<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
/ / Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE PERKIN-ELMER CORPORATION
--------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
----------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[LOGO]
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NOTICE OF
1997
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Notice of Annual Meeting of Shareholders
Proxy Statement
Election of Directors (Proposal 1)................................................. 1
Voting Securities.................................................................. 6
Executive Compensation............................................................. 8
Ratification of the Selection of Independent Accountants (Proposal 2).............. 18
Approval of an Amendment to the Restated Certificate of Incorporation to Increase
the Number of Authorized Shares of Common Stock (Proposal 3)..................... 19
Approval of the 1997 Stock Incentive Plan (Proposal 4)............................. 19
Miscellaneous Matters.............................................................. 25
Submission of Shareholder Proposals for Inclusion in 1998 Proxy Materials.......... 26
Multiple Copies of Annual Report................................................... 26
</TABLE>
RETURN OF PROXY
YOUR VOTE IS IMPORTANT. WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING, PLEASE COMPLETE, SIGN, DATE, AND RETURN THE ACCOMPANYING PROXY PROMPTLY
IN THE ENCLOSED PRE-ADDRESSED ENVELOPE. 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, YOUR PROXY WILL NOT BE USED.
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.
<PAGE>
[LOGO]
The Perkin-Elmer Corporation
761 Main Avenue
Norwalk, CT 06859-0001
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
TO BE HELD THURSDAY,
OCTOBER 16, 1997
September 8, 1997
Notice is hereby given that the Annual Meeting of Shareholders of The
Perkin-Elmer Corporation, a New York corporation (the "Corporation"), will be
held in the Corporation's auditorium at 50 Danbury Road, Wilton, Connecticut, on
Thursday, October 16, 1997. 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 eight directors for the ensuing year;
(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, 1998;
(3) To consider and act upon a proposal to approve an amendment to the
Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock; and
(4) To consider and act upon a proposal to approve the 1997 Stock
Incentive Plan.
The Board of Directors has fixed the close of business on September 2, 1997
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting. Accordingly, only shareholders of record as
of 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
<PAGE>
[LOGO]
The Perkin-Elmer Corporation
761 Main Avenue
Norwalk, CT 06859-0001
PROXY STATEMENT
September 8, 1997
The accompanying proxy is solicited by the Board of Directors of The
Perkin-Elmer Corporation (the "Corporation") for use at the Annual Meeting of
Shareholders to be held on Thursday, October 16, 1997, at 11:00 a.m., and at any
adjournment or adjournments thereof. This Proxy Statement and the accompanying
proxy are first being sent to shareholders on or about September 10, 1997.
The Board of Directors has fixed the close of business on September 2, 1997
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 43,845,821 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 on
the other proposals 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 in such election, 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. The approval of the holders of a majority of all
outstanding shares entitled to vote at the Annual Meeting is required for
approval of the amendment to the Restated Certificate of Incorporation (Proposal
3) and approval of the 1997 Stock Incentive Plan (Proposal 4). Accordingly, an
abstention or broker non-vote on either of these proposals will have the same
legal effect as a vote against the proposal.
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 revocation to the
Secretary of the Corporation, (2) submitting 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" (1)
the election of all nominees for director (Proposal 1); (2) the ratification of
the selection of independent accountants (Proposal 2); (3) the approval of the
amendment to the Restated Certificate of Incorporation (Proposal 3); and (4) the
approval of the 1997 Stock Incentive Plan (Proposal 4).
1. ELECTION OF DIRECTORS
The Board of Directors has nominated eight candidates for election as
directors of the Corporation at the Annual Meeting, each to serve until the 1998
Annual Meeting and until his or her successor has 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. Messrs. Donald R. Melville, Burnell R. Roberts, and Richard F.
Tucker, having reached the mandatory retirement age of 70, will retire from the
Board as of the date of the Annual Meeting. If prior to the Annual Meeting any
nominee should become
1
<PAGE>
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 nominees include their principal
occupations, their ages, an account of their recent business experience, the
names of certain corporations of which they are directors, and the number of
shares of Common Stock which they beneficially owned as of August 11, 1997.(1)
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.
<TABLE>
<S> <C> <C>
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Mr. Abely is the retired Chairman and Chief
Executive Officer of Sea-Land Corporation, having
JOSEPH F. ABELY, JR. served in that capacity from April, 1984 through
68 Years Old April, 1987. From 1979 to April, 1984, he served as
Became Director 1984 Vice Chairman of the Board and Chairman of the
Beneficially Owns [PHOTO] Finance Committee of R.J. Reynolds Industries, Inc.
3,738 Shares of Mr. Abely formerly served as a director of the
Common Stock Corporation from February, 1976 to April, 1977. He
is also a director of Burlington Industries, Inc.
and C.R. Bard, Inc.
- ------------------------------------------------------------------------------------------------------------------
Mr. Ayers is Advisor to the Chairman and Chief
Executive Officer of The Stanley Works, a tool and
hardware manufacturer, a position he has held since
RICHARD H. AYERS January, 1997. He previously served as Chairman and
54 Years Old Chief Executive Officer of The Stanley Works from
Became Director 1988 [PHOTO] May, 1989 to December, 1996 and President and Chief
Beneficially Owns Executive Officer from 1987 to May, 1989. Mr. Ayers
3,717 Shares of is also a director of Southern New England
Common Stock Telecommunications Corporation and a Trustee of
MassMutual Institutional Funds and MML Series
Investment Fund.
- ------------------------------------------------------------------------------------------------------------------
Mr. Belingard is Director General of the
Diagnostics Division and a member of the Executive
JEAN-LUC BELINGARD Committee of F. Hoffmann-La Roche Ltd., a
48 Years Old pharmaceutical manufacturer and strategic partner
Became Director 1993 of the Corporation in the biotechnology field. He
Beneficially Owns [PHOTO] joined Hoffmann-La Roche in 1982 and held various
1,772 Shares of positions prior to being named to his current
Common Stock positions in 1990. Mr. Belingard is also a director
of Laboratory Corporation of America Holdings and a
Foreign Trade Advisor to the French Government.
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ROBERT H. HAYES
61 Years Old Dr. Hayes is the Philip Caldwell Professor of
Became Director 1985 Business Administration and Senior Associate Dean
Beneficially Owns [PHOTO] for Faculty Development at the Harvard Business
2,445 Shares of School, a position he has held since 1992. He has
Common Stock held various other positions at Harvard since 1966.
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</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
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GEORGES C. ST. LAURENT, JR.
61 Years Old
Became Director 1996 Mr. St. Laurent served as Chief Executive Officer
Beneficially Owns [PHOTO] of Western Bank from January, 1988 to April, 1997.
2,548 Shares of He is also a director of Baxter International Inc.
Common Stock
- ------------------------------------------------------------------------------------------------------------------
Dr. Slayman is the Sterling Professor of Genetics
and Deputy Dean for Academic and Scientific Affairs
CAROLYN W. SLAYMAN at Yale University School of Medicine. She joined
60 Years Old the Yale faculty in 1967. Dr. Slayman is a
Became Director 1994 [PHOTO] consultant to the National Institutes of Health,
Beneficially Owns most recently having served as a member of the
1,530 Shares of National Advisory General Medical Sciences Council,
Common Stock and a member of the Scientific Review Board of the
Howard Hughes Medical Institute.
- ------------------------------------------------------------------------------------------------------------------
Mr. Smith is a director and Chairman and Chief
Executive Officer of Engelhard Corporation, a
provider of environmental technologies, specialty
ORIN R. SMITH chemical products, and engineered materials, a
62 Years Old position he has held since January, 1995. He
Became Director 1995 [PHOTO] previously served as President and Chief Executive
Beneficially Owns Officer of that company from 1984 to December,
1,845 Shares of 1994. He is also a director of Ingersoll-Rand
Common Stock Company, The Louisiana Land and Exploration
Company, The Summit Bancorporation, Vulcan
Materials Company, and Minorco.
- ------------------------------------------------------------------------------------------------------------------
Mr. White was elected Chairman, President and Chief
Executive Officer of the Corporation in September,
TONY L. WHITE 1995. Prior to his joining the Corporation, he was
51 Years Old Executive Vice President and a member of the Office
Became Director 1995 of the Chief Executive of Baxter International
Beneficially Owns [PHOTO] Inc., a manufacturer of health care products and
224,083 Shares of instruments. He also served as Group Vice President
Common Stock(2) of Baxter International Inc. from 1986 to 1992. Mr.
White is also a director of C.R. Bard, Inc. and
Ingersoll-Rand Company.
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</TABLE>
1 Includes the following number of units representing full shares of Common
Stock deferred under The Perkin-Elmer Corporation 1993 Director Stock
Purchase and Deferred Compensation Plan described below under "COMPENSATION
OF DIRECTORS": Mr. Abely, 1,738 units; Mr. Ayers, 3,217 units; Dr. Hayes,
1,945 units; and Mr. Smith, 845 units.
2 Includes 18,000 shares of restricted stock as to which Mr. White has sole
voting power but no investment power prior to the lapse of restrictions and
157,500 shares of Common Stock which Mr. White has the right to acquire
within 60 days of August 11, 1997 through the exercise of vested stock
options. No voting or investment power exists with respect to such option
shares prior to exercise.
3
<PAGE>
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, 1997. Average attendance at all meetings of the Board and its
committees during the fiscal year was 91%, and each director attended at least
75% of the meetings of the Board and of the committees on which he or she
served, except for Richard F. Tucker who was unable to attend certain meetings
for health reasons.
The Board of Directors of the Corporation has established Audit, Executive,
Finance, Management Resources, Nominating, and Technology Advisory committees.
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, performance, and results 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 the scope,
findings, and recommendations of the Corporation's internal auditors regarding
internal accounting controls and operating efficiencies, reviews policies and
practices designed to assure the Corporation's compliance with legal and ethical
standards, 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, 1997. The current members of the Audit Committee are Georges
C. St. Laurent, Jr. (Chair), Jean-Luc Belingard, Donald R. Melville, Carolyn W.
Slayman, and Richard F. Tucker.
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, 1997. The current members of the Executive Committee are Tony L. White
(Chair), Joseph F. Abely, Jr., Burnell R. Roberts, and Richard F. Tucker.
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 policy, and pension and savings plan policies and
investment performance. The Finance Committee met two times during the fiscal
year ended June 30, 1997. The current members of the Finance Committee are
Robert H. Hayes (Chair), Donald R. Melville, Georges C. St. Laurent, Jr.,
Richard F. Tucker, and Tony L. White.
The Management Resources Committee reviews and approves all forms of
remuneration for the senior management of the Corporation and administers the
Corporation's stock plans. It also reviews management development and succession
programs. The Management Resources Committee met six times during the fiscal
year ended June 30, 1997. The Management Resources Committee is composed of non-
employee directors, and the current members are Richard H. Ayers (Chair), Joseph
F. Abely, Jr., Burnell R. Roberts, and Orin R. Smith.
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 four times during the fiscal year
ended June 30, 1997. The current members of the Nominating Committee are
4
<PAGE>
Orin R. Smith (Chair), Joseph F. Abely, Jr., Richard H. Ayers, Robert H. Hayes,
Burnell R. Roberts, and Tony L. White (EX OFFICIO).
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 Technology Advisory Committee met one time during
the fiscal year ended June 30, 1997. The current members of the Technology
Advisory Committee are Carolyn W. Slayman (Chair) and Jean-Luc Belingard.
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.
Each non-employee director is also granted on the date of election or
reelection to the Board of Directors a stock option to purchase 1,500 shares of
Common Stock. The options are granted with an exercise price equal to the fair
market value of a share of Common Stock on the date of grant and generally
become exercisable in two equal annual installments.
If the 1997 Stock Incentive Plan is approved by the shareholders at the
Annual Meeting, each non-employee director will automatically be granted 30 days
after the date of election or reelection to the Board of Directors during the
term of the plan (commencing with election at the Annual Meeting) 300 shares of
Common Stock (or a pro rated portion of 300 shares if the director is elected
between annual meetings). These shares will vest on the date immediately
preceding the annual meeting next following the date of grant and will be
forfeited, subject to certain exceptions, if the director ceases to serve as a
member of the Board of Directors prior to such date. Prior to vesting, the
director will have the right to receive cash dividends and to vote but may not
transfer or otherwise dispose of such shares. See "APPROVAL OF THE 1997 STOCK
INCENTIVE PLAN" for a more detailed description of the 1997 Stock Incentive
Plan.
Under the terms of the Corporation's 1993 Director Stock Purchase and
Deferred Compensation Plan (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 the cash
or stock portion of their annual retainer. The stock portion is credited to the
account of a participant in units quarterly as above, 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 of June 30, 1997, six
directors deferred the stock and/or cash portion of their annual retainer under
the Director Plan.
The Corporation has adopted an Estate Enhancement Plan for the benefit of
its non-employee directors. Pursuant to this plan, a non-employee director may
elect to enter into a split-dollar life insurance arrangement with the
Corporation in exchange for a freezing of the director's cash deferral account
under the Director Plan. If so elected, the Corporation will acquire a life
insurance policy on the life of the director and will pay premiums in an amount
no greater than such director's cash deferral account balance. Until the death
of the director, that portion of the director's account equal to the
Corporation's premium payments will be frozen (i.e., no interest will be
credited and no distributions will be made). Upon the death of the director, the
Corporation will receive the greater of the policy's cash surrender value or the
cumulative premiums paid under the policy and the director's beneficiary will
receive the excess, if any, of the policy's death benefit over
5
<PAGE>
the amount received by the Corporation. At that time, a corresponding portion of
the cash deferral account will become unfrozen and distributed to the director's
beneficiary.
As part of the Corporation's overall program to promote charitable giving,
the Board of Directors has established a Director's Charitable Award Program.
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 costs of the Estate Enhancement Plan and Charitable Award
Program are not material to the Corporation.
CERTAIN TRANSACTIONS
During the 1997 fiscal year, the Corporation made payments to F. Hoffmann-La
Roche Ltd. ("Roche") and its affiliates of $68.2 million for the purchase of
reagents and consumables for resale in the Corporation's life science business.
Mr. Belingard is Director General of the Diagnostics Division and a member of
the Executive Committee of Roche.
VOTING SECURITIES
The following are the only persons known by the Corporation, as of August
11, 1997, to own beneficially more than 5% of the outstanding Common Stock.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ----------------------------------------------------------------------- ---------------------- -------------------
<S> <C> <C>
J.P. Morgan & Co. Incorporated......................................... 4,830,286(1) 11.0
60 Wall Street
New York, NY 10015
George Soros and Purnendu Chatterjee................................... 3,416,212(2) 7.8
c/o Akin, Gump, Strauss, Hauer & Feld, L.L.P.
399 Park Avenue
New York, NY 10022
FMR Corp............................................................... 2,556,858(3) 5.8
82 Devonshire Street
Boston, MA 02109
</TABLE>
- ------------------------
(1) Based on a Form 13F-E for the quarter ended June 30, 1997 filed with the
Securities and Exchange Commission (the "SEC"), J.P. Morgan & Co.
