SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. 1)
Filed by the registrant X
Filed by a party other than the registrant
Check the appropriate box:
Preliminary proxy statement
X Definitive proxy statement
Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
POLAROID CORPORATION
(Name of Registrant as Specified in Its Charter)
RICHARD F. deLIMA
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule O-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and O-11.
(1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
(2) Aggregate number of securities to which transactions applies:
___________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule O-11:(1)<F1>
___________________________________________________________________________
[FN]
- ---------------
<F1>(1) Set forth the amount on which the filing fee is calculated and state
how it was determined.
<PAGE>
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
Check box if any part of the fee is offset as provided by
Exchange Act Rule O-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the form or schedule and the date of its
filing.
(1) Amount previously paid:
___________________________________________________________________________
(2) Form, schedule or registration statement no.:
___________________________________________________________________________
(3) Filing party:
___________________________________________________________________________
(4) Date filed:
___________________________________________________________________________
<PAGE>
Polaroid
Corporation
Notice of
1994 Annual
Meeting of
Stockholders
and Proxy
Statement
<PAGE>
Polaroid Corporation
549 Technology Square
Cambridge, Massachusetts 02139
March 15, 1994
To Polaroid Employee Benefit Plan Participants:
This booklet contains important information to assist you in voting as a
participant in one or both of the Polaroid benefit plans under which shares of
Polaroid stock are held in trust: the Polaroid Stock Equity Plan (the "ESOP")
and the Polaroid Profit Sharing Retirement Plan (the "Profit Sharing Plan").
You should refer also to the Company's Annual Report for 1993 and the Voting
Instructions form enclosed with this booklet.
The Company's Annual Meeting will be held on Tuesday, May 10, 1994, for
the following purposes:
1. To elect twelve directors to serve until the next Annual Meeting of
Stockholders.
2. To ratify the appointment of KPMG Peat Marwick as independent auditors
of the Company for the year 1994 -- recommended by the Board of
Directors.
3. To consider and act upon a stockholder proposal -- opposed by the Board
of Directors.
4. To conduct such other business as may properly come before the meeting.
You have a right to instruct the Plan Trustee to vote your stock. Subject
to the Plan Trustee's responsibilities under the plan, your shares and
fractions of shares will be voted in accordance with your instructions on the
enclosed Voting Instructions form. If you do not send in your instructions,
your shares will be voted in the same proportion as the shares of other
participants from whom instructions are received. Unallocated ESOP shares will
be voted in the same proportion as the voting of shares allocated to ESOP
participants' accounts.
Sincerely yours,
RICHARD F. deLIMA
Richard F. deLima
Vice President, Secretary and General Counsel
SO THAT YOUR STOCK MAY BE VOTED, PLEASE MARK, SIGN AND DATE THE ENCLOSED
VOTING INSTRUCTIONS FORM AND RETURN IT IN THE ENVELOPE PROVIDED NOT LATER THAN
MAY 3, 1994.
<PAGE>
Polaroid Corporation
549 Technology Square
Cambridge, Massachusetts 02139
March 15, 1994
To Our Stockholders:
You are cordially invited to attend the Company's 1994 Annual Meeting on
Tuesday, May 10, 1994, in Wellesley, Massachusetts.
The meeting will begin at 2:00 P.M. at Alumnae Hall, Wellesley College.
The principal items of business will be the election of directors,
ratification of the appointment of independent auditors and the
consideration of a stockholder proposal. I will also report on the progress
of the Company during the past year and answer stockholder questions.
The vote of every stockholder is important. Please note that returning
your completed proxy will not prevent you from voting in person at the
meeting if you wish to do so. Your cooperation in promptly signing, dating
and returning your proxy will be greatly appreciated.
Sincerely yours,
I. MacALLISTER BOOTH
I. MacAllister Booth
Chairman, President and
Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING
To the Stockholders:
The Annual Meeting of Stockholders of Polaroid Corporation will be held at
Alumnae Hall, Wellesley College, Wellesley, Massachusetts, on Tuesday, May 10,
1994, at 2:00 P.M. for the following purposes:
1. To elect twelve directors to serve until the next Annual Meeting of
Stockholders.
2. To ratify the appointment of KPMG Peat Marwick as independent auditors
of the Company for the year 1994 -- recommended by the Board of
Directors.
3. To consider and act upon a stockholder proposal -- opposed by the Board
of Directors.
4. To conduct such other business as may properly come before the meeting.
Stockholders of record at the close of business on March 11, 1994 are
entitled to vote at the meeting.
By order of the Board of Directors.
RICHARD F. deLIMA
Richard F. deLima
Vice President, Secretary and General Counsel
March 15, 1994
YOUR VOTE IS IMPORTANT
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE MARK, SIGN AND DATE THE
ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENVELOPE PROVIDED, WHICH REQUIRES
NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE>
POLAROID CORPORATION
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Polaroid Corporation (the "Company") to
be voted at the Annual Meeting of Stockholders of the Company on Tuesday, May
10, 1994, and any adjournment.
All holders of record of common stock of the Company as of the close of
business on March 11, 1994, the record date, are entitled to vote at the
meeting. As of that date, 46,820,350 shares of common stock of the Company
were outstanding. Each share is entitled to one vote. A favorable vote of a
majority of the shares of common stock represented in person or by proxy at
the meeting and entitled to vote is required for the approval of each of the
proposals described in this Proxy Statement.
If a proxy is signed and not revoked the shares it represents will be voted in
accordance with the instructions of the stockholder. Shares represented by a
proxy marked for abstention on a proposal will be counted as represented at
the meeting with respect to the proposal, but will not be voted for or against
the proposal. (The effect of marking a proxy for abstention, however, is the
same as marking it against the proposal.) Shares registered in the name of a
broker will be counted as represented at the meeting only for the proposals as
to which the broker's proxy gives voting directions.
At any time before a proxy is voted it may be revoked by the stockholder who
submitted it. If a proxy is signed and returned without instructions as to one
or more proposals, and the shares it represents are not registered in the name
of a broker, the shares will be voted on those proposals in accordance with
the recommendations of the Board of Directors.
For participants in the Company's Automatic Dividend Reinvestment Plan,
proxies representing shares of common stock held of record will also represent
shares held under that plan.
The approximate date on which this Proxy Statement and proxy are first being
sent to stockholders is March 18, 1994.
ELECTION OF DIRECTORS
At the Annual Meeting, twelve directors will be elected to hold office until
the next Annual Meeting and until their respective successors are elected and
qualify. All nominees have consented to be named in this Proxy Statement and
to serve if elected.
