<PAGE>
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 Section240.14a-11(c) or
Section240.14a-12
THE PERKIN ELMER CORPORATION
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / 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
1998
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
<PAGE>
TABLE OF CONTENTS
<TABLE>
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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).............. 17
Approval of Amendments to the 1996 Employee Stock Purchase Plan (Proposal 3)....... 17
Approval of the 1998 Stock Incentive Plan (Proposal 4)............................. 20
Miscellaneous Matters.............................................................. 26
Submission of Shareholder Proposals; Discretionary Voting.......................... 26
Multiple Copies of Annual Report................................................... 27
</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 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 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 15, 1998
September 9, 1998
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 15, 1998. 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
PricewaterhouseCoopers LLP as independent accountants for the fiscal
year ending June 30, 1999;
(3) To consider and act upon a proposal to approve amendments to the 1996
Employee Stock Purchase Plan; and
(4) To consider and act upon a proposal to approve the 1998 Stock
Incentive Plan.
The Board of Directors has fixed the close of business on September 1, 1998
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 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 9, 1998
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 15, 1998, 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 11, 1998.
The Board of Directors has fixed the close of business on September 1, 1998
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 49,387,914 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 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. The election of directors
requires a plurality of the votes cast, and each other proposal submitted to
shareholders requires the approval of a majority of the votes cast at the
meeting. Only votes cast "for" or "against" a proposal will be counted for
purposes of determining the number of votes cast with respect to any voting
matter. Abstentions and "broker non-votes" will be counted only for purposes of
determining whether a quorum is present at the meeting.
A proxy may be revoked by a shareholder at any time before it is voted at
the 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 meeting. Unless so revoked, the shares represented by a
properly signed proxy will be voted at the meeting as specified by the
shareholder. If a proxy is properly signed and returned and no specification is
made, the shares represented by the proxy 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 amendments to
the 1996 Employee Stock Purchase Plan (Proposal 3); and (4) the approval of the
1998 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 1999
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. If prior to the meeting any nominee should become unavailable
to serve for any reason, the shares represented by all properly executed proxies
not containing contrary instructions will be voted for such other person as may
be designated by the Board of Directors, unless the Board shall determine to
reduce the number of directors pursuant to the By-laws.
The following brief biographies of the nominees include their principal
occupations, their ages, an account of their recent business experience, the
names of certain corporations of which they are directors,
1
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and the number of shares of Common Stock which they beneficially owned as of
August 20, 1998.(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>
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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
69 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.
6,552 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.
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Mr. Ayers is the retired Chairman and Chief
Executive Officer of The Stanley Works, a tool and
hardware manufacturer. He was an advisor to the
RICHARD H. AYERS Chairman and Chief Executive Officer of Stanley
55 Years Old from January, 1997 to October, 1997 after having
Became Director 1988 [PHOTO] served as Chairman and Chief Executive Officer of
Beneficially Owns Stanley from May, 1989 to December, 1996. Mr. Ayers
6,784 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.
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Mr. Belingard is General Director of the
Diagnostics Division and a member of the Executive
Committee of the Roche Group, a pharmaceutical
JEAN-LUC BELINGARD manufacturer and strategic partner of the
49 Years Old Corporation in the biotechnology field.(2) He
Became Director 1993 [PHOTO] joined the Roche Group in 1982 and held various
Beneficially Owns positions prior to being named to his current
4,564 Shares of positions in 1990. Mr. Belingard is also a director
Common Stock of Laboratory Corporation of America Holdings and
Boehringer Mannheim GmbH and a Foreign Trade
Advisor to the French Government.
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ROBERT H. HAYES
62 Years Old Dr. Hayes is the Philip Caldwell Professor of
Became Director 1985 Business Administration at the Harvard Business
Beneficially Owns [PHOTO] School. He has held various positions at Harvard
5,296 Shares of since 1966.
Common Stock
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</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
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Mr. St. Laurent is a Principal of St. Laurent
GEORGES C. ST. LAURENT, JR. Properties, a company engaged in various real
62 Years Old estate, agricultural, and forestry related
Became Director 1996 [PHOTO] ventures. He previously served as Chief Executive
Beneficially Owns Officer of Western Bank from January, 1988 to
5,583 Shares of April, 1997. He is also a director of Baxter
Common Stock International Inc. and Aames Financial Corporation.
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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
61 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
4,324 Shares of National Advisory General Medical Sciences Council,
Common Stock and a member of the Board of Overseers of Dartmouth
Medical School.
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Mr. Smith is Chairman and Chief Executive Officer
of Engelhard Corporation, a provider of
ORIN R. SMITH environmental technologies, specialty chemical
63 Years Old products, and engineered materials, a position he
Became Director 1995 has held since January, 1995. He previously served
Beneficially Owns [PHOTO] as President and Chief Executive Officer of
4,650 Shares of Engelhard from 1984 to December, 1994. He is also a
Common Stock director of Ingersoll-Rand Company, The Summit
Bancorporation, Vulcan Materials Company, and
Minorco.
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Mr. White has served as Chairman, President and
Chief Executive Officer of the Corporation since
TONY L. WHITE September, 1995. Prior to that date, he was
52 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
322,513 Shares of instruments. He also served as Group Vice President
Common Stock(3) of Baxter 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 2,250 shares of Common Stock which each non-employee director has
the right to acquire within 60 days of August 20, 1998 through the exercise
of vested stock options. No voting or investment power exists with respect
to such option shares prior to exercise. Also includes (i) the following
number of units representing full shares of Common Stock (including
restricted stock awards) deferred by non-employee directors (see
"COMPENSATION OF DIRECTORS," below): Mr. Abely, 2,302 units; Mr. Ayers,
3,365 units; Dr. Hayes, 2,546 units; Dr. Slayman, 302 units; and Mr. Smith,
1,400 units; and (ii) 300 shares of restricted stock held by each of Messrs.
Ayers, Belingard, and St. Laurent. No voting power exists with respect to
any deferred share units, and holders of restricted shares have sole voting
power but no investment power prior to the lapse of restrictions.
(2) Mr. Belingard has announced his intention to leave the Roche Group
effective October 1, 1998.
(3) Includes 36,000 shares of restricted stock as to which Mr. White has sole
voting power but no investment power prior to the lapse of restrictions and
232,500 shares of Common Stock which Mr. White has the right to acquire
within 60 days of August 20, 1998 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 seven meetings during the fiscal year
ended June 30, 1998. Average attendance at all meetings of the Board and its
committees during the fiscal year was 93%, and each nominee for director
attended at least 75% of the meetings of the Board and of the committees on
which he or she served.
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 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, 1998. The current members of the committee are Georges C.
St. Laurent, Jr. (Chair), Jean-Luc Belingard, and Carolyn W. Slayman.
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, 1998. The current members of the committee are Tony L. White (Chair),
Joseph F. Abely, Jr., Richard H. Ayers, and Robert H. Hayes.
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 one time during the fiscal
year ended June 30, 1998. The current members of the committee are Robert H.
Hayes (Chair), Georges C. St. Laurent, Jr., and Tony L. White.
The Management Resources Committee is composed of non-employee directors.
The 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 seven times during the fiscal year ended June 30, 1998.
The current members of the committee are Richard H. Ayers (Chair), Joseph F.
Abely, Jr., and Orin R. Smith.
The Nominating Committee recommends nominees to fill vacancies on the Board
of Directors 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
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 two times during the
fiscal year ended June 30, 1998. The current members of the committee are Orin
R. Smith (Chair), Joseph F. Abely, Jr., Richard H. Ayers, Robert H. Hayes, and
Tony L. White (EX OFFICIO).
4
<PAGE>
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 two times during
the fiscal year ended June 30, 1998. The current members of the committee are
Carolyn W. Slayman (Chair), Jean-Luc Belingard, and Georges C. St. Laurent, Jr.
COMPENSATION OF DIRECTORS
Employee directors receive no additional compensation for service on the
Board of Directors or its committees. Non-employee directors receive an annual
retainer of $35,000. No additional amounts are paid for participation on
committees. All directors are reimbursed for expenses incurred in attending
Board and committee meetings.
Under the terms of the 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, 1998, three
directors deferred the stock and/or cash portion of their annual retainer under
the Director Plan.
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 and 30 days thereafter a stock award of 300 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. The stock award vests 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 prior to such date. Prior to vesting, the director has the
right to receive cash dividends and to vote but may not transfer or otherwise
dispose of such shares. Non-employee directors may elect to defer receipt of
their stock award on generally the same terms as deferrals under the Director
Plan described above. As of June 30, 1998, four directors had elected to defer
receipt of their stock award.