Incorporated has sole voting authority with respect to 2,803,943 shares,
shared voting authority with respect to 50,805 shares, and shared investment
discretion (as defined) with respect to 4,715,816 shares.
(2) Based on an amendment dated January 1, 1997 to a Schedule 13D filed with
the SEC, these shares are held as follows: Mr. Soros and Mr. Chatterjee have
sole voting and dispositive power with respect to 1,380,437 and 393,136
shares, respectively, and 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.
(3) Based on a Form 13F-E for the quarter ended June 30, 1997 filed with the
SEC, FMR Corp. has shared investment discretion (as defined) with respect to
2,556,858 shares.
6
<PAGE>
The following table sets forth, as of August 11, 1997, certain information
with respect to the beneficial ownership of Common Stock by each of the persons
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, none of such persons beneficially owned more than one percent of the
outstanding Common Stock, and all directors and executive officers as a group
beneficially owned 1.9% 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.
<TABLE>
<CAPTION>
NAME OF NUMBER
BENEFICIAL OWNER OF SHARES(1)
- -------------------------------------------------------------------------------- ------------
<S> <C>
Tony L. White................................................................... 224,083(2)
Mark C. Rogers.................................................................. 33,169
Manuel A. Baez.................................................................. 33,169
Michael W. Hunkapiller.......................................................... 180,745
Stephen O. Jaeger............................................................... 84,668(2)
All directors and executive officers as a group (20)............................ 844,451(2),(3)
</TABLE>
- ------------------------
(1) Includes shares which the following have the right to acquire within 60
days of August 11, 1997 through the exercise of vested stock options: Mr.
White, 157,500; Dr. Rogers, 25,000; Mr. Baez, 25,000; Dr. Hunkapiller,
83,201; Mr. Jaeger, 64,000; and all directors and executive officers as a
group, 550,201. No voting or investment power exists with respect to such
shares prior to exercise.
(2) Includes 18,000 shares of restricted stock held by Mr. White and 3,000
shares of restricted stock held by Mr. Jaeger, as to which the holder
thereof has sole voting power but no investment power prior to the lapse of
restrictions.
(3) Includes 2,038, 3,667, and 2,172 shares beneficially owned by Messrs.
Donald R. Melville, Burnell R. Roberts, and Richard F. Tucker, respectively
(including 1,738 and 3,217 units representing full shares of Common Stock
deferred under the Director Plan by Mr. Melville and Mr. Roberts,
respectively), who are retiring from the Board of Directors as of the date
of the Annual Meeting. Also includes 7,745 units representing full shares of
Common Stock deferred by the other non-employee directors under the Director
Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Corporation is required to identify any officer, director, or owner of
more than 10% of the Common Stock who failed to timely file with the SEC and the
New York Stock Exchange a required report relating to beneficial ownership of
Common Stock under Section 16(a) of the Securities Exchange Act of 1934. Based
solely on a review of information provided to the Corporation, all persons
subject to these reporting requirements filed the required reports on a timely
basis for fiscal year 1997.
7
<PAGE>
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. 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, 1997, the Corporation employed various
programs to meet the above-referenced objectives: base salary, contingent
compensation (a short-term incentive plan), and long-term incentive plans which
include stock options and restricted stock.
The philosophy which governs the compensation program is to provide a
competitive total compensation package to senior management. Competitiveness is
determined based upon professionally compiled surveys of the Corporation's peer
group and other comparable companies. The MRC particularly focuses upon
competitive compensation practices for companies engaged in high technology and
biotechnology product development and manufacturing. To provide strong incentive
to senior managers to maximize returns for the Corporation, separate short-term
pay for performance, long-term stock based incentive plans, and long-term cash
incentive plans have been designed with the assistance of external professional
compensation consultants.
During fiscal year 1997, the MRC continued to refine senior management
compensation programs to ensure that the major portion of the remuneration
provided to executives of the Corporation was directly tied to shareholder
results. 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 MRC obtains surveys of compensation trends and practices from
several independent compensation consultants in order to determine the
competitiveness of the pay structure for the Corporation's senior managers.
Within the broad comparative group of companies which the consultants survey,
the MRC has 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. These surveys also include all of the companies contained in
the industry index selected by the Corporation for purposes of the Performance
Graph set forth under that heading below.
Mr. White's base salary of $600,000 became effective on September 1, 1996.
The MRC established Mr. White's base salary based on the Corporation's overall
performance during the 1996 fiscal year and competitive pay practices relative
to peer companies.
CONTINGENT COMPENSATION
The MRC also uses survey information from comparable companies in reviewing
and approving annual individual incentive plan participation percentages and
targets for each executive officer. The MRC uses
8
<PAGE>
earnings per share and after-tax operating cash flow targets as a basis on which
to measure the performance of executive officers. These financial measures are
well recognized throughout the investment community, and the MRC believes that
achieving financial goals based upon these measures will help maximize
shareholder return. The MRC also considers division operating income for
division executive officers.
In determining annual contingent compensation awards for each executive
officer, the MRC also considers other business actions taken during the fiscal
year which contribute to the strategic growth and competitiveness of the
Corporation. Additionally, Mr. White, based upon his review of each executive
officer's performance throughout the year, may propose modifications of a
contingent compensation recommendation between 0 and 150% to reflect personal
performance. The MRC is responsible for final approval of all contingent
compensation awards.
Mr. White's contingent compensation formula is based entirely on the
achievement of the Corporation's business and financial goals. Mr. White would
receive a minimum incentive payment of 100% of base salary for achievement of
all corporate goals. For the fiscal year ended June 30, 1997, Mr. White earned a
contingent compensation award of $1,171,380. This award was based on the
financial performance of the Corporation during fiscal year 1997 and the
strategic initiatives which Mr. White has undertaken since 1995 which have
enabled a shareholder return of 136% over the same period. According to the
Corporation's consultants, this return places the Corporation in the 75th
percentile of high performing industrial companies with revenues of $1 to $3
billion.
DIVISION LONG-TERM INCENTIVE PLAN
To continue to strengthen the alignment of incentive programs with the
Corporation's long-term growth objectives, the Corporation adopted, effective
July 1, 1996, the Division Long-Term Incentive Plan. The purpose of the plan is
to focus Analytical Instruments and Applied Biosystems division management on
the strategic growth of their businesses and to strengthen the link between
shareholder value and division management's individual incentives.
The plan will be administered in a three-year performance cycle with awards
determined by the compound increase in EBIT (earnings before interest and income
taxes) and after-tax operating cash flow. At the end of the performance cycle,
the value of each award will be adjusted upward or downward based upon achieved
compound annual growth rates in these measures as compared to the targeted
growth rates set by the MRC at the beginning of the performance cycle. The MRC
believes that the focus and corresponding growth in these measures will
contribute to long-term shareholder value.
Participation in the plan is limited to employees of the Corporation's
operating divisions. Accordingly, Mr. White and non-division executive officers
do not participate in the plan.
RESTRICTED STOCK
In fiscal year 1997, the MRC granted restricted stock awards to members of
senior management in order to continue alignment of management and shareholder
interests. These awards, which were at risk and dependent on the creation of
incremental shareholder value, also provided additional incentives for
individual performance. As with prior awards, the program provided for awards to
vest upon the attainment and maintenance of the price of a share of Common Stock
at varying increased levels.
To improve on the design of the program, specifically to add a minimum
vesting period, the MRC offered each recipient of restricted stock during fiscal
year 1997 under the program the option of surrendering his or her entire award
for participation in a new program which utilized stock options and a
performance unit bonus pool to convey the value targeted by the restricted stock
program. As a result of this offer, all shares of restricted stock granted under
the restricted stock program in fiscal year 1997 were surrendered and replaced
by two grants of stock options which together equaled twice the number of
restricted shares surrendered and participation in a new incentive plan. The
first option grant vests three years from the date
9
<PAGE>
of grant and the second option grant, which was granted subject to shareholder
approval of the 1997 Stock Incentive Plan at the Annual Meeting, vests on the
earlier of (a) six years from the date of grant or (b) three years after the
price of a share of Common Stock has attained and maintained for a specified
period price levels of $80.00, $87.00, and $94.00 a share. Each stock option
grant was granted in conjunction with an equal number of performance units under
the Corporation's Performance Unit Bonus Plan. The first grant of performance
units vests in equal portions upon the price of a share of Common Stock
attaining and maintaining for a specified period price levels of $80.00, $87.00,
and $94.00 a share, and will be payable on or after June 26, 2000, provided, in
each case, that the officer remains an employee of the Corporation through the
date of payment. The second grant of performance units vests in equal portions
upon the price of a share of Common Stock attaining and maintaining for a
specified period price levels of $101.00, $108.00, and $115.00 a share, and will
be payable on or after the earlier of (a) June 26, 2003 or (b) three years after
the stock price targets applicable to the first grant have been attained,
provided, in each case, that the officer remains an employee of the Corporation
through the date of payment. The performance units will be forfeited to the
extent the stock price targets are not attained by June 26, 2007 or, subject to
certain limited exceptions, if the employment of the officer by the Corporation
is terminated prior to the date of payment. Upon vesting, the holder of
performance units will be entitled to a pre-tax cash or stock payment of $79.25
for each vested unit.
Mr. White was granted options to purchase an aggregate of 60,000 shares of
Common Stock at an exercise price of $79.25 per share and an equal number of
performance units under this program.
In addition to the awards noted above, in fiscal year 1997 Mr. White was
granted 36,000 shares of restricted stock pursuant to the terms of his
employment agreement. Of these shares, 6,000 vested automatically on June 30,
1997 and 6,000 will vest on June 30, 1998. An additional 12,000 shares vested
following the end of the 1997 fiscal year and up to 12,000 shares will vest
following the end of the 1998 fiscal year based upon the attainment of
performance goals relating to cumulative consolidated after-tax operating cash
flow for such year. A restricted stock award was also made to the Chief
Financial Officer which vests based upon the attainment of the same performance
goals relating to cumulative consolidated after-tax operating cash flow that
apply to Mr. White.
STOCK OPTIONS
The MRC believes that in order to achieve the Corporation's long-term growth
objectives and to align management and shareholder interests, it is in the
Corporation's best interest to grant stock options to 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.
Mr. White was granted options to purchase 75,000 shares of Common Stock at
an exercise price of $68.5625 per share in March, 1997 in connection with the
Corporation's customary annual grant of options to employees.
STOCK OWNERSHIP GUIDELINES
In order to reinforce the linkage of an executive's financial gain with
shareholder results, the MRC has established a requirement that each executive
officer of the Corporation retain a personal investment in the Common Stock
equaling between one and three times the individual's annual base salary
(depending upon the individual's management level). Grants of restricted stock
and shares of Common Stock acquired upon exercise of stock options are credited
towards an executive's ownership, and executives are granted a
10
<PAGE>
period of time to achieve these levels. As of June 30, 1997, a majority of the
Corporation's executive officers had satisfied their individual stock ownership
goals.
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 the MRC believes necessary to achieve above average performance within
the Corporation's industry.
The MRC intends to continue its policy of linking executive compensation
with corporate performance and shareholder returns to the extent possible
through the measurement procedures described in this report. Section 162(m) of
the Internal Revenue Code of 1986 generally limits the tax deductibility of
certain compensation in excess of one million dollars paid to a company's chief
executive officer and the four other most highly compensated executives. While
the Corporation currently seeks to maximize the deductibility of compensation
paid to its executive officers, it will maintain flexibility to take actions
that may be based on considerations other than tax deductibility.
Management Resources Committee
Richard H. Ayers, Chair
Joseph F. Abely, Jr.
Burnell R. Roberts
Orin R. Smith
11
<PAGE>
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 (the "DJ DTG"), a published industry index that includes the Corporation.
The other companies in the DJ DTG are: Corning Incorporated, Eaton Corporation,
Minnesota Mining and Manufacturing Company, Rockwell International Corporation,
Tektronix, Inc., Texas Instruments Incorporated, Thermo Electron Corporation,
TRW Inc., United Technologies Corporation, and Varian Associates, Inc.
Cumulative total returns are calculated assuming that $100 was invested on
July 31, 1992 in each of the Common Stock, the S&P 500, and the DJ DTG, and that
all dividends were reinvested.
THE PERKIN-ELMER CORPORATION
Comparison of 5 Year Cumulative Returns
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERKIN-ELMER S&P 500 DJ DTG
<S> <C> <C> <C>
1992 $100.00 $100.00 $100.00
1993 108.33 108.09 116.23
1994 102.13 111.21 124.59
1995 123.21 139.52 156.93
1996 170.86 175.69 187.70
1997 281.21 237.47 263.56
</TABLE>
<TABLE>
<CAPTION>
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Perkin-Elmer 100.00 108.33 102.13 123.21 170.86 281.21
S&P 500 100.00 108.09 111.21 139.52 175.69 237.47
DJ DTG 100.00 116.23 124.59 156.93 187.70 263.56
</TABLE>
12
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth cash or other compensation received for the
last three fiscal years by the Corporation's Chief Executive Officer and the
four other most highly paid executive officers of the Corporation based on
salary and bonuses paid for fiscal year 1997 (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL -----------------------------
COMPENSATION
----------------------------------- AWARDS
OTHER -------------------- PAYOUTS
ANNUAL RESTRICTED -------
COMPEN- STOCK STOCK LTIP ALL OTHER
FISCAL SALARY BONUS SATION AWARDS OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($)(3) (#)(4) ($) ($)(5)
- --------------------------------------- ------ ------- ------------ ----------- ---------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tony L. White.......................... 1997 589,424 1,171,380 158,939 1,804,500 135,000 0 20,068
Chairman, President and 1996 420,963 825,000 291,664 2,593,125 195,000 0 1,625,801
Chief Executive Officer(6)
Mark C. Rogers......................... 1997 375,001 325,000 220,416 0 55,000 0 7,500
Senior Vice President, 1996 41,827 50,000 769,688 50,000 0 150,837
Corporate Development and
Chief Technology Officer(7)
Manuel A. Baez......................... 1997 375,001 300,000 302,667 0 45,000 0 14,423
Senior Vice President 1996 14,423 50,000 804,375 50,000 0 150,288
and President, Analytical
Instruments Division(8)
Michael W. Hunkapiller................. 1997 261,655 335,500 0 45,000 0 9,033
Vice President and 1996 213,826 227,700 511,875 25,000 506,719 7,912
General Manager, Applied 1995 200,125 25,000 0 18,000 0 9,830
Biosystems Division
Stephen O. Jaeger...................... 1997 311,828 285,000 300,750 45,000 0 13,185
Vice President, Chief Financial 1996 306,000 223,000 511,875 28,000 506,719 9,231
Officer and Treasurer(9) 1995 78,462 67,500 0 50,000 0 31,671
</TABLE>
- ------------------------
(1) Awards under the Corporation's Contingent Compensation Plan are variable
and tied to the Corporation's performance.
