<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
PURITAN-BENNETT CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $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 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
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Notes:
<PAGE>
LOGO - PURITAN
-------
BENNETT(R)
PURITAN-BENNETT CORPORATION
Notice of Annual Meeting of Stockholders
June 20, 1995
Notice is hereby given that the Annual Meeting of Stockholders of
Puritan-Bennett Corporation will be held at the Overland Park Marriott, 10800
Metcalf Avenue, Overland Park, Kansas, on the 20th day of June, 1995, at 10:00
a.m., for the following purposes.
1. To elect two Class III directors to serve for a term of three years.
2. To consider and vote upon a stockholder proposal as described in the
attached Proxy Statement, if properly presented to the meeting.
3. To transact such other business as may properly come before the
meeting.
A list of stockholders entitled to vote at the meeting will be available
for inspection at the offices of the Company, 9401 Indian Creek Parkway, Suite
300, Overland Park, KS, during the ten days immediately preceding the date of
the meeting.
IN ORDER THAT YOUR STOCK MAY BE REPRESENTED AT THE MEETING IN THE EVENT YOU
ARE NOT PRESENT IN PERSON, PLEASE SIGN THE ENCLOSED PROXY AND RETURN IT IN THE
ENVELOPE PROVIDED.
BY ORDER OF THE BOARD OF DIRECTORS
DANIEL C. WEARY BURTON A. DOLE JR.
Secretary Chairman, President and
Chief Executive Officer
Overland Park, Kansas
May 19, 1995
1
<PAGE>
- - --------------------------------------------------------------------------------
Puritan-Bennett Corporation
9401 Indian Creek Parkway
Suite 300
Overland Park, Kansas 66210
(913) 661-0444
- - --------------------------------------------------------------------------------
Proxy Statement for
Annual Meeting of Stockholders
To Be Held June 20, 1995
The enclosed proxy is solicited by the Board of Directors of
Puritan-Bennett Corporation ("the Company") for use at the Annual Meeting
of Stockholders of the Company to be held at the Overland Park Marriott,
10800 Metcalf Avenue, Overland Park, Kansas, on June 20, 1995, at 10:00 a.m.
The proxy may be revoked at any time before it is exercised. It is expected
that this proxy statement and the proxy will be mailed to the stockholders
on May 19, 1995.
Only stockholders of record at the close of business on April 24, 1995
are entitled to vote at the Annual Meeting. At that date, the Company had
outstanding and entitled to vote 12,624,547 shares of common stock, $1 par
value. Each outstanding share entitles the record holder to one vote.
Abstentions and broker nonvotes will be considered to be present for quorum
purposes.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, elected for terms of
three years and until their successors are elected and qualified. At the meeting
two Class III directors are to be elected. The proxies named in the accompanying
proxy intend to vote for the election of Mr. McDonnell and Dr. Larson. In the
event the nominees should become unavailable, which is not anticipated, the
proxies will be voted for such substitute nominees as may be nominated by the
Board of Directors. The two nominees for election as Class III directors who
receive the greatest number of votes cast for election of directors at the
meeting, a quorum being present, shall be elected directors of the Company.
Abstentions, broker nonvotes and instructions on the accompanying proxy card to
withhold authority to vote for one or more of the nominees will result in the
respective nominees receiving fewer votes.
2
<PAGE>
INFORMATION CONCERNING NOMINEES
The following table sets forth information with respect to the nominees to
the Board of Directors:
Class III
[PHOTO OF THOMAS A. MCDONNELL]
THOMAS A. MCDONNELL (49)
Member of Compensation and Audit Committees
Served as director since April 1994. Mr. McDonnell has served as Vice Chairman
of the Board and Chief Executive Officer of DST Systems, Inc. ("DST"), a
provider of data processing based services to the financial industry, since
October 1984. He has served as President of DST from 1973 until October 1984 and
from March 1987 to the present, and has been its Treasurer since 1973. Mr.
McDonnell has been Executive Vice President of Kansas City Southern Industries,
Inc. (KCSI), a holding company and parent of DST, since February 1987, and a
member of the Office of the Chief Executive of KCSI since 1989. He is a director
of KCSI, Informix Software, Inc., The Continuum Corporation, BHA Group, Inc. and
First of Michigan Capital Corp.
[PHOTO OF C. PHILIP LARSON JR., M.D.]
C. PHILIP LARSON JR., M.D. (61)
Member of Technology and Quality and Regulatory Affairs Committees
Served as director since February 1988. From 1972 to 1994 Dr. Larson was
Professor of Anesthesia and Neurosurgery at Stanford University School of
Medicine. In 1994 Dr. Larson retired from Stanford University School as a
Professor-Emeritus and accepted a full time post as Professor of Anesthesiology
at UCLA School of Medicine, Los Angeles. Dr. Larson is a member of the Editorial
Boards of Current Reviews in Clinical Anesthesia and the Journal of Clinical
Anesthesiology; is a consultant to the Anesthetic and Life Support Drugs
Advisory Committee of the Food and Drug Administration; is on the Board of
Directors of the Anesthesiologists Professional Assurance Company; and is a
member of the Puritan-Bennett Corporation Medical Advisory Board.
3
<PAGE>
INFORMATION CONCERNING DIRECTORS CONTINUING IN OFFICE
The following table sets forth information with respect to the directors
who are continuing in office for the respective periods indicated and until
their successors are elected and qualified.
TERM EXPIRING 1996
Class I
[PHOTO OF FRANK P. WILTON]
FRANK P. WILTON (65)
Member of Audit, Quality and Regulatory Affairs and Pension Committees
Served as a director since January 1987. Since 1972, Mr. Wilton has served as
Chairman, President and Chief Executive Officer of Ethox Corp., a manufacturer
of sterile disposable medical products. Mr. Wilton currently serves as a
director of Chase Investment Council Corp.
[PHOTO OF BURTON A. DOLE JR.]
BURTON A. DOLE JR. (57)
Chairman of the Board, President, Chief Executive Officer and Member of the
Technology Committee
Served as Chairman of the Board, President and Chief Executive Officer since
April 1986, President and Chief Executive Officer from 1980-1986. Mr. Dole also
currently serves as Vice President of the Anesthesia Patient Safety Foundation,
a director of the Health Industry Manufacturers Association and a director of
the New England Mutual Life Insurance Company.
