SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
Form 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
January 16, 1996
-------------------
(Date of Report)
October 20, 1995
---------------------
(Date of earliest event reported)
POLAROID CORPORATION
------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation)
1-4085
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(Commission File Number)
04-1734655
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(IRS Employer Identification No.)
549 Technology Square, Cambridge, Massachusetts 02139
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(Address of principal executive offices) (Zip Code)
(617) 386-2000
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(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events.
On October 20, 1995, Polaroid Corporation
("Company") entered into an employment agreement for a term of
approximately five years with Gary T. DiCamillo. Pursuant to
the terms of the employment agreement, Mr. DiCamillo became
the Company's Chief Executive Officer effective December 1,
1995. See Exhibit 10.1. This agreement was amended on
December 21, 1995 to extend the date of the grant of the
restricted stock with performance criteria. See Exhibit 10.2.
On November 10, 1995, Polaroid Corporation entered into
a severance and retirement agreement with I. M. Booth, former
Chairman, President and Chief Executive Officer of the Company.
See Exhibit 10.3.
On December 19, 1995, Polaroid Corporation issued a
press release to set forth its plan to make fundamental changes
in its operating structure. A copy of such press release is
attached hereto as Exhibit 99.1 and incorporated by reference
herein. After that announcement, Polaroid stopped making any
additional stock repurchases.
On December 29, 1995, Polaroid Corporation entered into
a waiver with the banks who are a party to the $150,000,000
Credit Agreement dated as of August 24, 1994, and a waiver
with the banks who are a party to the $130,022,336 Amended and
Restated Credit Agreement dated as of November 29, 1994. In
these waivers the banks agreed to waive compliance with the
financial covenants set forth in such Credit Agreements until
February 29, 1996. See Exhibit 10.4 and 10.5.
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<PAGE>
Item 7 (c) Exhibits
Exhibit 10.1 Employment Agreement dated as of October 20, 1995
between Gary T. DiCamillo and Polaroid Corporation
Exhibit 10.2 Amendment of Employment Agreement dated as of
December 21, 1995 between Gary T. DiCamillo and
Polaroid Corporation
Exhibit 10.3 Severance and retirement agreement dated
November 10, 1995 between I. M. Booth and the Company
Exhibit 10.4 Waiver, dated December 29, 1995, with respect to
$150,000,000 Credit Agreement, dated as of
August 24, 1994
Exhibit 10.5 Waiver, dated December 29, 1995, with respect to
$130,022,336 Amended and Restated Credit Agreement,
dated as of November 29, 1994
Exhibit 99.1 Polaroid Press Release dated December 19, 1995
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
POLAROID CORPORATION
By /s/ Richard F. deLima
---------------------
Name Richard F. deLima
Title: Vice President, Secretary
and General Counsel
Dated: January 16, 1996
4
Exhibit 10.1
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT, made and entered into as of the 20th day of October,
1995 by and between Polaroid Corporation, a Delaware corporation
(together with its successors and assigns permitted under this
Agreement, the "Company"), and Gary T. DiCamillo (the "Executive").
W I T N E S S E T H :
-------------------
WHEREAS, the Company desires to employ the Executive and to enter
into an agreement embodying the terms of such employment (this
"Agreement") and the Executive desires to enter into this Agreement and
to accept such employment, subject to the terms and provisions of this
Agreement;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable
consideration, the receipt of which is mutually acknowledged, the
Company and the Executive (individually a "Party" and together the
"Parties") agree as follows:
1. Definitions.
-----------
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, is the
Beneficial Owner of 20% or more of the Stock then outstanding, but does
not include any Subsidiary of the Company, any employee benefit plan of
the Company or of any of its Subsidiaries or any Person holding Stock
for or pursuant to the terms of any such employee benefit plan.
(b) "Affiliate" and "Associate" when used with reference to
any Person, shall have the meaning given to such terms in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act.
(c) "Base Salary" shall mean the salary provided for in
Section 4 below or any increased salary granted to the Executive
pursuant to Section 4.
(d) "Beneficial Owner" shall be a Person deemed to
"beneficially own", any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly; or
(ii) which such Person or any of such Person's
Affiliates or Associates has:
<PAGE>
2
(A) the right to acquire (whether such
right is exercisable immediately or only after
the passage of time) pursuant to any
agreement, arrangement or understanding
(written or oral), or upon the exercise of
conversion rights, exchange rights, warrants
or options, or otherwise; provided, however,
that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or
exchange offer made by or on behalf of such
Person or any of such Person's Affiliates or
Associates until such tendered securities are
accepted for purchase or exchange thereunder;
or
(B) the right to vote pursuant to any
agreement, arrangement or understanding
(written or oral); provided however, that a
Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security
if the agreement, arrangement or understanding
(written or oral) to vote such security (i)
arises solely from a revocable proxy given to
such Person in response to a public proxy or
consent solicitation made pursuant to, and in
accordance with, the applicable rules and
regulations under the Exchange Act and (ii) is
not also then reportable on Schedule 13D under
the Exchange Act (or any comparable or
successor report).
(iii) which are beneficially owned, directly or
indirectly, by any Person with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement or
understanding (written or oral), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in Section
l(d)(ii)(B) of this Agreement) or disposing of any securities of the
Company.
(e) "Board" shall mean the Board of Directors of the Company.
(f) "Cause" shall mean:
(i) the Executive commits a felony or commits a
misdemeanor involving moral turpitude; or
(ii) the Executive is guilty of deliberate or gross
misconduct or gross negligence in carrying out his duties under this
Agreement.