(2) Amount shown for fiscal year 1997 for Mr. White includes $30,938 paid in
connection with his relocation to Connecticut, $46,696 for personal use of
the Corporation's aircraft, and $50,429 for reimbursement for the payment of
certain taxes. Amount shown for Dr. Rogers includes $92,000 paid in
connection with his relocation to Connecticut and $96,466 for reimbursement
for the payment of certain taxes. Amount shown for Mr. Baez includes
$148,332 paid in connection with his relocation to Connecticut and $127,151
for reimbursement for the payment of certain taxes.
(3) The dollar value of restricted stock awarded in fiscal year 1997 is based
on the value of a share of Common Stock on August 15, 1996, the date of
grant. Of these shares, 6,000 shares awarded to Mr. White vested on June 30,
1997, and 12,000 shares awarded to Mr. White and 3,000 shares awarded to Mr.
Jaeger vested on August 21, 1997 upon the certification of attainment of
certain performance goals relating to cumulative consolidated after-tax
operating cash flow for the fiscal year ended June 30, 1997. The remaining
shares of restricted stock will vest as follows: 6,000 shares awarded to Mr.
White will vest on June 30, 1998, subject to Mr. White's being an employee
of the Corporation as of such date, and up to an additional 12,000 shares
awarded to Mr. White and a portion of the 3,000 shares awarded to Mr. Jaeger
will vest following the end of the Corporation's 1998 fiscal year based upon
the attainment of certain additional performance goals relating to
cumulative consolidated after-tax operating cash flow for such fiscal year.
It is expected that the remaining shares held by Mr. Jaeger will be
forfeited in connection with his resignation as an officer of the
Corporation. See "EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT,
CHANGE-IN-CONTROL, AND OTHER AGREEMENTS," below. Prior to vesting, Messrs.
White and Jaeger have the right to receive dividends on and to vote, but may
not sell or otherwise dispose of, such shares. As of June 30, 1997, Messrs.
White and Jaeger held 30,000 and 6,000 unvested shares of restricted stock,
respectively, having a value of $2,386,875 and $477,375, respectively. As of
such date, none of Dr. Rogers, Mr. Baez, or Dr. Hunkapiller held any shares
of restricted stock. Amounts shown for fiscal year 1997 do not include
shares of restricted stock awarded to each of the Named Executive Officers
in fiscal year 1997 which were subsequently surrendered during such fiscal
year in exchange for stock options and participation in the Corporation's
Performance Unit Bonus Plan. See "EXECUTIVE COMPENSATION--REPORT OF THE
MANAGEMENT RESOURCES COMMITTEE" for further discussion of such action.
(4) Includes options granted subject to shareholder approval of the 1997 Stock
Incentive Plan. See "APPROVAL OF THE 1997 STOCK INCENTIVE PLAN," below.
(5) Amounts shown for fiscal year 1997 include (i) the Corporation's
contributions under the Corporation's Employee Savings Plan for Messrs.
White, Rogers, Baez, Hunkapiller, and Jaeger of $11,279, $3,000, $9,923,
$6,800, and $9,948, respectively; and (ii) amounts accrued under the savings
plan component of the Corporation's Excess Benefit Plan for Messrs. White,
Rogers, Baez, Hunkapiller, and Jaeger of $8,789, $4,500, $4,500, $2,233, and
$3,237, respectively.
(6) Mr. White became an employee and Chairman, President and Chief Executive
Officer of the Corporation on September 12, 1995.
(7) Dr. Rogers became an employee and executive officer of the Corporation on
May 7, 1996.
(8) Mr. Baez became an employee and executive officer of the Corporation on
June 3, 1996.
(9) Mr. Jaeger became an employee and executive officer of the Corporation on
March 16, 1995.
13
<PAGE>
OPTION GRANT TABLE
The following table sets forth information regarding stock option grants to
the Named Executive Officers during the fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
- ----------------------------------------------------------------------------------------------------- AT
NUMBER OF ASSUMED ANNUAL RATES OF
SECURITIES PERCENT OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED TO FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN FISCAL EXERCISE PRICE EXPIRATION ----------------------------
NAME GRANTED (#)(1) YEAR 1997 ($/SH) DATE 5% ($) 10% ($)
- --------------------------------- -------------- ------------------- -------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tony L. White.................... 75,000 7.6 68.5625 3/24/07 3,233,894 8,195,323
30,000(3) 3.0 79.25 6/26/07 1,495,197 3,789,123
30,000(4) 3.0 79.25 6/26/07 1,495,197 3,789,123
Mark C. Rogers................... 25,000 2.5 68.5625 3/24/07 1,077,965 2,731,774
15,000(3) 1.5 79.25 6/26/07 747,598 1,894,561
15,000(4) 1.5 79.25 6/26/07 747,598 1,894,561
Manuel A. Baez................... 15,000 1.5 68.5625 3/24/07 646,779 1,639,065
15,000(3) 1.5 79.25 6/26/07 747,598 1,894,561
15,000(4) 1.5 79.25 6/26/07 747,598 1,894,561
Michael W. Hunkapiller........... 15,000 1.5 68.5625 3/24/07 646,779 1,639,065
15,000(3) 1.5 79.25 6/26/07 747,598 1,894,561
15,000(4) 1.5 79.25 6/26/07 747,598 1,894,561
Stephen O. Jaeger................ 25,000 2.5 68.5625 3/24/07 1,077,965 2,731,774
10,000(3) 1.0 79.25 6/26/07 498,399 1,263,041
10,000(4) 1.0 79.25 6/26/07 498,399 1,263,041
- ------------------------------------------------------------------------------------------------------------------------------------
All Shareholders(5).............. $ 1.9 billion $ 4.8 billion
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------------------
(1) All stock options are granted with an exercise price equal to the fair
market value of a share of Common Stock on the date of grant and, except as
provided below, become exercisable in two equal annual installments
commencing one year after the date of grant.
(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) Options will vest on June 26, 2000 and were granted in conjunction with a
grant of an equal number of performance units under the Corporation's
Performance Unit Bonus Plan. Performance units granted under this plan will
vest according to the following schedule: 33 1/3%, if the fair market value
of a share of Common Stock averages $80.00 or more for a period of ninety
days; 66 2/3%, if the fair market value of a share of Common Stock averages
$87.00 or more for a period of ninety days; and 100%, if the fair market
value of a share of Common Stock averages $94.00 or more for a period of
ninety days, and will be payable on or after June 26, 2000, provided, in
each case, that the officer remains an employee of the Corporation through
the date of payment. Upon such vesting, the holder of performance units will
be entitled to a pre-tax cash or stock payment of $79.25 for each vested
unit. Prior to vesting of the performance units, holders will receive
dividend equivalents at the same time as, and in an amount per unit equal
to, dividends payable on each share of Common Stock, but will not have any
voting rights with respect to such performance units or the right to sell or
otherwise dispose of such units. The performance units will be forfeited to
the extent the stock price targets are not attained by June 26, 2007 or,
subject to certain limited exceptions, if the employment of the officer by
the Corporation is terminated prior to the date of payment.
(4) Options were granted subject to shareholder approval of the 1997 Stock
Incentive Plan at the Annual Meeting (see "APPROVAL OF THE 1997 STOCK
INCENTIVE PLAN," below) and will vest on the earlier of (a) June 26, 2003 or
(b) three years after all the stock price targets of the performance units
referred to in footnote 3 above have been attained, provided, in each case,
that the officer remains an employee of the Corporation through such date.
Options were granted in conjunction with a grant of an equal number of
performance units under the Corporation's Performance Unit Bonus Plan. The
performance units will vest according to the following schedule: 33 1/3%, if
the fair market value of a share of Common Stock averages $101.00 or more
for a period of ninety days; 66 2/3%, if the fair market value of a share of
Common Stock averages $108.00 or more for a period of ninety days; and 100%,
if the fair market value of a share of Common Stock averages $115.00 or more
for a period of ninety days, and will be payable on or after the earlier of
(a) June 26, 2003 or (b) three years after all the stock price targets of
the performance units referred to in footnote 3 above have been attained,
provided, in each case, that the officer remains an employee of the
Corporation through the date of payment. Performance units will be forfeited
to the extent the stock price targets are not attained by June 26, 2007 or,
subject to certain limited exceptions, if the employment of the officer by
the Corporation is terminated prior to the date of payment and were
otherwise generally granted on the same terms as those described in footnote
3 above.
(5) These amounts represent the increase in the aggregate market value of the
Common Stock outstanding as of the date of the initial grant (43.8 million
shares) assuming the annual rates of stock price appreciation set forth
above over the ten-year period used for the Named Executive Officers.
14
<PAGE>
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information regarding the exercise of options
by the Named Executive Officers during the fiscal year ended June 30, 1997, and
the value of their unexercised options at June 30, 1997.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS
UNEXERCISED OPTIONS AT JUNE 30,
AT JUNE 30, 1997 1997
(#) ($)(2)
------------------------------ -----------
<S> <C> <C> <C> <C> <C>
SHARES ACQUIRED
ON EXERCISE VALUE REALIZED
NAME (#) ($) EXERCISABLE UNEXERCISABLE(1) EXERCISABLE
- ---------------------------------- ---------------- --------------- ----------- ---------------- -----------
Tony L. White..................... 0 0 97,500 232,500 3,458,906
Mark C. Rogers.................... 0 0 25,000 80,000 673,437
Manuel A. Baez.................... 0 0 25,000 70,000 615,625
Michael W. Hunkapiller............ 0 0 77,201 63,500 3,826,701
Stephen O. Jaeger................. 0 0 64,000 59,000 2,800,000
<CAPTION>
<S> <C>
NAME UNEXERCISABLE
- ---------------------------------- -------------
Tony L. White..................... 4,185,468
Mark C. Rogers.................... 915,625
Manuel A. Baez.................... 760,937
Michael W. Hunkapiller............ 722,531
Stephen O. Jaeger................. 570,312
</TABLE>
- ------------------------
(1) Includes options granted subject to shareholder approval of the 1997 Stock
Incentive Plan. See "APPROVAL OF THE 1997 STOCK INCENTIVE PLAN," below.
(2) The fair market value of a share of Common Stock on June 30, 1997 was
$78.25.
LONG-TERM INCENTIVE PLANS
The following table sets forth information regarding awards made to the
Named Executive Officers under The Perkin-Elmer Corporation Division Long-Term
Incentive Plan during the fiscal year ended June 30, 1997.
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PAYOUTS UNDER
NON-STOCK
PERFORMANCE OR PRICE-BASED
NUMBER OF SHARES, OTHER PERIOD PLANS(1)
UNITS OR UNTIL -------------------
OTHER RIGHTS MATURATION OR TARGET
NAME (#) PAYOUT ($)
- --------------------------------------------------------------- ------------------------- ---------------- -------------------
<S> <C> <C> <C>
Tony L. White.................................................. 0 0 0
Mark C. Rogers................................................. 0 0 0
Manuel A. Baez................................................. 50,000 7/1/96--6/30/99 66,000(2)
Michael W. Hunkapiller......................................... 50,000 7/1/96--6/30/99 425,000(2)
Stephen O. Jaeger.............................................. 0 0 0
</TABLE>
- ------------------------
(1) Awards granted under the plan are valued over a three-year period (the
"Performance Cycle") based upon the attainment of certain EBIT (earnings
before interest and income taxes) and after-tax operating cash flow targets
for the Applied Biosystems Division of the Corporation, in the case of Dr.
Hunkapiller, and the Analytical Instruments Division of the Corporation, in
the case of Mr. Baez. At the end of the Performance Cycle, the value of each
unit will be adjusted upward or downward based upon the compound annual
growth in these measures for the applicable division. The awards will vest
as to 50% on the last day of the Performance Cycle and as to the remaining
50% on the first anniversary of that date and will be forfeited, subject to
certain limited exceptions, if the employment of the officer by the
Corporation is terminated prior to such date. There are no minimum or
maximum amounts payable under the plan.
(2) Based on the value of a unit as of the end of fiscal year 1997 without any
adjustment based upon compound annual growth in EBIT or after-tax operating
cash flow. The actual value of a unit at the end of the Performance Cycle
may be significantly higher or lower depending upon the performance of the
applicable division during the remainder of the Performance Cycle as
described in footnote 1 above.
RETIREMENT BENEFITS
The Corporation has in effect a qualified defined benefit Employee Pension
Plan covering all of its domestic employees, including the Named Executive
Officers, a non-qualified Excess Benefit Plan, which provides benefits that
would otherwise be denied participants by reason of certain limitations of the
Internal
15
<PAGE>
Revenue Code of 1986, as amended (the "Code"), on qualified plan benefits, and a
non-qualified Supplemental Retirement Plan, which provides benefits based on
payments made under the Corporation's Contingent Compensation Plan for Key
Employees and Incentive Compensation Plan. The Employee Pension Plan and the
Excess Benefit Plan provide annual benefits at normal retirement age 65 based on
a participant's final average base salary (measured over 36 months from October
1, 1995) and service from October 1, 1995. The Supplemental Retirement Plan
provides annual benefits at normal retirement age 65 based on a participant's
final average contingent compensation or incentive compensation awards (measured
over 36 months from July 1, 1995) and service from July 1, 1995.
The benefit under the Employee Pension Plan and the pension plan component
of the Excess Benefit Plan for service prior to October 1, 1995 was based on a
career average benefit formula providing 1.4% of base earnings during the period
of participation, plus 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
were calculated at a rate of 1.7% of base earnings. A variable annuity option
was available to each participant for benefit accruals prior to October 1, 1995.
The benefit under the Supplemental Retirement Plan for service prior to July 1,
1995 was based on a career average formula providing 1.5% of the sum of all
payments made to a participant during his or her participation in the Contingent
Compensation Plan and the Incentive Compensation Plan.
The following table sets forth the estimated total annual benefits payable
at normal retirement age at 65 under the Employee Pension Plan, the Excess
Benefit Plan, and the Supplemental Retirement Plan to covered participants for
service after October 1, 1995.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
AVERAGE
ANNUAL
REMUNERATION YEARS OF SERVICE FROM OCTOBER 1, 1995
- -------------- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 15 20 25 30 35
---------- ---------- ---------- ---------- ----------- -----------
$ 500,000 $ 85,020 $ 127,530 $ 170,040 $ 212,550 $ 255,060 $ 297,570
600,000 102,060 153,090 204,120 255,150 306,180 357,210
700,000 118,980 178,470 237,960 297,450 356,940 416,430
800,000 135,260 202,890 270,520 338,150 405,780 473,410
900,000 151,460 227,190 302,920 378,650 454,380 530,110
1,000,000 167,500 251,250 335,000 418,750 502,500 586,250
1,100,000 184,500 276,750 369,000 461,250 553,500 645,750
1,200,000 201,500 302,250 403,000 503,750 604,500 705,250
1,300,000 218,500 327,750 437,000 546,250 655,500 764,750
1,400,000 235,500 353,250 471,000 588,750 706,500 824,250
1,500,000 252,500 378,750 505,000 631,250 757,500 883,750
1,600,000 269,500 404,250 539,000 673,750 808,500 943,250
1,700,000 286,500 429,750 573,000 716,250 859,500 1,002,750
1,800,000 303,500 455,250 607,000 758,750 910,500 1,062,250
1,900,000 320,500 480,750 641,000 801,250 961,500 1,121,750
2,000,000 337,500 506,250 675,000 843,750 1,012,500 1,181,250
</TABLE>
The benefit amounts shown in the Pension Plan Table are computed on a
straight life annuity basis, payable at age 65, and assume covered compensation
for social security purposes of $50,000 in all cases. As of June 30, 1997, Mr.