4
<PAGE>
[PHOTO OF CHARLES A. DUBOC]
CHARLES A. DUBOC (72)
Member of Compensation and Pension Committees
Served as director since February 1988. Since April 1985 Mr. Duboc has been a
private investor. Prior to April 1985 he was Chairman of the Board and Chief
Executive Officer of The Western Casualty and Surety Company, a casualty
insurance company.
TERM EXPIRING 1997
Class II
[PHOTO OF DANIEL C. WEARY]
DANIEL C. WEARY (67)
Secretary and Member of Compensation and Pension Committees
Served as director since 1968; partner in Blackwell Sanders Matheny Weary &
Lombardi L.C., a law firm retained by the Company as general counsel.
5
<PAGE>
[PHOTO OF ANDRE F. MARION]
ANDRE F. MARION (59)
Member of Compensation, Audit and Quality and Regulatory Affairs Committees
Served as director since February 1988. In 1981 Mr. Marion was a founder of
Applied Biosystems, Inc., a supplier of instrumentation for biotechnology
research, and served as Chairman of the Board and Chief Executive Officer until
February 18, 1993 at which time it merged with the Perkin Elmer Corporation, a
manufacturer of analytical instruments, from which he retired as a Vice
President and President of its Applied Biosystems Division. Mr. Marion is
presently a consultant to technology companies. Mr. Marion is a director of
Cygnus Therapeutic Systems Inc. and Applied Imaging Corporation.
The Board of Directors of the Company held eight meetings during the last
fiscal year. No director attended fewer than 75% of the total number of meetings
of the Board of Directors and the committees of the Board on which he served.
The Board has an Audit Committee, Compensation Committee, Pension
Committee, Quality and Regulatory Affairs Committee and Technology Committee.
The Board does not have a nominating committee.
Messrs. Wilton, Marion and McDonnell served as members of the Audit
Committee, which held two meetings during the last fiscal year. The Audit
Committee annually recommends to the Board the appointment of independent
auditors of the Company and its subsidiaries, reviews the scope of audits,
determines the duties and responsibilities of, and reviews the annual program
for, the internal auditing staff, and receives and takes action deemed
appropriate with respect to audit reports submitted.
Messrs. Duboc, McDonnell, Marion and Weary served as members of the
Compensation Committee which held six meetings during the last fiscal year. The
Compensation Committee reviews and makes recommendations to the Board with
respect to compensation programs affecting the Company and its subsidiaries,
approves compensation to be paid to the officers of the Company and administers
the 1988 Employee Stock Benefit Plan.
Dr. Larson and Messrs. Wilton and Marion served as members of the Quality
and Regulatory Affairs Committee, which held one meeting during the last fiscal
year. This committee monitors the quality and regulatory compliance activities
of the Company.
Dr. Larson and Mr. Dole served as members of the Technology Committee,
which did not hold any meetings during the last fiscal year. This committee
assists and advises the Board on trends in technology as they relate to the
Company's activities.
Messrs. Wilton, Duboc and Weary served as members of the Pension Committee,
which held three meetings during the last fiscal year. This committee meets with
investment advisors, and monitors the activities, of the Company's Pension Plan
and Trust.
6
<PAGE>
SECURITY OWNERSHIP OF PRINCIPAL STOCKHOLDERS
To the knowledge of the Company, the beneficial ownership of the common
stock of the Company as of April 24, 1995 held by holders of more than 5% of the
outstanding common stock of the Company was as follows:
<TABLE>
<CAPTION>
Name and Address of Number Percent of
Beneficial Owner of Shares Class
---------------- --------- -----
<S> <C> <C>
First Pacific Advisors, Inc........................... 1,266,500/1/ 10.0%
11400 West Olympic Blvd.
Suite 1200
Los Angeles, California
Capital Research and Management Company .............. 663,600/2/ 5.3%
333 South Hope Street
Los Angeles, California
</TABLE>
/1/Beneficial owner had, as of December 31, 1994, shared voting power over
375,500 shares and shared dispositive power over 1,266,500 shares (based on
filing with the Securities and Exchange Commission dated February 13, 1995).
/2/Capital Research and Management Company, a registered investment advisor, and
an operating subsidiary of The Capital Group Companies, Inc., exercised as of
December 31, 1994, investment discretion with respect to 663,600 shares, or
5.3% of the outstanding shares of the class, which were owned by various
institutional investors. Said subsidiary has no power to direct the vote of
the above shares (based on filing with the Securities and Exchange Commission
dated February 8, 1995).
American Express Trust Company (formerly IDS Trust Company), Minneapolis,
Minnesota, as trustee under the Puritan-Bennett Retirement Savings & Stock
Ownership Plan for the Company's employees, held 622,469 shares of the common
stock on December 31, 1994. Shares held by the trustee on account of each of the
participating employees will be voted by the trustee in accordance with written
instructions from the participants and where no instructions have been received
or with respect to unallocated shares, as the Benefits Administration Committee
of the Company shall determine.
7
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
The following information is given as to the Chief Executive Officer and
the four other most highly paid executive officers of the Company for services
rendered in all capacities during the fiscal year ended January 31, 1993
("fiscal '93"), the fiscal year ended January 31, 1994 ("fiscal '94") and the
fiscal year ended January 31, 1995 ("fiscal '95").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation/1/ Long Term Compensation
-------------------------- -------------------------------
Restricted Securities
Name and Other Annual Stock Underlying All Other
Principal Position Year Salary($) Bonus($) Compensation($)/2/ Award(s)($)/3/ Options/SARs(#) Compensation($)/4/
- - ------------------ ---- --------- -------- --------------- ----------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
BURTON A. DOLE JR. 1995 $337,506 $ -- $ -- $303,750 30,000 $4,174
Chairman, President 1994 320,830 48,123 -- -- 30,000 4,027
and Chief Executive 1993 298,750 268,845 -- -- 30,000 3,801
Officer
JOHN H. MORROW 1995 227,504 -- -- 151,875 15,000 3,976
Executive Vice 1994 212,054 25,500 -- -- 15,000 3,846
President and Chief 1993 199,337 143,507 -- -- 15,000 3,704
Operating Officer
ROBERT L. DOYLE 1995 193,334 -- -- 75,937 7,500 3,941
Senior Vice President 1994 182,170 19,128 -- -- 7,500 3,819
1993 167,333 108,336 20,888 -- 5,000 3,582
THOMAS E. JONES 1995 183,338 -- -- 81,000 8,000 3,928
Senior Vice President 1994 170,840 58,748 -- -- 7,500 3,807
1993 149,167 105,718 1,661 -- 7,000 3,672
ALEXANDER R. RANKIN 1995 171,670 -- -- 50,625 5,000 3,869
Senior Vice President 1994 136,865 47,903 -- 34,125 15,000 3,433
1993 -- -- -- -- -- --
</TABLE>
- - ----------
/1/ Compensation deferred at election of executive includable in category and
year earned.