<PAGE>
3
(g) A "Change in Control" shall mean:
(i) the date on which a change in control of the
Company occurs of a nature that would be required to be reported
(assuming that the Company's Stock was registered under the Exchange
Act) in response to an item (currently item 6(e)) of Schedule 14A of
Regulation 14A promulgated under the Exchange Act or an item (currently
Item l(a)) of Form 8-K under the Exchange Act;
(ii) the date on which there is an Acquiring Person and
change in the composition of the Board of the Company within two years
after the Share Acquisition Date with respect to such Acquiring Person
that results in the disinterested directors (who shall be directors who
are not employees, officers or former officers of the Company and who
do not receive remuneration, either directly or indirectly, from the
Company in any capacity other than as a director) not constituting a
majority of the Board;
(iii) any day on or after the Share Acquisition Date
when directly or indirectly, any of the transactions specified in the
following clauses occurs:
(A) the Company shall consolidate with, or
merge with and into, any other Person;
(B) any Person shall merge with and into the
Company; or
(C) the Company shall sell, lease,
exchange or otherwise transfer or dispose of
(or one or more of its Subsidiaries shall
sell, lease, exchange or otherwise transfer or
dispose of), in one or more transactions, the
major part of the assets of the Company and
its Subsidiaries (taken as a whole) to any
other Person or Persons;
(iv) the date when a Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or
any of its Subsidiaries or any Person holding Stock for or pursuant to
the terms of any such employee benefit plan) alone or together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner
of 30% or more of the Stock then outstanding;
(v) the date on which the stockholders of the Company
approve a merger or consolidation of the Company with any other
corporation other than
<PAGE>
4
(A) a merger or consolidation which would
result in voting securities of the Company
outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by being converted into voting
securities of the surviving or parent entity)
50% or more of the combined voting power of
the voting securities of the Company or such
surviving or parent entity outstanding
immediately after such merger or
consolidation, or
(B) a merger or consolidation effected to
implement a recapitalization of the Company
(or similar transaction) in which no Person
acquires 50% or more of the combined voting
power of the company's then outstanding
securities; or
(vi) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets (or any transaction having a similar effect).
(h) "Constructive Termination Without Cause" shall mean a
termination of the Executive's employment at his initiative as provided
in Section 12(c) below following the occurrence, without the
Executive's prior consent, of one or more of the following events
(except in consequence of a prior termination):
(i) a reduction in the Executive's Base Salary;
(ii) a reduction in Executive's level of responsibility
with respect to the general management of the affairs of the Company;
or
(iii) any event set forth in subsections (A) through
(H) of Section 3.02 of the Polaroid Extended Severance Plan, or any
amendment thereof, following a Change in Control.
(i) "Disability" shall mean the Executive's disability
within the meaning of the Polaroid Long Term Disability Plan.
(j) "Exchange Act" shall mean the Securities Exchange Act of
1934, as in effect on the date in question.
(k) "Person" shall mean an individual, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(1) "Share Acquisition Date" shall mean the first date any
Person shall become an Acquiring Person.
(m) "Stock" shall mean the outstanding shares of Common
Stock of the Company and, for purposes of the Change in Control
provisions, any other shares of capital stock of the Company into which
the Common Stock shall be reclassified or changed.
<PAGE>
5
(n) "Subsidiary" of the Company shall mean any corporation
of which the Company owns, directly or indirectly, more than 50% of the
Voting Stock.
(o) "Term of Employment" shall mean the period specified in
Section 2 below.
(p) "Trading Day" is any day on which the Stock is traded on
the New York Stock Exchange.
(q) "Voting Stock" shall mean capital stock of any class or
classes having general voting power under ordinary circumstances, in
the absence of contingencies, to elect the directors of a corporation.
2. Term of Employment.
------------------
The Company hereby employs the Executive, and the Executive
hereby accepts such employment, for the period commencing October 20,
1995 and ending October 31, 2000, subject to earlier termination as
provided in Section 12, below.
3. Position, Duties and Responsibilities.
-------------------------------------
(a) During the Term of Employment, the Executive shall be
employed commencing December 1, 1995 as the Chief Executive Officer of
the Company and be responsible for the general management of the
affairs of the Company. It is the intention of the Parties that the
Executive shall be elected to and serve as a member of the Board and
thereafter shall be Chairman of the Board. The Executive, in carrying
out his duties under this Agreement, shall report to the Board.
(b) Anything herein to the contrary notwithstanding, nothing
shall preclude the Executive from (i) serving, subject to approval of
the Board, on the boards of directors of a reasonable number of other
corporations or the boards of a reasonable number of trade associations
and/or charitable organizations, (ii) engaging in charitable activities
and community affairs, and (iii) managing his personal investments and
affairs, provided that such activities do not interfere with the proper
performance of his duties and responsibilities as the Company's
Chairman and Chief Executive Officer.
4. Base Salary.
-----------
The Executive shall be paid an annualized Base Salary,
payable in accordance with the regular payroll practices of the
Company, of no less than $550,000. The Base Salary shall be reviewed
periodically by the Board.
5. Annual Bonus.
------------
Commencing January 1, 1996, the Executive shall participate
in the Company's annual bonus plan with an annual target award
opportunity of at least $400,000, which amount shall be guaranteed in
respect of 1996. Such guaranteed amount of $400,000 shall be paid no
later than February 28, 1997.