White, Dr. Hunkapiller, and Mr. Jaeger each had 1.75 years of credited service
from October 1, 1995 for pension purposes, and Dr. Rogers and Mr. Baez had 1.08
years and 1.00 year, respectively, of credited service for pension purposes. The
base salary and contingent compensation for each such person for the three most
recent fiscal years are as set forth in the salary and bonus columns of the
Summary Compensation Table above under "EXECUTIVE COMPENSATION."
Estimated annual benefits accrued prior to October 1, 1995 and payable upon
retirement at age 65 under the Employee Pension Plan, the Supplemental
Retirement Plan, and the Retirement Plan component of the Excess Benefit Plan to
Mr. White, Dr. Hunkapiller, and Mr. Jaeger are $267, $21,072, and $2,442,
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respectively, assuming continued service for benefit eligibility and based on
the current variable unit value, as applicable. Mr. Baez and Dr. Rogers do not
have benefit accruals prior to October 1, 1995.
Under the terms of individual employment agreements, Mr. White, Dr. Rogers,
and Mr. Baez are entitled to receive additional retirement benefits equal to the
annual benefit each would have received if they were credited under the Employee
Pension Plan and non-qualified plans (the Excess Benefit Plan and the
Supplemental Retirement Plan) with an additional 25, 13, and 13 years of
service, respectively, reduced by the annual benefit each will receive from the
Employee Pension Plan and non-qualified plans. Mr. White's annual benefit will
be further reduced by $111,528. Mr. White was 50% vested in this additional
benefit as of September 12, 1995 (his date of hire), and his vesting percentage
increases by 10% each year to 100% vesting in this additional non-qualified plan
benefit after five years of service. Dr. Rogers and Mr. Baez are fully vested in
this benefit.
The Employee Pension 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 the 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 Employee Pension Plan after
the change in control. Additionally, in the event the Employee Pension 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.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, CHANGE-IN-CONTROL, AND OTHER
AGREEMENTS
The Corporation has entered into a three-year employment agreement with Mr.
White dated September 12, 1995 pursuant to which he serves as Chairman,
President and Chief Executive Officer of the Corporation. The agreement will be
automatically extended for consecutive one-year periods unless either party
gives at least 180 days notice of its intent not to renew. Under the terms of
the agreement, Mr. White will receive a base salary (currently set at $630,000)
subject to annual review and a target incentive payment under the Corporation's
Contingent Compensation Plan equal to 100% of his base salary. In the event of
termination by the Corporation of Mr. White's employment without cause or if he
terminates employment for good reason (as defined), Mr. White would receive
three times his base salary and target bonus, the fair market value of 36,000
shares of Common Stock, a pro rated incentive payment, and other specified
benefits.
The Corporation has entered into an agreement with Dr. Rogers dated as of
May 7, 1996 pursuant to which he serves as Senior Vice President and Chief
Technology Officer of the Corporation. Under the terms of the agreement, Dr.
Rogers will receive a minimum annual base salary of $375,000 and a target
incentive payment under the Corporation's Contingent Compensation Plan equal to
60% of his base salary. The agreement also provided for the Corporation to
reimburse Dr. Rogers for costs incurred in connection with his relocation to
Connecticut and a special one-time payment of $150,000 to assist in such
relocation. In the event of termination of Dr. Rogers' employment without cause
or if Dr. Rogers terminates employment for good reason (as defined), he will be
entitled to, in lieu of severance under any other severance pay plan of the
Corporation, an annual severance payment of $150,000 payable until age 65 and
other specified benefits.
The Corporation has entered into an agreement with Mr. Baez dated June 3,
1996 pursuant to which he serves as Senior Vice President and President,
Analytical Instruments Division of the Corporation. Under the terms of the
agreement, Mr. Baez will receive a minimum annual base salary of $375,000 and a
target incentive payment under the Corporation's Contingent Compensation Plan
equal to 60% of his base salary. The agreement also provided for the Corporation
to reimburse Mr. Baez for costs incurred in connection with his relocation to
Connecticut and a special one-time payment of $150,000 to assist in such
relocation.
The Corporation has 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
that if, following a change in control, any of the Named Executive Officers
leaves employment for good reason (as defined) or his employment is terminated
without cause, he will generally
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<PAGE>
be entitled to receive three times his base salary and average incentive
compensation, full vesting of all restricted stock and stock options, and other
specified benefits.
The Corporation has entered into a deferred compensation contract with Dr.
Hunkapiller which, subject to certain conditions, provides for payments to be
made for a maximum of ten years of $25,000 per annum, commencing upon his
retirement from the Corporation (or in the event of the termination of his
employment 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
Dr. Hunkapiller elects one of several optional forms of payment based on
actuarial determinations, terminates employment prior to normal retirement age,
or competes with the Corporation.
Dr. Hunkapiller and Mr. Jaeger incurred indebtedness to the Corporation for
the payment of taxes in connection with the vesting of shares of restricted
stock during the fiscal year ended June 30, 1996. Such indebtedness was
evidenced by individual three-year promissory notes dated March 8, 1996 and
secured by shares of Common Stock. Interest is payable on amounts outstanding at
the federal short-term rate required by Section 7872 of the Code, compounded
semiannually. The largest aggregate amount of such indebtedness outstanding
during the 1997 fiscal year for Dr. Hunkapiller and Mr. Jaeger was $89,558 and
$85,538, respectively, and the amount of such indebtedness outstanding as of
August 11, 1997 for Dr. Hunkapiller and Mr. Jaeger was $90,109 and $86,064,
respectively.
Mr. Jaeger has announced his intention to resign as Vice President, Chief
Financial Officer and Treasurer of the Corporation on or about September 30,
1997. Although the parties have not yet finalized an agreement, it is expected
that Mr. Jaeger would continue to receive his base salary for a period of
twenty-four months following such resignation and would, subject to certain
limitations, also be entitled to continue to participate in certain of the
Corporation's benefit plans during such period. It is also expected that Mr.
Jaeger would receive a portion of the shares of restricted stock held by him
which would otherwise vest following the end of the Corporation's 1998 fiscal
year based upon the attainment of certain performance goals, performance units
granted under the Corporation's Performance Unit Bonus Plan which have vested as
of the date of such resignation, and certain other benefits to be determined.
2. RATIFICATION OF THE 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, 1998. 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,
will have the opportunity to make a statement, and will be available to respond
to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THIS
PROPOSAL.
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3. APPROVAL OF AN AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has approved, subject to approval by the shareholders
at the Annual Meeting, an amendment to the Corporation's Restated Certificate of
Incorporation (the "Certificate") to increase the number of authorized shares of
Common Stock from 90,000,000 to 180,000,000 shares. Specifically, the Board of
Directors proposes that the first paragraph of Article Third of the Certificate
be amended to read as follows:
The total number of shares which may be issued by the Corporation
is one hundred and eighty million (180,000,000) shares of Common
Stock, all of which shall have a par value of one dollar ($1.00)
per share, and one million (1,000,000) shares of Preferred Stock,
all of which shall have a par value of one dollar ($1.00) per
share.
As of August 11, 1997, 45,599,755 shares of Common Stock were issued and
outstanding, 1,756,977 shares were held in treasury, and 5,216,489 shares were
reserved for issuance under the Corporation's stock incentive and stock purchase
plans. If the amendment is adopted, approximately 128,900,000 shares of Common
Stock would be unreserved and available for future issuance.
The Board of Directors believes that it is in the best interest of the
Corporation to have additional shares of Common Stock available for possible
future actions, such as financings, investments and acquisitions, stock splits
and dividends, employee benefit plans, and other corporate purposes. While the
Corporation expects to issue previously authorized shares of Common Stock in
connection with its proposed acquisition of PerSeptive Biosystems, Inc. and
under its employee benefit plans (including the 1997 Stock Incentive Plan
proposed to be approved at the Annual Meeting), there are no present plans,
understandings, or agreements for the issuance of the shares of Common Stock
proposed to be authorized pursuant to this proposal.
Authorized but unissued shares of Common Stock may be issued at such times,
for such purposes, and for such consideration as the Board of Directors may
determine without further shareholder approval, except as otherwise required by
law or applicable stock exchange rules. However, the Board does not intend to
issue any shares of Common Stock to be authorized under the amendment except
upon terms that the Board deems to be in the best interest of the Corporation.
The issuance of additional shares of Common Stock without further shareholder
approval may, among other things, have a dilutive effect on earnings per share
and on the equity of the present holders of Common Stock and their voting
rights. Holders of shares of Common Stock have no preemptive rights.
The affirmative vote of the holders of a majority of all outstanding shares
of Common Stock entitled to vote at the Annual Meeting is required for approval
of the amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THIS
PROPOSAL.
4. APPROVAL OF THE 1997 STOCK INCENTIVE PLAN
The Board of Directors has adopted, subject to approval by the shareholders
at the Annual Meeting, The Perkin-Elmer Corporation 1997 Stock Incentive Plan
(the "Incentive Plan"). The Incentive Plan is intended to continue the
established policy of the Corporation of encouraging ownership of Common Stock
by employees, officers, and directors of the Corporation and of providing
incentives for such persons to put forth maximum efforts for the success of the
Corporation. The Board believes that the Incentive Plan will promote the
long-term growth and profitability of the Corporation and is thus in the best
interest of the Corporation and its shareholders.
Stock-based incentives are an integral component of the Corporation's
compensation system, and the Incentive Plan reflects the principles that
underlie the Corporation's compensation policies. Specifically, the Board of
Directors believes that the Incentive Plan will (a) further efforts of the
Corporation to place a portion of employee and director compensation "at risk"
and tied to the performance of corporate objectives, (b) further the goal of
increased ownership of Common Stock by employees and directors and thereby
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<PAGE>
further align their interests with those of the shareholders, and (c) facilitate
the structuring of appropriate and necessary incentives to attract and retain
highly qualified and talented individuals.
The Corporation currently has in effect its 1996 Stock Incentive Plan (the
"1996 Plan") which does not permit the award of stock incentives after October
31, 1998. Consistent with its stated intent at the time of the adoption of the
1996 Plan, the Management Resources Committee of the Board of Directors has
granted stock options under the Incentive Plan to a significantly broader group
of employees than had historically been the case under previous plans. The
broader grants were necessitated in part by the prevailing compensation
practices of technology companies in the San Francisco Bay area with whom the
Corporation must compete for employees. Consequently, only 57,200 shares of
Common Stock remained available for the grant of new awards under the 1996 Plan
as of June 30, 1997. The Corporation intends to continue to make awards under
the 1996 Plan until such time as no shares are available for grant under such
plan or October 31, 1998.
The following is a summary of the material provisions of the Incentive Plan.
This summary is qualified in its entirety by reference to the specific
provisions of the Incentive Plan, the full text of which is attached to this
Proxy Statement as Exhibit A.
SUMMARY OF THE INCENTIVE PLAN
SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided below,
2,000,000 shares of Common Stock will be available for issuance under the
Incentive Plan. Shares of Common Stock delivered under the Incentive Plan may be
newly issued shares, treasury shares, reacquired shares, or any combination
thereof. As of August 11, 1997, the fair market value of a share of Common Stock
was $81.1563.
TYPES OF INCENTIVES. Incentives granted under the Incentive Plan may be (1)
employee stock options, consisting of incentive stock options within the meaning
of Section 422 of the Code and non-qualified stock options (collectively,
"Employee Options"), (2) director stock options, which will be non-qualified
stock options ("Director Options"), (3) shares of Common Stock, which may be
subject to restrictions ("Employee Stock Awards"), (4) shares of Common Stock
subject to performance goals ("Performance Shares"), or (5) director stock
awards, which will be shares of Common Stock subject to certain restrictions
("Director Stock Awards").
ADMINISTRATION. The Incentive Plan will be administered by the Management
Resources Committee (the "Committee") of the Board of Directors. The Committee
will determine, subject to the express provisions of the Incentive Plan, the
employees to whom, and the time or times at which, Employee Options, Employee
Stock Awards, and Performance Shares (collectively, "Employee Awards") are to be
granted, as well as the terms and provisions governing each such award.
ELIGIBILITY. All regular salaried employees (including executive officers)
of the Corporation and its subsidiaries will be eligible to receive Employee
Awards, and all non-employee directors of the Corporation will receive Director
Options and Director Stock Awards, under the Incentive Plan. As of June 30,
1997, approximately 5,700 persons would be eligible to participate in the
Incentive Plan, including ten non-employee directors.
STOCK OPTIONS--EMPLOYEE OPTIONS. The purchase price of a share of Common
Stock covered by an Employee Option will be determined by the Committee, but may
not be less than 100% of the fair market value of a share of Common Stock on the
date of grant. The vesting period and all other terms and conditions of each
Employee Option will be determined by the Committee, provided that the term of
each Employee Option may not be more than ten years from the date of grant.
If the employment of an employee to whom an Employee Option has been granted
is terminated (other than by reason of retirement, disability, or death), the
Employee Option may be exercised (to the extent that
20
<PAGE>
the employee would be entitled to do so at the date of termination) for 30 days
after such termination, but not after the expiration of the term of the Employee
Option.
If an employee to whom an Employee Option has been granted retires from the
Corporation pursuant to any qualified pension plan provided by the Corporation,
or is totally and permanently disabled, such Employee Option may be fully
exercised without regard to the period of continuous employment at any time: (a)
in the case of an incentive stock option, within three months after such
retirement or disability, but not after the expiration of the term of the
Employee Option; or (b) in the case of a non-qualified stock option, within one
year after such retirement or disability, but not after the expiration of the
term of the Employee Option.
If an employee to whom an Employee Option has been granted dies while
employed by the Corporation, such Employee Option may be exercised to the extent
that the employee was entitled to do so at the date of death by his or her
executor or administrator or other person at the time entitled by law to the
employee's rights under the Employee Option, at any time within one year after
his or her death, as shall be prescribed in the option agreement, but not after
the expiration of the term of the Employee Option.
STOCK OPTIONS--DIRECTOR OPTIONS. As of the date of each election or
reelection to the Board of Directors of the Corporation, each non-employee
director of the Corporation will be automatically granted a Director Option to
purchase 1,500 shares of Common Stock, subject to adjustment as provided below,
provided that non-employee directors may not receive options for more than an
aggregate of 1,500 shares for any fiscal year (subject to adjustment as provided
below) under the Incentive Plan and the 1996 Plan. The purchase price of a share
of Common Stock covered by a Director Option will be 100% of the fair market
value of a share of Common Stock on the date of grant.