The stock options and stock awards granted to non-employee directors have
been granted under the terms of stock incentive plans previously approved by the
shareholders. However, such stock options and stock awards may in the future be
granted under the terms of the 1998 Stock Incentive Plan proposed to be approved
by the shareholders at the meeting. See "APPROVAL OF THE 1998 STOCK INCENTIVE
PLAN" for a more detailed description of the 1998 Stock Incentive Plan.
The Corporation has adopted an Estate Enhancement Program for the benefit of
its non-employee directors. Pursuant to this program, 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
5
<PAGE>
the policy's death benefit over 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 of June 30, 1998, none of the
directors participated in this program.
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 cost of the Estate Enhancement Plan and the Charitable Award
Program are not material to the Corporation.
VOTING SECURITIES
The following are the only persons known by the Corporation, as of August
20, 1998, 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
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<S> <C> <C>
Capital Research and Management Company................................ 6,752,440(1) 13.7
333 South Hope Street
Los Angeles, CA 90071
J.P. Morgan & Co. Incorporated......................................... 4,370,189(2) 8.8
60 Wall Street
New York, NY 10260
George Soros, Purnendu Chatterjee, and................................. 4,043,290(3) 8.2
Stanley F. Druckenmiller
888 Seventh Avenue
New York, NY 10106
Wellington Management Company, LLP..................................... 3,696,263(4) 7.5
75 State Street
Boston, MA 02109
</TABLE>
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(1) Based on a Form 13F for the quarter ended June 30, 1998 filed with the
Securities and Exchange Commission (the "SEC"), Capital Research and
Management Company has shared investment discretion (as defined) with
respect to all such shares. Shares reported include 1,040 shares which may
be acquired within 60 days through the exercise of Class G Warrants.
(2) Based on an amendment to a Schedule 13G dated July 31, 1998 filed with the
SEC, J.P. Morgan & Co. Incorporated has sole voting power with respect to
2,919,879 shares, shared voting power with respect to 39,950 shares, sole
dispositive power with respect to 4,272,674 shares, and shared dispositive
power with respect to 96,915 shares.
(3) Based on a Schedule 13G dated March 6, 1998 filed with the SEC, these
shares are held as follows: Mr. Soros has sole voting power with respect to
1,511,737 shares, shared voting power with respect to 2,531,553 shares, sole
dispositive power with respect to 1,399,600 shares, and shared dispositive
power with respect to 2,531,553 shares; Dr. Chatterjee has sole voting and
dispositive power with respect to 393,136 shares and shared voting and
dispositive power with respect to 2,429,475 shares; and Mr. Druckenmiller
has shared voting and dispositive power with respect to 2,531,553 shares.
(4) Based on a Form 13F for the quarter ended June 30, 1998 filed with the
SEC, Wellington Management Company, LLP has sole investment discretion with
respect to 3,662,431 shares, shared investment discretion (as defined) with
respect to 33,832 shares, sole voting authority with respect to 2,649,956
shares, and shared voting authority with respect to 33,232 shares.
6
<PAGE>
The following table sets forth, as of August 20, 1998, 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 2.2% 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>
NUMBER
NAME OF OF
BENEFICIAL OWNER SHARES(1)
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<S> <C>
Tony L. White.................................................................... 322,513(2)
Manuel A. Baez................................................................... 66,056
Michael W. Hunkapiller........................................................... 201,440
William B. Sawch................................................................. 61,162
Dennis L. Winger................................................................. 9,909(2)
All directors and executive officers as a group (18)............................. 1,098,310(2,3)
</TABLE>
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(1) Includes shares which the following have the right to acquire within 60
days of August 20, 1998 through the exercise of vested stock options: Mr.
White, 232,500; Mr. Baez, 57,500; Dr. Hunkapiller, 103,201; Mr. Sawch,
45,500; Mr. Winger, 3,750; and all directors and executive officers as a
group, 780,366. No voting or investment power exists with respect to such
shares prior to exercise.
(2) Includes 36,000 shares of restricted stock held by Mr. White and 6,000
shares of restricted stock held by Mr. Winger, as to which the holder has
sole voting power but no investment power prior to the lapse of
restrictions.
(3) Includes 9,918 units representing full shares of Common Stock deferred by
non-employee directors.
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 1998.
7
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EXECUTIVE COMPENSATION
REPORT OF THE MANAGEMENT RESOURCES COMMITTEE
The Management Resources Committee (the "MRC") of the Board of Directors is
comprised of three 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, 1998, the Corporation employed various
programs to meet these objectives: base salary, contingent compensation (a
short-term incentive plan), and long-term incentive plans which include stock
options, performance units, 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.
The MRC periodically reviews and refines senior management compensation
programs to ensure that the major portion of the remuneration provided to
executives of the Corporation is directly tied to shareholder results. The
Corporation expects to be competitive with the market for base pay and annual
incentive payments when corporate objectives are met.
BASE SALARY
Each year, the MRC obtains surveys of compensation trends and practices from
independent compensation consultants in order to determine the competitiveness
of the pay structure for its senior managers. Within the broad comparative group
of companies which 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. This group
includes 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.
During the fiscal year ended June 30, 1998, Mr. White's base salary was
increased to $630,000 effective August 23, 1997. The MRC established Mr. White's
base salary based on the Corporation's overall performance during the 1997
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 earnings per share and
after-tax operating cash flow targets as a basis on which to measure the
8
<PAGE>
performance of its 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, 1998, Mr. White earned a
contingent compensation award of $870,000. This award was based on the financial
performance of the Corporation and Mr. White's leadership during fiscal year
1998, including in particular his initiatives in and development of the
Corporation's life sciences business.
DIVISION LONG-TERM INCENTIVE PLAN
During fiscal year 1998, the MRC suspended the Division Long-Term Incentive
Plan in favor of a return to the broader use of corporate-wide stock options. In
connection with the suspension, individual participants surrendered awards
previously granted under the plan for a grant of stock options and a cash
payment reflecting fiscal year 1997 achievement under the plan. The cash payment
(together with interest) will be made at the same time as payment would
otherwise have been made under the plan (August, 1999), subject to the
individual continuing to be employed by the Corporation until such time. The MRC
believes that this action will help promote overall corporate goals and thereby
strengthen the link between division management's individual incentives and
shareholder interests.
Participation in the Division Long-Term Incentive Plan was limited to
employees of the Corporation's operating divisions. Accordingly, Mr. White and
non-division executive officers did not participate in the plan.
PERFORMANCE UNITS/RESTRICTED STOCK
In fiscal year 1998, the MRC granted awards under the Corporation's
Performance Unit Bonus Plan to newly-hired members of senior management in order
to continue alignment of management and shareholder interests. These awards,
which were generally made on the same terms as awards made to members of senior
management in fiscal year 1997, are dependent on the creation of incremental
shareholder value and are intended to provide additional incentives for
individual performance.
The MRC also continues to award shares of Common Stock subject to the
attainment of performance goals when it deems such awards to be appropriate and
in the best interest of the Corporation. The Committee believes that such awards
provide strong individual incentives for the achievement of corporate objectives
and thereby help increase shareholder value.
Mr. White did not receive any awards under the Performance Unit Bonus Plan
or restricted stock awards during fiscal year 1998.
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
9
<PAGE>
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 $72.6563 per share in March, 1998 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 performance units
and restricted stock are credited towards an executive's ownership, and
executives are given a period of time to achieve these levels. As of June 30,
1998, all 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.
Orin R. Smith
10
<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., Thermo Electron Corporation, TRW Inc., United Technologies
Corporation, and Varian Associates, Inc.
Cumulative total returns are calculated assuming that $100 was invested on
July 2, 1993 in each of the Common Stock, the S&P 500, and the DJ DTG, and that
all dividends were reinvested.