All nominees except Ralph E. Gomory were elected directors at the last Annual
Meeting.
The Company has agreed to use its best efforts to secure the election to the
Board of Directors by the Company's stockholders of one nominee designated by
Corporate Advisors, L.P. and satisfactory to the Board. The agreement
terminates such right when specified affiliates beneficially own less than
1,500,000 shares of common stock and their voting power is less than 3% of the
Company's then outstanding voting power. The agreement will terminate, in any
event, on January 30, 1999. Mr. Pollack is the designated nominee.
The following information is submitted respecting the nominees for election:
I. MacAllister Booth, 62, has been a director since 1983. He is Chairman,
President and Chief Executive Officer of the Company. He is also a
director of Western Digital Corporation, John Hancock Mutual Life
Insurance Company, and State Street Bank and State Street Holding Company.
Yen-Tsai Feng, 71, has been a director since 1981. She has been retired
since July 1990, prior to which she was the Roy E. Larsen Librarian of
Harvard College.
<PAGE>
Ralph E. Gomory, 64, has been a director since July 1993. He is President
of the Alfred P. Sloan Foundation. He is also a director of Ashland Oil,
Inc., Bank of New York, Lexmark International, Inc., and Washington Post
Company.
Frank S. Jones, 65, has been a director since 1973. Since February 1992,
he has been Professor Emeritus, and, prior to that time, was Ford
Professor of Urban Affairs of Massachusetts Institute of Technology. He is
also a director of CIGNA Corporation, Capital Cities/ABC, Inc., and
Scientific Games Holdings Corporation.
James D. Mahoney, 59, has been a director since 1993. He is a Plant
Engineering Manager of the Company.
Henry Necarsulmer, 80, has been a director since 1967. Since January 1990,
he has been a consultant to Lehman Brothers Inc. (an investment banking
firm) and from January 1988 to January 1990 was an Advisory Director of
that firm.
Kenneth H. Olsen, 68, has been a director since 1975. He has been retired
since October 1992. Prior to that time, he was the President, Chief
Executive Officer and a Director of Digital Equipment Corporation (a
manufacturer of computer and peripheral equipment). He is also a director
of Ford Motor Company.
Lester Pollack, 60, has been a director since 1989. Since June 1988, he
has been the Senior Managing Director, Corporate Advisors, L.P.
(investment partnership). Since June 1986, he has been a general partner
at Lazard Freres & Co. (investment banking firm) and the Chief Executive
Officer, Centre Partners, L.P. (investment partnership). He is also a
director of Continental Cablevision, Inc., CNA Financial Corporation,
Kaufman & Broad Home Corporation, Loews Corporation, Paramount
Communications Inc., Parlex Corporation, Sphere Drake Holding Limited,
SunAmerica, Inc. (formerly Broad, Inc.), Tidewater Inc., and Transco
Energy Company.
Charles P. Slichter, 70, has been a director since 1975. He is Professor
of Physics and Chemistry, Center for Advanced Study, Loomis Laboratory of
Physics, University of Illinois.
Ralph Z. Sorenson, 60, has been a director since 1984. Since July 1993, he
has been Professor, University of Colorado. From July 1992 to July 1993 he
was Dean of the College of Business at the University of Colorado, and
from September 1989 until July 1992, he was an Adjunct Professor at
Harvard Business School. Prior to that time, he was the Chairman of the
Board, President and Chief Executive Officer of Barry Wright Corporation.
He is also a director of Eaton Vance Corporation, Exabyte Corporation,
Houghton Mifflin Company, and Sweetwater, Inc.
Delbert C. Staley, 69, has been a director since 1989. He has been retired
since October 1991. From October 1989 until October 1991, he was the
Chairman and a Director of NYNEX International Management Committee. He
was Chairman, Chief Executive Officer and a Director of NYNEX Corporation
from 1983 until his retirement in September 1989. He is also a director of
Allied-Signal, Inc., Ball Corporation, The Bank of New York Company, Inc.,
The Bank of New York, Dean Foods Company, John Hancock Mutual Life
Insurance Company, and Digital Equipment Corporation.
Alfred M. Zeien, 64, has been a director since 1985. Since February 1991,
he has been Chairman of the Board and Chief Executive Officer of The
Gillette Company (a manufacturer of consumer products). From January 1,
1991 to February 1991, he was President and Director, and prior to that
time, Vice Chairman of the Board of The Gillette Company. He is also a
director of Repligen Corporation, Massachusetts Mutual Life Insurance
Company, Bank of Boston Corporation, Raytheon Company, and Gillette
Company.
<PAGE>
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth certain information as of January 31, 1994 with
respect to shares of common stock owned by (i) beneficial owners of more than
5% of the outstanding common stock; (ii) the chief executive officer and the
four other most highly compensated executive officers of the Company; (iii)
each director of the Company; and (iv) all directors and executive officers as
a group. Individuals have sole voting and investment power over the stock
unless otherwise indicated in the footnotes.
<TABLE>
<CAPTION>
Common Stock
Beneficially Percent of
Name Owned(1)<F1>(2)<F2> Class
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------
EXECUTIVE OFFICERS AND DIRECTORS
- ----------------------------------------------------------------------------------------------------
I. MacAllister Booth 53,046 *<f0>
Sheldon A. Buckler 23,323 *<f0>
Bruce B. Henry 17,665 *<f0>
Joseph R. Oldfield 18,309 *<f0>
William J. O'Neill, Jr. 19,442 *<f0>
Yen-Tsai Feng 3,620 *<f0>
Ralph E. Gomory 1,000 *<f0>
Frank S. Jones 3,100 *<f0>
James D. Mahoney 1,413 *<f0>
Henry Necarsulmer 7,000 *<f0>
Kenneth H. Olsen 5,000(3)<F3> *<f0>
Lester Pollack 3,000(4)<F4> *<f0>
Charles P. Slichter 3,200(5)<F5> *<f0>
Ralph Z. Sorenson 3,200 *<f0>
Delbert C. Staley 3,200 *<f0>
Alfred M. Zeien 3,400 *<f0>
All directors and executive officers as a group 211,499 *<f0>
(21 persons)
FIVE PERCENT OWNERS
- -------------------
NationsBank of Georgia, N.A. 9,655,496(6)<F6> 20.6%
600 Peachtree Street, NE Plaza
Atlanta, Georgia 30308
LFCP Corp. and Corporate Advisors, L.P. 4,307,687(7)<F7> 8.4%
One Rockefeller Plaza
New York, New York 10020
FMR Corp. 2,442,111(8)<F8> 5.2%
82 Devonshire Street
Boston, Massachusetts 02109
Waddell & Reed Investment Management Company 2,392,550(9)<F9> 5.1%
Waddell & Reed Asset Management Company
6300 Lamar Avenue
Shawnee Mission, KS 66202-4200
<FN>
- ------------------------------------------------------------------------------
<f0> *Less than 1%
<F1>(1) The number of shares set forth opposite the name of each nominee or
executive officer includes shares obtainable upon the exercise of stock
options under the Polaroid Stock Incentive Plans within 60 days of January
31, 1994 (the "Option Shares"): 41,760 for Mr. Booth, 16,660 for Mr.