The term of each Director Option will be for a period of ten years from the
date of grant. Each Director Option will vest as to 750 shares of Common Stock
on the date immediately preceding the first annual meeting of shareholders next
following the date of grant and as to the remaining 750 shares on the date
immediately preceding the second annual meeting of shareholders next following
the date of grant, provided that the holder thereof continues to serve as a
member of the Board of Directors as of each such date.
If a director's service as a member of the Board of Directors is terminated
(other than by reason of retirement, disability, resignation with the approval
of the Board, or death), the Director Option may be exercised (to the extent
that the director would be entitled to do so at the date of termination) for 30
days after such termination, but not after the expiration of the term of the
Director Option.
If a director to whom a Director Option has been granted ceases to serve as
a director as a result of (a) retiring from the Board of Directors upon normal
retirement age, (b) becoming totally and permanently disabled, or (c) resigning
or declining to stand for reelection with the approval of the Board of
Directors, such Director Option may be fully exercised without regard to the
period of continuous service at any time within one year after such retirement,
but not after the expiration of the term of the Director Option.
If a director to whom a Director Option has been granted dies while serving
as a member of the Board of Directors, such Director Option may be exercised to
the extent that the director was entitled to do so at the date of death by his
or her executor or administrator or other person at the time entitled by law to
the director's rights under the Director Option, at any time within one year
after his or her death, but not after the expiration of the term of the Director
Option.
STOCK OPTIONS--GENERAL. Employee Options and Director Options
(collectively, "Options") will be exercisable only by the optionee or his or her
guardian or legal representative, and may not be transferred, except pursuant to
a domestic relations order, provided that the Committee may, in its sole
discretion, permit an optionee to transfer a non-qualified stock option to (a) a
member of the optionee's immediate family, (b) a trust, the beneficiaries of
which consist exclusively of members of the optionee's immediate family, or (c)
a
21
<PAGE>
partnership, the partners of which consist exclusively of members of the
optionee's immediate family. After the death of an optionee, an Option may be
transferred pursuant to the laws of descent and distribution.
It is a condition to the exercise of an Option within one year following
termination of employment or service that the optionee has not (a) rendered
services or engaged directly or indirectly in any business which in the opinion
of the Committee competes with or is in conflict with the interests of the
Corporation or (b) violated any written agreement with the Corporation. An
optionee's violation of either of these conditions will result in the forfeiture
of all Options held by such optionee.
LIMITATIONS ON THE GRANT OF OPTIONS. No one individual may be granted an
Option or Options under the Incentive Plan during any fiscal year of the
Corporation for an aggregate number of shares of Common Stock which exceeds 10%
of the total number of shares reserved for issuance under the Incentive Plan.
EMPLOYEE STOCK AWARDS. Employee Stock Awards may, but need not, be subject
to such restrictions as the Committee may determine. Until any conditions
associated with Employee Stock Awards are met, none of such shares may be sold,
assigned, bequeathed, transferred, pledged, or otherwise disposed of in any way.
Recipients of Employee Stock Awards will otherwise be entitled to such rights of
a shareholder with respect to the shares of Common Stock subject to Employee
Stock Awards as the Committee may determine, including the right to vote and
receive dividends and other distributions made with respect to such Common
Stock.
In the event that a recipient of an Employee Stock Award terminates
employment before any applicable restrictions have been met, by reason of death,
total and permanent disability, retirement, or resignation or discharge from
employment other than for cause, the Committee may, in its sole discretion,
remove restrictions on all or a portion of the Common Stock subject to the
Employee Stock Award.
LIMITATIONS ON EMPLOYEE STOCK AWARDS. Subject to adjustment as provided
below, no employee may receive an Employee Stock Award representing more than
40,000 shares of Common Stock during any fiscal year of the Corporation, and the
maximum number of shares of Common Stock that may be issued to all employees
pursuant to Employee Stock Awards under the Incentive Plan is 80,000.
PERFORMANCE SHARES. Awards of Performance Shares will be subject to the
attainment of performance goals relating to one or more criteria within the
meaning of Section 162(m) of the Code and the regulations thereunder, including,
without limitation, stock price, market share, sales, earnings per share, return
on equity, costs, and cash flow, as determined by the Committee from time to
time. Certificates representing Performance Shares will be registered in the
name of the award recipient but remain in the physical custody of the
Corporation until the Committee has determined that performance goals have been
attained and other stock restrictions have been satisfied. Until the Performance
Shares are delivered to an award recipient, none of such shares may be sold,
assigned, bequeathed, transferred, pledged, or otherwise disposed of in any way
by the recipient. Recipients of Performance Shares will otherwise be entitled to
such rights of a shareholder with respect to the Performance Shares as the
Committee may determine, including the right to vote and receive dividends and
other distributions made with respect to the Performance Shares.
In the event that a recipient of Performance Shares terminates employment
before all applicable performance goals have been attained, by reason of death,
total and permanent disability, retirement, or resignation or discharge from
employment other than for cause, the Committee may, in its sole discretion,
remove restrictions on all or a portion of the Performance Shares or determine
the performance objectives with respect to all or a portion of the Performance
Shares to have been attained, provided that the Committee may not exercise such
discretion to the extent that it would cause the award of Performance Shares not
to qualify as performance based compensation under Section 162(m) of the Code.
LIMITATIONS ON PERFORMANCE SHARES. Subject to adjustment as provided below,
no employee may receive Performance Shares representing more than 100,000 shares
of Common Stock during any fiscal
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<PAGE>
year of the Corporation, and the maximum number of shares of Common Stock that
may be issued to all employees pursuant to awards of Performance Shares under
the Incentive Plan is 400,000.
DIRECTOR STOCK AWARDS. Thirty days after the date of each election or
reelection to the Board of Directors, commencing with election at the Annual
Meeting, each non-employee director will automatically be granted a Director
Stock Award with respect to 300 shares of Common Stock, subject to adjustment as
provided below. Non-employee directors elected to the Board other than at an
annual meeting will be granted a pro rata portion of such shares. Each Director
Stock Award will vest as of the date immediately preceding the date of the first
annual meeting of shareholders next following the date of grant, provided that
the holder thereof continues to serve as a member of the Board of Directors as
of such date.
Except as set forth below, the holder of Director Stock Award will be
entitled to all rights of a shareholder with respect to the shares of Common
Stock issued pursuant to the Director Stock Award, including the right to
receive dividends and to vote such shares of Common Stock, provided that stock
dividends paid with respect to such shares will be restricted to the same extent
as the underlying shares of Common Stock issued pursuant to the Director Stock
Award. Prior to vesting, none of the shares of Common Stock issued pursuant to a
Director Stock Award may be sold, assigned, bequeathed, transferred, pledged,
hypothecated, or otherwise disposed of in any way.
If a non-employee director to whom a Director Stock Award has been granted
ceases to serve as a director as a result of (a) his or her death, (b) retiring
from the Board of Directors upon reaching normal retirement age, (c) becoming
totally and permanently disabled, or (d) resigning with the approval of the
Board of Directors, all shares subject to such Director Stock Award will be
fully vested as of the date of termination of service.
Non-employee directors will be permitted to defer the receipt of their
Director Stock Awards. Deferred awards will be credited to a bookkeeping account
and will be deemed invested in Common Stock units, each unit representing one
share of Common Stock. As dividends are paid on Common Stock, a corresponding
amount of additional units will be credited to the non-employee director's
deferral account. A non-employee director who defers receipt of his or her
Director Stock Awards will not have any voting rights with respect to such
Director Stock Award until such time as he or she receives an actual
distribution of Common Stock.
CHANGE OF CONTROL. All outstanding Options granted under the Incentive Plan
will become fully and immediately exercisable, all restrictions on Employee
Stock Awards and awards of Performance Shares will immediately terminate, all
performance objectives applicable to awards of Performance Shares will be deemed
attained, and all Director Stock Awards will become fully vested (a) in the
event that a tender offer or exchange offer (other than an offer by the
Corporation) for the Common Stock is made by any "person" within the meaning of
Section 14(d) of the Securities Exchange Act of 1934 and not withdrawn within a
specified period after the commencement thereof or (b) in the event of a "Change
in Control" (as defined in the Incentive Plan).
TERMINATION AND AMENDMENT; NO REPRICING. No award may be made under the
Incentive Plan after October 31, 2002. The Board of Directors may at any time
prior to that date terminate the Incentive Plan or make any amendment or
modification as it shall deem advisable, provided that amendments which would
(a) increase the aggregate number of shares which may be issued or (b)
materially modify the requirements as to eligibility for participation would
require shareholder approval.
The terms of any outstanding Employee Award may be amended by the Committee
at any time in its discretion in any manner it deems appropriate, including to
accelerate the date of exercise of any award, terminate restrictions, or convert
an incentive stock option into a non-qualified stock option, provided that no
such amendment may adversely affect in any material manner any right of any
recipient without his or her consent and, provided further, that the Committee
may not (a) amend any previously-issued award of
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<PAGE>
Performance Shares to the extent that the amendment would cause such award not
to qualify as performance based compensation under Section 162(m) of the Code or
(b) amend any previously-issued Employee Option to reduce the purchase price
thereof whether by modification of the Employee Option or by cancellation of the
Employee Option in consideration of the immediate issuance of a replacement
Employee Option bearing a reduced purchase price.
ADJUSTMENTS. The Incentive Plan provides that the number of shares
available, the number of shares subject to Director Options and Director Stock
Awards, the maximum number of shares that may be subject to awards to employees,
and the terms of any outstanding awards under the Incentive Plan may be adjusted
by the Committee in such manner as it deems appropriate in the event of changes
in the outstanding Common Stock by reason of stock dividends, stock splits,
recapitalizations, reorganizations, liquidations, or other similar events.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The Corporation has been advised that under current law the federal income
tax consequences to participants and the Corporation of Options granted under
the Incentive Plan would generally be as set forth in the following summary.
This summary does not purport to be a complete analysis of all potential tax
consequences relevant to optionees and the Corporation, or to describe tax
consequences based upon particular circumstances.
An employee to whom an incentive stock option is granted will not recognize
income at the time of grant or exercise of such option (except that the
alternative minimum tax may apply), and no federal income tax deduction will be
allowable to the Corporation upon the grant or exercise of such option. When the
employee sells shares of Common Stock received upon the exercise of an incentive
stock option more than one year after the date of exercise and more than two
years after the date of grant of such option, the employee will normally
recognize a capital gain (at the applicable mid-term or long-term rate) or loss
equal to the difference, if any, between the sale price of such shares and the
option exercise price. If the employee does not hold such shares for these
periods, when the employee sells such shares he or she will recognize ordinary
compensation income and possibly capital gain or loss in such amounts as are
prescribed by the Code and the regulations thereunder. Subject to applicable
provisions of the Code and the regulations thereunder, in the event of a
disposition prior to the end of the holding periods noted above, the Corporation
will generally be entitled to a federal income tax deduction in the amount of
such ordinary compensation income.
An employee or director to whom a non-qualified stock option is granted will
not recognize income at the time of grant of such option. When the employee or
director exercises such option, he or she will recognize ordinary compensation
income equal to the difference, if any, between the option price paid and the
fair market value, as of the date of exercise, of the shares of Common Stock
received by such employee or director. The tax basis of such shares to such
employee or director will be equal to the fair market value on the date of
exercise, and the employee's or director's holding period for such shares will
commence on the day on which the employee or director recognizes taxable income
in respect of such shares. Subject to applicable provisions of the Code and the
regulations thereunder, the Corporation will generally be entitled to a federal
income tax deduction in respect of non-qualified stock options in an amount
equal to the ordinary compensation income recognized by the employee or
director. Any compensation includable in the gross income of an employee in
respect of a non-qualified option will be subject to appropriate federal
employment taxes.
NEW PLAN BENEFITS
The Committee has made certain awards of Employee Options under the
Incentive Plan which are subject to shareholder approval of the Incentive Plan
at the Annual Meeting. (See "EXECUTIVE COMPENSATION--REPORT OF THE MANAGEMENT
RESOURCES COMMITTEE" for a description of such awards.) The following table sets
forth information with respect to these awards as of the date of this Proxy
Statement as well as the
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number of Director Stock Awards that would be granted to nominees elected at the
Annual Meeting if the Incentive Plan is approved. The table also sets forth the
number of Director Options that would be granted on the date of the Annual
Meeting under the Incentive Plan if no options were available for grant to non-
employee directors under the 1996 Plan.
<TABLE>
<CAPTION>
NUMBER OF
NUMBER OF DIRECTOR STOCK
NAME OPTIONS AWARDS
- ------------------------------------------------------------------------------------- ----------- ---------------
<S> <C> <C>
Tony L. White........................................................................ 30,000 0
Chairman, President and
Chief Executive Officer
Mark C. Rogers....................................................................... 15,000 0
Senior Vice President, Corporate
Development and Chief Technology Officer
Manuel A. Baez....................................................................... 15,000 0
Senior Vice President and
President, Analytical Instruments Division
Michael W. Hunkapiller............................................................... 15,000 0
Vice President and General Manager,
Applied Biosystems Division
Stephen O. Jaeger.................................................................... 10,000(1) 0
Vice President, Chief Financial Officer and
Treasurer
All executive officers as a group.................................................... 112,500 0
All directors who are not executive officers......................................... 10,500(2) 2,100(3)
All employees, excluding executive officers.......................................... 37,500 0
</TABLE>
- ------------------------
(1) Mr. Jaeger has announced his intention to resign as Vice President, Chief
Financial Officer and Treasurer of the Corporation on or about September 30,
1997. Although the parties have not yet finalized an agreement, it is
expected that Mr. Jaeger would forfeit such options in connection with his
resignation.
(2) Each nominee for director other than Mr. White will, if elected, receive a
grant of a Director Option covering 1,500 shares of Common Stock on the date
of the Annual Meeting under the Incentive Plan to the extent shares are not
available under the 1996 Plan.
(3) Subject to shareholder approval of the Incentive Plan, each nominee for
director other than Mr. White will, if elected, receive a grant of a
Director Stock Award with respect to 300 shares of Common Stock 30 days
after the date of the Annual Meeting.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of all outstanding shares
of Common Stock entitled to vote at the Annual Meeting is required for approval
of the Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THIS
PROPOSAL.
MISCELLANEOUS MATTERS
Management does not know of any other matter 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 unless otherwise instructed.
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 Morrow & Co., Inc., 909 Third Avenue, 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.
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<PAGE>
Effective July 1, 1997, 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. Three-year policies expiring July 1, 2000 have been obtained
from National Union Fire Insurance Company and Federal Insurance Company at
premiums of $725,000 and $406,000, 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 1998 PROXY MATERIALS
Any shareholder who intends to present a proposal at the Corporation's 1998
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 12, 1998, and the
proponent and the proposal must meet certain eligibility requirements of the
SEC.