<PAGE>
6
6. Stock Option Awards.
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Upon commencement of employment, the Executive shall be
awarded a ten-year option, substantially in the form attached to this
Agreement as Exhibit A, to purchase 250,000 shares of Stock (the
"Option"). The Executive shall be eligible to participate in the
ongoing stock option award program commencing in 1997.
7. Restricted Stock.
----------------
Upon commencement by the Executive of his full time duties,
he shall be awarded (i) 25,000 shares of restricted stock which shall
vest at the rate of 5,000 shares at the end of each of the first five
years of employment and (ii) 15,000 shares of restricted stock which
shall fully vest five years from the date of this Agreement if the
Executive achieves the performance criteria to be established by
December 31, 1995 by mutual agreement of the parties.
8. Special Payment.
---------------
Upon commencement of employment, the Executive shall be paid
in cash the amount of $500,000.
9. Employee Benefit Programs.
-------------------------
During the Term of Employment, the Executive shall be
entitled to participate in all employee pension and welfare benefit
plans and programs made available to the Company's senior level
executives, as such plans or programs may be in effect from time to
time, including, without limitation, pension, savings and other
retirement plans or programs, medical, dental, hospitalization,
short-term and long-term disability and life insurance.
Notwithstanding anything in this Agreement to the contrary, the terms
of this Agreement shall replace the Executive's participation in The
Polaroid Extended Severance Plan.
10. Supplemental Pension.
--------------------
The Company shall provide the Executive an additional monthly
retirement benefit pursuant to the terms of this Agreement which shall
be equal to the excess of (i) the monthly pension benefit that would be
payable to the Executive under the terms of the Polaroid Pension Plan
enhanced by the benefits under the Polaroid Retirement Parity Plan and
the Polaroid Executive Equalization Retirement Plan ("Retirement
Benefit") as in effect on the date hereof, assuming that the Executive
is credited with one additional year of service for each of his first
ten years of actual service with the Company over (ii) the monthly
Retirement Benefit which is actually payable to the Executive without
regard to this Section 10. In determining the amount of any offset as
provided in the preceding sentence, such amount shall be calculated
assuming the same frequency of payment, the same form of annuity and
the same commencement date of payment as the benefits to be paid under
this Section 10. The Retirement Benefit payable to or in respect of
the Executive pursuant to this Section 10 shall be vested upon
completion of 2-1/2 years of service, and shall commence to be paid at
the same time as the Executive's Retirement Benefit. The
Retirement Benefit payable to or in respect of the Executive pursuant
to this Section 10 shall be paid in the form of a straight life annuity
for his lifetime or in such other alternative form of benefit permitted
under the terms of the Plans as currently in effect as the Executive
may elect in accordance with the election provisions applicable.
<PAGE>
7
11. Reimbursement of Business and Other Expenses.
--------------------------------------------
The Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement and
the Company shall promptly reimburse him for all business expenses
incurred in connection with carrying out the business of the Company,
subject to documentation in accordance with the Company's policy.
12. Termination of Employment.
-------------------------
(a) Termination Due to Disability or Death. In the event
the Executive's employment is terminated due to his Disability or
death, he, or his estate or his beneficiaries, as the case may be,
shall be entitled to:
(i) Base Salary through the date of termination;
(ii) pro-rata bonus for the year in which the
Executive's Disability or death occurs, such bonus to be paid when
other bonuses for the year involved are paid;
(iii) other benefits or entitlements in accordance
with applicable plans and programs of the Company.
(b) Termination by the Company for Cause. In the event the
Company terminates the Executive's employment for Cause, he shall be
entitled to:
(i) Base Salary through the date of the termination of
his employment for Cause;
(ii) other benefits or entitlements, if any, in
accordance with applicable plans or programs of the Company; however,
notwithstanding the foregoing, the Executive shall not be entitled to
any bonus for the year in which his termination occurs.
(c) Termination Without Cause or Constructive Termination
Without Cause. In the event the Executive's employment is terminated
without Cause, other than due to Disability or death, or in the event
there is a Constructive Termination Without Cause, the Executive shall
be entitled to:
(i) Base Salary through the date of termination of the
Executive's employment;
<PAGE>
8
(ii) Base Salary, at the annualized rate in effect on
the date of termination of the Executive's employment (or in the event
a reduction in Base Salary is the basis for a Constructive Termination
Without Cause, then the Base Salary in
effect immediately prior to such reduction), for a period of 24 months
following such termination (the "Severance Period");
(iii) annual bonus payments for the period from the
beginning of the year in which the termination occurs through the end
of the Severance Period based on the actual performance of the Company;
any such payment for a period of less than a full year shall be
prorated by the number of days for which payment is made;
(iv) other benefits or entitlements in accordance with
applicable plans and programs of the Company.
(d) Termination of Employment Following a Change in Control.
If, following a Change in Control, the Executive's employment is
terminated without Cause or there is a Constructive Termination Without
Cause, the Executive shall be entitled to the payments and benefits
provided in Section 12(c), provided that the salary continuation
payments shall be based on 36 months and shall be paid in a lump sum
without any discount. Also, immediately following a Change in Control,
all amounts, entitlements or benefits in which he is not yet vested
shall become fully vested except to the extent such vesting would be
inconsistent with the terms of the relevant plan.