THE PERKIN-ELMER CORPORATION
Comparison of 5 Year Cumulative Returns
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERKIN-ELMER S&P 500 DJ DTG
<S> <C> <C> <C>
1993 100.00 100.00 100.00
1994 94.26 102.89 107.20
1995 113.70 129.08 135.02
1996 157.68 162.54 161.49
1997 259.48 219.69 226.76
1998 207.36 285.48 219.23
</TABLE>
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Perkin-Elmer 100.00 94.26 113.70 157.68 259.48 207.36
S&P 500 100.00 102.89 129.08 162.54 219.69 285.48
DJ DTG 100.00 107.20 135.02 161.49 226.76 219.23
</TABLE>
11
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth cash or other compensation received for the
last three fiscal years by the Corporation's Chief Executive Officer and the
four other most highly paid executive officers of the Corporation based on
salary and bonuses paid for fiscal year 1998 (the "Named Executive Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
ANNUAL -----------------------------
COMPENSATION
----------------------------------- AWARDS
OTHER -------------------- PAYOUTS
ANNUAL RESTRICTED -------
COMPEN- STOCK STOCK LTIP ALL OTHER
FISCAL SALARY BONUS SATION AWARDS OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($)(3) (#) ($) ($)(4)
- --------------------------------------- ------ ------- ------------ ----------- ---------- ------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Tony L. White.......................... 1998 648,462 870,000 162,417 0 75,000 0 27,575
Chairman, President and 1997 589,424 1,171,380 158,939 1,804,500 135,000 0 20,068
Chief Executive Officer(5) 1996 420,963 825,000 291,664 2,593,125 195,000 0 1,625,801
Manuel A. Baez......................... 1998 405,502 0 205,891 0 39,649 0 17,658
Senior Vice President 1997 375,001 300,000 302,667 0 45,000 0 14,423
and President, Analytical 1996 14,423 50,000 804,375 50,000 0 150,288
Instruments Division(6)
Michael W. Hunkapiller................. 1998 327,885 281,900 0 49,234 0 10,308
Senior Vice President 1997 261,655 335,500 0 45,000 0 9,033
and President, PE 1996 213,826 227,700 511,875 25,000 506,719 7,912
Biosystems Division
William B. Sawch....................... 1998 259,924 220,100 0 20,000 0 15,043
Senior Vice President, 1997 214,713 200,000 0 30,000 0 12,883
General Counsel and 1996 190,962 135,000 511,875 10,000 506,719 7,719
Secretary
Dennis L. Winger....................... 1998 284,135 243,600 59,395 167,906 120,000 0 260,154
Senior Vice President and
Chief Financial Officer(7)
</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 1998 for Mr. White includes $112,738 for
personal use of the Corporation's aircraft. Amounts shown for Mr. Baez and
Mr. Winger include $100,806 and $22,089, respectively, paid in connection
with their relocation to Connecticut and $54,776 and $18,117, respectively,
for reimbursement for the payment of certain taxes.
(3) The dollar value of restricted stock awarded to Mr. Winger in fiscal year
1998 is based on the value of a share of Common Stock on September 25, 1997,
the date of grant. A portion of these shares vested on August 20, 1998 based
upon the attainment of certain performance goals relating to cumulative
consolidated after-tax operating cash flow for the Corporation's 1998 fiscal
year. The remainder of the shares were forfeited. Prior to vesting, Mr.
Winger had the right to receive dividends on and to vote, but could not sell
or otherwise dispose of, such shares. As of June 30, 1998, Messrs. White and
Winger held 12,000 and 2,250 unvested shares of restricted stock,
respectively, having a value of $746,250 and $139,922, respectively. As of
such date, none of the other Named Executive Officers held any shares of
restricted stock.
(4) Amounts shown for fiscal year 1998 include (i) the Corporation's
contributions under the Corporation's Employee Savings Plan for Messrs.
White, Baez, Hunkapiller, Sawch, and Winger of $18,290, $13,051, $7,200,
$13,257, and $7,960, respectively; and (ii) amounts accrued under the
savings plan component of the Corporation's Excess Benefit Plan for Messrs.
White, Baez, Hunkapiller, Sawch, and Winger of $9,285, $4,607, $3,108,
$1,786, and $2,194, respectively. Amount shown for Mr. Winger also includes
a one-time payment of $250,000 as partial replacement of certain benefits
from his former employer that were forfeited upon joining the Corporation.
See "EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, CHANGE-IN-CONTROL, AND
OTHER AGREEMENTS," below.
(5) Mr. White became an employee and Chairman, President and Chief Executive
Officer of the Corporation on September 12, 1995.
(6) Mr. Baez became an employee and executive officer of the Corporation on
June 3, 1996.
(7) Mr. Winger became an employee and executive officer of the Corporation on
September 25, 1997.
12
<PAGE>
OPTION GRANT TABLE
The following table sets forth information regarding stock option grants to
the Named Executive Officers during the fiscal year ended June 30, 1998.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
- ----------------------------------------------------------------------------------------------------- AT
NUMBER OF ASSUMED ANNUAL RATES OF
SECURITIES PERCENT OF TOTAL STOCK PRICE APPRECIATION
UNDERLYING OPTIONS GRANTED TO FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN FISCAL EXERCISE PRICE EXPIRATION ----------------------------
NAME GRANTED (#)(1) YEAR 1998 ($/SH) DATE 5% ($) 10% ($)
- --------------------------------- -------------- ------------------- -------------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tony L. White.................... 75,000 4.1 72.6563 3/30/08 3,426,987 8,684,657
Manuel A. Baez................... 14,649(3) 0.8 69.3125 10/22/07 638,554 1,618,220
25,000 1.4 72.6563 3/30/08 1,142,329 2,894,886
Michael W. Hunkapiller........... 24,234(3) 1.3 69.3125 10/22/07 1,056,366 2,677,040
25,000 1.4 72.6563 3/30/08 1,142,329 2,894,886
William B. Sawch................. 20,000 1.1 72.6563 3/30/08 913,863 2,315,909
Dennis L. Winger................. 15,000(4) 0.8 75.4375 9/25/07 711,634 1,803,419
15,000(5) 0.8 75.4375 6/26/07 711,634 1,803,419
15,000(6) 0.8 75.4375 6/26/07 711,634 1,803,419
50,000 2.7 71.00 11/20/07 2,232,576 5,657,786
25,000 1.4 72.6563 3/30/08 1,142,329 2,894,886
- ------------------------------------------------------------------------------------------------------------------------------------
All Shareholders(7).............. $ 1.9 billion $ 4.9 billion
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- ------------------------
(1) All stock options were 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
described 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 were granted in connection with the surrender of awards previously
granted under the Corporation's Division Long-Term Incentive Plan. See
"REPORT OF THE MANAGEMENT RESOURCES COMMITTEE," above.
(4) Options become exercisable in four equal annual installments commencing
one year after the date of grant.
(5) 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 become 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 cash or stock payment of $75.4375 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 attainment of such stock price
targets.
(6) Options 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 5 above have been attained, provided, in each case that the officer
remains an employee of the Corporation through such date. Each option was
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 $115.00 or more for a
period of ninety days, and will become payable on or after the earlier of
(a) June 26, 2003 or (b) three years after all the stock price targets of
the performance units referred to in footnote 5 above have been attained,
provided, in each case that the officer remains an employee of the
Corporation through the date of payment. Performance units will be forfeited
to the extent the stock price targets are not attained by June 26, 2007 or,
subject to certain limited exceptions, if the employment of the officer by
the Corporation is terminated prior to the attainment of such targets and
were otherwise granted on the same terms as those described in footnote 5
above.
(7) These amounts represent the increase in the aggregate market value of the
Common Stock outstanding as of June 30, 1998 (49.3 million shares) assuming
the annual rates of stock price appreciation set forth above over the
ten-year period used for the Named Executive Officers.
13
<PAGE>
OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth information regarding the exercise of options
by the Named Executive Officers during the fiscal year ended June 30, 1998, and
the value of their unexercised options at June 30, 1998.
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING OPTIONS
UNEXERCISED OPTIONS AT JUNE 30,
AT JUNE 30, 1998 1998
(#) ($)(1)
------------------------------ -----------
SHARES ACQUIRED
ON EXERCISE VALUE REALIZED
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE
- ---------------------------------- ---------------- --------------- ----------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Tony L. White..................... 0 0 232,500 172,500 3,706,416
Manuel A. Baez.................... 0 0 57,500 77,149 407,815
Michael W. Hunkapiller............ 0 0 103,201 86,734 2,827,848
William B. Sawch.................. 0 0 45,500 45,000 1,031,955
Dennis L. Winger.................. 0 0 0 120,000 0
<CAPTION>
NAME UNEXERCISABLE
- ---------------------------------- -------------
<S> <C>
Tony L. White..................... 0
Manuel A. Baez.................... 0
Michael W. Hunkapiller............ 0
William B. Sawch.................. 0
Dennis L. Winger.................. 0
</TABLE>
- ------------------------
(1) The fair market value of a share of Common Stock on June 30, 1998 was
$61.7813.
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, and a non-qualified Excess Benefit Plan, which provides benefits that
would otherwise be denied participants by reason of certain limitations of the
Internal Revenue Code of 1986, as amended (the "Code"), on qualified plan
benefits. 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 and 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 Corporation also has a frozen non-qualified Supplemental
Retirement Plan, which provides benefits based on service and awards prior to
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 and the Excess
Benefit Plan to covered participants for service after October 1, 1995.