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 applicable 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 8, 1997
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<PAGE>
EXHIBIT A
THE PERKIN-ELMER CORPORATION
1997 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of The Perkin-Elmer Corporation 1997 Stock Incentive Plan (the
"Plan") is to increase shareholder value and to advance the interests of The
Perkin-Elmer Corporation and its subsidiaries (collectively, the "Corporation")
by providing financial incentives designed to attract, retain, and motivate
employees, officers, and directors of the Corporation. The Plan continues the
established policy of the Corporation of encouraging ownership of its Common
Stock by key personnel and of providing incentives for such individuals to put
forth maximum efforts for the success of the Corporation.
2. DEFINITIONS.
As used herein, the following terms have the meanings hereinafter set forth
unless the context clearly indicates to the contrary:
2.1 "ACT" means the Securities Exchange Act of 1934, as amended from time to
time.
2.2 "AGREEMENT" means the written agreement between the Corporation and an
Optionee or Award Recipient, as the case may be, evidencing the grant of an
Option or Award and setting forth the terms and conditions thereof.
2.3 "AWARD" means a Stock Award or Performance Share Award.
2.4 "AWARD RECIPIENT" means an individual to whom an Award has been granted
under the Plan.
2.5 "BOARD OF DIRECTORS" means the Board of Directors of the Corporation.
2.6 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
2.7 "COMMITTEE" means the Management Resources Committee of the Board of
Directors, or any successor thereto or committee designated thereby whose
members qualify as outside directors as defined in Section 162(m) of the Code
and the Treasury Regulations issued pursuant thereto.
2.8 "COMMON STOCK" means the common stock, par value $1.00 per share, of the
Corporation.
2.9 "COMMON STOCK UNIT" means the bookkeeping entry representing the
equivalent of one share of Common Stock.
2.10 "CONTINUOUS EMPLOYMENT" means an uninterrupted chain of continuous
regular employment by the Corporation. A leave of absence granted in accordance
with the Corporation's usual procedures which does not operate to interrupt
continuous employment for other benefits granted by the Corporation shall not be
considered a termination of employment nor an interruption of Continuous
Employment hereunder, and an employee who is granted such a leave of absence
shall be considered to be continuously employed during the period of such leave;
provided, however, that if regulations under the Code or an amendment to the
Code shall establish a more restrictive definition of a leave of absence, such
definition shall be substituted herein.
2.11 "DEFERRAL ACCOUNT" means the bookkeeping account established for the
deferral of a Director Stock Award by a Non-Employee Director pursuant to
Section 11.7 hereof.
2.12 "DIRECTOR AWARD" means a Director Stock Award or Director Option.
2.13 "DIRECTOR OPTION" means an Option granted pursuant to Section 7 hereof.
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2.14 "DIRECTOR STOCK AWARD" means an award of shares of Common Stock granted
pursuant to Section 11 hereof.
2.15 "EMPLOYEE AWARD" means an Employee Stock Award or Performance Share
Award.
2.16 "EMPLOYEE OPTION" means an Option granted pursuant to Section 6 hereof.
2.17 "EMPLOYEE STOCK AWARD" means an award of shares of Common Stock granted
pursuant to Section 9 hereof.
2.18 "FAIR MARKET VALUE" means the simple average of the high and low sales
prices of a share of Common Stock as reported in the report of composite
transactions (or other source designated by the Committee) on the date on which
fair market value is to be determined (or if there shall be no trading on such
date, then on the first previous date on which sales were made on a national
securities exchange).
2.19 "INCENTIVE STOCK OPTIONS" means those Options granted hereunder as
Incentive Stock Options as defined in, and which by their terms comply with the
requirements for such Options set out in, Section 422 of the Code and the
Treasury Regulations issued pursuant thereto.
2.20 "NON-EMPLOYEE DIRECTOR" means a member of the Board of Directors who is
not an employee or officer of the Corporation.
2.21 "NON-QUALIFIED STOCK OPTIONS" means those Options granted hereunder
which are not intended to qualify as Incentive Stock Options.
2.22 "OPTION" means an Employee Option or Director Option.
2.23 "OPTIONEE" means an individual to whom an Option has been granted under
the Plan.
2.24 "PERFORMANCE SHARE AWARD" means an award of Performance Shares granted
pursuant to Section 10 hereof.
2.25 "PERFORMANCE SHARES" means shares of Common Stock covered by a
Performance Share Award.
2.26 "STOCK AWARD" means an Employee Stock Award or Director Stock Award.
2.27 "STOCK RESTRICTIONS" mean the restrictions, including performance
goals, placed on a Stock Award or Performance Share Award under the Plan.
2.28 "TEN PERCENT SHAREHOLDER" means an individual who owns, within the
meaning of Section 422(b)(6) of the Code and the Treasury Regulations issued
pursuant thereto, stock possessing more than ten (10%) percent of the total
combined voting power of all classes of stock of the Corporation.
3. SHARES RESERVED FOR THE PLAN.
The aggregate number of shares of Common Stock available for Options and
Awards under the Plan is Two Million (2,000,000), subject to adjustment in
accordance with Section 16. Shares of Common Stock issued under the Plan shall
be authorized but unissued shares. In lieu of such unissued shares, the
Corporation may, in its discretion, transfer on the exercise of Options or the
delivery of shares of Common Stock issued pursuant to Awards treasury shares,
reacquired shares, or shares acquired in the market for purposes of the Plan.
If any Options or Awards granted under the Plan shall for any reason
terminate, be canceled, or expire without having been exercised or vested in
full, shares of Common Stock not issued or vested in full under such Options or
Awards shall be available again for issuance under the Plan.
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4. ADMINISTRATION OF THE PLAN.
The Committee shall have plenary authority in its discretion, but subject to
the express provisions of the Plan, to administer the Plan, including, without
limitation, the authority to determine the individuals to whom, and the time or
times at which, Employee Options and Employee Awards shall be granted, the
number of shares of Common Stock to be covered by each Employee Option and
Employee Award, and the terms and conditions of each Employee Option and
Employee Award. The Committee shall also have plenary authority in its
discretion to interpret the Plan; to prescribe, amend, and rescind rules and
regulations relating to it; to determine the terms (which need not be identical)
of Agreements executed and delivered under the Plan, including, without
limitation, such terms and provisions as shall be requisite in the judgment of
the Committee to conform to any change in any law or regulation applicable
thereto; and to make any and all other determinations and take any and all
actions deemed necessary or advisable for the administration of the Plan. The
Committee's determination on the foregoing matters shall be conclusive and
binding on all persons having an interest in the Plan.
5. ELIGIBLE EMPLOYEES; FACTORS TO BE CONSIDERED IN GRANTING EMPLOYEE OPTIONS AND
EMPLOYEE AWARDS.
Subject to the terms of the Plan, an Employee Option or Employee Award may
be granted to any person who, at the time the Employee Option or Employee Award
is granted, is a regular full-time employee (which term shall include officers
and directors) of the Corporation. Non-Employee Directors shall not be eligible
to receive Employee Options or Employee Awards. In determining the employees to
whom Employee Options or Employee Awards shall be granted, the number of shares
of Common Stock to be covered by each Employee Option or Employee Award, and the
terms and conditions of each Employee Option and Employee Award, the Committee
shall take into account the duties and responsibilities of the respective
employees, their present and potential contributions to the success of the
Corporation, and such other factors as they shall deem relevant in connection
with accomplishing the purposes of the Plan. An employee who has been granted an
Employee Option or Employee Award may be granted and hold additional Employee
Options or Employee Awards if the Committee shall so determine.
6. EMPLOYEE OPTIONS.
6.1 GRANT OF EMPLOYEE OPTIONS. Subject to the terms of the Plan, the
Committee may grant Employee Options to such employees at such time or times and
in such amounts as it shall determine. Each Employee Option granted hereunder
shall be designated as an Incentive Stock Option or Non-Qualified Stock Option
and shall be evidenced by an Agreement containing such terms and conditions
consistent with the Plan as the Committee shall determine.
6.2 PURCHASE PRICE. The purchase price of each share of Common Stock
covered by an Employee Option shall be 100% (or 110% in the case of an Incentive
Stock Option granted to a Ten Percent Shareholder) of the Fair Market Value of a
share of Common Stock on the date the Employee Option is granted.
6.3 TERM. The term of each Employee Option shall be for such period as the
Committee shall determine, but not more than ten (10) years (or five (5) years
in the case of an Incentive Stock Option granted to a Ten Percent Shareholder)
from the date of grant thereof, and shall be subject to earlier termination as
hereinafter provided. If the original term of any Employee Option is less than
ten (10) years (or five (5) years in the case of an Incentive Stock Option
granted to a Ten Percent Shareholder) from the date of grant, the Employee
Option prior to its expiration may be amended, with the approval of the
Committee and the employee, to extend the term so that the term as amended is
not more than ten (10) years (or five (5) years in the case of an Incentive
Stock Option granted to a Ten Percent Shareholder) from the original date of
grant of such Employee Option.
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6.4 VESTING. An Employee Option shall be exercisable at such time or times
and in such manner and number of shares as the Committee shall determine. If no
exercise schedule is specified, an Employee Option shall be exercisable as to
one-half of the total number of shares covered by the Employee Option on or
after the date on which the Optionee shall have completed one (1) year of
Continuous Employment following the date of grant of the Employee Option and as
to the remaining one-half of the total number of shares covered by the Employee
Option on or after the date on which the Optionee shall have completed two (2)
years of Continuous Employment following the date of grant of the Employee
Option. Except as provided in the Plan, no Employee Option may be exercised at
any time unless the holder thereof is then a regular employee of the
Corporation. Employee Options granted under the Plan shall not be affected by
any change of duties or position so long as the holder continues to be an
employee of the Corporation.
6.5 TERMINATION OF EMPLOYMENT. In the event that the employment of an
employee to whom an Employee Option has been granted under the Plan shall be
terminated (other than by reason of retirement, disability, or death) such
Employee Option may, subject to the provisions of the Plan, be exercised, to the
extent that the employee was entitled to do so at the date of termination of his
or her employment, at any time within thirty (30) days after such termination,
but in no event after the expiration of the term of the Employee Option.
6.6 RETIREMENT OR DISABILITY. If an employee to whom an Employee Option
has been granted under the Plan shall retire from the Corporation pursuant to
any qualified pension plan provided by the Corporation, or if the employee is
totally and permanently disabled, such Employee Option may be exercised,
notwithstanding the provisions of Section 6.4, in full without regard to the
period of Continuous Employment after the Employee Option was granted at any
time (a) in the case of an Incentive Stock Option within three (3) months after
such retirement or disability retirement, but in no event after the expiration
of the term of the Employee Option, or (b) in the case of a Non-Qualified Stock
Option within one (1) year after such retirement or disability retirement, but
in no event after the expiration of the term of the Employee Option.
6.7 DEATH. If an employee to whom an Employee Option has been granted
under the Plan shall die while employed by the Corporation, such Employee Option
may be exercised to the extent that the employee was entitled to do so at the
date of his or her death, by his or her executor or administrator or other
person at the time entitled by law to the employee's rights under the Employee
Option, at any time within such period, not exceeding one (1) year after his or
her death, as shall be prescribed in the Agreement, but in no event after the
expiration of the term of the Employee Option.
7. DIRECTOR OPTIONS.
7.1 GRANT OF DIRECTOR OPTIONS. As of the date of each election or
reelection to the Board of Directors, commencing on the date of approval of the
Plan by the shareholders of the Corporation, each Non-Employee Director shall
automatically be granted a Director Option to purchase 1,500 shares of Common
Stock, subject to adjustment in accordance with Section 16; provided, however,
that in any calendar year prior to 1999, Director Options granted to a
Non-Employee Director hereunder and under The Perkin-Elmer Corporation 1996
Stock Incentive Plan shall not exceed in the aggregate options to purchase 1,500
shares of Common Stock, subject to adjustment as provided above. All Director
Options shall be designated as Non-Qualified Stock Options and shall be
evidenced by an Agreement containing such terms and conditions consistent with
the Plan as the Committee shall determine.
7.2 PURCHASE PRICE. The purchase price of each share of Common Stock
covered by a Director Option shall be 100% of the Fair Market Value of a share
of Common Stock on the date the Director Option is granted.
7.3 TERM. The term of each Director Option shall be for a period of ten
(10) years from the date of grant thereof and shall be subject to earlier
termination as hereinafter provided.
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7.4 VESTING. Each Director Option shall be exercisable as to one-half of
the total number of shares covered by the Director Option as of the date
immediately preceding the date of the first annual meeting of shareholders next
following the date of grant and as to the remaining one-half of the total number
of shares covered by the Director Option as of the date immediately preceding
the date of the second annual meeting of shareholders next following the date of
grant; provided, however, that, except as provided in the Plan, the holder
thereof continues to serve as a member of the Board of Directors as of each such
date.
7.5 TERMINATION OF SERVICE. In the event that a Non-Employee Director's
service as a member of the Board of Directors shall be terminated (other than
pursuant to Section 7.6 or 7.7) any Director Option granted to such Non-Employee
Director may, subject to the provisions of the Plan, be exercised, to the extent
that the Non-Employee Director was entitled to do so at the date of termination
of his or her service as a member of the Board of Directors, at any time within
thirty (30) days after such termination, but in no event after the expiration of
the term of the Director Option.
7.6 RETIREMENT OR DISABILITY. If a Non-Employee Director to whom a
Director Option has been granted under the Plan shall cease to serve as a
director as a result of (a) retiring from the Board of Directors upon reaching
normal retirement age, (b) becoming totally and permanently disabled, or (c)
resigning or declining to stand for reelection with the approval of the Board of
Directors, such Director Option may be exercised, notwithstanding the provisions
of Section 7.4, in full within one (1) year after such retirement or disability
retirement, but in no event after the expiration of the term of the Director
Option.
7.7 DEATH. If a Non-Employee Director to whom a Director Option has been
granted under the Plan shall die while serving as a member of the Board of
Directors, such Director Option may be exercised to the extent that the
Non-Employee Director was entitled to do so at the date of his or her death, by
his or her executor or administrator or other person at the time entitled by law
to the Non-Employee Director's rights under the Director Option, at any time
within one (1) year after his or her death, but in no event after the expiration
of the term of the Director Option.
8. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS.
8.1 TRANSFERABILITY. During the lifetime of an Optionee, an Option shall
not be transferable, except pursuant to a domestic relations order; provided,
however, that the Committee may, in its sole discretion, permit an Optionee to
transfer a Non-Qualified Stock Option to (i) a member of the Optionee's
immediate family, (ii) a trust, the beneficiaries of which consist exclusively
of members of the Optionee's immediate family, or (iii) a partnership, the
partners of which consist exclusively of members of the Optionee's immediate
family. After the death of an Optionee, an Option may be transferred pursuant to
the laws of descent and distribution.