(e) Limitation Following a Change in Control. In the event
that the termination of the Executive's employment is for one of the
reasons set forth in Section 12(d) above and the aggregate of all
payments or benefits made or provided to the Executive under Section
12(d) above and under all other plans and programs of the Company (the
"Aggregate Payment") is determined to constitute a Parachute Payment,
as such term is defined in Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the "Code"), notwithstanding any other
provision of this Agreement to the contrary the aggregate amount of
payments or benefits paid by the Company to the Executive pursuant to
this Agreement shall be reduced to the maximum amount (if any) that can
be so provided without any portion of the Aggregate Payment being
subject to any excise tax imposed by Section 4999 of the Code ("Excise
Tax"). The determination of whether the Aggregate Payment constitutes
a Parachute Payment and, if so, the amount to be paid to the Executive
and the time of payment pursuant to this Section 12(e) shall be made by
the regular independent auditor of the Company.
(f) Mitigation; Offset. In the event of any termination of
employment under this Section 12, the Executive shall make reasonable
effort to seek other comparable employment and any remuneration
attributable to any subsequent employment that he may obtain shall be
offset against amounts due the Executive under this Agreement for any
period corresponding to such period of subsequent employment.
<PAGE>
9
(g) Full Discharge of Company Obligations. The amounts payable to
Executive pursuant to this Section 12 following termination of his
employment shall be in full and complete satisfaction of Executive's
rights under this Agreement and any other claims he may have in respect
of his employment by the Company or any of its subsidiaries. Such
amounts shall constitute liquidated damages with respect to any and all
such rights and claims and, upon Executive's receipt of such amounts,
the Company shall be released and discharged from any and all liability
to Executive in connection with this Agreement or otherwise in
connection with Executive's employment with the Company.
13. Noncompetition and Confidentiality.
----------------------------------
(a) Noncompetition. During the period in which Executive is
employed by the Company or any of its subsidiaries and during any
Severance Period, as provided in Section 12(c), above, but in no event
for a period of less than 12 months following a termination of his
employment, Executive shall not engage in any activity or become
associated with any entity or venture, whether as a principal, partner,
employee, consultant, shareholder (other than as a holder of not in
excess of 1% of the outstanding voting shares of any publicly traded
company) or otherwise, that is in competition in any geographic area
with the business of the Company.
(b) Confidentiality. Without the prior written consent of
the Company, except to the extent required by an order of a court
having competent jurisdiction or under subpoena from an appropriate
government agency, Executive shall not disclose any trade secrets,
customer lists, drawings, designs, information regarding product
development, marketing plans, sales plans, manufacturing plans,
management organization information (including data and other
information relating to members of the Board and management), operating
policies or manuals, business plans, financial records or other
financial, commercial, business or technical information relating to
the Company or any of its subsidiaries or information designated as
confidential or proprietary that the Company or any of its subsidiaries
may receive belonging to suppliers, customers or others who do business
with the Company or any of its subsidiaries (collectively,
"Confidential Information") to any third person unless such
Confidential Information has been previously disclosed to the public by
the Company or is in the public domain (other than by reason of
Executive's breach of this Section 13(b)).
(c) Company Property. Promptly following Executive's
termination of employment, Executive shall return to the Company all
property of the Company, and all copies thereof in Executive's
possession or under his control.
(d) Non-Solicitation of Employees. During the period in
which Executive is employed by the Company and any of its subsidiaries,
and for two years following any termination of employment by the
Executive, Executive shall not directly or indirectly induce any
employee of the Company or any of its subsidiaries to terminate
employment with such entity, and shall not directly or indirectly,
either individually or as owner, agent, employee, consultant or
otherwise, employ or offer employment to any person who is or was
employed by the Company or a subsidiary thereof unless such person
shall have ceased to be employed by such entity for a period of at
least 6 months.
<PAGE>
10
(e) Injunctive Relief with Respect to Covenants. Executive
acknowledges and agrees that the covenants and obligations of Executive
with respect to noncompetition, nonsolicitation, confidentiality and
Company property relate to special, unique and extraordinary matters,
including his own skills, and that a violation of any of the terms of
such covenants and obligations will cause the Company irreparable
injury for which adequate remedies are not available at law.
Therefore, the Executive agrees that the Company shall be entitled to
an injunction, restraining order or such other equitable relief
(without the requirement to post bond) restraining Executive from
committing any violation of the covenants and obligations contained in
this Section 13. These injunctive remedies are cumulative and are in
addition to any other rights and remedies the Company may have at law
or in equity.
14. Effect of Agreement on Other Benefits.
-------------------------------------
Except as specifically provided in this Agreement, the
existence of this Agreement shall not prohibit or restrict the
Executive's entitlement to full participation in the employee benefit
and other plans or programs in which senior executives of the Company
are eligible to participate.
15. Assignability: Binding Nature.
-----------------------------
This Agreement shall be binding upon and inure to the benefit
of the Parties and their respective successors, heirs (in the case of
the Executive) and assigns. Without the prior written consent of the
Company, no rights or obligations of the Executive under this Agreement
may be assigned or transferred by the Executive other than his rights
to compensation and benefits, which may be transferred only by will or
operation of law, except as provided in Section 21 below.
16. Representation.
--------------
The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and each of the
parties represents and warrants that the performance of the obligations
of such party under this Agreement will not violate any agreement
between that party and any other person, firm or organization.
17. Entire Agreement.
----------------
This Agreement contains the entire understanding and
agreement between the Parties concerning the subject matter hereof and
supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the
Parties with respect thereto.
18. Amendment or Waiver.
-------------------
No provision in this Agreement may be amended unless such
amendment is agreed to in writing and signed by the Executive and an
authorized officer of the Company. No waiver by either Party of any
breach by the other Party of any condition or provision contained in
this Agreement to be performed by such other Party shall be deemed a
waiver of a similar or dissimilar condition or provision at the same or
any prior or subsequent time. Any waiver must be in writing and signed
by the Executive or an authorized officer of the Company, as the case
may be.
<PAGE>
11
19. Severability.
------------
In the event that any provision or portion of this Agreement
shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the
fullest extent permitted by law.
20. Survivorship.
------------
The respective rights and obligations of the Parties
hereunder shall survive any termination of the Executive's employment
to the extent necessary to the intended preservation of such rights and
obligations.
21. Beneficiaries/References.
------------------------
The Executive shall be entitled to select (and change, to the
extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder
following the Executive's death by giving the Company written notice
thereof. In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the
Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative.
22. Governing Law.
-------------
This Agreement shall be governed by and construed and
interpreted in accordance with the laws of Massachusetts without
reference to principles of conflict of laws.
23. Notices.
-------
Any notice given to a Party shall be in writing and shall be
deemed to have been given when delivered personally or sent by
certified or registered mail, postage prepaid, return receipt
requested, duly addressed to the Party concerned at the address
indicated below or to such changed address as such Party may
subsequently give such notice of:
If to the Company: Polaroid Corporation
565 Technology Square
Cambridge, MA 02139
Attention: Vice President, Human Resources
If to the Executive: Gary T. DiCamillo
c/o Polaroid Corporation
565 Technology Square
Cambridge, MA 02139
<PAGE>
12
24. Headings.
--------
The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
25. Counterparts.
------------
This Agreement may be executed in two or more counterparts.
26. Conditions.
----------
This Agreement is conditioned upon its approval by the Board
and upon the Executive's providing the Company with evidence of his
good health based upon a medical examination satisfactory to the
Company.
IN WITNESS WHEREOF, the undersigned have executed this Agreement
as of the date first written above.
Polaroid Corporation
By: /s/ I M Booth
-------------
/s/ Gary T. Dicamillo
-----------------
Gary T. DiCamillo
<PAGE>
EXHIBIT A
POLAROID STOCK INCENTIVE PLAN
1995 STOCK INCENTIVE AGREEMENT
This Agreement is evidence of a grant effective _______, 1995 by
Polaroid Corporation to ____________ who is employed by Polaroid. The
purpose is to encourage, motivate and retain individuals such as
yourself and create a stronger alliance between senior members of
Polaroid and its shareholders. This Agreement and the option described
in this Agreement are subject to and qualified by the provisions of the
Polaroid Stock Incentive Plan as amended from time to time (the
"Plan"), the terms and conditions of which are incorporated by
reference into this Agreement as if fully set forth in this Agreement.
Should any questions arise, the terms of the official Plan document
will govern. The Plan document is available from Polaroid's Corporate
Compensation and Benefits Department. (Tel: 617-386-3911)
THE GRANT: The Company grants you the right and option to purchase
250,000 shares of Polaroid Common Stock, par value $1.00 per share, at
the price of $________ per share. This grant is in addition to your
salary and other compensation. The option may be used only by you and
may not be transferred, assigned, pledged or encumbered. The price,
number and kind of shares subject to the option may be adjusted upon
the occurrence of certain events specified in the Plan. The grant is
intended to be a "Nonstatutory Stock Option", not qualifying for tax
treatment as an "Incentive Stock Option".
WHEN YOU CAN EXERCISE YOUR OPTION: If you remain employed by Polaroid
or one of its subsidiaries, the following vesting schedule applies:
25% of the option (62,500 shares) may be exercised beginning
__/__/96
50% of the option may be exercised beginning __/__/97
75% of the option may be exercised beginning __/__/98
100% of the option may be exercised beginning __/__/99.
The entire option must be exercised within 10 years from ________,
1995. At any one time, you must exercise a minimum of 100 shares or
the total shares still available to be exercised under this option,
whichever is less.
IF YOUR EMPLOYMENT TERMINATES: If your employment with Polaroid or
one of its subsidiaries terminates (whether by death or otherwise), the
vesting schedule stops as of your termination date, unless the Change
In Control provision set forth in the Plan is applicable.. (Transfers
between Polaroid and its subsidiaries are not considered termination.)
Once your employment terminates, shares already exercisable remain so
until 10 years from _________, 1995 or the following, whichever is
earlier:
. three years from your retirement date
. two years from the date you go on Long Term Disability
. one year from your death
. three months from the date of termination of your employment for
any other reason. (If federal securities laws prohibit exercise
during this period, the company reserves the right to extend an
individual's exercise period beyond three months.)
ACCELERATION OF VESTING: Upon date of termination, any portion of a
grant which is not fully vested shall automatically become fully
vested;
. If a participant is 65 years of age or older and years of service
is 10 or greater; or,
. If a participant's age plus years of service equals at least 90
TAXES AND SECURITIES LAWS: General information on taxes and
Securities and Exchange Commission regulations is provided in the Plan
booklet. Please review the information and keep it and this Agreement
with your other important papers. Individual tax and securities
situations vary. We strongly recommend that you seek individual
guidance from a qualified adviser.
<PAGE>
This Agreement and the option described in this Agreement are fully
subject to any applicable federal and state securities and tax laws and
regulations in effect from time to time, whether or not described in
the Plan. These legal requirements may affect your rights and
obligations with respect to the option, your ability to exercise it,
the manner in which it may be exercised, any duties you may have to
disclose the grant or the exercise of the option, and the disposition
of stock acquired upon exercise of the option. For example, federal
securities laws prohibit you from exercising the option if you hold
material, non-public information concerning Polaroid Corporation. As
tax and securities laws may change, you should consult a competent
adviser before taking any actions with respect to your option. By
signing below, you agree to sign such further documents as Polaroid may
reasonably require to assure compliance with federal and state
securities and tax laws.
NOT AN EMPLOYMENT CONTRACT: Also by signing below, you acknowledge
that nothing in this Agreement or the Plan confers upon you any rights
to continued employment or limits the right of Polaroid or its
subsidiaries to modify the terms of your employment.
POLAROID CORPORATION
By:
Director
Corporate Compensation & Benefits
I understand and agree to comply with the terms of this Agreement and
the Plan
- ---------------- --------------------
Date Participant
Return signed original (as indicated on the enclosed letter) and keep a
copy for your records.
Exhibit 10.2
AMENDMENT OF EMPLOYMENT AGREEMENT
AMENDMENT of EMPLOYMENT AGREEMENT made and entered into
as of the 20th day of October, 1995, between Polaroid
Corporation, a Delaware Corporation (together with its successors
and assigns permitted under the Employment Agreement referred to
herein as the "Company"), and Gary T. DiCamillo (the
"Executive").
The Company and the Executive agree that the Employment
Agreement be, and hereby is, amended by deleting the text of
Section 7 of the Employment Agreement and inserting in its place:
(a) Upon commencement by the Executive of his full time duties,
he shall be awarded 25,000 shares of restricted stock of the
Company, which shall vest at the rate of 5,000 shares at the end
of each of the first five years of employment.
(b) The Executive shall be awarded an additional 15,000 shares
of restricted stock of the Company as of the date a Restricted
Stock Agreement relating to such shares is executed by the
Executive, such shares to vest on the fifth anniversary of such
date if by that date performance criteria to be established by
mutual agreement of the parties not later than February 28, 1996,
and set forth in the Restricted Stock Agreement shall have been
achieved.
IN WITNESS WHEREOF, the undersigned have executed this
Amendment as of December 21, 1995.
Polaroid Corporation
By: /s/ Joseph Parham
-------------
/s/ Gary T. DiCamillo
-----------------
Gary T. DiCamillo
Exhibit 10.3
Polaroid Corporation
Cambridge Massachusetts 02139
November 10, 1995
I. MacAllister Booth
Polaroid Corporation
549 Technology Square
Cambridge, Mass. 02139
Dear Mac:
This will confirm the terms of your severance and retirement
agreement with Polaroid Corporation. As we discussed, you have
agreed to retire from the Company on March 31, 1996, and you will
receive the following benefits:
Severance Payment: You will receive a severance payment of
$1,012,110. This payment was calculated using the terms and
conditions set forth in the 1995 special severance plan. You
will receive this payment in the first week of April.
Retirement Enhancement: You will receive your full age 65
pension benefit. An enhancement of approximately $700 per month
will be added to your accrued pension benefit. This is the same
benefit you would have received under the 1995 early retirement
plan. You will begin to receive your pension payments about
mid-May.
Annual Bonus: You will be eligible to participate in the annual
executive bonus plan for 1996 determined on a pro rata basis
based on your total compensation received through the date of
your retirement. You will receive the bonus payment in February,
1997.
ESOP AND OCEP Plans: You will be eligible to participate in
these plans. You will receive a distribution based on
participation until March 31, 1996. These distributions will be
made in August, 1996.
Stock Options: All options which have been granted to you as of
the date of your retirement will be fully vested. You will have
three years from the date of your termination within which to
exercise your options. However, your entitlement to the award of
additional options under the Polaroid Stock Incentive Plan shall
cease upon your retirement.
<PAGE>
Medical and Life Insurance Coverage: As a bona-fide retiree,
you will be entitled to participate in the Company's retiree
medical and life insurance plans in the same manner as any other
retiree. As you are aware, retiree programs are not lifetime
guarantees and are subject to change from time to time.
Dental Insurance: You may also continue coverage in the
Polaroid Dental Plan receiving dental insurance coverage for
yourself and your spouse for two years.
Mac, I appreciate your support and cooperation during this period
of transition.
Sincerely,
/s/ Joe Parham
Joseph G. Parham, Jr.
Vice President
Human Resources
/s/ I M Booth
- --------------------
I. MacAllister Booth
Agreed and Accepted
Exhibit 10.4
WAIVER UNDER REVOLVING CREDIT AGREEMENT
WAIVER dated as of December 29, 1995 under the
$150,000,000 Credit Agreement dated as of August 24, 1994,
as amended (the "Credit Agreement") among POLAROID
CORPORATION (the "Company"), the BANKS party thereto (the
"Banks"), and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as
Agent (the "Agent").
WHEREAS, on December 19, 1995 the Company announced a
restructuring plan that will result in a total pre-tax
special charge of $195 million, of which $155 million will
be charged in the fourth quarter of fiscal 1995 and $40
million in fiscal 1996; and
WHEREAS, the Company has asked the Banks to waive
compliance with the financial covenants set forth in Section
5.07, 5.08 and 5.09 of the Credit Agreement until February
29, 1996 to allow the Company and the Banks time to
negotiate an amendment to the Credit Agreement dealing with
issues raised by said special charge (the "Proposed
Amendment");
NOW, THEREFORE, the undersigned parties hereto agree as
follows:
SECTION 1. Definitions, References. Unless otherwise
specifically defined herein, each term used herein which is
defined in the Credit Agreement has the meaning assigned to
such term in the Credit Agreement.
SECTION 2. Waivers. The undersigned Banks waive any
Default or Event of Default arising from any failure by the
Company to comply with the provisions of Sections 5.07, 5.08
and 5.09 of the Credit Agreement during the period from and
including December 19, 1995 to and including the earlier of
(i) February 29, 1996 and (ii) the date on which the
Proposed Amendment becomes effective.
SECTION 3. Governing Law. This Waiver shall be
governed by and construed in accordance with the laws of the
State of New York.
SECTION 4. Counterparts; Effectiveness. This Waiver
may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
This Waiver shall become effective when the Agent shall have
received from each of the Company and the Required Banks
either a counterpart hereof signed by such party or telex,
facsimile or other written confirmation that such party has
signed a counterpart hereof.
<PAGE>
IN WITNESS WHEREOF, the undersigned parties hereto
have caused this Waiver to be duly executed by their
respective authorized officers as of the day and year first
above written.
POLAROID CORPORATION
By /s/ Graham M. Brown, Jr.
------------------------
Title: V.P. & Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Deborah Brodheim
------------------------
Title: Vice President
ABN AMRO BANK N.V.
By /s/ Alta M. Fleming
------------------------
Title: Vice President
By /s/ R.E. James Hunter
------------------------
Title: Group Vice President
THE FIRST NATIONAL BANK
OF BOSTON
By /s/ Carol A. Lovell
------------------------
Title: Director
THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ Kathleen Comella
------------------------
Title: Vice President
<PAGE>
THE MITSUBISHI BANK, LIMITED
(acting through its New York
Branch)
By
------------------------
Title:
NATIONSBANK, N.A.
By /s/ Eric Stephenson
------------------------
Title: Vice President
WACHOVIA BANK OF GEORGIA,
N.A.
By /s/ Terrence Snellings
------------------------
Title: Sr. Vice President
Exhibit 10.5
WAIVER UNDER ESOP CREDIT AGREEMENT
WAIVER dated as of December 29, 1995 under the
$130,022,336 Amended and Restated Credit Agreement
dated as of November 29, 1994, as amended (the
"Credit Agreement") among POLAROID CORPORATION (the
"Company"), the BANKS party thereto (the "Banks"),
ABN AMRO BANK N.V., as Co-Agent and MORGAN GUARANTY
TRUST COMPANY OF NEW YORK, as Agent (the "Agent").
WHEREAS, on December 19, 1995 the Company
announced a restructuring plan that will result in a
total pre-tax special charge of $195 million, of
which $155 million will be charged in the fourth
quarter of fiscal 1995 and $40 million in fiscal
1996; and
WHEREAS, the Company has asked the Banks to
waive compliance with the financial covenants set
forth in Section 5.07, 5.08 and 5.09 of the Credit
Agreement until February 29, 1996 to allow the
Company and the Banks time to negotiate an amendment
to the Credit Agreement dealing with issues raised
by said special charge (the "Proposed Amendment");
NOW, THEREFORE, the undersigned parties hereto
agree as follows:
SECTION 1. Definitions, References. Unless
otherwise specifically defined herein, each term
used herein which is defined in the Credit Agreement
has the meaning assigned to such term in the Credit
Agreement.
SECTION 2. Waivers. The undersigned Banks
waive any Default or Event of Default arising from any
failure by the Company to comply with the provisions
of Sections 5.07, 5.08 and 5.09 of the Credit
Agreement during the period from and including
December 19, 1995 to and including the earlier of
(i) February 29, 1996 and (ii) the date on which the
Proposed Amendment becomes effective.
SECTION 3. Governing Law. This Waiver shall
be governed by and construed in accordance with the
laws of the State of New York.
SECTION 4. Counterparts; Effectiveness. This
Waiver may be signed in any number of counterparts,
each of which shall be an original, with the same
effect as if the signatures thereto and hereto were
upon the same instrument. This Waiver shall become
effective when the Agent shall have received from
each of the Company and the Required Banks either a
counterpart hereof signed by such party or telex,
facsimile or other written confirmation that such
party has signed a counterpart hereof.
<PAGE>
IN WITNESS WHEREOF, the undersigned parties hereto
have caused this Waiver to be duly executed by their
respective authorized officers as of the day and
year first above written.
POLAROID CORPORATION
By /s/ Graham M. Brown, Jr.
------------------------
Title: V.P. & Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By /s/ Deborah A. Brodheim
------------------------
Title: Vice President
ABN AMRO BANK N.V.
By /s/ Alta M. Fleming
------------------------
Title: Vice President
By /s/ R.E. James Hunter
------------------------
Title: Group Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By
------------------------
Title:
CREDIT SUISSE
By /s/ Anne Schultheiss-Jensen
------------------------
Title: Associate
By /s/ Michael C. Mast
------------------------
Title: Member of Sr. Management
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
By /s/ Kwan Grays
------------------------
Title: Assistant Vice President
THE TORONTO DOMINION BANK
By
------------------------
Title:
WACHOVIA BANK OF NORTH
CAROLINA, N.A.
By /s/ Robert G. Brookby
------------------------
Title: Executive Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH
By /s/ Iain Stewart
------------------------
Title: Assistant Vice President
By /s/ Stephan A. Wiedemann
------------------------
Title: Vice President
DEUTSCHE BANK AG, CAYMAN ISLANDS BRANCH
By /s/ Iain Stewart
------------------------
Title: Assistant Vice President
By /s/ Stephan A. Wiedemann
------------------------
Title: Vice President
FLEET BANK OF MASSACHUSETTS,
N.A.