14
<PAGE>
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
---------- ---------- ---------- ---------- ----------- -----------
$ 400,000 $ 67,820 $ 101,730 $ 135,640 $ 169,550 $ 203,460 $ 237,370
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
</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, 1998, Mr.
White, Dr. Hunkapiller, and Mr. Sawch each had 2.75 years of credited service
from October 1, 1995 for pension purposes, and Mr. Baez and Mr. Winger had 2.00
years and .75 year, respectively, of credited service for pension purposes. The
base salary and contingent compensation for each such person 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 pension plan component of the Excess Benefit Plan to
Mr. White, Dr. Hunkapiller, and Mr. Sawch are $267, $21,783, and $21,930,
respectively, assuming continued service for benefit eligibility and based on
the current variable unit value, as applicable. Messrs. Baez and Winger do not
have benefit accruals prior to October 1, 1995.
Under the terms of individual employment agreements, Mr. White 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 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. Mr. Baez is 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.
15
<PAGE>
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT, CHANGE-IN-CONTROL, AND OTHER
AGREEMENTS
The Corporation 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 is
automatically extended for consecutive one-year periods unless either party
gives at least 180 days' notice of its intent not to renew. No such notice has
been given by either party. Under the terms of the agreement, Mr. White receives
a base salary (currently set at $730,000) 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 prorated
incentive payment, and other specified benefits.
The Corporation 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 receives a minimum annual salary of $375,000 and a target incentive payment
under the Corporation's Contingent Compensation Plan equal to 60% of his annual
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 entered into an agreement with Mr. Winger dated June 24,
1997, as amended, pursuant to which he serves as Senior Vice President and Chief
Financial Officer of the Corporation. Under the terms of the agreement, Mr.
Winger receives a minimum annual salary of $375,000 and a target incentive
payment under the Corporation's Contingent Compensation Plan equal to 60% of his
annual salary. He is also eligible to receive an annual restricted stock award
which vests based on performance criteria related to the Corporation's cash
flow. In consideration of certain benefits from his former employer that were
forfeited upon his joining the Corporation, Mr. Winger also received a special
one-time stock option grant of 15,000 shares of Common Stock which vests over a
period of four years and a cash payment of $250,000. In the event that the
appreciation of these options does not equal $250,000 in any year of such
four-year period or $1,000,000 at the end of such four-year period, Mr. Winger
will be entitled to an amount equal to such shortfall. The agreement also
provides that if Mr. Winger is terminated other than for cause during the first
two years (subject to annual extension), he would receive two times his base
salary and continuation of health benefits.
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 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 deferred compensation contracts with Dr.
Hunkapiller and Mr. Sawch which, subject to certain conditions, provide for
payments to be made for a maximum of ten years of $25,000 per annum, commencing
upon retirement from the Corporation (or in the event of the termination of
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
the recipient elects one of several optional forms of payment based on actuarial
determinations, terminates employment prior to normal retirement age, or
competes with the Corporation.
Dr. Hunkapiller 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 is evidenced by a three-year
promissory note dated March 8, 1996 and secured by shares of Common Stock.
Interest is payable on the amount 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
16
<PAGE>
the 1998 fiscal year was $94,159, and the amount of such indebtedness
outstanding as of August 20, 1998 was $94,777.
2. RATIFICATION OF THE SELECTION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has selected PricewaterhouseCoopers LLP ("PwC"),
independent accountants, to audit the books, records, and accounts of the
Corporation and its subsidiaries for the fiscal year ending June 30, 1999. This
selection is being presented to the shareholders for ratification at the annual
meeting.
PwC is the successor to Price Waterhouse LLP, which audited the
Corporation's books annually since 1944. PwC 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 PwC, the selection of independent
accountants will be reconsidered by the Audit Committee of the Board of
Directors.
A representative of PwC 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.
3. APPROVAL OF AMENDMENTS TO THE 1996 EMPLOYEE STOCK PURCHASE PLAN
The Board of Directors has approved, subject to approval by the shareholders
at the annual meeting, certain amendments to The Perkin-Elmer Corporation 1996
Employee Stock Purchase Plan (the "Purchase Plan") designed to encourage
employee participation and reduce administrative costs under the Purchase Plan.
The Board believes that these amendments will help further align the interests
of employees with those of the shareholders and are thus in the best interest of
the Corporation and its shareholders.
The Board of Directors considers the Purchase Plan to be an important
employee benefit and a significant vehicle for increasing employee ownership of
the Common Stock. However, because the Purchase Plan currently permits only
annual offerings, the Board believes that its effectiveness as an aid in
recruiting and retaining employees and in increasing employee share ownership is
limited. Moreover, individuals becoming employees of the Corporation after an
offering date, including employees of companies acquired by the Corporation,
have had to wait up to a year to participate in the Purchase Plan. Accordingly,
the Board has determined that it is in the best interest of the Corporation and
its shareholders to amend the Purchase Plan to permit quarterly offerings. In
connection with this amendment, the Board has also determined that it is in the
best interest of the Corporation and its shareholders to make certain amendments
to the Purchase Plan designed to simplify its operation and thereby reduce
administrative costs.
SUMMARY OF PROPOSED AMENDMENTS
In general, the proposed amendments would (a) provide for quarterly
offerings under the Purchase Plan rather than annual offerings, and (b) simplify
the operation of the Purchase Plan by, among other things, (i) permitting the
issuance of fractional shares and permitting the issuance of shares in book
entry form to participant accounts, (ii) specifying certain time periods for
participant elections, and (iii) vesting in the Management Resources Committee
of the Board of Directors (the "Committee") the authority to take certain
actions previously reserved for the Board.
The Corporation is not seeking any increase in the number of shares
authorized for issuance under the Purchase Plan, nor is it seeking any extension
of the term of the Purchase Plan.
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SUMMARY OF THE PURCHASE PLAN AS PROPOSED TO BE AMENDED
The following is a summary of the material provisions of the Purchase Plan
as proposed to be amended. This summary is qualified in its entirety by
reference to the specific provisions of the Purchase Plan, the full text of
which, including the proposed amendments, is attached to this Proxy Statement as
Exhibit A. The proposed amendments will not be effective unless shareholder
approval is obtained.
SHARES SUBJECT TO THE PLAN; TERM. Subject to adjustment as provided below,
600,000 shares of Common Stock were authorized for issuance under the Purchase
Plan, of which approximately 250,000 shares remained available for issuance as
of August 20, 1998 (assuming the exercise of all outstanding options under the
Purchase Plan at the initial offering price). Shares of Common Stock delivered
under the Purchase Plan may be newly issued shares, treasury shares, reacquired
shares, or any combination thereof. No offering may be made under the Purchase
Plan after December 31, 1999. As of August 20, 1998, the fair market value of a
share of Common Stock was $62.6563.
ADMINISTRATION. The Purchase Plan is administered by the Committee. The
Committee, whose members are not eligible to participate in the Purchase Plan,
has the discretion to interpret the Purchase Plan and make rules and regulations
relating thereto.
PARTICIPATION. Any person who is an employee of the Corporation or of a
designated majority-owned subsidiary as of the date of each offering is eligible
to participate in the Purchase Plan. Directors who are not employees of the
Corporation and any person who, after the grant of an option to purchase, would
hold 5% or more of the Common Stock are not eligible to participate. As of
August 20, 1998, approximately 5,135 domestic and non-domestic employees of the
Corporation were eligible to participate in the Purchase Plan. Up to
approximately 2,055 additional domestic and non-domestic employees would be
eligible to participate in the Purchase Plan if the Committee were to designate
all majority-owned subsidiaries of the Corporation as participating
subsidiaries.
PURCHASES UNDER THE PURCHASE PLAN. Under the proposed amendments, the
Corporation would make quarterly offerings to eligible employees of options to
purchase shares of Common Stock under the Purchase Plan on the first trading day
of January, April, July, and October commencing in 1999. Each offering period
would be for a period of three months from the date of offering, and each
eligible employee as of the date of offering would be entitled to purchase
shares of Common Stock at a purchase price equal to the lower of 85% of the fair
market value of the Common Stock on the first day of the offering period or 85%
of the fair market value of the Common Stock on the last day of the offering
period. The Purchase Plan currently provides only for annual offering periods.
In general, eligible employees who desire to participate in the Purchase
Plan elect a stated whole percentage of their compensation, up to a maximum of
10%, to be credited to an account maintained by the Corporation for such
employee for the purpose of purchasing Common Stock as described above. Under
the proposed amendments, participant elections made after December 31, 1998
would continue in effect for subsequent offerings unless modified or rescinded
by the participant. Currently, individual elections must be made for each
offering under the Purchase Plan.
Payment for shares of Common Stock purchased under the Purchase Plan is made
by payroll deductions from an employee's compensation, the definition of which
is proposed to be amended to mirror the definition used in the administration of
certain other benefit plans of the Corporation. As is currently provided under
the Purchase Plan, no participant is permitted to purchase Common Stock under
the Purchase Plan and all other stock purchase plans of the Corporation and its
subsidiaries at a rate that exceeds $25,000 of the fair market value of such
shares (determined as of the date of grant of such right) for each calendar year
during which any option granted to such individual under any such plan is
outstanding at any time.
A participating employee has none of the rights or privileges of a
shareholder of the Corporation (including the right to receive dividends) until
the shares purchased under the Purchase Plan are fully paid for and issued.
Under the proposed amendments, the Corporation has the option to issue shares of
Common Stock purchased under the Purchase Plan in book entry or certificate
form. Further, under the
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proposed amendments, the Corporation may issue fractional shares. The Purchase
Plan currently does not permit the issuance of fractional shares and therefore
generally requires that participant contributions be adjusted or amounts
refunded at the end of each offering period.
WITHDRAWAL. No later than ten days prior to the end of an offering period,
a participating employee would be able to (a) direct the Corporation to make no
further deductions from his or her compensation or (b) cancel his or her option
to purchase shares of Common Stock. No time period for such election is
currently specified in the Purchase Plan. If the employee has directed that
payroll deductions be discontinued, any sums deducted will be retained by the
Corporation until the end of the offering period, at which time the employee
will receive that number of whole and, if the proposed amendments are approved,
fractional shares which can be purchased with the amount so retained. If the
employee has directed that the option be canceled, the Corporation will, as soon
as practicable thereafter, refund in cash, without interest, all amounts
credited to such employee's account.
TERMINATION OF EMPLOYMENT. If the employment of a participating employee is
terminated within three months prior to the end of an offering period because of
total and permanent disability or retirement, or at any time within an offering
period because of death, the employee or his or her legal representative may
either (a) cancel the option to purchase and, as soon as practicable thereafter,
receive a cash refund, without interest, of all payroll deductions credited to
his or her account with respect to the offering, or (b) elect to receive at the
end of the offering period that number of whole and, if the proposed amendments
are approved, fractional shares of Common Stock which such payroll deductions
will purchase. Under the proposed amendments, for offerings after December 31,
1998, such election must be made no later than 10 days prior to the end of the
applicable offering period. Currently, such election must be made within three
months of the event causing the termination of employment.
If the employment of a participating employee is terminated for any other
reason, or, with respect to any offerings made under the Purchase Plan prior to
January 1, 1999, if such employment is terminated more than three months prior
to the end of an offering period because of total and permanent disability or
retirement, the employee will receive, as soon as practicable thereafter, a cash
refund, without interest, of all payroll deductions credited to his or her
account with respect to the offering.
TRANSFERABILITY. A participating employee's rights under the Purchase Plan
are exercisable, during his or her lifetime, only by such employee and may not
be transferred in any manner. After the death of a participating employee, his
or her rights may be transferred pursuant to the laws of descent and
distribution.
TERMINATION AND AMENDMENT. The Committee would be able to terminate the
Purchase Plan at any time or make any amendment or modification as it shall deem
advisable. Currently, any such action would require action by the entire Board.
In the event of any termination of the Purchase Plan, the date of such
termination will be deemed the end of the then current offering period.
ADJUSTMENTS. The number and class of shares available under the Purchase
Plan or covered by the options to purchase shares of Common Stock granted under
the Purchase Plan are subject to adjustment 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 Purchase Plan, as proposed to be amended, 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 employees and the Corporation, or
to describe tax consequences based upon particular circumstances.
It is intended that the option to purchase shares of Common Stock granted
under the Purchase Plan will constitute options issued pursuant to an "employee
stock purchase plan" within the meaning of Section 423
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of the Code. If such shares are issued to a participating employee upon his or
her exercise of an option to purchase granted under the Purchase Plan, and if no
disposition of such shares is made within two years of the date of grant of the
option, or within one year after the transfer to such participating employee of
such shares, or in the event of his or her death (whenever occurring) while
owning such shares, then: (a) no income will be realized by the participating
employee at the time of the transfer of the shares to such employee and (b) when
the participating employee sells or otherwise disposes of such shares (or dies
holding the shares), there will be included in his or her gross income, as
compensation, an amount equal to the lesser of (i) the amount by which the fair
market value of the shares on the first day of the offering period exceeds the
purchase price for the shares, or (ii) the amount by which the fair market value
at time of disposition or death exceeds the purchase price per share. Any
further gain will be treated for tax purposes as long-term capital gain,
provided that the employee holds the shares for the applicable long-term capital
gain holding period after the last day of the offering period applicable to such
shares.
No deduction will be allowed to the Corporation for federal income tax
purposes in connection with the grant or exercise of any option to purchase
shares under the Purchase Plan if there is no disposition of the shares within
either the two-year or the one-year periods referred to above. If there is a
disposition of shares by a participating employee within either of these
periods, such employee will realize ordinary income in the year of the
disposition in an amount equal to the difference between the purchase price and
the fair market value of the shares at the time of exercise of the option, and
the Corporation will be entitled to a deduction in the same amount. Any
difference between the amount received by an employee upon such a disposition
and the fair market value of the shares at the time of exercise of the option
will be capital gain or loss, as the case may be.
NEW PLAN BENEFITS
Participation in the Purchase Plan is voluntary and dependent on each
eligible employee's individual election to participate and his or her
determination as to the level of payroll deductions. Accordingly, it cannot be
determined at this time what benefits or amounts, if any, will be received by or
allocated to any person or group of persons under the Purchase Plan if the
amendments to the Purchase Plan are approved at the annual meeting, or what
benefits or amounts, if any, would have been received by or allocated to any
person or group of persons for the fiscal year ended June 30, 1998 if the
Purchase Plan, as proposed to be amended, had been in effect during such fiscal
year.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of votes cast at the
annual meeting is required for approval of the amendments to the Purchase Plan.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THIS
PROPOSAL.
4. APPROVAL OF THE 1998 STOCK INCENTIVE PLAN
The Board of Directors has adopted, subject to approval by the shareholders
at the annual meeting, The Perkin-Elmer Corporation 1998 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 key personnel 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 an individual's compensation "at risk" and
tied to the performance of corporate objectives, (b) further the goal of
increased ownership of Common Stock by key personnel and thereby further align
their interests with
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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, and its 1997 Stock Incentive Plan (the "1997 Plan") which does not
permit the award of stock incentives after October 31, 2002. Consistent with its
stated intent at the time of the adoption of these plans, the Management
Resources Committee of the Board of Directors (the "Committee") has continued to
grant stock options to a broader group of employees than had historically been
the case under previous plans. In fiscal year 1998, stock options were granted
to approximately 1,760 employees, as compared with 1,140 in fiscal year 1997 and
560 in fiscal year 1996. These broader grants were necessitated in part by the
prevailing compensation practices of technology companies (particularly in the
San Francisco Bay area) with whom the Corporation must compete for employees. In
addition, the Corporation has experienced a greater need for stock based
incentives as a result of its recent acquisitions, most notably PerSeptive
Biosystems, Inc. and Molecular Informatics, Inc. which together added
approximately 665 employees to the Corporation's payroll during fiscal year
1998. Consequently, as of June 30, 1998, 85,500 shares of Common Stock remained
available for the grant of new awards under the 1996 Plan and 155,937 shares of
Common Stock remained available for the grant of new awards under the 1997 Plan.
The Corporation intends to continue to make awards under these plans until such
time as no shares are available for grant under the plans or the expiration of
their terms.
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 B.
SUMMARY OF THE INCENTIVE PLAN
SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided below,
2,400,000 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 20, 1998, the fair market value of a share of Common Stock
was $62.6563.
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").
ELIGIBILITY. Under the terms of the Incentive Plan, all regular salaried
employees (including executive officers) of the Corporation and its subsidiaries
will be eligible to receive Employee Options, Employee Stock Awards, and
Performance Shares (collectively, "Employee Awards"), all consultants performing
significant services for the Corporation will be eligible to receive Employee
Options, which shall consist solely of non-qualified stock options, and all
non-employee directors of the Corporation will receive Director Options and
Director Stock Awards. As of August 20, 1998, approximately 7,200 employees,
consultants, and directors would have been eligible to participate in the
Incentive Plan.
ADMINISTRATION. The Incentive Plan will be administered by the Committee,
all of the members of which qualify as outside directors as defined under
Section 162(m) of the Code. The Committee will determine, subject to the express
provisions of the Incentive Plan, the employees and consultants to whom, and the
time or times at which, awards are to be granted, as well as the terms and
provisions governing each such award.
STOCK OPTIONS--EMPLOYEE OPTIONS. The purchase price of a share of Common
Stock covered by an Employee Option will be equal to 100% of the fair market
value of a share of Common Stock on the date of
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the 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 the grant.
If the employment of an employee or the service of a consultant 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 the employee or consultant 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 if an employee or a consultant to whom an Employee Option has been granted
becomes totally and permanently disabled, such Employee Option may be fully
exercised without regard to the period of continuous employment or service 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 or consultant to whom an Employee Option has been granted
dies while employed by or engaged to provide services to the Corporation, such
Employee Option may be exercised to the extent that the employee or consultant
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 or
consultant'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 in any fiscal year, subject to adjustment as provided
below, under the Incentive Plan, the 1997 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 the 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, except as provided below, 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's Director Options 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 Options.
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's Director Options may be fully exercised at any time
within three years after such retirement, disability, resignation, or declining,
but not after the expiration of the term of the Director Options.
If a director to whom a Director Option has been granted dies while serving
as a member of the Board of Directors, such director's Director Options 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 Options, at any time
within one year after his or her death, but not after the expiration of the term
of the Director Options.
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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 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 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.
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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 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, 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, provided that no
non-employee director may receive a stock award for more than an aggregate of
300 shares in any fiscal year, subject to adjustment as provided below, under
the Incentive Plan and the 1997 Plan. 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 a 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
number 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 Award 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, 2003. 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
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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 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 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 he or she sells such shares the employee will recognize ordinary
compensation income equal to the difference, if any, between the option purchase
price paid and the fair market value as of the date of exercise. The balance of
the gain, if any, will be capital gain taxed at the applicable capital gains
rate. 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, consultant, 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, consultant, or director exercises such option, he or she will
recognize ordinary compensation income equal to the difference, if any, between
the option purchase price paid and the fair market value, as of the date of
exercise, of the shares of Common Stock received. The tax basis of such shares
will be equal to the fair market value on the date of exercise, and the
employee's, consultant's, or director's holding period for such shares will
commence on the day on which the employee, consultant, 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, consultant, 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 number of Employee Awards granted and the recipients of such awards
under the Incentive Plan will be determined by the Committee in its sole
discretion. Accordingly, future Employee Awards under the
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Incentive Plan cannot be determined. The following table sets forth the number
of Director Options and Director Stock Awards that would be granted to nominees
for director elected at the annual meeting if the Incentive Plan is approved and
such grants are made under the terms of the Incentive Plan. Mr. White is not
eligible to receive Director Options or Director Stock Awards.
<TABLE>
<CAPTION>
NUMBER OF
NUMBER DIRECTOR
OF STOCK
NAME OPTIONS AWARDS
- ----------------------------------------------------------------- ----------- ---------------
<S> <C> <C>
All directors who are not executive officers..................... 10,500(1) 2,100(2)
</TABLE>
- ------------------------------
(1) 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 options are not
granted under any other stock incentive plan of the Corporation.
(2) 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 to the extent awards are not
granted under any other stock incentive plan of the Corporation.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of the holders of a majority of the votes cast 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 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.
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; DISCRETIONARY VOTING
Any shareholder who intends to present a proposal at the Corporation's 1999
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, 1999, and the
proponent and the proposal must meet certain eligibility requirements of the
SEC.
The Corporation's By-laws also provide that any shareholder who intends to
present a proposal at any annual or special meeting of shareholders must give
advance notice of such proposal together with certain
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<PAGE>
specified information. These requirements are separate and apart from and in
addition to the SEC requirements noted above that a shareholder must meet in
order to have a proposal included in the Corporation's proxy materials. In
general, the advance notice must be given to the Secretary of the Corporation
not less than 60 days nor more than 90 days prior to the date of the meeting.
Because the Corporation did not have advance notice of any shareholder proposal
in accordance with these requirements, it will have discretionary authority to
vote on any shareholder proposal presented at the annual meeting. Further
information regarding the submission of shareholder proposals may be obtained by
writing to the Secretary of the Corporation.
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 9, 1998
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<PAGE>
EXHIBIT A
THE PERKIN-ELMER CORPORATION
1996 EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED)
1. PURPOSE OF THE PLAN.
The purpose of The Perkin-Elmer Corporation 1996 Employee Stock Purchase
Plan (the "Plan") is to provide an incentive for Eligible Employees to continue
to devote their best efforts to the success of the Corporation, and to afford
such employees an opportunity to obtain a proprietary interest in the continued
growth and prosperity of the Corporation through ownership of its Common Stock
acquired in a convenient fashion.
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 "BOARD OF DIRECTORS" means the Board of Directors of the Corporation.
2.3 "CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
2.4 "COMMITTEE" means the Management Resources Committee of the Board of
Directors, or any successor thereto or committee designated thereby.
2.5 "COMMON STOCK" means the common stock, par value $1.00 per share, of the
Corporation.
2.6 "COMPENSATION" means the regular basic wage or salary, including
commissions, paid to an Eligible Employee by the Corporation and any amount
which is contributed by the Corporation pursuant to a salary reduction agreement
and which is not includable in the gross income of the Eligible Employee under
Sections 125 and 402(g) of the Code or because it is made to a deferred
compensation plan sponsored by the Corporation. Bonus, payment for overtime, or
other special payments shall not be considered as part of Compensation.
2.7 "CORPORATION" means The Perkin-Elmer Corporation and such of its
Subsidiaries existing as of the effective date of the Plan or thereafter
acquired as may be designated from time to time by the Committee.
2.8 "DATE OF OFFERING" means, with respect to any offering made under the
Plan prior to January 1, 1999, the date within the first fifteen (15) days of
January of each year of the Plan as specified by the Committee for any offering
made under the Plan, and with respect to any offering made under the Plan from
and after January 1, 1999, the first date in the applicable Purchase Period on
which sales of Common Stock are made on a national securities exchange unless
another date is specified by the Committee.
2.9 "ELIGIBLE EMPLOYEE" means any person who is an employee of the
Corporation on a Date of Offering during the term of the Plan. Directors of the
Corporation who are not officers and any employee who, immediately after the
grant of an option hereunder, would own (within the meaning of Section 424(d) of
the Code) Common Stock (including stock which such employee may purchase under
outstanding options) possessing 5% or more of the total combined voting power or
value of all classes of the capital stock of the Corporation or of a Subsidiary,
shall be ineligible to participate in the Plan.
2.10 "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
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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).
2.11 "OFFERING PRICE" means the lower of (a) 85% of the Fair Market Value of
a share of Common Stock on the applicable Date of Offering, and (b) 85% of the
Fair Market Value of a share of Common Stock on the last day of the applicable
Purchase Period on which sales of Common Stock are made on a national securities
exchange unless another date is specified by the Committee.
2.12 "PARTICIPATING EMPLOYEE" means an Eligible Employee who has accepted
all or any part of an option to purchase shares of Common Stock under an
offering pursuant to Section 7 hereof.
2.13 "PURCHASE PERIOD" means, with respect to any offering made under the
Plan prior to January 1, 1999, a period of one (1) year commencing on the Date
of Offering and, with respect to any offering made under the Plan from and after
January 1, 1999, each period of three calendar months commencing on January 1,
April 1, July 1, and October 1.
2.14 "SUBSIDIARY" means any corporation in respect of which the Corporation
owns, directly or indirectly, more than 50% of the total combined voting power
of all classes of stock issued by such corporation.
3. SHARES RESERVED FOR THE PLAN.
The aggregate number of shares of Common Stock available for issuance under
the Plan is Six Hundred Thousand (600,000), subject to adjustment in accordance
with Section 16 hereof. 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, deliver treasury shares, reacquired shares, or shares
acquired in the market for purposes of the Plan.
If any option granted under the Plan shall for any reason terminate, be
canceled, or expire without having been exercised, shares of Common Stock not
issued under such option shall be available again for issuance under the Plan.
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. 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, 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. OFFERINGS.
Subject to the terms and conditions of the Plan, the Corporation may make
offerings to Eligible Employees to purchase shares of Common Stock under the
Plan during each of the three calendar years commencing January 1, 1997.
6. AMOUNT OF COMMON STOCK EACH ELIGIBLE EMPLOYEE MAY PURCHASE.
6.1 AMOUNT OF PURCHASE. Subject to the terms of the Plan, and as to each
offering made hereunder, each Eligible Employee shall be offered an option to
purchase that number of whole and fractional shares of Common Stock equal to (a)
the total amount accumulated in such Eligible Employee's account established
pursuant to Section 8 hereof with respect to such offering as of the last day of
the applicable Purchase Period divided by (b) the Offering Price.
6.2 LIMITATIONS ON PURCHASES. No Eligible Employee shall be granted an
option to purchase shares of Common Stock under all employee stock purchase
plans (to which Section 423 of the Code is applicable) of
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the Corporation and its subsidiaries at a rate which exceeds $25,000 of the Fair
Market Value of the Common Stock (determined as of the date of grant of such
option) for each calendar year during which any option granted to such
individual under any such plan is outstanding at any time.
7. METHOD OF PARTICIPATION.
7.1 NOTICE OF OFFERING. The Committee shall give notice to each Eligible
Employee of each offering under the Plan and the terms and conditions of such
offering.
7.2 ELECTION BY ELIGIBLE EMPLOYEES. Each Eligible Employee who desires to
accept all or any part of the option to purchase shares of Common Stock under an
offering shall signify his or her election to do so in the form and manner
prescribed by the Committee. Each such Eligible Employee shall also authorize
the Corporation to make payroll deductions in accordance with Section 8 hereof
to cover the aggregate purchase price of those shares in respect of which he or
she has elected to accept an option. Prior to January 1, 1999, such election and
authorization shall continue in effect unless and until such Eligible Employee
withdraws from the Plan or terminates employment with the Corporation, as
hereinafter provided. From and after January 1, 1999, such election and
authorization shall continue in effect for each subsequent offering unless at
least ten (10) days prior to the first day of the next succeeding Purchase
Period the Eligible Employee withdraws from the Plan or terminates employment
with the Corporation, as hereinafter provided, or elects a different rate of
payroll deductions in the form and manner prescribed by the Committee.
8. PAYROLL DEDUCTIONS.
8.1 PAYROLL DEDUCTIONS. Each Participating Employee shall authorize the
Corporation, in the form and manner prescribed by the Committee, to make payroll
deductions equal to any whole percentage of such Eligible Employee's
Compensation up to a maximum of 10% to cover the aggregate purchase price of
those shares in respect of which he or she has elected to accept an option.
Payroll deductions shall be deducted from such Participating Employee's
compensation through regular payroll deductions, and shall commence as soon as
practicable following the applicable Date of Offering and shall continue for the
duration of the Purchase Period. A separate bookkeeping account shall be
maintained by the Corporation for each Participating Employee, and the amount of
each Participating Employee's payroll deductions shall be credited to such
account.
8.2 CONFLICTS WITH LAW. If any law, rule, or regulation applicable to any
Eligible Employee prohibits the use of payroll deductions for purposes of the
Plan, or if such deductions impair or hinder the operation of the Plan, an
alternative method of payment approved by the Committee may be substituted for
such Eligible Employee.
9. EXERCISE OF OPTION AND PURCHASE OF SHARES.
9.1 EXERCISE OF OPTION. Unless a Participating Employee has subsequently
withdrawn from the offering pursuant to Section 12 hereof, such Participating
Employee's option shall be deemed to have been automatically exercised as of the
last day of the applicable Purchase Period and become on such date an
irrevocable obligation to purchase shares of Common Stock in accordance with the
provisions of the Plan. The number of whole and fractional shares of Common
Stock so purchased by each such Participating Employee shall be determined by
dividing (a) the amount accumulated in such Participating Employee's account by
payroll deductions with respect to the offering by (b) the Offering Price.
9.2 OVERSUBSCRIPTION. In the event that, with respect to any offering
hereunder, Participating Employees become entitled to purchase more shares of
Common Stock than the number of shares of Common Stock then available for
issuance under the Plan, the aggregate number of shares of Common Stock then
available shall be apportioned among Participating Employees on a pro rata basis
in accordance with the number of shares of Common Stock actually subscribed for
by each such Participating Employee, except that subscriptions to purchase one
share shall, to the extent possible, be honored in full.
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10. ISSUANCE OF SHARES.
All full and fractional shares of Common Stock purchased by a Participating
Employee under the Plan shall be issued in book entry form and credited to an
account established in such Participating Employee's name at a stock brokerage
or other financial services company designated by the Committee. Alternatively,
the Committee may, in its sole discretion, cause the Corporation to issue a
certificate to a Participating Employee for the number of whole shares of Common
Stock purchased by such Participating Employee. In such event, the Corporation
shall pay to such Participating Employee an amount in cash equal to any
fractional share multiplied by the Fair Market Value of a share of Common Stock
on the date as of which the payment is made.
11. RIGHTS AS A SHAREHOLDER.
No Participating Employee shall be entitled to any rights or privileges of a
shareholder of the Corporation, including the right to receive any dividends
which may be declared on shares of Common Stock, until such time as the full
purchase price of such Participating Employee's shares has been paid and shares
have been issued to or for the account of such Participating Employee in
accordance with Section 10 hereof.
12. WITHDRAWALS.
12.1 RIGHT TO WITHDRAWAL. No later than ten (10) days prior to the end of
the Purchase Period with respect to any offering, a Participating Employee may,
by filing an appropriate notice with the Committee, direct the Corporation to
(a) make no further deductions from his or her Compensation with respect to such
offering, or (b) cancel his or her entire option under such offering. Such
notice shall be irrevocable. As soon as practicable following receipt of such
notice, the Corporation shall cease all payroll deductions with respect to such
offering by such Participating Employee. If the employee has directed that
payroll deductions be discontinued, any sums theretofore deducted in respect of
the offering shall, subject to the provisions of Section 13 hereof, be retained
by the Corporation until the end of the applicable Purchase Period, at which
time there shall be issued to or for the account of the employee that number of
whole and fractional shares which can be purchased with the sum deducted. If the
employee has directed that his or her option be canceled, the Corporation shall,
as soon as practicable following receipt of such notice, refund in cash, without
interest, all amounts credited to the account of such employee with respect to
the applicable offering.
12.2 WAIVER OF WITHDRAWAL RIGHT. Notwithstanding the provisions of Section
12.1 above, a Participating Employee may, at any time prior to the expiration of
any Purchase Period, irrevocably elect to waive both the right to direct the
Corporation to make no further deductions from such Participating Employee's
Compensation with respect to any option granted hereunder and the right to
cancel the entire option, which election shall be made by the filing of an
appropriate notice to such effect with the Committee. Upon the filing of such a
notice, such Participating Employee shall be irrevocably obligated to purchase
all of the shares of Common Stock covered by the option to which such notice
relates.
13. TERMINATION OF EMPLOYMENT.
13.1 DEATH, DISABILITY, OR RETIREMENT. In the event that the employment of
a Participating Employee is terminated within three (3) months prior to the end
of a Purchase Period because of total and permanent disability or retirement, or
at any time within a Purchase Period because of death, such Participating
Employee or his or her legal representative, as applicable, may either:
(a) cancel his or her entire option with respect to such offering, in
which event the Corporation shall, as soon as practicable thereafter, refund
in cash, without interest, all amounts credited to such Participating
Employee's account with respect to such offering; or
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(b) elect to receive at the conclusion of the applicable Purchase Period
that number of whole and fractional shares of Common Stock which such
Participating Employee's payroll deductions actually made are sufficient to
purchase.
13.2 ELECTION. The election of a Participating Employee or his or her legal
representative, as applicable, pursuant to Section 13.1 above, shall be made (a)
in the event of any offering made under the Plan prior to January 1, 1999,
within three (3) months of the event causing the termination of employment and
(b) in the event of any offering made under the Plan from and after January 1,
1999, not later than ten (10) days prior to the end of the applicable Purchase
Period. Notification of the election shall be filed in the form and manner
prescribed by the Committee and, in the event that no notification has been
filed within the prescribed period, the Corporation shall act in accordance with
Section 13.1(a) above.
13.3 OTHER TERMINATION OF EMPLOYMENT. In the event that the employment of a
Participating Employee is terminated for any reason other than those specified
in Section 13.1 above, or, with respect to any offering made under the Plan
prior to January 1, 1999, if such employment is terminated more than three (3)
months prior to the end of a Purchase Period because of total and permanent
disability or retirement, the Corporation shall, as soon as practicable
thereafter, refund in cash, without interest, all amounts credited to such
Participating Employee's accounts under all applicable offerings under the Plan.
13.4 TEMPORARY ABSENCE. In the event that the payroll deductions of a
Participating Employee are temporarily discontinued because of leave of absence,
temporary disability, or other similar reasons, then the number of shares of
Common Stock subject to purchase by such Participating Employee in any offering
shall be automatically reduced to that number of whole and fractional shares
which his or her aggregate payroll deductions actually made within the Purchase
Period are sufficient to purchase. Notwithstanding the foregoing, such
Participating Employee may make arrangements to pay to the Corporation an amount
equal to the amount which was not subject to payroll deductions by reason of the
temporary discontinuance thereof, and, in that event, such Participating
Employee shall then be entitled to purchase the total number of shares of Common
Stock for which he or she has accepted an option provided that full payment for
all such shares is made not later than the last day of the applicable Purchase
Period.
14. RIGHTS NOT TRANSFERABLE.
A Participating Employee's rights under the Plan are exercisable, during his
or her lifetime, only by such Participating Employee and may not be sold,
pledged, assigned, or transferred in any manner. Any attempt to sell, pledge,
assign, or transfer such rights shall be void and unenforceable against the
Corporation or any affiliate. After the death of a Participating Employee, such
Participating Employee's rights may be transferred pursuant to the laws of
descent and distribution.
15. NO RIGHT TO CONTINUED EMPLOYMENT.
Nothing contained in the Plan shall confer upon any employee the right to
continue in the employ of the Corporation or any Subsidiary or interfere with
the right of the Corporation or such Subsidiary to terminate such employee's
employment at any time.
16. ADJUSTMENT 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 and the number and class of shares under option but not
yet issued under the Plan shall be adjusted in such manner as the Committee in
its discretion deems appropriate.
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17. TERMINATION AND AMENDMENT OF THE PLAN.
The Committee may terminate the Plan at any time or make such modification
or amendment to the Plan as it shall deem advisable. Upon termination of the
Plan, shares of Common Stock shall be issued to Participating Employees as if
the end of the applicable Purchase Period were the date of termination of the
Plan.
18. GOVERNMENTAL REGULATIONS AND LISTING.
All rights granted or to be granted to Eligible Employees under the Plan are
expressly subject to all applicable laws and regulations and to the approval of
all governmental authorities required in connection with the authorization,
issuance, sale or transfer of the shares of Common Stock reserved for the Plan,
including, without limitation, there being a current registration statement of
the Corporation covering the offer of shares of Common Stock purchasable under
the options on the last day of the Purchase Period applicable to such options,
and if a registration statement shall not then be effective, the term of such
options and the Purchase Period shall be extended until the first business day
after the effective date of such registration statement, or post-effective
amendment thereto. In addition, all rights are subject to the due listing of
such shares of Common Stock on any securities exchange on which the Common Stock
is then listed.
Notwithstanding any other provision of the Plan, the Plan is intended to
comply with all applicable provisions of Section 423 of the Code. To the extent
that any provision of the Plan or any action by the Committee under the Plan
fails to so comply, such provision or action shall, without further action by
any person, be deemed automatically amended to the extent necessary to effect
compliance with Section 423, provided that if such provision or action cannot be
amended to effect such compliance, such provision or action shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
Each option granted to an Eligible Employee under the Plan shall be deemed
issued subject to the foregoing qualification.
19. 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 made to individuals employed in such countries and to meet the
objectives of the Plan.
20. GOVERNING LAW.
Except where, and to the extent, offers of options under the Plan to foreign
employees are subject to foreign laws, the Plan shall be construed, regulated,
and administered under the internal laws of the State of Connecticut.
21. SHAREHOLDER APPROVAL.
The Plan as amended shall not become effective unless and until it has been
approved, in the manner prescribed by law, by the shareholders of the
Corporation.
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EXHIBIT B
THE PERKIN-ELMER CORPORATION
1998 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The purpose of The Perkin-Elmer Corporation 1998 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, consultants, 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 SERVICE" means an uninterrupted chain of continuous regular
employment by the Corporation or an uninterrupted chain of continuous
performance of significant services for the Corporation by a consultant. A leave
of absence granted in accordance with the Corporation's usual procedures which
does not operate to interrupt continuous employment or continuous performance of
significant services for other benefits granted by the Corporation shall not be
considered a termination of employment nor an interruption of Continuous Service
hereunder, and an employee or consultant who is granted such a leave of absence
shall be considered to be continuously employed or continuously performing
significant services 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.
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2.13 "DIRECTOR OPTION" means an Option granted pursuant to Section 7 hereof.
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 to
employees 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 Four Hundred Thousand (2,400,000), 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 AND CONSULTANTS; FACTORS TO BE CONSIDERED IN GRANTING
EMPLOYEE OPTIONS AND EMPLOYEE AWARDS.
Subject to the terms of the Plan, an Employee Option may be granted to any
person who, at the time the Employee Option is granted, is a regular full-time
employee (which term shall include officers and directors) of the Corporation or
a consultant performing significant services for the Corporation. Employee
Awards may be granted to any person who, at the time the 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 and
consultants 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 and consultants, 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 or consultant 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 and consultants 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; provided, however, that Incentive Stock Options shall be granted only
to employees of the Corporation.
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
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employee or consultant, as the case may be, 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.
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 Service 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 Service 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 or a
consultant performing significant services for 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 or a
consultant performing significant services for the Corporation.
6.5 TERMINATION OF EMPLOYMENT OR SERVICES. In the event that the
employment of an employee to whom an Employee Option has been granted under the
Plan shall be terminated or the services of a consultant 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 or
consultant was entitled to do so at the date of termination of his or her
employment or services, 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 an employee or
consultant to whom an Employee Option has been granted becomes 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
Service 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, 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, but in no event after the expiration of the
term of the Employee Option.
6.7 DEATH. If an employee or consultant to whom an Employee Option has
been granted under the Plan shall die while employed by the Corporation or
engaged to perform services for the Corporation, such Employee Option may be
exercised to the extent that the employee or consultant 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 or consultant'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, 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 Director Options granted to a Non-Employee Director hereunder and under The
Perkin-Elmer Corporation 1996 Stock Incentive Plan and The Perkin-Elmer
Corporation 1997 Stock Incentive Plan shall not exceed in the aggregate options
to purchase 1,500 shares of Common Stock in any fiscal year of the Corporation,
subject to adjustment as provided above. All Director Options shall be
designated as Non-Qualified Stock Options
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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.
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 three (3) years after such retirement,
disability, resignation, or declining, 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
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States of America, (b) by tendering to the Corporation shares of Common Stock
owned by such holder for at least six (6) months 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 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 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
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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.
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
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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 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, 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;
provided, however, that Director Stock Awards granted to a Non-Employee Director
hereunder and under The Perkin-Elmer Corporation 1997 Stock Incentive Plan shall
not exceed in the aggregate 300 shares of Common Stock in any fiscal year of the
Corporation, subject to adjustment as provided above. 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
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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.
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 15(th) of the calendar year prior to
the calendar year in which such deferral is to be effective. Notwithstanding the
foregoing, any person 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 (1/100)) 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
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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.
(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 31(st) of such year and shall be made or
commence, as the case may be, on December 31(st) 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 his 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
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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.
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.
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<PAGE>
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, any consultant the right to continue
to perform services for the Corporation, or any Non-Employee Director the right
to continue as a member of the Board of Directors or interfere with the right of
the Corporation to terminate such employee's employment, such consultant's
service, 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 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) and of any Common Stock Units 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, 2003. 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
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<PAGE>
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 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 shareholders of the Corporation in
accordance with applicable law. 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>
PERKIN ELMER
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.
<TABLE>
<S> <C>
PRK63A 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 FOR AGAINST ABSTAIN
Belingard, Robert H. Hayes, Georges C. St. Laurent, Jr., 2. Ratification of the selection of / / / / / /
Carolyn W. Slayman, Orin R. Smith, and Tony L. White PricewaterhouseCoopers LLP as
independent accountants for the
FOR WITHHELD fiscal year ending June 30, 1999.
/ / / /
3. Approval of amendments to the 1996 / / / / / /
Employee Stock Purchase Plan.
4. Approval of the 1998 Stock Incentive / / / / / /
Plan.
------------------------------------------
For all nominees except as noted above
MARK HERE FOR / / MARK HERE IF / /
ADDRESS CHANGE YOU PLAN TO ATTEND
AND NOTE AT LEFT 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:
--------------------------- -------------------- --------------------------- --------------------
</TABLE>
<PAGE>
PRK63B DETACH HERE
PROXY
THE PERKIN-ELMER CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON OCTOBER 15, 1998
The undersigned shareholder(s) of The Perkin-Elmer Corporation (the
"Corporation") hereby appoints TONY L. WHITE, DENNIS L. WINGER, and WILLIAM
B. SAWCH, and each 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 and by ChaseMellon Shareholder
Services, L.L.C. under the Corporation's employee stock purchase plans) at
the 1998 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.
- ----------- -----------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ----------- -----------