8.2 METHOD OF EXERCISE. An Option may be exercised by giving written
notice to the Corporation specifying the number of shares of Common Stock to be
purchased; provided that, except as otherwise provided by the Committee, an
Option may not be exercised as to fewer than 50 shares, or the remaining shares
covered by the Option if fewer than 50, at any one time. No Option may be
exercised with respect to a fractional share. The purchase price of the shares
as to which an Option shall be exercised shall be paid in full at the time of
exercise at the election of the holder of an Option (a) in cash or currency of
the United States of America, (b) by tendering to the Corporation shares of
Common Stock, then owned by such holder, having a Fair Market Value equal to the
cash exercise price applicable to the purchase price of the shares as to which
the Option is being exercised, (c) by making an election to have shares of
Common Stock underlying the Option withheld by the Corporation (provided that
the Option has been held for at least six (6) months), with such shares having a
Fair Market Value equal to the cash exercise price applicable to the purchase
price of the shares as to which the Option is being exercised, (d) a combination
of cash, previously owned shares of Common Stock, and/or share withholding, with
any shares of Common Stock valued at Fair Market Value, or (e) by payment of
such other consideration as the Committee shall from time to time determine. For
purposes of the immediately preceding sentence, Fair Market Value shall be
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determined as of the business day immediately preceding the day on which the
Option is exercised. Notwithstanding the foregoing, the Committee shall have the
right to modify, amend, or cancel the provisions of clauses (b), (c), and (d)
above at any time upon prior notice to the holders of Options.
8.3 SHAREHOLDER RIGHTS. An Optionee shall have none of the rights of a
shareholder with respect to the shares subject to an Option until such shares
have been registered upon the exercise of the Option on the transfer books of
the Corporation in the name of such Optionee and then only to the extent that
any restrictions imposed thereon by the Committee shall have lapsed.
8.4 NO LOANS. Neither the Corporation, any company with which it is
affiliated, nor any of their respective subsidiaries may directly or indirectly
lend money to any person for the purpose of assisting such person in acquiring
or carrying shares of Common Stock issued upon the exercise of an Option.
8.5 CONDITIONS PRECEDENT TO EXERCISE. Notwithstanding any other provision
of the Plan, but subject to the provisions of Section 12, the exercise of an
Option within one (1) year following termination of employment or service shall
be subject to the satisfaction of the conditions precedent that the Optionee has
not (a) rendered services or engaged directly or indirectly in any business
which in the opinion of the Committee competes with or is in conflict with the
interests of the Corporation; provided, however, that the ownership by an
Optionee of 5% or less of any class of securities of a publicly traded company
shall not be deemed to violate this clause, or (b) violated any written
agreement with the Corporation, including, without limitation, any
confidentiality agreement. An Optionee's violation of clause (a) or (b) of the
preceding sentence shall result in the immediate forfeiture of any Options held
by such Optionee.
8.6 LIMITATIONS ON THE GRANT OF OPTIONS. No one individual may be granted
an Option or Options under the Plan during any fiscal year of the Corporation
for an aggregate number of shares of Common Stock which exceeds 10% of the total
number of shares reserved for issuance under the Plan. The aggregate Fair Market
Value of the Common Stock (determined as of the date the Option is granted) with
respect to which Incentive Stock Options granted under the Plan and all other
stock option plans of the Corporation (or any parent or subsidiary of the
Corporation) are exercisable for the first time by any specific individual
during any calendar year shall not exceed $100,000. No Incentive Stock Option
may be granted hereunder to an individual who immediately after such Option is
granted is a Ten Percent Shareholder unless (a) the Option price is at least
110% of the fair market value of such stock on the date of grant and (b) the
Option may not be exercised more than five (5) years after the date of grant.
9. EMPLOYEE STOCK AWARDS.
9.1 GRANT OF EMPLOYEE STOCK AWARDS. Subject to the terms of the Plan, the
Committee may grant Employee Stock Awards to such employees at such time or
times and in such amounts as it shall determine. Shares of Common Stock issued
pursuant to Employee Stock Awards may, but need not, be subject to such
restrictions as may be established by the Committee at the time of the grant and
reflected in an Agreement.
9.2 RESTRICTIONS ON EMPLOYEE STOCK AWARDS. Except as provided in the Plan,
any shares of Common Stock subject to an Employee Stock Award with respect to
which Stock Restrictions have not been satisfied shall be forfeited and all
rights of the employee to such Employee Stock Award shall terminate without any
payment of consideration by the Corporation. Except as set forth in Section 9.5,
a recipient of an Employee Stock Award subject to Stock Restrictions shall
forfeit such award in the event of the termination of his or her employment
during the period the shares are subject to Stock Restrictions.
9.3 SHAREHOLDER RIGHTS. The recipient of an Employee Stock Award shall be
entitled to such rights of a shareholder with respect to the shares of Common
Stock issued pursuant to such Employee Stock Award as the Committee shall
determine, including the right to vote such shares of Common Stock, except that
cash and stock dividends with respect to such shares may, at the discretion of
the Committee, be either paid currently or withheld by the Corporation for the
Award Recipient's account, and interest may be accrued on the amount of cash
dividends withheld at a rate and subject to such terms as determined by the
Committee.
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The Committee, in its discretion, may cause a legend or legends to be placed
on any certificate representing shares issued pursuant to Employee Stock Awards,
which legend or legends shall make appropriate reference to the Stock
Restrictions imposed thereon. The Committee may also in its discretion require
that certificates representing shares issued pursuant to Employee Stock Awards
remain in the physical custody of the Corporation or an escrow holder until any
or all of the Stock Restrictions imposed under the Plan have lapsed.
9.4 NON-TRANSFERABILITY. Prior to the time Stock Restrictions lapse, none
of the shares of Common Stock issued pursuant to an Employee Stock Award may be
sold, assigned, bequeathed, transferred, pledged, hypothecated, or otherwise
disposed of in any way by the Award Recipient.
9.5 LAPSE OF RESTRICTIONS. In the event of the termination of employment
of an Award Recipient, prior to the lapse of Stock Restrictions, by reason of
death, total and permanent disability, retirement, or resignation or discharge
from employment other than discharge for cause, the Committee may, in its
discretion, remove any Stock Restrictions on all or a portion of the Common
Stock subject to an Employee Stock Award.
9.6 LIMITATIONS ON EMPLOYEE STOCK AWARDS. No employee may receive an
Employee Stock Award representing more than Forty Thousand (40,000) shares of
Common Stock during any fiscal year of the Corporation, and the maximum number
of shares of Common Stock which may be issued to all employees pursuant to
Employee Stock Awards under the Plan shall be Eighty Thousand (80,000), subject
in each case to adjustment in accordance with Section 16.
10. PERFORMANCE SHARE AWARDS.
10.1 GRANT OF PERFORMANCE SHARE AWARDS. Subject to the terms of the Plan,
the Committee may grant Performance Share Awards to such employees at such time
or times and in such amounts as it shall determine. Common Stock issued pursuant
to a Performance Share Award shall be subject to the attainment of performance
goals relating to one or more criteria within the meaning of Section 162(m) of
the Code and the Treasury Regulations issued pursuant thereto, including,
without limitation, stock price, market share, sales, earnings per share, return
on equity, costs, and cash flow, as determined by the Committee from time to
time. Any such objectives and the period in which such objectives are to be met
shall be determined by the Committee at the time of the grant and reflected in
an Agreement. Each Performance Share Award shall also be subject to such other
restrictions as the Committee may determine.
10.2 DELIVERY OF PERFORMANCE SHARES. Certificates representing Performance
Shares shall be registered in the Award Recipient's name but shall remain in the
physical custody of the Corporation until the Committee has determined that the
performance goals and other Stock Restrictions with respect to such Performance
Shares have been met.
10.3 SHAREHOLDER RIGHTS. The recipient of a Performance Share Award shall
be entitled to such rights of a shareholder with respect to the Performance
Shares as the Committee shall determine, including the right to vote such shares
of Common Stock, except that cash and stock dividends with respect to the
Performance Shares may, at the discretion of the Committee, be either paid
currently or withheld by the Corporation for the Award Recipient's account, and
interest may be accrued on the amount of cash dividends withheld at a rate and
subject to such terms as determined by the Committee.
10.4 NON-TRANSFERABILITY. Prior to the time shares of Common Stock issued
pursuant to a Performance Share Award are delivered to an Award Recipient, none
of such shares may be sold, assigned, bequeathed, transferred, pledged,
hypothecated, or otherwise disposed of in any way by the Award Recipient.
10.5 LAPSE OF RESTRICTIONS. In the event of the termination of employment
of an Award Recipient, prior to the lapse of Stock Restrictions, by reason of
death, total and permanent disability, retirement, or
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resignation or discharge from employment other than discharge for cause, the
Committee may, in its discretion, remove any Stock Restrictions on all or a
portion of a Performance Share Award, or determine the performance objectives
with respect to all or a portion of a Performance Share Award to have been
attained; provided, however, that the Committee shall not be entitled to
exercise such discretion to the extent that the ability to exercise such
discretion would cause the Performance Share Award not to qualify as performance
based compensation under Section 162(m) of the Code.
10.6 LIMITATIONS ON PERFORMANCE SHARE AWARDS. No employee may receive
Performance Share Awards representing more than One Hundred Thousand (100,000)
shares of Common Stock during any fiscal year of the Corporation, and the
maximum number of shares of Common Stock which may be issued to all employees
pursuant to Performance Share Awards under the Plan shall be Four Hundred
Thousand (400,000), subject in each case to adjustment in accordance with
Section 16.
11. DIRECTOR STOCK AWARDS.
11.1 GRANT OF DIRECTOR STOCK AWARDS. Thirty (30) days after the date of
his or her election or reelection to the Board of Directors, commencing with the
election on October 16, 1997, each Non-Employee Director shall automatically be
granted a Director Stock Award with respect to 300 shares of Common Stock,
subject to adjustment in accordance with Section 16. Notwithstanding the
foregoing, each Non-Employee Director first elected to the Board of Directors on
a date other than the date of an annual meeting of shareholders shall be granted
that number of whole shares of Common Stock equal to the number of shares then
subject to a Director Stock Award multiplied by a fraction, the numerator of
which shall be the number of months remaining until the anticipated date of the
next annual meeting of shareholders, and the denominator of which shall be 12.
All Director Stock Awards shall be evidenced by an agreement containing such
terms and conditions consistent with the Plan as the Committee shall determine.
11.2 VESTING. Each Director Stock Award shall vest in full as of the date
immediately preceding the date of the first annual meeting of shareholders next
following the date of grant; provided, however, that, except as provided in the
Plan, the recipient thereof continues to serve as a member of the Board of
Directors as of such date.
11.3 FORFEITURE OF DIRECTOR STOCK AWARDS. Except as provided in the Plan,
a recipient of a Director Stock Award shall forfeit any unvested shares of
Common Stock subject to the Director Stock Award, and all rights of the
Non-Employee Director to such unvested shares shall terminate without payment of
consideration by the Corporation, upon the termination of his or her service as
a member of the Board of Directors.
11.4 SHAREHOLDER RIGHTS. Except as provided in Sections 11.5 and 11.7, a
recipient of a Director Stock Award shall be entitled to all rights of a
shareholder with respect to the shares of Common Stock issued pursuant to the
Director Stock Award, including the right to receive dividends and to vote such
shares of Common Stock; provided, however, that stock dividends paid with
respect to such shares shall be restricted to the same extent as the underlying
shares of Common Stock issued pursuant to the Director Stock Award.
The Committee shall cause a legend or legends to be placed on any
certificate representing shares issued pursuant to a Director Stock Award, which
legend or legends shall make appropriate reference to the terms of the Director
Stock Award and the Plan. The Committee shall also require that certificates
representing shares issued pursuant to Director Stock Awards remain in the
physical custody of the Corporation or an escrow holder until such shares have
vested in accordance with the terms of the Plan.
11.5 NON-TRANSFERABILITY. Prior to vesting, none of the shares of Common
Stock issued pursuant to a Director Stock Award may be sold, assigned,
bequeathed, transferred, pledged, hypothecated, or otherwise disposed of in any
way by the recipient thereof.
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11.6 TERMINATION OF SERVICE. If a Non-Employee Director to whom a Director
Stock Award has been granted shall cease to serve as a director as a result of
(a) his or her death, (b) retiring from the Board of Directors upon reaching
normal retirement age, (c) becoming totally and permanently disabled, or (d)
resigning with the approval of the Board of Directors, all shares subject to
such Director Stock Award shall be vested in full, notwithstanding the
provisions of Section 11.2, as of the date of termination of service.
11.7 DEFERRAL ELECTION. A Non-Employee Director may elect to defer receipt
of any Director Stock Award by filing the appropriate deferral form with the
Corporate Secretary on or before December 15th of the calendar year prior to the
calendar year in which such deferral is to be effective. Notwithstanding the
foregoing, persons elected or reelected as Non-Employee Directors on October 16,
1997 shall be permitted to make the deferral election no later than twenty (20)
days after such date, and any person subsequently elected as a Non-Employee
Director for the first time shall be permitted to make his or her first deferral
election no later than twenty (20) days after such election. In no event,
however, shall any deferral be permitted to the extent prohibited by applicable
law. Deferrals shall be subject to the following terms and conditions:
(a) A Non-Employee Director may elect to defer receipt of a Director
Stock Award until (i) a specified date in the future, (ii) cessation of his
or her service as a member of the Board of Directors, or (iii) the end of
the calendar year in which cessation of his or her service as a member of
the Board of Directors occurs.
(b) There shall be established a Deferral Account on the books of the
Corporation for each Non-Employee Director electing to defer a Director
Stock Award pursuant to this Section 11.7. Deferrals shall be credited to
the Non-Employee Director's Deferral Account in Common Stock Units in the
following manner: on the award date to which the deferral election applies,
the amount deferred shall be converted into a number of Common Stock Units
equal to the number of shares of Common Stock awarded that are subject to
the deferral election. A Non-Employee Director shall not have any voting
rights with respect to any Common Stock Units held in his or her Deferral
Account.
(c) Whenever cash dividends are paid with respect to shares of Common
Stock, each Non-Employee Director's Deferral Account shall be credited on
the payment date of such dividend with additional Common Stock Units
(including fractional units to the nearest one/one hundredth (1/100th))
equal in value to the amount of the cash dividend paid on a single share of
Common Stock multiplied by the number of Common Stock Units (including
fractional units) credited to his or her Deferral Account as of the date of
record for dividend purposes. For purposes of crediting dividends, the value
of a Common Stock Unit shall be the Fair Market Value of a Share of Common
Stock as of the payment date of the dividend.
(d) The number of Common Stock Units credited to each Non-Employee
Director's Deferral Account shall be appropriately adjusted in the same
manner and to the same extent Director Stock Awards are adjusted and
modified pursuant to Section 16. In the event of a transaction subject to
Section 12, the Board of Directors shall have the authority to amend the
Plan to provide for the conversion of Common Stock Units credited to
Deferral Accounts into units equal to shares of stock of the resulting or
acquiring company (or a related company), as appropriate, if such stock is
publicly traded or, if not, into cash of equal value on the effective date
of such transaction. If pursuant to the preceding sentence cash is credited
to a Non-Employee Director's Deferral Account, interest shall be credited
thereon from the date such cash is received to the date of distribution
quarterly, at the end of each calendar quarter, at a rate per annum
(computed on the basis of a 360-day year and a 91-day quarter) equal to the
prime rate announced publicly by Citibank, N.A. at the end of such calendar
quarter. If units representing publicly traded stock of the resulting or
acquired company (or a related company) are credited to a Non-Employee
Director's Deferral Account, dividends shall be credited thereto in the same
manner as dividends are credited on Common Stock Units credited to such
Deferral Accounts.