By /s/ Roger Boucher
------------------------
Title: Vice President
Exhibit 99.1
Corporate Public Relations
Polaroid
Polaroid Corporation
549 Technology Square
Cambridge, Massachussets 02139
617 386 3112
Fax: 617 386 3125
CONTACTS: Robert L. Guenther Gregory R. Venne
(617) 386-3112 (617) 386-3116
FOR IMMEDIATE RELEASE
POLAROID ANNOUNCES PLAN TO CHANGE FUNDAMENTALLY ITS
OPERATING STRUCTURE, IMPROVE PROFITABILITY, AND SHARPEN
STRATEGIC FOCUS
Company Will Take Total Pre-Tax Charge of $195 million,
$155 million in 1995 Fourth Quarter and $40 million in 1996
Cambridge, Mass., -- December 19, 1995 -- Polaroid Corporation
(NYSE: PRD) today announced a broad plan of action designed
to change fundamentally its operating structure and to
sharpen its strategic focus, improving the company's
profitability, productivity and product commercialization
process for both the near and long-term.
Gary T. DiCamillo, chairman and chief executive
officer, said, "After a thorough initial review, it is clear
to me that Polaroid's business has real potential for
meaningful growth. The actions we are taking today will
refocus our considerable assets and resources on areas with
the greatest potential for commercialization, and bring
costs and investments more in line with near-term revenues
and realistic projected rates of growth. These steps will
enable our photographic imaging business to devote more
resources to existing product platforms, globalization of
markets, and advertising and marketing.
(more)
<PAGE>
Polaroid Plan to Change Structure -- 2
Our plan also will enhance the prospects that our
electronic imaging systems, medical imaging and graphic arts
imaging businesses will turn profitable sooner while
maintaining the flexibility to add infrastructure as market
conditions demand."
The plan will result in a total pre-tax special charge of
$195 million. $155 million will be charged in the fiscal 1995
fourth quarter, and $40 million in fiscal 1996. The plan will
reduce operating expenses by approximately $90 million on an
annualized basis. A majority of these annual savings will be
realized in 1996.
"We currently expect our 1995 fourth quarter operating
profit, excluding special charges, to be below our 1995 third-
quarter operating profit, due to higher overhead spending and
less than expected increases in our business. Combined with a
significantly higher effective tax rate, we expect to report
near break-even results for the 1995 fourth quarter,"
DiCamillo said. "This past year the company made major
changes in the ways it sells and distributes its products in
almost every market around the world -- inventory adjustment
programs in the United States and Europe, direct distribution
in Japan, increased investments in emerging markets, and
increased promotional expenses. These initiatives likely will
result in increased retail sales in the fourth quarter as
compared to the same period last year, and revenues will not
be burdened with the significant year-end loading that
occurred last year. However, the costs associated with these
programs were designed to achieve higher revenues than will be
the case."
"The expected fourth quarter results will also reflect
increased spending relating to the introduction of the
company's new line of graphic arts imaging products and its
new Helios 1417 medical imaging system," DiCamillo said.
The restructuring plan features three principal
components -- program reductions in certain product,
research and manufacturing areas; strategic refocusing of
the company's high-resolution imaging businesses for the
medical diagnostic and graphic arts markets; and a reduction
in corporate overhead expenses. Specific actions being
taken include:
(more)
<PAGE>
Polaroid Plan to Change Structure -- 3
. The company will scale back manufacturing of the
Captiva camera and write-off certain assembly
equipment and fixed assets. The company will
continue to sell and service Captiva cameras and
will continue to manufacture instant film for
Captiva. In addition, the company is curtailing
several major research programs and shifting
research resources to projects with the greatest and
most immediate commercial potential. The company
also is consolidating its coating facilities,
shifting capacity from some of its oldest to its
newer, more efficient facilities. This step will
enhance product quality and reduce production costs
without sacrificing manufacturing flexibility.
. The company is also refocusing its high-resolution
imaging businesses for the medical and graphic arts
markets. The intent of this step is to produce a
better alignment of the infrastructure of these
businesses with their near-term prospects without
impinging on their ability to bring current product
development projects to market.
. The company is sharply downsizing its corporate
overhead area and will reduce expenses in various
service and administrative groups.
Overall, these changes will result in the elimination
of about 1,300 jobs. Employees in areas affected by the
restructuring are being offered voluntary severance
packages. In addition, eligible employees companywide may
take advantage of an enhanced early retirement program, and
some employees will be eligible for both. The workforce
reduction program will be complete before the end of the
first quarter. If the two voluntary programs do not achieve
the necessary reductions, the company will initiate layoffs.
(more)
<PAGE>
Polaroid Plan to Change Structure -- 4
"Obviously these are difficult steps, but we take them
with a view toward the future. Today's actions will
strengthen our foundation for growth, and while I am excited
about the businesses in which Polaroid participates, my next
task is to move the organization toward achieving its
strategic goals," DiCamillo said.
Polaroid Corporation, with annual sales in excess of $2
billion, is the worldwide leader in instant imaging. The
company supplies instant photographic cameras and films,
conventional cameras and films, videotapes, and electronic
imaging products to markets worldwide, including amateur and
professional photography, industry, graphic arts, science,
medicine, government, and education.
# # #