Buckler, 13,795 for Mr. Henry, 0 for Mr. Mahoney, 15,075 for Mr. O'Neill,
14,135 for Mr. Oldfield, 3,000 for each of the other nominees (with the
exception of Mr. Gomory whose options are not exercisable), and 159,200
for all directors and executive officers as a group.
<PAGE>
<F2>(2) Includes allocated shares under the Polaroid Stock Equity Plan (the
"ESOP") and shares under the Polaroid Profit Sharing Retirement Plan:
4,936 for Mr. Booth, 4,463 for Mr. Buckler, 3,620 for Mr. Henry, 1,413 for
Mr. Mahoney, 4,367 for Mr. O'Neill, 3,768 for Mr. Oldfield, and 34,073 for
all directors and executive officers as a group.
<F3> (3) Includes 2,000 shares held in a revocable trust created by Mr. Olsen. Mr.
Olsen does not have investment powers with respect to such shares.
<F4>(4) Does not include an aggregate of 4,307,687 shares of common stock (8.4%)
(described in Note 7) as to which Mr. Pollack disclaims beneficial
ownership.
<F5>(5) Includes 200 shares over which Dr. Slichter has shared investment powers.
<F6>(6) Includes 9,652,184 shares (20.6%) held by NationsBank of Georgia, N.A.
("NB-Georgia"), as Trustee for the ESOP, of which 5,700,043 shares have
been allocated to the accounts of the ESOP participants and 3,952,141
shares are unallocated. Also includes 3,312 shares not held as Trustee for
the ESOP (the "Non-ESOP Shares"). NB-Georgia has sole voting power over
3,312 Non-ESOP shares, sole dispositive power over 0 Non-ESOP shares and
shared dispositive power over 3,312 Non-ESOP shares. NationsBank
Corporation ("NationsBank"), the parent holding company of NB-Georgia,
beneficially owns (directly and through subsidiaries) 9,710,475 shares
(20.7%), which includes 9,652,184 ESOP shares. Of the 58,291 additional
shares, NationsBank has sole voting power over 37,296 shares, shared
voting power over 6,522 shares, sole dispositive power over 23,821 shares
and shared dispositive power over 16,112 shares.
<F7>(7) The Company has received the following information: LFCP Corp. ("LFCP"), a
subsidiary of Lazard Freres & Co. ("Lazard Freres"), is the general
partner of Corporate Advisors, L.P. LFCP and Corporate Advisors, L.P. are
referred to collectively as "Corporate Partners". Corporate Advisors, L.P.
is the general partner of two limited partnerships, Corporate Partners,
L.P. ("CP") and Corporate Offshore Partners, L.P. ("Offshore"). CP and
Offshore are referred to collectively as the "Partnerships". Corporate
Advisors also serves as investment manager over assets held in a certain
custody account for the State Board of Administration of Florida (the
"SBA"). The Partnerships and the SBA are referred to collectively as
"Corporate Partners Affiliates". Giving effect to the conversion of all
the Convertible Subordinated Debentures due 2001 (the "Subordinated
Debentures") over which CP holds conversion rights, CP beneficially owns
3,635,350 shares of common stock (7.2%). Through their control of
Corporate Partners Affiliates, each of LFCP and Corporate Advisors may be
deemed to own beneficially 4,307,687 shares of common stock (8.4%)
issuable upon exercise of rights to convert the Subordinated Debentures.
Lester Pollack, a director of the Company, is Chairman, Treasurer and a
director of LFCP, Senior Managing Director of CP and a general partner of
Lazard Freres. Through those positions, Mr. Pollack may be deemed to
control Corporate Partners and to be able to direct the voting and
investment of common stock beneficially owned by Corporate Partners. Mr.
Pollack disclaims beneficial ownership of such 4,307,687 shares of common
stock.
<F8>(8) FMR Corp. has sole voting power over 9,804 shares and sole dispositive
power over 2,442,111 shares.
<F9>(9) Waddell & Reed Investment Management Company has sole voting power over
1,496,900 shares and sole dispositive power over 1,496,900 shares. Waddell
& Reed Asset Management Company has shared voting power over 895,650
shares and shared dispositive power over 895,650 shares.
</TABLE>
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Executive Committee is composed of I. MacAllister Booth (Chairman),
Sheldon A. Buckler, Henry Necarsulmer, Kenneth H. Olsen and Charles P.
Slichter.
<PAGE>
The Audit Committee is composed of Henry Necarsulmer (Chairman), Yen-Tsai
Feng, Frank S. Jones, Ralph Z. Sorenson and Delbert C. Staley. The functions
of the Audit Committee include recommending to the Board of Directors the
appointment of the independent auditors, reviewing the independence of the
auditors, reviewing in advance the plan and scope of the annual audit,
reviewing and approving professional services provided by the independent
auditors, considering in advance the range of audit and non-audit services and
reviewing the adequacy of the Company's system of internal accounting
controls.
The Human Resources Committee is composed of Delbert C. Staley (Chairman),
Frank S. Jones, Lester Pollack, Ralph Z. Sorenson and Alfred M. Zeien. The
functions of the Committee include recommending to the Board of Directors the
remuneration of the Company's officers and other senior personnel and
proposals to adopt various employee benefit plans in which directors, officers
and senior personnel are eligible to participate.
The Committee on Directors is composed of Alfred M. Zeien (Chairman), Kenneth
H. Olsen, Lester Pollack, and Charles P. Slichter. The Committee recommends
nominees to the Board of Directors.
During 1993, the numbers of meetings of the Board of Directors and of the
Audit Committee, Human Resources Committee and Committee on Directors were,
respectively, 11, 3, 8 and 0. The average attendance of directors at meetings
of the Board of Directors was 91%. All current directors attended 75% or more
of the aggregate of the meetings of the Board and meetings of Committees of
the Board on which they served, except Messrs. Gomory, Pollack and Staley
whose attendance was, respectively, 20%, 68% and 67%. Mr. Gomory became a
member of the Board in July of 1993. Previously scheduled meetings created a
direct conflict with his attendance at the Company's Board meetings during the
balance of the year.
FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
Directors' fees are paid only to directors who are not employees. Each such
director is paid $16,000 per year as an annual retainer and $1,000 for each
Board or Committee meeting attended. Committee chairmen receive an additional
$2,000 per year.
Pursuant to the terms of the Polaroid Board of Directors Stock Option Plan
(the "Stock Option Plan"), a one-time grant of an option for 3,000 shares of
common stock is made to each non-employee director on the later of the date
the Stock Option Plan was approved or the date the director joins the board.
Options are valued at the fair market price on the date of grant.
The Polaroid Board of Directors Retirement Plan ("Retirement Plan") provides
that each non-employee Director who has served on the Board for at least five
years receives, commencing in the year following the year in which his or her
service as a Director ends, an annual payment equal to the then annual
retainer. Payments continue for a number of years equal to the number of years
in which he or she served as a non-employee Director prior to attaining age
73. The age limitation does not apply to any director who attained age 73
prior to January 1, 1990. No participant may receive annual payments under the
Retirement Plan for more than 25 years.
BOARD PROPOSAL -- TO RATIFY THE APPOINTMENT OF INDEPENDENT AUDITORS
Subject to shareholder ratification, the Board of Directors has appointed KPMG
Peat Marwick as the independent auditors of the financial statements of the
Company for 1994.
KPMG Peat Marwick has performed audit and non-audit services for the Company
for many years. Representatives of KPMG Peat Marwick will be present at the
Annual Meeting, will have an opportunity to make a statement if they so
desire, and will be available to respond to questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS BOARD PROPOSAL.
<PAGE>
STOCKHOLDER PROPOSAL TO SEPARATE THE POSITION OF CHAIRMAN FROM THAT OF CHIEF
EXECUTIVE OFFICER/PRESIDENT
The Company has been informed that New York City Teachers' Retirement System,
Municipal Building, New York, NY 10007-2341, the holder of 155,100 shares of
common stock, intends to submit the resolution set forth below for adoption at
the Annual Meeting.
"WHEREAS, the board of directors is meant to be an independent body
elected by shareholders and charged by law and shareholders with the duty,
authority and responsibility to formulate and direct corporate policies,
and
WHEREAS, the chairperson of the board is responsible for, among other
things, the smooth functioning of the board by setting the agenda,
presiding at board meetings and ensuring that directors are given adequate
information, and the chair should have a central role in the board's
evaluation of management's performance, and
WHEREAS, the position of chairperson should be a nonexecutive role, whose
basic responsibilities should include working with the directors to direct
management operations and overseeing corporate strategy, compliance with
laws, accounting principles and ethical standards applicable to our
company,
NOW THEREFORE, BE IT RESOLVED, that the shareholders request that the by-
laws be amended to provide that the positions of chairperson of the board,
and chief executive officer/president not be held by the same individual
and that the chairperson not be a former CEO of this company, but be
elected from among the outside, independent directors."
The stockholder has submitted the following supporting statement:
"We believe that shareholders will best be served when the board includes
a chairperson who is chosen from among the independent, outside directors.
Such a person will bring objectivity and unique perspectives to issues
facing our company.
As matters stand, the chief executive officer/president is an employee of
the company who reports to our board of directors. However, he or she also
acts as the chairperson of the very same board he or she is accountable
to. There is an appearance of a conflict of interests each time matters
concerning executive compensation policies, possible takeover offers and
corporate performance issues arise. How can one person who serves as both
chairperson and CEO/president evaluate his or her own performance?
Clearly, shareholders have no role to play in the day-to-day operations of
our company. We rely on management to run, direct, and operate the company
and we expect the directors to oversee management. We believe this on-
going dynamic, and the resolution of our company's disappointing
performance, can best be served by having different individuals serve as
chairperson and chief executive officer/president."
"We urge you to vote FOR this proposal."
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS RESOLUTION FOR THE
FOLLOWING REASONS:
The Board of Directors believes that separating the position of Chairman of
the Board from the positions of Chief Executive Officer and President is
neither necessary nor desirable. The chief executive officer of the Company
has been the Chairman of the Board since the Company's founding in 1937. The
arrangement has worked well.
The proponent states that a chairperson chosen from the outside directors will
bring objectivity and unique
<PAGE>
perspectives to issues facing the Company. All directors now have the
opportunity, however, to bring objectivity and perspectives to the work of
the Board. The proponent does not explain how that opportunity will be
enhanced if an outside director becomes Chairman of the Board. The advice
and counsel brought to the Company by the outside director will not differ
in any respect if one of them becomes Chairman.
The combination of the position of Chairman and those of Chief Executive
Officer and President does not create a conflict of interest, as suggested by
the proponent. The Committee on Human Resources and the Board of Directors
evaluate the performance and establish the compensation of the Chief Executive
Officer and President. No officer or employee of the Company, including the
Chief Executive Officer and President, serves or has served on the Human
Resources Committee, and none participates or has participated in the Board's
evaluation of the performance or establishment of the compensation of the
Chief Executive Officer and President.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE RESOLUTION.
EXECUTIVE COMPENSATION HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
COMMITTEE PROCEDURES
The Human Resources Committee (the "Committee") of the Board of Directors acts
as the compensation committee of the Company. The Committee makes
recommendations to the Board of Directors on the Company's executive
compensation policies, as well as the compensation to be paid to the Chief
Executive Officer and the other executive officers of the Company. Based on
the Committee's recommendations, the Board of Directors makes the final
decisions on executive compensation. None of the members of the Committee is
or has been an officer or employee of the Company or receives remuneration
from the Company in any capacity other than as a director.
COMPENSATION PHILOSOPHY
The Company's executive compensation program recognizes that attracting,
retaining and rewarding superior officers is important to the success of the
Company. The objectives of the Company's executive compensation program are to
provide incentives to enhance shareholder value, to support the implementation
of the Company's business strategy and to improve both corporate and personal
performance. The Committee attempts to provide fair and competitive total
compensation, including adequate cash compensation, while awarding incentives,
typically options to purchase common stock, which are designed to align the
interests of management with those of the stockholders.
The Company examines the compensation arrangements of ten comparable companies
in determining appropriate levels and structures of base salary, and annual
and long-term incentive compensation. The comparable companies used by the
Committee are engaged in diverse photographic, technological and consumer
goods businesses. Five of these companies are included in the industry index
used by the Company in the Performance Graph below. To provide a better basis
for comparison, the compensation information of the comparable companies is
adjusted by an independent compensation consultant to reflect differences in
sales volume. While the Company strives to provide comparable pay for
comparable performance, total compensation for the Company's executive
officers has generally been below that of the comparable companies.
The three key components of the Company's executive compensation program are
(i) base salaries, (ii) annual bonuses, and (iii) long-term incentives,
currently in the form of options to purchase common stock. The executive
compensation program is structured to increase the proportion of risk-related
incentives and long-term incentives at progressively higher management levels.
At higher executive levels, therefore, incentive compensation comprises a
larger proportion of total compensation, and long-term incentive compensation
comprises a larger proportion of total incentive compensation.
<PAGE>
COMPONENTS OF COMPENSATION
Base Salary. The primary factor in determining the base salary range for the
Chief Executive Officer is the salary range of the chief executive officers of
the comparable companies discussed above. The primary considerations in
establishing base salary ranges for other executive officers are (i) each
officer's position relative to the Chief Executive Officer, (ii) the level of
responsibility of the officer, (iii) the base salaries of similar officers in
the comparable companies, and (iv) the Company's assessment of the importance
of the position to its overall objectives. Within a range, each salary is
adjusted based on the individual's performance. For executives named in the
summary compensation table below, base salaries are moderately below the base
salaries paid by the comparable companies referred to above to executives in
similar positions.
Annual Bonus Awards. The Company's officers are eligible for annual cash
bonuses pursuant to the Polaroid Executive Incentive Compensation Plan, in
which approximately 225 of the Company's employees participated in 1993. The
Board of Directors, upon recommendation of the Committee, establishes an
internal operating profit target which is used to determine the Company's
contribution under the plan. For 1993, the internal operating profit target
was established based on a goal of earnings before interest, taxes, employee
incentive plans and the charge for the 1993 severance program. In addition, a
threshold profit target is established below the operating profit target. For
1993, the threshold profit target was set at approximately 80% of the
operating profit target. The internal operating profit target and the
threshold profit target may be adjusted to exclude unusual and significant
expenses or revenues if such adjustment is approved by the Board of Directors.
The Company has made such adjustments in recent years in connection with
severance charges and with revenues received in the settlement of the Eastman
Kodak litigation.
Bonus opportunity award levels are established for each class of participant
under the plan and are correlated to the internal operating profit target and
threshold profit target. If the operating profit target is attained, the full
bonus opportunity amount is contributed by the Company. Conversely, if the
threshold profit target is not met, the Company does not make any contribution
to the plan. The Board of Directors may nevertheless award special
distributions for significant individual achievement. The Board of Directors
has made no such award to an executive named in the summary chart below during
the past three years. If only the threshold profit target is met, the Company
makes a smaller contribution to the plan. For 1993, this threshold
contribution was set at 3313% of the target contribution. At other attainment
levels, the Company's contribution is determined proportionately.
Following determination of the Company's contribution under the bonus plan,
the Chief Executive Officer's participation in the plan is determined by the
plan formula. For other classes of participants, including the other executive
officers, the award for each participant consists of two parts. The first part
of the award is the result of applying 50% of the bonus opportunity percentage
for that participant class to the participant's annual salary. The second part
of the award is the result of applying to the participant's annual salary a
percentage determined by the Committee on the recommendation of the Chief
Executive Officer to reflect the participant's performance. This percentage
must be within 0% to 100% of the bonus opportunity percentage for the
participant class. The total bonus award for any participant may not exceed
75% of the participant's annual salary.
In 1993, there were no awards to the executives named in the summary chart
below, because the threshold profit target was not met.
Long-Term Incentives. Pursuant to the Company's Stock Incentive Plan, officers
of the Company may receive incentive awards as determined by the Committee.
Officers of the Company have received non-qualified stock options with related
dividend equivalents pursuant to the Stock Incentive Plan. For the past four
years, the exercise price of options has been based on the closing price of
the Company's common stock on the fifth business day after the release of the
financial results for the first quarter even though such price may be lower
than the fair market value on the date of grant. The Board of Directors has
recently amended the Stock Incentive Plan, however, to provide that options
under the Plan may not be issued with an exercise price less
<PAGE>
than the fair market value on the date of grant. Stock option awards achieve
the important objective of rewarding executives for the enhancement of
shareholder value and for long-term strategic management. The primary
factors the Committee takes into account in making awards to the Chief
Executive Officer and the other executive officers under the Stock Incentive
Plan are (i) the officer's level of responsibility in the Company, (ii) the
practices of comparable companies, and (iii) the likely value of the
officer's contributions to the long-term growth of the Company. The
Committee typically does not consider the amount of options already
outstanding or previously awarded in making such decisions. The value of
the options granted, including the value of the accompanying dividend
equivalents, is roughly equivalent to the value of the long-term incentive
paid by our comparable companies to executives in similar positions.
A second type of long-term incentive for officers is provided through
mandatory participation in the Company's Officers' Compensation Exchange Plan.
Upon the implementation of the Plan in 1989, the base compensation of officer
participants was reduced by 5%, in exchange for which the participants receive
biannual allocations of units tied in value to the market price of the common
stock. The value of an officer's account is equal to the number of the
officer's units in the plan multiplied by the fair market value of common
stock on the date of distribution. Under the terms of this Plan, a
participant's allocation equals 50% of the stock which would have been
allocated to the participant under the Polaroid Stock Equity Plan without
regard to IRS limitations, plus the amount of stock that would have been
allocated under the ESOP if the Internal Revenue Code imposed no limits on
allocations. The units are cashed out based upon the market value of the stock
at the date of distribution, which is, generally, the date of retirement or
termination of employment or on August 31, 1998, whichever is earlier, unless
the participant defers payment until retirement, but in any event not earlier
than six months from the date of award. Distributions under the Plan are paid
in cash.
The Committee has considered the impact of Section 162(m) of the Internal
Revenue Code, which provides a limit on the deductibility of compensation for
certain executive officers in excess of $1,000,000 per year. Future options
granted under the Stock Incentive Plan will be structured to be exempt from
the deduction limit under the transition rules proposed by the Internal
Revenue Service. The remaining current compensation structure is not likely to
create compensation in excess of $1,000,000 for any of the specified officers.