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(e) Subject to Section 11.7(g), distributions of a Non-Employee
Director's Deferral Account under the Plan shall be made as follows:
(i) If a Non-Employee Director has elected to defer a Director Stock
Award to a specified date in the future, payment shall be as of such date
and shall be made or shall commence, as the case may be, within thirty
(30) days after the date specified;
(ii) If a Non-Employee Director has elected to defer a Director Stock
Award until cessation of his or her service as a member of the Board of
Directors, payment shall be as of the date of such cessation of service
and shall be made or shall commence, as the case may be, within thirty
(30) days after the cessation of the Non-Employee Director's service as a
director; and
(iii) If a Non-Employee Director has elected to defer a Director
Stock Award until the end of the calendar year in which the cessation of
his or her service as a member of the Board of Directors occurs, payment
shall be made as of December 31st of such year and shall be made or
commence, as the case may be, on December 31st of such year.
(f) Notwithstanding any elections pursuant to Sections 11.7(a) and/or
(g) hereof, in the event of the death of the Non-Employee Director prior to
the distribution of her or her Deferral Account, the balance credited to
such Deferral Account as of the date of his or her death shall be paid, as
soon as reasonably possible thereafter, in a single distribution to the
Non-Employee Director's beneficiary or beneficiaries designated on such
Non-Employee Director's deferral election form. If no such election or
designation has been made, such amounts shall be payable to the Non-Employee
Director's estate.
(g) A Non-Employee Director may elect to have his or her Deferral
Account under the Plan paid in a single distribution or equal annual
installments, not to exceed ten (10) annual installments. To the extent a
Deferral Account is deemed invested in Common Stock Units, such Common Stock
Units shall be converted to Common Stock on the distribution date as
provided in Section 11.7(h). To the extent deemed invested in units of any
other stock, such units shall similarly be converted and distributed in the
form of stock. To the extent invested in a medium other than Common Stock
Units or other units, each such distribution hereunder shall be in the
medium credited to the Deferral Account.
(h) To the extent a Deferral Account is deemed invested in Common Stock
Units, a single distribution shall consist of the number of whole shares of
Common Stock equal to the number of Common Stock Units credited to the
Non-Employee Director's Deferral Account on the date as of which the
distribution occurs. Cash shall be paid to a Non-Employee Director in lieu
of a fractional share, determined by reference to the Fair Market Value of a
share of Common Stock on the date as of which the distribution occurs. In
the event a Non-Employee Director has elected to receive annual installment
payments, each such payment shall be determined as follows:
(i) To the extent his or her Deferral Account is deemed to be
invested in Common Stock Units, each such payment shall consist of the
number of whole shares of Common Stock equal to the number of Common
Stock Units (including fractional units) credited to the Deferral Account
on the date as of which the distribution occurs, divided by the number of
annual installments remaining as of such distribution date. Cash shall be
paid to Non-Employee Directors in lieu of fractional shares, determined
by reference to the Fair Market Value of a share of Common Stock on the
date as of which the distribution occurs.
(ii) To the extent his or her Deferral Account has been credited in
cash, each such payment shall be calculated by dividing the value on the
date the distribution occurs of that portion of the Non-Employee
Director's Deferral Account which is in cash by the number of annual
installments remaining as of such distribution date.
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12. ACCELERATION UPON A CHANGE OF CONTROL.
Notwithstanding any other provision of the Plan or any Option or Award
granted hereunder, (a) any Option granted hereunder and then outstanding shall
become immediately exercisable in full, (b) all Stock Restrictions shall
immediately terminate, and (c) all performance objectives applicable to any
Performance Share Award shall be deemed attained (i) in the event that a tender
offer or exchange offer (other than an offer by the Corporation) for the Common
Stock is made by any "person" within the meaning of Section 14(d) of the Act and
not withdrawn within ten (10) days after the commencement thereof; provided,
however, that the Committee may by action taken prior to the end of such ten
(10) day period extend such ten (10) day period for up to a period of ninety
(90) days after the commencement of such tender offer or exchange offer; and,
provided further, that the Committee may by further action taken prior to the
end of such extended period declare (a) all Options granted hereunder and then
outstanding to be immediately exercisable in full, (b) all Stock Restrictions to
be immediately terminated, and (c) all performance objectives applicable to any
Performance Share Award to be deemed attained, or (ii) in the event of a Change
in Control (as hereinafter defined).
For purposes of this Section 12, a "Change in Control" means an event that
would be required to be reported (assuming such event has not been "previously
reported") in response to Item 1(a) of the Current Report on Form 8-K, as in
effect on the effective date of the Plan, pursuant to Section 13 or 15(d) of the
Act; provided, however, that, without limitation, such a Change in Control shall
be deemed to have occurred at such time as (a) any "person" within the meaning
of Section 14(d) of the Act becomes the "beneficial owner" as defined in Rule
13d-3 thereunder, directly or indirectly, of more than 25% of the Common Stock,
(b) during any two-year period, individuals who constitute the Board of
Directors (the "Incumbent Board") as of the beginning of the period cease for
any reason to constitute at least a majority thereof, provided that any person
becoming a director during such period whose election or nomination for election
by the Corporation's shareholders was approved by a vote of at least
three-quarters of the Incumbent Board (either by a specific vote or by approval
of the proxy statement of the Corporation in which such person is named as a
nominee for director without objection to such nomination) shall be, for
purposes of this clause (b), considered as though such person were a member of
the Incumbent Board, or (c) the approval by the Corporation's shareholders of
the sale of all or substantially all of the stock or assets of the Corporation.
The Committee may adopt such procedures as to notice and exercise as may be
necessary to effectuate the acceleration of the exercisability of Options,
termination of Stock Restrictions, and attainment of performance objectives as
described above.
13. SHARE WITHHOLDING.
With respect to any Option or Award, the Committee may, in its discretion
and subject to such rules as the Committee may adopt, permit or require any
Optionee or Award Recipient to satisfy, in whole or in part, any withholding tax
obligation which may arise in connection with an Option or Award by electing to
have the Corporation withhold Common Stock having a Fair Market Value (as of the
date the amount of withholding tax is determined) equal to the amount of
withholding tax.
14. NO RIGHT TO CONTINUED EMPLOYMENT OR SERVICE.
Nothing contained in the Plan or in any Option or Award granted or Agreement
entered into pursuant to the Plan shall confer upon any employee the right to
continue in the employ of the Corporation or any Non-Employee Director to
continue as a member of the Board of Directors or interfere with the right of
the Corporation to terminate such employee's employment or Non-Employee
Director's service at any time.
15. TIME OF GRANTING EMPLOYEE OPTIONS AND EMPLOYEE AWARDS.
Nothing contained in the Plan or in any resolution adopted by the Board of
Directors or the holders of Common Stock shall constitute the grant of any
Employee Option or Employee Award hereunder. An
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Employee Option or Employee Award under the Plan shall be deemed to have been
granted on the date on which the name of the recipient and the terms of the
Employee Option or Employee Award are set forth in an Agreement and delivered to
the recipient, unless otherwise provided in the Agreement.
16. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
Notwithstanding any other provision of the Plan, in the event of changes in
the outstanding Common Stock by reason of stock dividends, stock splits,
recapitalizations, combinations or exchanges of shares, corporate separations or
divisions (including, but not limited to, split-ups, split-offs, or spin-offs),
reorganizations (including, but not limited to, mergers or consolidations),
liquidations, or other similar events, the aggregate number and class of shares
available under the Plan, the number of shares subject to Director Options and
Director Stock Awards, the maximum number of shares that may be subject to
Options and Awards, and the terms of any outstanding Options or Awards
(including, without limitation, the number of shares subject to an outstanding
Option or Award and the price at which shares of Common Stock may be issued
pursuant to an outstanding Option) shall be adjusted in such manner as the
Committee in its discretion deems appropriate.
17. TERMINATION AND AMENDMENT OF THE PLAN.
Unless the Plan shall have been terminated as hereinafter provided, no
Option or Award shall be granted hereunder after October 31, 2002. The Board of
Directors may at any time prior to that date terminate the Plan or make such
modification or amendment to the Plan as it shall deem advisable; provided,
however, that no amendment may be made without the approval by the holders of
Common Stock (except as provided by Section 16 hereof) which would (a) increase
the aggregate number of shares of Common Stock which may be issued under the
Plan, or (b) materially modify the requirements as to eligibility for
participation in the Plan. No termination, modification, or amendment of the
Plan may, without the consent of an Optionee or Award Recipient, adversely
affect in any material manner the rights of such Optionee or Award Recipient
under any Option or Award.
18. AMENDMENT OF EMPLOYEE OPTIONS AND EMPLOYEE AWARDS AT THE DISCRETION OF THE
COMMITTEE.
The terms of any outstanding Employee Option or Employee Award may be
amended from time to time by the Committee in its discretion in any manner that
it deems appropriate, including, without limitation, acceleration of the date of
exercise of any Employee Option or Employee Award, termination of Stock
Restrictions as to any Employee Award, or the conversion of an Incentive Stock
Option into a Non-Qualified Stock Option; provided, however, that no such
amendment shall adversely affect in any material manner any right of any
Optionee or Award Recipient under the Plan without his or her consent; and,
provided further, that the Committee shall not (a) amend any previously-issued
Performance Share Award to the extent that such amendment would cause such
Performance Share Award not to qualify as performance based compensation under
Section 162(m) of the Code or (b) amend any previously-issued Employee Option to
reduce the purchase price thereof whether by modification of the Employee Option
or by cancellation of the Employee Option in consideration of the immediate
issuance of a replacement Employee Option bearing a reduced purchase price.
19. GOVERNMENT REGULATIONS.
The Plan and the grant and exercise of Options and Awards hereunder, and the
obligation of the Corporation to issue, sell and deliver shares, as applicable,
under such Options and Awards, shall be subject to all applicable laws, rules,
and regulations.
Notwithstanding any other provision of the Plan, transactions under the Plan
are intended to comply with the applicable exemptions under Rule 16b-3 under the
Act as to persons subject to the reporting
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requirements of Section 16(a) of the Act with respect to shares of Common Stock,
and Options and Awards under the Plan shall be fashioned and administered in a
manner consistent with the conditions applicable under Rule 16b-3.
20. OPTIONS AND AWARDS IN FOREIGN COUNTRIES.
The Committee shall have the authority and discretion to adopt such
modifications, procedures, and subplans as it shall deem necessary or desirable
to comply with the provisions of the laws of foreign countries in which the
Corporation may operate in order to assure the viability of the benefits of the
Options and Awards made to individuals employed in such countries and to meet
the objectives of the Plan.
21. GOVERNING LAW.
The Plan shall be construed, regulated, and administered under the internal
laws of the State of Connecticut.
22. SHAREHOLDER APPROVAL.
The Plan shall become effective upon the date of adoption by the Board of
Directors, subject to approval by the affirmative vote of the holders of a
majority of all outstanding shares of Common Stock entitled to vote thereon.
Unless so approved within one (1) year after the date of the adoption of the
Plan by the Board of Directors, the Plan shall not be effective for any purpose.
Prior to approval by the Corporation's shareholders, the Committee may grant
Options and Awards under the terms of the Plan, but if shareholder approval is
not obtained in the specified period, such Options and Awards shall be of no
effect.
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[LOGO]
THE PERKIN-ELMER CORPORATION
761 Main Avenue
Norwalk, CT 06859-0001
[LOGO]
<PAGE>
[DETACH HERE]
THE PERKIN-ELMER CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors for the Annual
Meeting of Shareholders on October 16, 1997
The undersigned shareholder(s) of The Perkin-Elmer Corporation (the
"Corporation") hereby appoints TONY L. WHITE and WILLIAM B. SAWCH, and either
of them, as proxy or proxies, with power of substitution to vote all shares
of Common Stock of the Corporation which the undersigned is entitled to vote
(including shares, if any, held on behalf of the undersigned, and indicated
on the reverse hereof, by BankBoston, N.A., under the Corporation's Dividend
Reinvestment Plan) at the 1997 Annual Meeting of Shareholders and at any
adjournment or adjournments thereof, as indicated on the reverse side hereof,
and, in their discretion, upon such other matters as may properly come before
the meeting, all as more fully described in the Proxy Statement for such
Annual Meeting.
THIS PROXY WHEN PROPERLY EXECUTED AND RETURNED WILL BE VOTED AS DIRECTED
ON THE REVERSE SIDE OR, IF NO DIRECTION IS GIVEN, IT WILL BE VOTED FOR THE
ELECTION OF ALL NOMINEES FOR DIRECTOR AND FOR PROPOSALS 2, 3 AND 4.
CONTINUED, AND TO BE SIGNED, ON REVERSE SIDE
/SEE REVERSE SIDE/
<PAGE>
[LOGO]
YOUR VOTE IS IMPORTANT
PLEASE VOTE YOUR PREFERENCES ON THE PROXY CARD BELOW. SIGN, DATE, AND RETURN
YOUR PROXY AS SOON AS POSSIBLE IN THE ENCLOSED PRE-ADDRESSED ENVELOPE.
[DETACH HERE]
/X/ Please mark votes as in this example.
The Board of Directors recommends a vote FOR all Proposals.
1. Election of Directors.
Nominees: Joseph F. Abely, Jr., Richard H. Ayers, Jean-Luc Belingard,
Robert H. Hayes, Georges C. St. Laurent, Jr., Carolyn W. Slayman, Orin R.
Smith, and Tony L. White.
FOR / / WITHHELD / /
For all nominees except as noted above
2. Ratification of the selection of Price Waterhouse LLP as independent
accountants for the fiscal year ending June 30, 1998.
FOR / / AGAINST / / ABSTAIN / /
3. Approval of an amendment to the Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock.
FOR / / AGAINST / / ABSTAIN / /
4. Approval of the 1997 Stock Incentive Plan.
FOR / / AGAINST / / ABSTAIN / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
MARK HERE IF YOU PLAN TO ATTEND THE MEETING / /
MARK HERE IF YOU WANT TO DISCONTINUE MAILING ANNUAL REPORT ON THIS ACCOUNT (AT
LEAST ONE ACCOUNT AT THIS ADDRESS MUST CONTINUE TO RECEIVE AN ANNUAL REPORT) / /
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS. IF ACTING AS ATTORNEY, EXECUTOR,
TRUSTEE, OR IN REPRESENTATIVE CAPACITY, SIGN NAME AND TITLE.
Signature: Date:
Signature: Date:
