.83 169.84
</TABLE>
10
<PG$PCN>
SUMMARY COMPENSATION TABLE
The following table sets forth cash or other compensation received by the
Chief Executive Officer and the four other most highly paid executive officers
of the Corporation for the last three fiscal years.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
STOCK ALL OTHER
FISCAL SALARY BONUS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) (#) ($)(2),(3)
--------------------------- ------ ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Gaynor N. Kelley................................. 1994 527,501 232,256 120,000 23,358
Chairman and Chief............................... 1993(4) 443,654 277,362 75,000 21,888
Executive Officer................................ 1992 433,078 223,220 35,000
Riccardo Pigliucci............................... 1994 345,001 146,388 75,000 15,277
President and.................................... 1993(4) 256,443 165,000 48,000 12,652
Chief Operating Officer.......................... 1992 219,039 110,000 20,000
William F. Emswiler.............................. 1994 234,713 92,225 45,000 10,424
Vice President, Finance.......................... 1993(4) 192,116 100,000 30,000 9,501
Chief Financial Officer.......................... 1992(5) 43,077 21,200 10,000
Andre F. Marion.................................. 1994 225,251 88,133 30,000 10,003
Vice President and President,.................... 1993(4),(6) 76,154 79,600 10,000 1,100
Applied Biosystems Division...................... 1992
Joseph E. Malandrakis............................ 1994 204,000 60,458 21,000 9,060
Vice President,.................................. 1993(4) 175,673 75,000 14,000 8,687
Worldwide Operations............................. 1992 167,405 55,000 3,500
</TABLE>
- - ---------------
(1) Awards under the Corporation's contingent compensation plan are variable and
tied to the Corporation's performance.
(2) Disclosure of amounts of All Other Compensation is not required for the 1992
fiscal year under SEC transition rules.
(3) Amounts shown for 1994 consist of (i) the Corporation's contributions under
the Corporation's Profit Sharing and Savings Plan for Mr. Kelley, Mr.
Pigliucci, Mr. Emswiler, Mr. Marion, and Mr. Malandrakis of $10,474,
$10,474, $10,424, $10,003, and $9,060, respectively; and (ii) amounts
accrued under the Profit Sharing Component of the Corporation's
Excess Benefit Plan for Mr. Kelley and Mr. Pigliucci of $12,884 and
$4,803, respectively.
(4) Consists of 11 months. On May 18, 1993, the Board of Directors changed the
fiscal year-end of the Corporation from July 31 to June 30, effective
June 30, 1993.
(5) Reflects a partial year. Mr. Emswiler was hired in May, 1992.
(6) Reflects a partial year. Mr. Marion became an officer of the Corporation
upon the acquisition of Applied Biosystems, Inc. in February, 1993.
OPTION GRANT TABLE
The following table sets forth information regarding stock option grants to
the executive officers named in the Summary Compensation Table during the fiscal
year ended June 30, 1994.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
INDIVIDUAL GRANTS ANNUAL RATES OF
- - ----------------------------------------------------------------------------------------- STOCK PRICE
PERCENT OF TOTAL APPRECIATION FOR
OPTIONS OPTIONS GRANTED EXERCISE OPTION TERM(2)
GRANTED TO EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- ------- ---------------- -------- ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
G. N. Kelley......................... 120,000 12.36 30.25 04/21/04 2,282,887 5,785,285
R. Pigliucci......................... 75,000 7.72 30.25 04/21/04 1,426,805 3,615,803
W. F. Emswiler....................... 45,000 4.63 30.25 04/21/04 856,083 2,169,482
A.F. Marion.......................... 30,000 3.09 30.25 04/21/04 570,722 1,446,321
J. E. Malandrakis.................... 21,000 2.16 30.25 04/21/04 399,505 1,012,425
- - ------------------------------------------------------------------------------------------------------------------------
ALL SHAREHOLDERS(3).................... $835 MILLION $2.1 BILLION
- - ------------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PG$PCN>
- - ---------------
(1) The stock options were granted to the named executive
officers with the expectation that they would replace the customary
annual grants over a period of three years. Stock options are awarded with
an exercise price equal to the fair market value of the Common Stock on the
date of award and, for the named executive officers, become exercisable in
three equal annual installments commencing one year after the date of
award.
(2) The values shown assume that the price of the Common Stock will appreciate
at the annual rates shown. These rates are arbitrarily assumed rates
established by the SEC and are not intended as a forecast of future
appreciation. The actual gain, if any, realized by the recipient will
depend upon the actual performance of the Common Stock.
(3) These amounts represent the increase in the aggregate market value of the
Common Stock outstanding as of the date of the grant (43.87 million
shares) assuming the annual rates of stock price appreciation set forth
above over the ten-year period used for the named executives.
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information regarding the exercise of
options by the executive officers named in the Summary Compensation Table during
the fiscal year ended June 30, 1994, and the value of their unexercised options
at June 30, 1994.
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT JUNE 30, 1994 AT JUNE 30, 1994
(#) ($)(2)
SHARES ACQUIRED ON VALUE REALIZED --------------------------- ---------------------------
NAME EXERCISE(#) ($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------------ -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
G. N. Kelley........ 10,000 113,750 210,000 157,500 826,719 0
R. Pigliucci........ 0 0 49,486 99,000 82,067 0
W. F. Emswiler...... 0 0 25,000 60,000 0 0
A.F. Marion......... 29,830 603,268 74,494 39,409 896,486 44,125
J. E. Malandrakis... 0 0 40,800 28,000 154,719 0
</TABLE>
- - ---------------
(1) Represents the difference between the exercise price and the market value on
the date of exercise.
(2) The closing price of a share of Common Stock on June 30, 1994 was $29.50.
RETIREMENT BENEFITS
The Corporation has in effect a Retirement Plan for all employees of the
Corporation (and certain designated subsidiaries). In general, this plan
provides annual payments upon normal retirement at age 65 equal to 1.4% of base
earnings during the period of participation, plus an additional annuity equal to
0.5% of base earnings above a specified wage base called "covered compensation"
(defined by the Internal Revenue Service as a function of year of birth). After
August 1, 1989, plan accruals for service over 35 years are calculated at a rate
of 1.7% of base earnings. A variable annuity option is available to each
participant. The total cost for future accrued benefits and all other costs of
the Retirement Plan are borne by the Corporation.
The Retirement Plan preserves and protects the benefits of any active
participant in the plan whose employment by the Corporation is terminated within
three years following a change in control of the Corporation. In the event of
such a termination, the rights, expectancies, and benefits of such participants
(as in effect on the date of the change in control) may not be diminished
through amendment or termination of the Retirement Plan after the change in
control. Additionally, in the event the Retirement Plan is terminated within
three years following a change in control, any funds remaining after the
satisfaction of all liabilities under the plan will be allocated among
participants in accordance with applicable United States Department of Labor
regulations.
The Corporation also has in effect a Supplemental Retirement Plan which
covers the employees who participate in the Corporation's Contingent
Compensation Plan for Key Employees and Incentive Compensation Plan. In general,
the Supplemental Retirement Plan provides annual payments upon normal retirement
at age 65 equal to 1.5% of the sum of all payments made to a participant during
his participation in the Contingent Compensation Plan and Incentive Compensation
Plan. This plan is unfunded, non-contributory, and is not qualified under the
provisions of the Internal Revenue Code of 1986, as amended.
12
<PG$PCN>
As required by Internal Revenue Service regulations, benefit calculations
for both the Retirement Plan and the Corporation's Profit Sharing and Savings
Plan exclude any participant's annual earnings that are over a specified limit
(set at $235,840 for fiscal 1994). The Corporation has adopted an Excess Benefit
Plan, an unfunded and non-contributory plan, to provide benefits equal to those
which an employee loses because of this limitation. The benefit payable under
the Excess Benefit Plan in respect of the Retirement Plan (the "Retirement Plan
Component") is determined by the same formula described above for the Retirement
Plan. The benefit under the Excess Benefit Plan in respect of the Profit Sharing
and Savings Plan (the "Profit Sharing Component") equals the excess of the
benefit which would have been payable under the Profit Sharing and Savings Plan
if the limit on covered compensation described above had not been adopted and
the benefit in fact paid under that Plan. The amounts accrued by the Corporation
as the Profit Sharing Component for the fiscal year ended June 30, 1994 for each
of the executive officers named in the Summary Compensation Table are included
in such table.
Estimated aggregate annual benefits payable upon retirement under the
Corporation's Retirement Plan, its Supplemental Retirement Plan, and the
Retirement Plan Component of the Excess Benefit Plan (exclusive of any Social
Security benefits) to Mr. Kelley, Mr. Pigliucci, Mr. Emswiler, and Mr.
Malandrakis are $172,097, $171,968, $84,608, and $112,184, respectively,
assuming no change in present salary and continued service to normal retirement
at age 65. Mr. Marion, who announced his intention to retire from the
Corporation effective February 1, 1995, will be entitled to receive aggregate
annual benefits upon retirement under such plans of $28,764.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL AGREEMENTS
The Corporation has entered into deferred compensation contracts with each
of the executive officers named in the Summary Compensation Table which, subject
to certain conditions, provide for payments to be made for a maximum of ten
years of: $190,000 per annum to Mr. Kelley; $50,000 per annum to Mr. Pigliucci;
and $25,000 per annum to each of Messrs. Emswiler, Marion, and Malandrakis. Such
payments would generally commence upon retirement from the Corporation (or in
the event of the termination of employment of the officer for good reason (as
defined) or without cause following a change in control of the Corporation). The
annual payment may be reduced or forfeited if the recipient elects one of
several optional forms of payment based on actuarial determinations, terminates
employment prior to normal retirement age, or competes with the Corporation.
Upon his retirement, Mr. Marion will receive the full benefit under his deferred
compensation contract.