/2/ Amounts in this column are above-market earnings on deferred compensation
accounts maintained in trust accounts in a bank. Such amounts include
investment earnings and additional amounts to be paid by the Company in
future years based upon earnings and the participant's contributions during
the year.
/3/ These shares have a four-year vesting period with 25% of the stock vesting
on the first, second, third and fourth anniversary dates of the award. The
holders have the right to vote and receive dividends on these shares. The
value of the awards shown in the table was based on the market value of the
shares as of the date of the grant. For each of the named executive
officers, the number and value of the aggregate restricted stock holdings at
the end of fiscal '95 was as follows: Mr. Dole, 15,000/$318,750; Mr. Morrow,
7,500/$159,375; Mr. Doyle, 3,750/$79,687.50; Mr. Jones, 4,000/$85,000; and
Mr. Rankin 3,625/$77,031.25. These awards were granted in April of 1994 in
order to motivate and retain senior management following a difficult year in
which they were faced with uncommon challenges, shared by other
manufacturers of critical care medical equipment, resulting from the
combined effect of health care reform uncertainty and the increasingly
demanding FDA regulatory environment focused on manufacturers of critical
care devices.
/4/ Amounts in this column include Company matching contributions for fiscal '95
under the Company's 401(k) savings plan as follows: Mr. Dole, $3,460; Mr.
Morrow, $3,364; Mr. Doyle, $3,329; Mr. Jones, $3,316; and Mr. Rankin,
$3,257. The balance shown for fiscal '95 represents insurance premiums for
term life insurance for the benefit of such executive officers.
8
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
The following table provides information on option grants in fiscal '95 to
the named executive officers.
<TABLE>
<CAPTION>
Potential Realizable Value at Assumed
Annual Rates of Stock Price Appreciation
Individual Grants for Option Term/1/
---------------------------------------------------- -----------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration
Name Granted(#)/2/ Fiscal Year ($/Sh) Date 0%($)/3/ 5%($)/4/ 10%($)/4/
- - ---- ---------- ----------- ------ ---- ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C>
BURTON A. DOLE JR. 30,000 14.0 $20.25 4/5/2004 0 $382,050 $968,190
JOHN H. MORROW 15,000 7.0 20.25 4/5/2004 0 191,025 484,095
ROBERT L. DOYLE 7,500 3.5 20.25 4/5/2004 0 95,513 242,048
THOMAS E. JONES 8,000 3.7 20.25 4/5/2004 0 101,856 258,184
ALEXANDER R. RANKIN 5,000 2.3 20.25 4/5/2004 0 63,675 161,365
</TABLE>
- - ----------
/1/ Based on actual term and annual compounding.
/2/ Mr. Dole's option is exercisable for 15,000 shares on 4/5/95, 10,062 shares
on 4/5/96 and 4,938 shares on 1/1/04. Mr. Morrow's option is exercisable for
7,500 shares on 4/5/95, 2,562 shares on 4/5/96 and 4,938 shares on 1/1/04.
Mr. Doyle's option is exercisable for 2,723 shares on 1/1/99 and 4,777
shares on 1/1/00. Mr. Jones' option is exercisable for 3,156 shares on
1/1/98 and 4,844 shares on 1/1/99. Mr. Rankin's option is exercisable for
2,899 shares on 1/1/97 and 2,101 shares on 1/1/98. However, options may only
be exercised as to shares exercisable during employment (except for death,
total disability or retirement pursuant to Company retirement plans) and
must be exercised within 90 days after termination of employment. All
options become immediately exercisable for a period of 30 days preceding
certain events that may result in a change of control or liquidation or sale
of substantially all of the assets of the Company. The exercise price may be
paid by delivery of already-owned shares and tax withholding obligations may
be paid by offset of the underlying shares, subject to certain conditions.
/3/ No gain to the optionees is possible without an increase in stock
appreciation, which will benefit all stockholders.
/4/ These amounts represent certain assumed rates of appreciation only and have
no correlation to current or future market conditions.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
The following table provides information on options exercised in fiscal '95
by the named executive officers and the value of such officers' unexercised
options at January 31, 1995.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-
UNDERLYING UNEXERCISED THE-MONEY OPTIONS/
OPTIONS/SARS AT FY-END(#) SARS AT FY-END($)/2/
------------------------- ------------------------
SHARES ACQUIRED ON VALUE
NAME EXERCISE(#) REALIZED($)/1/ EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ---- ----------- ----------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
BURTON A. DOLE JR. None None 137,177 / 76,723 $461,410 / $52,970
JOHN H. MORROW 10,000 $162,200 61,230 / 49,270 148,625 / 15,000
ROBERT L. DOYLE None None 21,812 / 21,682 2,248 / 7,500
THOMAS E. JONES None None 28,359 / 18,041 24,850 / 8,000
ALEXANDER R. RANKIN None None 4,395 / 15,605 0 / 5,000
</TABLE>
- - ----------
/1/ Market value of underlying securities at exercise, minus the exercise or
base price.
/2/ Based on the closing stock price on January 31, 1995 of $21.25 per share,
minus the exercise or base price.
9
<PAGE>
PERFORMANCE GRAPHS
The following graphs compare the cumulative total stockholder return (stock
price appreciation plus dividends) on the Company's Common Stock with the
cumulative total returns of the S&P 500 Index and the S&P Medical Products &
Supplies Index for the two fiscal years ending December 31, 1990 and 1991, the
thirteen month period ending January 31, 1993, the fiscal year ending January
31, 1994 (fiscal '94) and the fiscal year ending January 31, 1995 (fiscal '95)
plus comparable returns for the seven fiscal years ending December 31, 1985
through 1991, the thirteen month period ending January 31, 1993, the fiscal year
ending January 31, 1994 (fiscal '94) and the fiscal year ending January 31, 1995
(fiscal '95). The Company has presented ten-year and one-month data to provide a
longer time perspective.
61-MONTH CUMULATIVE TOTAL RETURN* PURITAN-BENNETT CORPORATION,
THE S & P 500 INDEX AND THE S & P MEDICAL PRODUCTS & SUPPLIES INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Cumulative Total Return
-------------------------------------------
PURITAN S & P
Measurement period BENNETT MEDICAL
(Fiscal year Covered) CORP S & P 500 PROD & SUPL
- - --------------------- ------- --------- -----------
<S> <C> <C> <C>
Measurement PT -
12/89 $ 100 $ 100 $ 100
FYE 12/90 $ 95 $ 97 $ 117
FYE 12/91 $ 100 $ 126 $ 192
FYE 1/93 $ 121 $ 137 $ 158
FYE 1/94 $ 84 $ 155 $ 131
FYE 1/95 $ 90 $ 156 $ 156
</TABLE>
- - ----------
*$100 invested on 12/31/89 in stock or index -- including reinvestment of
dividends. Fiscal year ending December 31 from 1989-1991, January 31,
thereafter.
121-MONTH CUMULATIVE TOTAL RETURN* PURITAN-BENNETT CORPORATION,
THE S & P 500 INDEX AND THE S & P MEDICAL PRODUCTS & SUPPLIES INDEX
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Cumulative Total Return
-------------------------------------------
PURITAN S & P
Measurement period BENNETT MEDICAL
(Fiscal year Covered) CORP S & P 500 PROD & SUPL
- - --------------------- ------- --------- -----------
<S> <C> <C> <C>
Measurement PT -
12/84 $ 100 $ 100 $ 100
FYE 12/85 $ 217 $ 132 $ 158
FYE 12/86 $ 412 $ 156 $ 210
FYE 12/87 $ 540 $ 164 $ 225
FYE 12/88 $ 444 $ 192 $ 212
FYE 12/89 $ 687 $ 252 $ 291
FYE 12/90 $ 656 $ 245 $ 341
FYE 12/91 $ 687 $ 319 $ 558
FYE 1/93 $ 834 $ 346 $ 460
FYE 1/94 $ 579 $ 391 $ 381
FYE 1/95 $ 619 $ 393 $ 453
</TABLE>
- - ----------
*$100 invested on 12/31/84 in stock or index -- including reinvestment of
dividends. Fiscal year ending December 31 from 1984-1991, January 31,
thereafter.
10
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is intended to provide a total
compensation package that will be competitive, motivate, reward superior
performance and retain key executives. The Company's compensation policies
applicable to its senior managers, including the executive officers, consist of
three major components: salary, annual bonus and long-term incentive
compensation.
BASE SALARY. The Company has established and annually updates salary ranges
for each executive officer position. The midpoint of the range for each position
is intended to reflect the average base salary for similar positions in similar
companies. To determine average base salary for similar positions in similar
companies, the Company uses external industry salary surveys of medical device
and other technology oriented manufacturers. Where sample sizes are large enough
to permit, the Company specifically uses the portion of such surveys related to
companies of similar size. Once the midpoint of the range for a given position
is established or updated, the range minimum is set to 80% and the range maximum
is set to 120% of midpoint.
Salaries of individual executive officers are reviewed annually in April
after the close of the Company's fiscal year. The rate of annual adjustment is
based upon the combination of two factors: (1) where the individuals
compensation is within the relevant range (i.e., lower third, middle third, or
upper third); and (2) the individual's performance appraisal. For example, a
combination of lower position in range and higher performance leads to higher
annual adjustments and vice versa.
Mr. Dole, the Chief Executive Officer, recommends such salaries for all
executive officers, except for himself, to the Compensation Committee and the
Compensation Committee then finally establishes such salaries annually. The
Compensation Committee annually recommends to the Board of Directors adjustments
in the salary of the Chief Executive Officer and the Board approves or rejects
this recommendation.
In April 1995, upon the recommendation of senior management, the Committee
and the Board deferred consideration of any salary increases for Mr. Dole and
the other four executive officers named in the Summary Compensation Table until
April 1996, except for a 4% merit increase to Mr. Rankin in connection with his
promotion to Senior Vice President. The current base salary of Mr. Dole, who has
been Chief Executive Officer of the Company for 15 years and Chairman of the
Board for nine years, is above the relevant range midpoint, but within the
middle third of the range.
ANNUAL BONUS. The Company paid no bonuses to executive officers for fiscal
'95. Effective with respect to fiscal '96, executive officers' bonuses are tied
100% to Company annual financial performance. Bonuses, if otherwise earned by
the Company's financial performance, will be paid only to the extent that they
can be paid out of earnings in excess of $2.00 per share before any
extraordinary charges. Under the Company's bonus plan, an individual bonus
cannot exceed the individual participant's base salary. The measure of annual
financial performance used is pre-bonus, after-tax return on average assets
employed (ROA), excluding such extraordinary items that the Chief Executive
Officer may recommend and the Compensation Committee may approve. For those
officers with major
11
<PAGE>
business unit responsibility, the annual financial performance element of
the bonus calculation is, in turn, based 60% on the ROA of the major business
unit and 40% on the ROA of the Company. Company and major business unit ROA
schedules are established and communicated prospectively each year. Bonus
potential as a percentage of base salary is also established for and
communicated to each officer prospectively each year.
Mr. Dole's annual bonus as a percentage of his base salary has fluctuated
from 15.0% in 1991, to 90.0% in fiscal '93, to 14.8% in fiscal '94, to zero in
fiscal '95. Similarly, the annual bonus as a percentage of base salary for three
of the other four executive officers named in the Summary Compensation Table
taken as a group has fluctuated from 14.0% in 1991, to 63.2% in fiscal '93, to
18.3% in fiscal '94, to zero in fiscal '95. Mr. Rankins fiscal '94 bonus was
fixed at an agreed minimum amount under the terms of his employment in April of
1993. Almost all of these fluctuations were due to differences in Company and
major business unit annual financial performance.
LONG-TERM INCENTIVE COMPENSATION. The third major component of the
officers' compensation consists of stock options and awards of restricted stock.
Whereas the annual bonus plan is designed primarily to link cash compensation to
near-term financial performance, the primary purpose of granting stock options
and awards is to link the non-cash compensation of the executive officers and
other participating employees with the long-term interests of the stockholders.
For all executive officers named above and for most other participating
employees, the Committee has been using stock options, and, on occasion, grants
of restricted stock, to achieve this link. Options are issued at 100% of fair
market value so that officers and other participating employees will benefit
only when the price of stock increases for the benefit of all stockholders of
the Company.
The Committee awarded stock options to 156 of its employees in April 1995,
including options for 30,000 shares to Mr. Dole and options for 36,000 shares to
the other four executive officers named above, taken as a group. The grants to
Mr. Dole and to the other executive officers reflect the Committee's desire to
focus them on maximizing shareholder value over the long-term and the potential
they have to do so. The Committee has established target-level guidelines for
stock options for various other levels of management based upon the individual's
performance and potential to improve shareholder value, as recommended by the
Chief Executive Officer.
The Omnibus Budget Reconciliation Act of 1993 generally disallows
deductibility of executive compensation paid to the Chief Executive Officer and
the four other most highly compensated executives of public companies in excess
of $1,000,000 for any year. Because current compensation levels fall
significantly below that amount, the Committee has not yet adopted a policy with
respect to this limitation.
Charles A. Duboc Andre F. Marion Thomas A. McDonnell Daniel C. Weary
12
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee during the fiscal year '95, was
composed of Mr. Charles Duboc, Mr. Andre F. Marion, Mr. Thomas A. McDonnell and
Mr. Daniel C. Weary. Mr. Weary is Secretary of the Company and is a member of
the law firm of Blackwell Sanders Matheny Weary & Lombardi L.C., retained by the
Company as general counsel.
DIRECTOR COMPENSATION
Directors who are not employees of the Company are compensated with a
retainer fee of $13,000 per annum plus $3,000 per annum for serving as a member
on each committee, plus an additional $1,000 per committee membership if the
director serves as chairman. Separate fees for attendance at meetings of the
Board and committees are not paid. Directors are eligible for group term life
insurance of $50,000 paid for by the Company.
The Company also maintains a retirement plan for non-employee directors
that provides for payments to a retiring director who has completed a minimum of
five years of continuous service and attained the age of 60. Such payments will
equal the larger of the annual retainer currently in effect at the time of
retirement or the highest average annual retainer and committee fees paid to
such director during the three immediately preceding years. The payment will be
reduced by 10% per year for each year of service less than ten years.
RETIREMENT BENEFITS
The Company maintains a qualified defined benefit pension plan for
virtually all U.S. employees, the Restated Puritan-Bennett Pension Plan (the
"Retirement Plan") in which Messrs. Dole, Morrow, Doyle, Jones and Rankin are
participants. The Company also maintains a nonqualified supplemental pension
plan, the Puritan-Bennett Corporation Pension Benefit Make Up Plan (the "Make Up
Plan"), which provides benefits that would otherwise be denied participants in
the Retirement Plan by reason of certain Internal Revenue Code limitations on
qualified plan benefits. Messrs. Dole, Morrow, Doyle, Jones and Rankin are
participants in the Make Up Plan.
The following table shows the estimated annual pension benefits payable to
employees, including Messrs. Doyle, Jones and Rankin, upon retirement at age 65,
in various remuneration and years-of-service classifications assuming the
election of a retirement benefit payable as a straight life annuity under the
Retirement Plan and the Make Up Plan.
<TABLE>
<CAPTION>
YEARS OF SERVICE
Remuneration 10 Years 15 Years 20 Years 25 Years 30 or more Years
- - ------------ -------- -------- -------- -------- ----------------
<S> <C> <C> <C> <C> <C>
$100,000 $14,625 $ 21,938 $ 29,250 $ 36,563 $ 43,895
200,000 32,625 48,938 65,250 81,563 97,875
300,000 50,625 75,938 101,250 126,563 151,875
400,000 68,625 102,938 137,250 171,563 205,875
500,000 86,625 129,938 173,250 216,563 259,875
</TABLE>
13
<PAGE>
In addition to the Retirement Plan and the Make Up Plan, other supplemental
retirement benefits are payable to Messrs. Dole and Morrow, upon retirement at
age 65, so that each would receive combined annual retirement benefits equal to
60% of the remuneration set forth in the table above, based upon their years of
service.
Covered compensation includes salary, bonus (both as reported in the
Summary Compensation Table) and other amounts reported on Treasury Form W-2 plus
elective contributions under 401(k) and cafeteria plans and excludes all
reimbursement or other expense allowances, fringe benefits, moving expenses and
deferred compensation.
The compensation for the 12 months ended December 31, 1994, covered by the
plans for the persons named in the Summary Compensation Table was: Mr. Dole,
$386,758; Mr. Morrow, $256,134; Mr. Doyle, $205,482; Mr. Jones, $226,843 and Mr.
Rankin, $187,274.
Those executive officers named in the Summary Compensation Table have years
of credited service under the plans as follows: Mr. Dole (15), Mr. Morrow (16),
Mr. Doyle (11), Mr. Jones (21) and Mr. Rankin (2). The above annual pension
benefits are not subject to any deduction for Social Security or other offset
amounts.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
The Company has a five-year employment agreement with its President, Burton
A. Dole Jr. which is automatically extended for an additional one-year period on
each anniversary date of his employment. In the discretion of the Board of
Directors, the minimum annual compensation may be increased during the term of
the agreement. The amounts paid to Mr. Dole under this agreement for fiscal '95
are included in the Summary Compensation Table above. The minimum annual
compensation under this agreement is currently $340,000. In addition, the
Company is obligated to pay Mr. Dole, in 90 installments, upon his termination
without cause, or upon his election to terminate the agreement in the event that
the Company participates in a merger or consolidation wherein it is not the
surviving corporation or in the event that the Company liquidates, dissolves or
disposes of substantially all of its assets, an amount equal to four to five
years' compensation at the minimum annual rate then in effect. Further, Mr. Dole
has the option to terminate the agreement if any other corporation, person,
entity or group thereof acting in concert shall acquire control of 50% or more
of the voting stock of the Company, in which event the Company will be obligated
to pay Mr. Dole, in 54 installments, an amount equal to three years'
compensation at the minimum annual rate then in effect. In the event of Mr.
Dole's death prior to the effective date of any termination of his employment,
the Company will be obligated to pay Mr. Doles estate, in 36 monthly
installments, an amount equal to two years' compensation at the minimum annual
rate then in effect.
The Company has employment agreements with its Executive Vice President,
John H. Morrow, and its Senior Vice Presidents, Robert L. Doyle, Thomas E. Jones
and Alexander R. Rankin, which are substantially similar to each other. These
agreements provide for minimum base salaries and target bonus percentages as
follows: (i) for Mr. Morrow, a salary of $230,000 and a target bonus of 40% of
salary; (ii) for Mr. Doyle, a salary of $195,000 and a target bonus of 35% of
salary; (iii) for Mr. Jones, a salary of $185,000 and a target
14
<PAGE>
bonus of 35% of salary; and (iv) for Mr. Rankin, a salary of $180,000 and a
target bonus of 35% of salary. Actual bonuses may be higher or lower than the
target bonus, based on the Company's financial performance. See "Compensation
Committee Report on Executive Compensation," above. The agreements continue
until written notice of termination is delivered by the Company or the
executive.
Under these agreements, if an executive is terminated without "cause" or
resigns for "good reason" (as defined) prior to the executive's normal
retirement date, (1) all stock options will vest, (2) during any period when the
executive is receiving severance payments from the Company, the executive will
be bound by a noncompete obligation and (3) the Company will be required to (a)
provide severance payments to the executive for a period of up to two to three
years, (b) pay the executive's prorated bonus for that year, (c) pay the
executive the market value of any unvested restricted stock held by the
executive and (d) provide certain "COBRA" health insurance continuation
benefits; provided that if such termination or resignation occurs within two
years following a "change in control" (as defined below), (i) the present value
of the executive's severance payments will be payable in a lump sum (except in
the case of Mr. Morrow) and (ii) the executive's noncompete obligations will
terminate (except in the case of Mr. Morrow, whose noncompete obligations will
continue during any period in which he is receiving severance payments from the
Company). All benefits under these agreements will be reduced or deferred as
necessary to be exempt from the excise tax and the nondeductibility provisions
imposed by the Internal Revenue Code on certain change of control payments and
executive compensation.
For purposes of these agreements, a "change in control" is deemed to have
occurred (i) if someone acquires 50% or more of the Company's then outstanding
voting securities, (ii) if there is a change of a majority of the directors
since the date of these agreements, (iii) upon the approval by the stockholders
of the Company of a reorganization, merger, consolidation (if stockholders of
the Company immediately prior to such reorganization, merger or consolidation do
not, immediately thereafter, own more than 50% of the combined voting power of
the reorganized, merged or consolidated Company's then outstanding voting
securities), liquidation, dissolution or sale of all or substantially all of the
assets of the Company, or (iv) the occurrence of any other event which the Board
of Directors determines is a change in control.
The Company also has agreements with each of Messrs. Dole and Morrow, which
provide certain rights to supplemental retirement benefits in addition to those
under the Retirement Plan and the Make Up Plan. See "Retirement Benefits,"
above. Under these agreements, if (i) Mr. Dole or Mr. Morrow is terminated
without "cause" or resigns for "good reason" (as defined) and (ii) in the case
of Mr. Dole only, such termination or resignation occurs within two years
following a "change in control" (generally, as described above), he will receive
a supplemental retirement benefit equal to the benefit that he would have been
entitled to receive otherwise upon a termination of employment at age 65. In the
case of Mr. Dole, the Company will be required to provide certain "COBRA" health
insurance
15
<PAGE>
continuation benefits upon any termination without cause or resignation for good
reason. In addition, all benefits under the agreement with Mr. Dole will be
reduced or deferred as necessary to be exempt from the excise tax and the
nondeductibility provisions imposed by the Internal Revenue Code on certain
change of control payments and executive compensation. The agreement for Mr.
Morrow also provides for additional noncompetition obligations on the part of
Mr. Morrow, and generally defers the payment of the supplemental retirement
benefits to Mr. Morrow until the later of age 55 or the lapse of severance
benefits under his agreement.
INDEBTEDNESS OF MANAGEMENT
During fiscal '95, the Company had outstanding to Robert Doyle, an
executive officer of the Company, a 17-year mortgage loan in an amount of
$178,995, bearing contingent interest equal to 19.16% of the net appreciated
value of the mortgaged property, that is due and owing to the Company upon the
occurrence of any one of certain events described in the loan note, including
the sale or transfer of the property encumbered. This loan enabled Mr. Doyle to
purchase a personal residence necessitated by his relocation, at the Company's
request, during 1989 to an area of the country that was experiencing at the time
unusually high real estate values. In addition, Mr. Doyle had an outstanding
demand loan during fiscal '95 of $30,000, bearing interest at 7% per year, for
personal purposes. This loan was repaid by the end of the year. In connection
with a subsequent relocation, Mr. Doyle is now leasing his former residence in
California to the Company for two years at $2,500 per month.
16
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following information is given as to the beneficial ownership of shares
of Common Stock of the Company by the executive officers named in the Summary
Compensation Table above, by all of the directors and by all of the executive
officers and directors as a group as of April 24, 1995.
<TABLE>
<CAPTION>
Name No. of Shares/1/ Percent of Class*
- - ---- ---------------- -----------------
<S> <C> <C>
BURTON A. DOLE JR. /1/,/2/.......... 227,236 1.8
JOHN H. MORROW /1/,/3/.............. 100,237
ROBERT L. DOYLE JR. /1/,/4/......... 31,808
THOMAS E. JONES /1/,/5/............. 49,745
ALEXANDER R. RANKIN /1/,/6/......... 8,728
ANDRE F. MARION /1/................. 200
C. PHILIP LARSON JR., M.D./1/....... 1,150
CHARLES A. DUBOC /1/................ 4,000
FRANK P. WILTON /1/................. 1,100
DANIEL C. WEARY /1/................. 21,000
THOMAS A. MCDONNELL /1/............. 2,500
ALL DIRECTORS AND
EXECUTIVE OFFICERS AS A GROUP/7/.... 481,589 3.7
</TABLE>
- - ----------
* Percentages are omitted for persons who have less than 1% of the shares
outstanding.
/1/ Beneficial owner indicated has sole voting and investment power except that
C. Philip Larson Jr., M.D. shares voting and investment power with respect
to his shares. In addition, shares credited to officers in the Retirement
Savings & Stock Ownership Plan are included in the table as of March 31,
1995. Additional shares may have been accumulated since that date and
participants in that Plan do not have investment power over all of the
shares credited to their accounts. Beneficial ownership of shares held by
the immediate families or family trusts of the executive officers and
directors has been, or is being, specifically disclaimed by certain
nominees, directors and officers in ownership reports filed with the
Securities and Exchange Commission ("SEC").
/2/ Includes 150,382 shares held under options exercisable within 60 days and
11,250 shares of restricted stock.
/3/ Includes 71,835 shares held under options exercisable within 60 days and
5,625 shares of restricted stock.
/4/ Includes 21,812 shares held under options exercisable within 60 days and
2,813 shares of restricted stock.
/5/ Includes 28,359 shares held under options exercisable within 60 days and
3,000 shares of restricted stock.
/6/ Includes 4,395 shares held under options exercisable within 60 days and
2,625 shares of restricted stock.
/7/ Includes 303,633 shares held under options exercisable within 60 days and
26,250 shares of restricted stock.
17
<PAGE>
STOCKHOLDER PROPOSAL
Kenneth Steiner of 14 Stoner Avenue, Apt. 2M, Great Neck, New York 11021-
2100, as owner of 200 shares of Common Stock of the Company, has asked that the
following resolution (the "Steiner Proposal"), which he intends to introduce at
the Annual Meeting, and the reasons in support of the resolution be set forth in
this Proxy Statement:
"RESOLVED, that the stockholders of Puritan-Bennett
Corporation (the "Company") recommend that the Board of
Directors of the Company immediately commence an auction
process to sell the Company to the highest qualified bidder,
subject to a minimum bid of $24.50 in cash per share, and
that the Board of Directors report to stockholders periodically
on the progress of the sale process."
PROPONENT'S SUPPORTING STATEMENT
"By their response to the recent tender offer for the Company by Thermo
Electron Corp., stockholders sent a strong but unheeded message to the Board of
Directors to maximize stockholder value through a sale of the Company. In
October 1994, Thermo Electron commenced a tender offer for the Company's shares
at $24.50 per share. This price offered stockholders a 36% premium over the
price of the Company's shares on the day before Thermo Electron's offer to
acquire the Company was first announced. Over 70% of the Company's stockholders
tendered their shares to Thermo Electron in the offer. The offer was not
consummated because the Board of Directors refused to permit satisfaction of
necessary conditions to the offer. Despite the overwhelming response to the
tender offer, the Board of Directors disparaged the stockholder response to the
tender offer and termed it meaningless. The Board neither negotiated with Thermo
Electron nor attempted to solicit higher offers for the Company. I believe the
tender offer was a referendum on the sale of the Company. This proposal is
certainly a referendum on the sale of the Company. A vote FOR the proposal
recommending a sale of the Company at a minimum price of $24.50 will express
forceful displeasure with the attitude of the Board and send the Board a
further, unequivocal message of the stockholder's desire to sell the Company now
at the best available price."
THE BOARD OF DIRECTORS OPPOSES THIS RESOLUTION
The Board of Directors of the Company unanimously believes that the
proposed resolution is not in the best interest of the Company and its
stockholders for the reasons set forth below:
. THE BOARD OF DIRECTORS BELIEVES THAT AN "AUCTION" CONDUCTED
AS CONTEMPLATED BY THE STEINER PROPOSAL COULD CREATE A "FORCED
SALE" ATMOSPHERE. Such an atmosphere could tend to have the
effect of pressuring the Company into accepting the stated
minimum price of $24.50 per share. At a meeting on November
6-7, 1994, the Board of Directors received an opinion from
Smith Barney Inc., the Company's financial advisor, that the
$24.50 per share offered by Thermo Electron was grossly
inadequate from a financial point of view to the stockholders
of the Company. The Board believes that the Steiner Proposal,
by restricting the range of options available to the Company,
could
18
<PAGE>
force the Company to negotiate with bidders from a position of
weakness. In addition, the uncertainty created by a publicly
announced auction could adversely affect the Company's
relationships with its customers, suppliers, employees and
other constituencies, thus potentially lowering the value of
the Company rather than raising it.
. THE BOARD OF DIRECTORS IS COMMITTED TO MAXIMIZING VALUE FOR
STOCKHOLDERS. However, a sale of the Company may not be the
best way to do so. At the end of fiscal year 1995, the Company
took important steps to cut costs, including a work force
reduction of nearly 6%, and thereby increased its
opportunities for future profitability. Management of the
Company has established $2.00 per share as its minimum
earnings target for fiscal year 1996 (before any additional
charges flowing from Thermo Electron's unsolicited offer or
similar matters). This target represents growth of 48% from
fiscal year 1995 pre-charge earnings of $1.35 per share. For
fiscal year 1996, no cash incentive compensation will be
received by the managers of the Company (except for quality
and regulatory affairs professionals), unless the Company
attains this goal. See "Compensation Committee Report on
Executive Compensation -- Annual Bonus," above. In addition,
the Company has endeavored to improve the quality of its
communications with investors and analysts in order to
increase their understanding of the Company's businesses, and
the considerable value inherent in the Company.
. THE BOARD OF DIRECTORS WILL CAREFULLY CONSIDER ANY BONA FIDE
PROPOSAL FOR THE ACQUISITION OF THE COMPANY. The Boards
fiduciary duties do not, however, permit the Board to
facilitate a bid that does not reflect the intrinsic value of
the Company.
Stockholders should know: the Company welcomes your input. Management and
the Board consider suggestions received from you seriously and carefully.
However, for the reasons set forth above, THE BOARD OF DIRECTORS OF THE COMPANY
STRONGLY URGES A VOTE AGAINST THE STEINER PROPOSAL.
The affirmative vote of the holders of a majority of the shares of common
stock present or represented at the meeting and entitled to vote is required for
approval of the Steiner Proposal. Abstentions will be treated as shares that are
present and entitled to vote for purposes of determining the number of shares
present and entitled to vote with respect to approval of the Steiner Proposal,
but will not be counted as a vote in favor of such matter. Accordingly, an
abstention from voting on the Steiner Proposal will have the same legal effect
as a vote against such matter. Broker nonvotes will not be considered as present
and entitled to vote with respect to the Steiner Proposal and, thus, will have
no impact on such matter.
19
<PAGE>
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
In order to be considered for inclusion in the Company's proxy statement
for the Company's Annual Meeting to be held in 1996, stockholder proposals must
be received by the Company, the attention of the Secretary, on or prior to
January 20, 1996.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16 of the Securities Exchange Act of 1934 ("Section 16") requires
that reports of beneficial ownership of Common Stock and changes in such
ownership be filed with the SEC by the Company's directors and executive
officers. The Company is required to conduct a review and to identify in its
proxy statement each director or officer who failed to file any required reports
under Section 16 on a timely basis. Based upon that review, the Company has
determined that Dr. C. Philip Larson Jr. filed one report relating to one
transaction later than required. To the Company's knowledge, all other Section
16 reporting requirements applicable to its directors and executive officers
were complied with for fiscal year 1995.
OTHER MATTERS
The Board of Directors knows of no other matters that may be presented at
the Annual Meeting, but if other matters do properly come before the Meeting, it
is intended that the persons named in the proxy will vote according to their
best judgment.
The cost of solicitation of the proxies will be borne by the Company. In
addition to solicitation of the proxies by use of the mails, employees of the
Company, without extra remuneration, may solicit proxies personally or by
telephone. Georgeson & Company Inc. has been retained by management to assist in
the solicitation of proxies for a fee of $6,000 plus reimbursement of expenses.
The Company will reimburse brokerage firms, nominees, custodians and fiduciaries
for their out-of-pocket expenses for forwarding proxy materials to beneficial
owners and seeking instruction with respect thereto.
Representatives of Ernst & Young LLP, the Company's independent auditors
for the fiscal year ended January 31, 1995, are expected to be present at the
Annual Meeting of the stockholders with the opportunity to make a statement if
they desire to do so and to be available to respond to appropriate questions.
The Company has followed the practice in the past of annually selecting the firm
of independent accountants for the current year by action of the Board of
Directors upon recommendation by the Audit Committee in the latter part of the
fiscal year, and anticipates that such selection will be made for the current
year in this manner.
The Company has been informed by Ernst & Young LLP that no member of the
firm has any financial interest, either direct or indirect, in the Company or
any of its subsidiaries and that during the past three years no such member has
had any connection with the Company or any of its subsidiaries in any capacity
other than that of independent auditors.
20
<PAGE>
Stockholders are requested to fill in, date, sign and return the enclosed
Proxy in the enclosed envelope, to which no postage need be affixed if mailed in
the United States. If you attend the Annual Meeting, you may revoke your Proxy
at that time and vote in person if you so desire, otherwise your Proxy will be
voted for you.
BY ORDER OF THE BOARD OF DIRECTORS
BURTON A. DOLE JR.
Chairman, President and
Chief Executive Officer
DANIEL C. WEARY
Secretary
Overland Park, Kansas
May 19, 1995
21
<PAGE>
PURITAN-BENNETT CORPORATION
9401 Indian Creek Parkway
P.O.Box 25905
Overland Park, Kansas
66225-5905 PROXY
- - --------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby appoints Burton A. Dole Jr. and Daniel C. Weary as
Proxies, each with the power to appoint his substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of common
stock of Puritan-Bennett Corporation that the undersigned is entitled to vote at
the annual meeting of the stockholders to be held on June 20, 1995, or any
adjournment or postponement thereof. Receipt of the Notice of Meeting and Proxy
Statement is hereby acknowledged. This proxy revokes all prior proxies given by
the undersigned.
The Board of Directors recommends a vote FOR election of all nominees
1. ELECTION OF DIRECTORS, NOMINEES: Thomas A. McDonnell
C. Philip Larson Jr., M.D.
FOR all nominees [_] WITHHOLD AUTHORITY to vote for all nominees [_]
FOR, except vote withheld from the following nominee:
----------------------------------------------------
The Board of Directors recommends a vote AGAINST the Steiner Stockholder
Proposal
2. Steiner Stockholder Proposal: FOR [_] AGAINST [_] ABSTAIN [_]
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting and all matters incident to
the conduct of the meeting.
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR EACH OF THE NOMINEES FOR DIRECTOR LISTED AND AGAINST THE STEINER STOCKHOLDER
PROPOSAL.
Dated
---------------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature if held jointly
Please sign exactly as name appears to the
left. When shares are held by joint
tenants, both should sign. When signing as
an attorney, as executor, administrator,
trustee or guardian, please give full title
as such. If a corporation, please sign in
full corporate name by President or other
authorized officer. If a partnership,
please sign in partnership name by an
authorized person.
Please Mark, Sign, Date and Return the Proxy
Card Promptly Using the Enclosed Envelope.
<PAGE>
GRAPHICS APPENDIX
1. Page 10 of the Proxy Statement contains a graph comparing the cumulative
shareholder return on the Common Stock of the Company for the last five years
with the cumulative total return on the S&P 500 Index and the S&P Medical
Products and Supplies Index. Page 10 of the Proxy Statement also contains a
graph comparing the cumulative shareholder return on the Common Stock of the
Company for the last 10 years with the cumulative total return on the S&P 500
Index and the S&P Medical Products and Supplies Index.
2. Page 3 of the Proxy Statement contains photographs of each of the two
nominees for election as directors at the Company's 1995 Annual Meeting of
Stockholders, and pages 4, 5, and 6 contain photographs of each of the other 5
directors of the Company.