The Committee will continue to review the situation in light of the final
regulations and future events, however, with an objective of achieving
deductibility to the extent possible.
The Company entered into a retirement and severance arrangement with Dr.
Buckler during the time of the Company-wide severance program in the first
quarter of 1993 in connection with his deferred retirement. The additional
amount Dr. Buckler received is the amount he would have received had he
terminated during this severance program.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Mr. Booth's base salary was increased by approximately 5% from 1992 to 1993.
The Committee recommended this increase after reviewing the salary ranges for
the chief executive officers of comparable companies, considering Mr. Booth's
personal performance as the Company's Chief Executive Officer in 1993 and for
past years. The Chief Executive Officer's salary is moderately below the
salary paid to chief executive officers in comparable companies.
<PAGE>
The table under "Option Grants in 1993" sets forth Mr. Booth's option grant
for 1993. In 1993, Mr. Booth received $72,828.00 in dividend equivalents on
the options previously granted to him. Upon exercise of these options, Mr.
Booth will realize a gain if the market price of the common stock exceeds the
exercise price of the options. This appreciation in the common stock would
also benefit all of the Company's shareholders.
Submitted by the Human Resources Committee:
Delbert C. Staley, Chairman
Frank S. Jones
Lester Pollack
Ralph Z. Sorenson
Alfred M. Zeien
SUMMARY COMPENSATION TABLE
The following table sets forth all compensation earned in 1991, 1992 and 1993
by the CEO of the Company and its four other most highly compensated executive
officers. The Company paid no compensation which would be reportable in a
column for "Other Annual Compensation" and therefore no such column is shown
in the table.
<TABLE>
<CAPTION>
Annual
Compensation Long-Term
---------------------------- ------------------------------
Long-Term
Incentive All
Stock Plan Other
Salary Bonus (1)<F1> Options Payouts (2)<F2> Compensation
Name and Position Year ($) ($) (#) ($) ($) (3)<F3>
<S> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
I.M. Booth
Chairman, President, 1993 525,507 0 40,000 0 69,526
Chief Executive 1992 500,004 207,233 35,540 0 61,202
Officer 1991 490,500 219,141 36,020 71,184 53,906
- --------------------------------------------------------------------------------------------------------------------
S.A. Buckler
Vice Chairman of the 1993 336,045 0 20,000 0 625,536
Board, 1992 325,008 115,734 18,840 0 39,009
Office of the CEO 1991 314,550 123,408 19,080 38,338 33,353
- --------------------------------------------------------------------------------------------------------------------
W. J. O'Neill, Jr.
Executive Vice
President, 1993 261,558 0 15,000 0 34,720
Chief Financial 1992 244,527 71,084 12,680 0 29,463
Officer 1991 241,146 77,906 12,740 32,350 25,656
- --------------------------------------------------------------------------------------------------------------------
J.R. Oldfield
Executive Vice 1993 268,935 0 15,000 0 35,611
President, 1992 241,419 75,589 12,680 0 29,037
Photographic Imaging 1991 225,144 73,389 12,060 26,736 28,353
- --------------------------------------------------------------------------------------------------------------------
B.B. Henry
Executive Vice
President, 1993 257,640 0 15,000 0 34,046
High Resolution 1992 233,427 73,038 12,160 0 27,983
Imaging 1991 219,054 71,670 11,640 25,562 27,477
<FN>
- --------------------------------------------------------------------------------------------------------------------
<F1>(1) The amounts shown in this column for 1993 were earned under the Executive
Incentive Compensation Plan, the Company's annual bonus plan for
executives. The amounts shown for 1991 and 1992 aggregate the amounts
earned under that Plan and the 1991 Special Incentive Plan. The Special
Incentive Plan provides employees incentive payments attributable to the
amount received in 1991 in settlement of the patent infringement
litigation between the Company and Eastman Kodak Company. The Special
Incentive Plan was created as part of the Company's tradition of providing
profit sharing incentives to employees to encourage them to work more
effectively for the success of the Company. Distributions to the named
officers under the Special Incentive Plan occurred in 1991 and 1992.
<F2>(2) Payments for 1991 were made pursuant to the 1989 Incentive Program which
terminated on December 31, 1991.
<PAGE>
<F3>(3) The amounts shown in this column include the value of shares of common
stock in the ESOP and the Profit Sharing Retirement Plan ("PSRP") and the
value of units allocated to participants under the Officers' Compensation
Exchange Plan ("OCEP") in the years shown. The value of the shares or
units was calculated by using a year-end closing price of $ 26.625 per
share of common stock for 1991, $31.125 for 1992 and $33.50 for 1993. For
1993, the amounts represent: $47,842 OCEP, $189 PSRP and $21,495 ESOP for
Mr. Booth; $23,324 OCEP, $159 PSRP and $21,038 ESOP for Dr. Buckler;
$13,689 OCEP, $226 PSRP and $20,805 ESOP for Mr. O'Neill; $14,632 OCEP,
$175 PSRP and $20,805 ESOP for Mr. Oldfield; and $13,164 OCEP, $125 PSRP
and $20,757 ESOP for Mr. Henry. In 1993, for Mr. Booth this amount also
includes a seniority award of $9,615, and for Dr. Buckler this amount
includes a severance payment of $581,015 in connection with his
retirement. In 1991, for Mr. Oldfield and Mr. Henry this amount also
includes seniority awards of $4,423 and $4,269, respectively. A seniority
award is paid to every employee on the tenth anniversary of employment and
on each fifth anniversary subsequent thereto.
</TABLE>
OPTION GRANTS IN 1993
The following table sets forth information concerning Stock Options granted in
1993 to the CEO and the other named executive officers under the Polaroid
Stock Incentive Plan.
<TABLE>
<CAPTION>
Individual Grants
- ------------------------------------------------------------------------------------------------------------------------------
Percent of
Total Options
Options Granted to Exercise or Market Price
Granted Employees in Base Price on Grant Date Expiration
Name (#) Fiscal Year ($/Sh) ($/Sh) Date
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
I.M. Booth 40,000 4.72 32.25 37.00 04-26-03
- -------------------------------------------------------------------------------------------------------------------------------
S.A. Buckler 20,000 2.36 32.25 37.00 04-26-03
- -------------------------------------------------------------------------------------------------------------------------------
W.J. O'Neill, Jr. 15,000 1.77 32.25 37.00 04-26-03
- -------------------------------------------------------------------------------------------------------------------------------
J.R. Oldfield 15,000 1.77 32.25 37.00 04-26-03
- --------------------------------------------------------------------------------------------------------------------------------
B.B. Henry 15,000 1.77 32.25 37.00 04-26-03
Grant Date
Present
Name Value $
<S> <C>
- -------------------------------------------------------------------
I.M. Booth 921,600
- -------------------------------------------------------------------
S.A. Buckler 460,800
- -------------------------------------------------------------------
W.J. O'Neill, Jr. 345,600
- --------------------------------------------------------------------
J.R. Oldfield 345,600
- --------------------------------------------------------------------
B.B. Henry 345,600
<FN>
- ------------------------------------------------------------------------------
<F1>(1) All grants (i) were made on a discounted basis with the exercise price of
$32.25 per share which was the closing price on the fifth business day
after the first quarter financial results were released; the fair market
value of the stock on the date of the grant, June 15, 1993, was $37.00;
(ii) vest 25% per year beginning April 26, 1994; (iii) will terminate
April 26, 2003, or earlier, if there is a separation of service (including
termination, retirement, death); (iv) cease vesting when an officer's
employment terminates; and (v) accelerate to full vesting upon a change in
control or retirement after specified years of service. Dividend
equivalents identical in both timing and value to the dividends paid to
shareholders on common stock, are paid on outstanding options under the
Plan. Common stock dividends have been $0.15 per quarter since 1987.
<F2>(2) The Options are valued using the Black-Scholes option pricing model. The
estimated values under the Black-Scholes model are based on various
assumptions regarding variables such as stock price volatility, future
dividend yield and interest rates. In calculating the grant date present
values set forth in the table above (i) a factor of 31.82% has been
assigned to the volatility of the common stock, based on daily stock
market quotations for the 12 months preceding the date of grant; (ii) the
yield on the common stock has been set at 1.62%, based upon its annual
dividend rate of $0.60 per share at date of grant; (iii) the dividend
equivalent feature has been valued by taking the present value of the
dividends which would be paid over time assuming a constant dividend
yield; (iv) the risk-free rate of return has been fixed at 5.96%, the rate
for a ten-year U.S. Treasury Note in June 1993; and (v) the actual option
term to the expiration date of April 26, 2003 has been used (approximately
9.9 years). The actual value that an executive may realize, if any, will
depend on the amount by which the stock price at the time of exercise
<PAGE>
exceeds the exercise price. There is no assurance that the value realized
by an executive will equal or approximate the value estimated by the
Black-Scholes model.
</TABLE>
AGGREGATED OPTION EXERCISES IN 1993 AND 1993 YEAR-END OPTION VALUES
The following chart shows the number of shares exercised in 1993 and the
number of shares covered by both "exercisable" (vested) and "unexercisable"
(unvested) stock options as of December 31, 1993. Also reported are the values
for "in-the-money" options which represent the positive spread between the
exercise price of any such stock options and the year-end price of the common
stock of $33.50.
<TABLE>
<CAPTION>
Shares Number of Value of Unexercised
Acquired Unexercised Options In-the-money Options
on Value at 12/31/93(#) at 12/31/93 ($)(2)<F2>
Exercise Realized -------------------------- --------------------------
Name (#) ($)(1)<F1> Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
I.M. Booth 0 0 26,895 84,665 237,643 434,245
- -------------------------------------------------------------------------------------------------------------------------------
S.A. Buckler 5,000 63,750 14,250 43,670 125,910 228,625
- ---------------------------------------------------------------------------------------------------------------------------------
W.J. O'Neill, Jr. 0 0 9,540 30,880 84,279 155,334
- -------------------------------------------------------------------------------------------------------------------------------
J.R. Oldfield 0 0 9,200 30,540 81,176 152,231
- -------------------------------------------------------------------------------------------------------------------------------
B.B. Henry 0 0 8,860 29,940 71,188 147,098
<FN>
- -------------------------------------------------------------------------------------------------------------------------------
<F1>(1) Aggregate fair market value on the date of exercise, less the exercise
price.
<F2>(2) Aggregate fair market value underlying unexercised options at year end,
less the exercise price.
</TABLE>
<PAGE>
PENSION PLAN TABLE
The Polaroid Pension Plan is a defined benefit plan qualified under the rules
of the Internal Revenue Code of 1986 (the "Code") which provides a pension
benefit to all eligible employees, including officers. To the extent that any
participant's benefit exceeds limitations imposed by the Code, the excess
benefits are paid out of unfunded supplementary plans. The following Table
provides the aggregate annual pension benefit that would be payable under all
these plans to a participant at age 65 in the form of a straight life annuity
based on the Final Average Compensation and benefit accrual as of December 31,
1993, before the deduction for Social Security equal to 123% of the
participant's primary social security benefit multiplied by his or her years
of service (not in excess of 30 years). Final Average Compensation is a
participant's average annual compensation for the five consecutive highest
compensation years in the participant's last 10 years of employment. For this
purpose, Compensation includes base pay plus overtime and shift premiums up to
15% of base pay and excludes any bonus payment or any payment pursuant to any
incentive compensation or profit sharing plan. Such amounts for the named
executives are shown in the "Salary" column of the Summary Compensation Table.
Compensation for 1993 is deemed to be 107.55% of "compensation" as otherwise
defined in the plan.
<TABLE>
<CAPTION>
Final Years of Service
Average --------------------------------------------------------------
Pay($) 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------
125,000 33,938 45,250 56,563 67,875 67,875
- ------------------------------------------------------------------------------
150,000 40,725 54,300 67,875 81,450 81,450
- ------------------------------------------------------------------------------
175,000 47,513 63,350 79,188 95,025 95,025
- ------------------------------------------------------------------------------
200,000 54,300 72,400 90,500 108,600 108,600
- ------------------------------------------------------------------------------
225,000 61,088 81,450 101,813 122,175 122,175
- ------------------------------------------------------------------------------
250,000 67,875 90,500 113,125 133,750 133,750
- ------------------------------------------------------------------------------
300,000 81,450 108,600 135,750 162,900 162,900
- ------------------------------------------------------------------------------
400,000 108,600 144,800 181,000 217,200 217,200
- ------------------------------------------------------------------------------
450,000 122,175 162,900 203,625 244,350 244,350
- ------------------------------------------------------------------------------
500,000 135,750 181,000 226,250 271,500 271,500
- ------------------------------------------------------------------------------
550,000 149,325 199,100 248,875 298,650 298,650
- ------------------------------------------------------------------------------
600,000 162,900 217,200 271,500 325,800 325,800
- ------------------------------------------------------------------------------
650,000 176,475 235,300 294,125 352,950 352,950
- ------------------------------------------------------------------------------
</TABLE>
The following table sets forth current compensation as defined in the Pension
Plan and credited years of service of the CEO and the other named executive
officers.
<TABLE>
<CAPTION>
Name Pension Plan Compensation($) Credited Years of Service
<S> <C> <C>
- ------------------------------------------------------------------------------
I.M. Booth 527,910 22.0
- ------------------------------------------------------------------------------
S.A. Buckler 336,805 22.0
- ------------------------------------------------------------------------------
W.J. O'Neill, Jr. 266,163 22.0
- ------------------------------------------------------------------------------
J.R. Oldfield 243,002 22.0
- ------------------------------------------------------------------------------
B.B. Henry 235,374 22.0
- ------------------------------------------------------------------------------
</TABLE>
THE POLAROID EXTENDED SEVERANCE PLAN
The Extended Severance Plan is established for all employees of the Company
who may be adversely affected following a change in control of the Company.
The Extended Severance Plan becomes operative when there is a change in
control of the Company or after the acquisition by a person or a group of 30%
or more of the Company's stock. The Extended Severance Plan also becomes
operative upon the occurrence of certain events after the acquisition by a
person or a group of 20% or more of the Company's stock.
A participant in the Extended Severance Plan is entitled to receive a
severance payment under the Extended Severance Plan. This payment will be made
<PAGE>
in lieu of a normal severance payment, if, within two years of the Extended
Severance Plan becoming operative, his or her employment is terminated for any
reason by the Company, except for serious or willful misconduct, or if he or
she voluntarily leaves the Company after the occurrence of certain defined
events which adversely affect the participant. This severance payment will be
the greater of (i) twice the highest amount provided under any Company layoff
or severance plan; (ii) one-twelfth of one month's Compensation for each month
of service; or (iii) six months' Compensation. However, this severance payment
may not exceed thirty months of Compensation. For purposes of the Extended
Severance Plan, Compensation includes base pay, shift and overtime premiums
and cash bonuses (except for payments under long-term incentive plans such as
the 1989 Incentive Award Program). A participant who receives a severance
payment under the Extended Severance Plan has the right to continue to receive
certain Company welfare benefits, such as medical, dental and life insurance
coverage.
RETIREMENT AND SEVERANCE AGREEMENT WITH DR. BUCKLER
In the first quarter of 1993, the Company entered into a retirement and
severance arrangement with Dr. Buckler. The monetary value of the arrangement
equals the value Dr. Buckler would have received if he had terminated his
employment during the Company-wide 1993 severance program. Under the
arrangement Dr. Buckler (i) agreed not to retire until May 31, 1994; (ii)
received a severance payment of $581,015 in December, 1993; (iii) will receive
a pension enhancement through a special plan of $1,936 per month; (iv) will
receive an annual bonus, if awarded, with respect to 1994, prorated based on
the time worked in 1994; (v) will receive medical and dental benefits on the
same terms as those who left in the 1993 severance program; and (vi) will
receive a 1994 Stock Option Award based on current salary and position and,
for all options that are not exercised when they lapse on May 31, 1997, a lump
sum payment equal to the then present value of the unpaid dividend stream
assuming the options would have remained exercisable for 10 years from the
date of grant.
<PAGE>
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total shareholder return
(including dividends) over the last five fiscal years with the S&P 500 Index
and a peer group index comprised of the Fortune 500 Scientific, Photographic,
and Control Equipment Index (for 1993: Eastman Kodak, Xerox, 3M, Baxter
International, Honeywell, Johnson Controls, EG&G, Becton Dickinson, Bausch &
Lomb, Tektronix, Varian Associates, United States Surgical, Medtronic,
C.R. Bard, Thermo Electron, Perkin-Elmer, Beckman Instruments, Millipore,
Ametek, Kendall International, Pall, and Anacomp).
<TABLE>
COMPARISON OF FIVE-YEAR
CUMULATIVE TOTAL SHAREHOLDER RETURN (1)<F1>
<CAPTION>
S&P FORTUNE
FISCAL YEAR ENDED POLAROID 500 INDEX 500
<S> <C> <C> <C>
- ---------------------------------------------------------------------------
Measurement Point
December 31, 1988 $100 $100 $100
December 31, 1989 $126 $132 $117
December 31, 1990 $ 65 $128 $126
December 31, 1991 $ 76 $166 $178
December 31, 1992 $ 91 $179 $177
December 31, 1993 $100 $197 $189
<FN>
- ----------------
<F1>(1) Assumes that the value of the investment in the Company's common stock
and in each index was $100 on December 31, 1988 and that all dividends
were reinvested.
</TABLE>
OTHER MATTERS
The cost of this solicitation of proxies will be borne by the Company. In
addition to solicitation by use of the mails, some officers and regular
employees of the Company may solicit proxies personally or by telephone or by
telegraph. The Company has engaged Georgeson & Co. Inc. to assist in proxy
solicitation at a cost of $15,000 plus out-of-pocket expenses. The Company
will reimburse banks, brokerage firms and other custodians, nominees and
fiduciaries for reasonable expenses incurred by them in sending proxy material
to beneficial owners of the Company's stock.
Nominations to the Board of Directors by Stockholders must be made in
accordance with the information and timely notice requirements of the
Company's By-Laws, a copy of which may be obtained from the Secretary of the
Company. Such nominations must be in writing. For consideration at an annual
meeting, such nominations must be received by the Secretary of the Company not
later than 90 days in advance of such meeting.
Stockholder proposals intended for presentation at the 1995 Annual Meeting of
Stockholders must be received by the Company for inclusion in its proxy
statement and form of proxy not later than December 9, 1994.
By order of the Board of Directors.
RICHARD F. deLIMA
Richard F. deLima
Vice President, Secretary and General Counsel
March 15, 1994
<PAGE>
[MAP SHOWING LOCATION OF ALUMNAE HALL, WELLESLEY COLLEGE,
WELLESLEY, MASSACHUSETTS]
<PAGE>
Polaroid
Corporation
Notice to
Polaroid Stock
Equity Plan
(ESOP) and
Polaroid Profit
Sharing Retirement
Plan Participants
and 1994 Proxy
Statement