The Corporation has also entered into agreements with each of the named
executive officers providing for continuation of the officer's employment for a
term of three years following any change in control of the Corporation. These
agreements provide for the officers' compensation to be continued during the
three-year term at the same level that existed at the time of a change in
control provided that the executive continues employment, leaves employment for
good reason (as defined), or is terminated without cause.
Mr. Marion announced his intention to retire from the Corporation effective
February 1, 1995. Pursuant to the terms of a severance agreement dated November
1, 1990, as amended, between Applied Biosystems, Inc. and Mr. Marion, following
his resignation, Mr. Marion will be entitled to receive 77 biweekly payments of
$14,286 and will be entitled to participate in certain of the Corporation's
welfare benefit programs during this period. These benefits are conditional upon
Mr. Marion not engaging in certain transactions with competitors of the
Corporation. It is expected that Mr. Marion will also become fully vested in all
outstanding stock option awards. The Corporation has entered into a consulting
agreement with Mr. Marion pursuant to which Mr. Marion will, upon request,
provide consulting services to the Corporation for a period of one year
following his retirement. Mr. Marion will receive a per diem rate of $1,750 for
such services, but will not be entitled to any guaranteed minimum payment.
13
<PG$PCN>
2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected Price Waterhouse LLP, independent
accountants, to audit the books, records, and accounts of the Corporation and
its subsidiaries for the fiscal year ending June 30, 1995. This selection is
being presented to the shareholders for ratification at the Annual Meeting.
The firm of Price Waterhouse LLP has audited the Corporation's books
annually since 1944, has offices in or convenient to the localities in the
United States and foreign countries where the Corporation or its subsidiaries
operate, and is considered to be well qualified. If the shareholders do not
ratify the selection of Price Waterhouse LLP, the selection of independent
accountants will be reconsidered by the Audit Committee of the Board of
Directors.
A representative of Price Waterhouse LLP will attend the Annual Meeting and
will have the opportunity to make a statement and be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THIS
PROPOSAL.
MISCELLANEOUS MATTERS
Management knows of no other matters to be voted upon at the Annual
Meeting. If any other matters properly come before the Annual Meeting, it is the
intention of the persons named in the accompanying proxy to vote said proxy in
accordance with their judgment on such matters.
In addition to solicitation by mail, proxies may be solicited by directors,
officers, and other employees of the Corporation personally or by telephone or
other means of communication without additional compensation for such services.
The Corporation has retained D.F. King & Co., Inc., 77 Water Street, New York,
New York, to assist in the distribution of proxy materials and with the
solicitation of proxies for a fee estimated at $6,500, plus out-of-pocket
expenses. The Corporation will bear the cost of solicitation of proxies.
The Corporation will also reimburse brokerage houses and other custodians,
nominees and fiduciaries for their reasonable expenses for forwarding proxy
materials to the beneficial owners of Common Stock.
Effective July 1, 1994, the Corporation obtained insurance policies
insuring the directors and officers of the Corporation and its subsidiaries
against certain liabilities they may incur in the performance of their duties
and insuring the Corporation against obligations to indemnify such persons
against such liabilities. One-year policies expiring July 1, 1995 have been
obtained from National Union Fire Insurance Company and Federal Insurance
Company at premiums of $341,250 and $197,500, respectively. The foregoing
information is provided to shareholders of the Corporation pursuant to Section
726(d) of the New York Business Corporation Law.
SUBMISSION OF SHAREHOLDER PROPOSALS FOR INCLUSION IN 1995 PROXY MATERIALS
Any shareholder who intends to present a proposal at the Corporation's 1995
Annual Meeting of Shareholders is advised that, in order for such proposal to be
included in the Board of Directors' proxy materials for such meeting, the
proposal must be directed to the Secretary of the Corporation at its principal
executive offices such that it is received no later than May 22, 1995, and the
proponent and the proposal must meet certain eligibility requirements of the
SEC.
14
<PG$PCN>
MULTIPLE COPIES OF ANNUAL REPORT
The rules of the SEC require that this proxy statement be accompanied or
preceded by an annual report. As a result, shareholders with multiple accounts
and households with multiple shareholders may be receiving more than one copy of
the annual report, which is costly to the Corporation and may be inconvenient to
these shareholders. If you are the shareholder of record and you mark the
appropriate box on the appropriate proxy card, the Corporation will discontinue
the mailing of annual reports on the accounts you select. However, at least one
account at each address must continue to receive an annual report. Eliminating
these duplicate mailings will not affect receipt of future proxy materials or
shareholder communications. To resume mailing of an annual report to the
shareholder of record, shareholders may call the Corporation's toll-free
shareholder services telephone number at (800) 730-4001.
By Order of the Board of Directors,
William B. Sawch
Secretary
Norwalk, Connecticut
September 16, 1994
15
<PG$PCN>
THE PERKIN-ELMER CORPORATION
761 Main Avenue
Norwalk, CT 06859
